California seeks to ease port congestion by leasing six container storage sites

The state of California moved yesterday to alleviate the persistent backup of freight imports at maritime ports by announcing a deal to lease space at six state-owned sites with enough capacity to store 20,000 shipping containers and clear valuable space at ocean-side docks.

State leaders identified the locations through a deal with Chunker, a Utah-based firm that provides a marketplace for trading short-term, on-demand warehouse space. As a result of the partnership, Chunker said it is now the largest off-port container storage company in California, with 165 acres and 11 sites located near ports.

Chunker’s role in the deal was to lease the six sites from the California Department of General Services for one year, with an option for a second year. They include three armories (in Lancaster, Palmdale, and Stockton), two fairground sites (San Joaquin County and Antelope Valley Fairgrounds), and a former prison site (Deuel Vocational Institute in Tracy).

Chunker will now coordinate between California ports, shipping/trucking companies, and cargo owners to help move containers and free up needed space elsewhere.

The effort is a result of California’s Executive Order N-19-21, which aims to strengthen the resilience of both the state’s and the nation’s supply chains. “California has taken swift action to keep goods moving at the state’s ports, leveraging our strategic partnerships to develop multifaceted solutions, including securing additional storage space for thousands of shipping containers,” California Governor Gavin Newsom said in a release. “These efforts are a vital investment to help meet the needs of not only Californians, but our entire nation, and we’ll continue advancing innovative solutions to address this global challenge.”

Efforts to ease port congestion over the past year have followed a range of strategies. Those steps have included moves to shift port operations toward 24/7 operations, stack containers in higher piles at the dock, or fine ocean carriers for containers that sit too long at the port complex.

However, the approach that seems to be gaining the most traction is simply opening new storage yards a short distance away from the container terminals themselves. That move allows workers to shift cargo off the crowded docks, thus creating precious space to accept new containers from ships waiting offshore, and offering truckers easier access to move loads on land.

Other examples of these sites include a 22-acre “pop up” container yard announced in January by the Port of Oakland and a similar approach by a South Carolina marine and rail logistics service provider that recently expanded container storage capacity at 18 depot locations throughout the Southeast, Mid-South, and Gulf regions.

More recently, the Los Angeles-based fulfillment provider Taylored Services LLC said on Feb. 11 that it had opened a new location directly at the Port of Los Angeles. Designed to support faster distribution by professional drayage services, the additional yard space in the area will assist Taylored in alleviating pressure from downstream congestion and increasing flow through the port, the company said.

"We intend to provide cross-docking, transloading services, and off-dock container transitioning services (free-flow yard, empty return site, container storage), all designed to assist with the efficient flow of containers to/from the Port of Los Angeles," Taylored CEO Jim DeVeau said in a release.

The initiatives come as freight import backups at west coast ports began to ease slightly in January, helped by a manufacturing pause in China during Lunar New Year celebrations and retailers drawing down inventory after the winter holiday peak shopping season, reports show.

That improvement is encouraging, but experts say it marks just a first step in bringing import and export flows back to pre-pandemic speeds. According to supply chain visibility provider project44, the easing of congestion in the U.S. serves as a reminder of the delicate balance of global trade, since the change has already shifted disruptions to Asian ports. Pointing to fresh rounds of Covid outbreaks and to the Lunar New Year holiday, project44 said delays at Asian maritime ports have increased even as Western nations improved.