Updated: Jan 31
You’ve probably seen the news lately about the backup on the west coast for container vessels. I work in the industry and have not read a complete article on this issue. Most of what I’ve seen is a column biased on one of the issues with incomplete facts, or someone mentioning the tip of an issue without many other points to back it up. There are multiple issues within in the supply chain, here are a few and there is no quick fix. This is a non-biased / non political article.
This all started during Covid and our response to shut stores down. Think of how we used to shop. You walk in a store and buy a product, then it’s restocked. The store front is always way bigger that the back warehouse. But when all stores were closed, this was the first domino. (And I’m not questioning that this wasn’t the correct response at all, just noting when/why this started). So, when money for travel and vacations got put on hold, people spent online. But most stores are not set up for this and can’t handle the increase in shipping; also too, they had limited or no staff. In addition to that, stores must order product months in advance to meet projected demands, so that cargo kept coming with nowhere to go. This is why Amazon thrived. They have huge DCs (distribution centers) and their business model is designed for this.
Not enough space on the terminals. Ships are anchored because there is no room to discharge the cargo. Imports are decked out of spot because there isn’t enough room where they need to go. Which causes operations to double or triple handle one container, further causing delays. Terminals only have a certain amount of space. Cargo has to move before more can come into the yard.
Lack of MTY return options. Another issue to the lack of space on a terminal effects customers and trucking companies from bringing MTYs back. (MTY refers to empty containers) A terminal can control their MTY storage but shutting out certain lines and MTY size types. The problem there is, a trucking company has a MSC 40HQ (40’ High Cube) MTY container that it needs to return, and they have a job to pick up an Import at TTI (Total Terminals International – a terminal in the POLB). But TTI does not have room for those MTYs so they are shut out. Now the trucker must go to a different terminal, drop the MTY off and get in line at TTI to pick up the import. No joke this process to drop off one container and go to another terminal to pick a container up could take 6 hours. Further causing congestion in the port and slowing the movement containers.
Not enough truckers. They are the least paid and get the fingered pointed at them the most. I do not know why? They are moving cargo as fast as they can, but with the influx of containers on a yard, their wait time could be hours on one run. It’s not their fault. Most trucking companies I’ve talked to all say they are understaffed with drivers.
Not enough chassis’ in SoCal. Probably one of the biggest problems that gets overlooked if you don’t know the ins of the industry. Chassis are what the container sits on and is locked to when the trucker is hauling it over the roads. We’ve been short for years. These are gold to truckers, no one wants to leave them because it is how they make their money. No chassis… no pickup. In my estimation we are 20K chassis short in circulation.
Not enough skilled union workers. The ILWU run all operations around the ports. Jobs get cycled regularly or are cut/not filled multiple times a week. This means that terminals put an order in every day to the union for the labor they need in the operation. Let us say all terminals combined need 60 crane operators. Well, the union only has 40 available - so they cut the rest. Which means, a terminal wanted to get a gang to move cargo, but the union couldn’t fill the order and those crane had to go idle for that shift. Lately the cuts have been attributed to the rise in Covid cases, but this has been going on for months.
Hoot gates to the rescue (😆) Hoot refers to the 3rd shift hours of 0300 -0800. A big push has been made about running a gate during these house to help keep up with the demand. But this doesn’t make any sense. See issues above 👆🏼. There is already a shortage of drivers and union members. Where are these trucks going to go? Most business are closed, and distribution centers aren’t fully staffed this time. Right now, terminals are working 20 hours a day. 0700-0300. This seems to be more of a political statement rather than one that makes operational or financial sense.
Not enough space at end facility - companies cannot pick all their containers because there is no place to store them. Also, containers that were for the holiday season and did not arrive in time are starting to get abandoned on terminal. Further taking space.
New lines showing up with no port to go to - There are some lines (CUL line for example) that never used to call (come) to the United States. They would just go up and down the coast of China. Now they are starting to come to America with Imports. Problem is, they are not in an alliance with these other companies and technically do not have a destination firmed up before setting sail. They will literally call the different terminals in the POLB & POLA to ask if there is an opening for them to discharge containers. Most terminals are already backed up, but this just adds more vessels anchored offshore.
Based on my experience, how many vessels are on the water and talking to other people in the industry, I believe that we won’t get out of this for a couple more years. This hole is deep and there are no signs of slowing down.
Some thoughts on solutions:
1) Create more off docked facilities (away from the ports to pull containers and store them there)
2) Increase wages for the truckers to encourage more people to work
3) Add more union workers. They have a casual hall which they can elevate and train more skilled workers. This is a contract year for the ILWU so who knows what their demands will be.
4) Add more chassis’ to the pool
5) Similar to #1 – not just have an off docked facility that truckers will go to, create a container yard in Diamond Barr or Riverside. And build a train track from the ports to this yard. Long dwell Imports can be moved via rails to clear space on the ports.
Please feel free to comment below or ask a question.