West coast ports announce fourth attempt to clear container backlog
Initiative would shift inventory to Utah for inland transport, following other plans to charge carriers for slow box moves, stack containers in higher piles, and run ports 24/7.
Supply chain executives at the ports of Los Angeles and Long Beach have unveiled three new measures in recent days to clear the epic container backlog on their shores, as scores of containerships continued to languish in the waters off the California coast just weeks before the winter holidays.
The moves come shortly after the Biden Administration announced a plan to solve the same problem by moving those two ports toward 24/7 operations, a move that industry analysts said may provide some temporary relief but will likely not provide a long-term fix.
Last week, the city of Long Beach tried to address a different part of the puzzle by issuing a temporary, 90-day waiver of its rule that containers could be stacked only two units high during storage. By allowing the boxes to be piled four or five levels high, the plan could help workers to move more containers off the ships floating offshore, according to published reports.
Then on Monday, the twin ports said they would increase the pressure on companies to move their inventory off the dock by assessing a surcharge to ocean carriers for import containers that dwell too long on marine terminals. The ports will now charge carriers a daily fee for every truck-bound container dwelling nine days or more and for every rail-bound container that has dwelled for three days or more.
“We must expedite the movement of cargo through the ports to work down the number of ships at anchor,” Port of Los Angeles Executive Director Gene Seroka said in a release. “Approximately 40% of the containers on our terminals today fall into the two categories. If we can clear this idling cargo, we’ll have much more space on our terminals to accept empties, handle exports, and improve fluidity for the wide range of cargo owners who utilize our ports.”
And on Wednesday, the Port of Long Beach announced a separate plan to move many of those lingering containers off the docks by shifting them to Utah through a deal with the Utah Inland Port Authority (UIPA) and Union Pacific Railroad. That move is intended to bring rapid relief from existing port congestion by optimizing rail deliveries between the two states
“The direct, regularly scheduled rail service connecting the Port of Long Beach to Salt Lake City will allow cargo destined for all of the Intermountain West to be rapidly evacuated from terminals in Long Beach to Salt Lake City for further distribution throughout the region,” according to a joint statement by executive directors Mario Cordero of the Port of Long Beach and Jack Hedge of the Utah Inland Port Authority. “Much of this cargo traditionally moves to Utah, Colorado, Nevada, and Idaho by truck, and thus must be removed from the port terminals one container at a time. Reengaging this direct rail service will allow removal of blocks of containers at a time.”
However, some industry experts were skeptical that the plans would have much impact, saying that without adding extra trucks to move the stalled containers, isolated plans like the detention fees would merely impose an added burden, likely to be passed on to shippers by ocean carriers.
“While the underlying principle of this measure reflects initiative on the part of the ports, we believe that there are many layers to this problem which will need attention from all decision makers and stakeholders,” Johannes Schlingmeier, co-founder and CEO of the German container logistics platform Container xChange, said in a release.
“It is important to reflect on the problem of the record volume and congestion problem at these ports and identify who could possibly play a key role in reducing the congestion. The intermodal stakeholders like the truckers and rail transport play a vital role in delivering the boxes on time. As much as they are important to the situation, they are beyond the capacity and control of the carriers and these charges to the carriers will likely not increase trucking supply.”
Surcharge update: For containers moving by rail, ocean carriers will be charged if the container has dwelled for six days or more. https://t.co/nygXl0oCkN https://t.co/mMZAjGDPv9
— Port of Los Angeles (@PortofLA) October 27, 2021
In an effort to improve cargo movement amid congestion and record volume, the ports of Long Beach and Los Angeles will begin assessing a surcharge to ocean carriers for import containers that dwell on marine terminals.
— Port of Long Beach (@portoflongbeach) October 26, 2021
Read more: https://t.co/NYRPkW5kui pic.twitter.com/EFZ0cEYnXI
