Facts Are Stubborn Things

By John McLaurin, President, Pacific Merchant Shipping Association

A lot has been said lately about the need for 24-hour marine terminal gate operations. It appears to be the default solution by some to “port congestion.” It’s a great sound bite. It is a simple and easily understood solution to a complex and difficult problem—wherein lies the problem.

We have a supply chain that is overwhelmed due to excess demand and cargo volume. Port congestion implies that every other component of the supply chain is working smoothly. It isn’t.

In August of last year, I participated in a conference call with port authorities, truckers, ocean carriers, and Beneficial Cargo Owner (BCO) representatives. The topic of conversation: port congestion.

A BCO representative described the problem that he was encountering in a very holistic and simple fashion. He stated:

"I have cargo in China, but I can’t get a box.
When I get a box, I can’t get a ship.
When I get a ship, I can’t get a berth.
When I get a berth, I can’t get a truck.
When I get a truck, I can’t get a chassis.
When I get a chassis, I can’t find space at a warehouse to take the cargo."

That isn’t port congestion—that is a supply chain that is absolutely saturated with cargo.

Every container ship and every container in the world is currently in use. Chassis are difficult to find—with on-street dwell time at a week or more (indicating their use as a storage unit rather than a mode of conveyance). Eastbound rail cargo has been held up at marine terminals due to a lack of rail cars and rail power. And warehouses and distribution centers are full.

There isn’t empty equipment or space lying around unused. Terminal operators and trucking companies have acquired land to store containers, waiting for cargo owners to pick them up. The same problems that exist in the United States are being experienced all over the world.

In addition, we can’t violate the laws of physics. You can only put so much cargo in one space at any given point in time.

Despite all of these supply chain challenges, record amounts of cargo are moving through ports all over the country—and during a pandemic when people were putting their health at risk by simply showing up to work. The Port of Los Angeles just announced the movement of one million TEUs for one month, a “Western Hemisphere” record.

I don’t doubt that there are individual specific problems. But let’s acknowledge and be proud of what we have been able to accomplish in the past year. We have gone from overseas factories being shut down and commerce all over the world coming to a standstill to the largest volume of cargo ever moved through our ports, by our truck and rail partners and final mile delivery drivers. We have delivered record volumes of ag exports. And the supply chain delivered needed medical supplies and personal protective equipment all over the world.

What should be done going forward?

First, we need to work together to fully utilize the first and second shifts before considering opening the gates 24/7. There is unused gate capacity during the first and second shifts at LA/LB marine terminals (see graphic on page 14). All parts of the supply chain need to be open and working to receive cargo.

Second, governments should allow the separate areas of the supply chain to draw down on the congestion and make continual progress without new rules or procedures that will make the situation worse.

Third, government should utilize available funds to upgrade infrastructure for ports and transportation systems as a critical part of the economic and job recovery program.

Last, new laws and regulations establishing energy, climate, and transportation goals should be evaluated for their impact on supply chain efficiency goals. Mandating changes that are not technically or economically feasible will have an impact on the ability of the supply chain to deliver goods in a timely manner.

Do we have serious problems and challenges? Yes, and we must work together to improve the system so it can handle the large influx of cargo efficiently. But we have to acknowledge that we have a supply chain capacity problem and to simply demand 24/7 gate operations while ignoring every other component of the supply chain is not a solution.