Congestion at Ports of L. A. & Lengthy Seashore Getting Worse, Not Higher

“The port congestion shouldn’t be getting higher however worse,” Daphne Chang, Operations Supervisor on the Los Angeles workplace of Common Cargo Administration, wrote because the opener of a company-wide e mail on Friday, October third.
The e-mail went on to stipulate new charges that Los Angeles/Lengthy Seashore truckers are charging due to the massive congestion issues they’re going through on the Ports of Los Angeles and Lengthy Seashore.

Provide Chain Administration Skilled Hugh Finerty shared a memo concerning the port congestion in his weblog which identified that drivers on the Los Angeles/Lengthy Seashore ports have gone from 3-4 masses per day final 12 months to 1-1.5 masses this 12 months.

That type of drop in productiveness merely makes it unimaginable for truckers and trucking firms to cowl prices. Due to this fact, trucking firm after trucking firm is including congestion charges and ready time prices.

Right here’s a condensed story from the memo Hugh Finerty shared about one firm’s wrestle to get a delivery container trucked out of the Port of Lengthy Seashore:

“This previous week I used to be concerned in a easy transfer from the Port of Lengthy Seashore… The cargo was one container… We have now executed this transfer over 2700 occasions for this buyer… we now have used the identical drayage firm to deal with the supply and with out fail it has run flawlessly. Final week, with out prior discover that drayage firm despatched a letter to our buyer, the importer of document, informing them they’ll now not deal with the container drayage for them, efficient instantly. We needed to scramble to cowl 5 masses that week for our buyer, we had been profitable in getting 4 containers delivered. Friday, September twenty sixth the fifth container was nonetheless not delivered, and our buyer’s buyer was threatening to cancel the order.

After going via our roster of drayage firms we couldn’t get one firm to go in, on that Friday morning, wait in line, hook up and ship the container. Lastly at 10:30AM, we discovered a trucker who would ship the products, for a premium…. it will value the client $2450 to ship the container to South El Monte, which is simply 29.6 miles from the Port of Lengthy Seashore.

… after I learn the $2450 value to ship the container, I couldn’t consider it! With out going into particulars, I used to be in a position to pull a favor from a drayage firm to go in and choose up the container at zero extra value. In following up on supply of the container, I reliazed the next:

The motive force was dispatched at 11:35AM
The container can be on wheels ready for the motive force in a pulled staging space
With a assure from CMACGM and the Port, the motive force can be let proper into the terminal to select up the container
With all of the measures taken to guarantee a fast hook up and departure, it nonetheless took the motive force 5 hours to get out of the port
Supply was lastly effected by 6:45PM Friday night time

… If that is the time-frame for an expedited choose up, with wheels, what’s the flip time for a standard container choose up…. it’s averaging 5.5 to 7 hours. Which means a driver that goes into the port, will almost certainly solely get one flip for the day, perhaps 1.5. A truck must make $600/day to cowl [its] working value, a transfer to Ontario California prices $395 complete. The place is the revenue for the drayman? Therefore the one and solely motive drayage firms are now not prepared to drag containers out of the port.

Whereas there are some drayage or trucking firms refusing to drag delivery containers from the Ports of Los Angeles and Lengthy Seashore throughout this excessive congestion drawback, many are nonetheless prepared to go in and get containers. However like within the story above, there are charges.

Nevertheless, a quantity like $2,450 is exorbitant.

Simply trying on the numbers by way of labor proportion and quantity development, it will seem that the union may be very unproductive. Whereas August delivery container quantity went up 1% at Los Angeles/Lengthy Seashore from the earlier 12 months, man-hours went up 20%.

Though many feared slowdowns at ports on the West Coast from labor due to contract negotiations, which nonetheless drag on lengthy after the ILWU contract has expired, the present slowdown and congestion on the Ports of Los Angeles and Lengthy Seashore have deeper roots than labor, regardless of how these quantity and man-hour numbers look.

Right here’s an excerpt from a Journal of Commerce article on the congestion:

Citing these numbers, PMA President Jim McKenna mentioned, “once we’re utilizing 20 % extra labor to do 1 % extra quantity, we’re doing a number of work.”

McKenna put the issues on the ports squarely on the shoulders of the chassis difficulty. “The foundation of all evils within the harbor is the chassis scarcity,” he mentioned.

The additional strikes that longshoremen should make every day to scrub up the container backlog are sucking up expert labor, and terminals are reporting that the PMA has begun to rationalize the dispatching of positions like high handlers and rubber-tired gantry operators. These positions can’t be dealt with [by] part-time staff, often called casuals.

The additional work can be forcing terminals to make use of the next proportion of casuals for driving yard tractors and different positions they’ll fill, however productiveness usually drops when the share of casuals will increase.

The chassis drawback is correct on the high of the listing of things inflicting the congestion drawback that’s prone to solely worsen earlier than it will get higher.

You may learn concerning the 5 elements inflicting congestion and the Ports of Los Angeles and Lengthy Seashore right here.