Welcome to the WHAT THE TRUCK?!? newsletter. In this issue, have “24/7” hours helped SoCal ports; are CARB and AB5 to blame; rule 34 hits supply chain; and more.
How are ‘24/7’ operations going?
Clock is ticking — It’s been less than a week since the White House ballyhooed about convincing the ports of Los Angeles and Long Beach as well as some key shippers to operate 24/7. While the talks served the purpose of generating headlines, the measures fell flat with some in the supply chain community. Notable by their absence were the major foreign steamship lines whose vessels sit at anchor in record numbers in San Pedro Bay. And are 3,500 additional containers moving a week at night like Biden promised? Let’s take a look at the early returns.
On the water — To internet conspiracy theorists, the above looks like a Star Destroyer deploying TIE fighters aimed at attacking the Rebel Alliance. In reality, what you’re looking at is the result of 20 months during which nearly every link in supply chains has been jerked by one disruptive force or another. Adding to that has been a massive spending shift from services to goods. Do you know where most of those goods come from?
“While both categories have since rebounded, spending growth for goods still remains stronger, surpassing pre-pandemic levels with a 25.69% increase from January 2019 to August 2021.” — Business Insider
According to Hapag-Lloyd’s North America Operational Updates, as of last Friday ships were waiting an average of nine to 12 days to catch a berth. As of Monday, 70 container ships were sitting at anchor or drifting outside the SoCal ports. FreightWaves’ Greg Miller suspects it’ll only get worse, tweeting, “Sept. 19 record of 73 container ships looks likely to be broken soon.” Should we set the over/under at 73.5? What are you taking? Email me your answer.
“During the month of August, the San Pedro Bay ports moved 1,241,896 TEUs. This projection of 3,500 does not move the needle at all. That’s a mere 14,000 containers — which translates into just 1% of the total TEUs. This plan is being called a ‘sprint.’” — Lori Ann LaRocco
Enemy at the ingates — Hapag-Lloyd’s update goes on to state, “Port of Long Beach did test a 24/7 gate model, but was not successful to implement a full program.” What’s worse is, “Imports wait for an average of 6 days for a truck to pick up, and street dwells are up to 9 days on average.” Last week, Lori Ann LaRocco called Biden’s plan a “political pawn to push the infrastructure bill.” She says that, because right now only one of 12 terminals is actually running 24/7. That’s just getting the containers out; here’s what the line looks like to bring them back.
“Last weekend, five of Los Angeles’ six terminals were open during the day on Saturday and none at night. In Long Beach, two terminals were open Saturday during the day, according to charts for the two ports. Next weekend appears to be a repeat of last weekend.” — Washington Examiner
Rail improvement — Aside from the ships at sea, the congestion at the port and the issues that dray operators are facing, rail has also been a massive bottleneck. However, the Port of Los Angeles has reported on some strong progress there as rail wait times have been reduced by more than half in the past 30 days.
Moving forward — We’re still in the early days of this push for 24/7 at the ports, but in order for it to work it will take more than just cooperation from a terminal or two, Walmart, and Coca-Cola. As Lori Ann wrote, “Truckers are not going to work 24/7 if they can’t pick up containers at a warehouse that is closed.” And as we saw last weekend at the gates (let’s all thank Steve Ferreira for sitting up all night watching the ingate cameras) if there’s nowhere to take the cargo, it’s going to sit.
Are AB5 and CARB to blame?
The claim — A conspiracy theory being peddled on Facebook states: “The NEWS says the California port situation is caused by a driver shortage. Not so fast: It is in part caused by a California Truck Ban which says all trucks must be 2011 or newer and a law called AB 5 which prohibits Owner Operators.”
CARB — While I do agree that there are many more factors causing congestion than a “driver shortage,” CARB and AB5 aren’t among them (see previous section). Karen Caesar, an information officer for the California Air Resources Board, told USA Today, “About 96% of trucks serving California’s major ports are already compliant with [CARB].”
AB5 — As for AB5, no it has not banned independent owner-ops from serving the ports or driving in California … yet. As FreightWaves’ John Kingston reported, “AB5 has been blocked from being implemented in California’s trucking sector because of an injunction handed down by a U.S. District Court in California at the start of January 2020.” That is still the case. However, should the U.S. Supreme Court not hear the case, then the owner-operator model in California would be eliminated. Right now there is hope that the case will be taken up by the Supreme Court in late November or early December.
Rule 34
WHAT THE TRUCK?!? — You’ve probably noticed many retailers integrating supply chain talk into their holiday marketing. Morning Brew even reported, “This year, S&P 500 companies have said the words ‘supply chain’ on earnings calls more than ‘synergy’ or ‘value proposition’ combined.” So, it only stands to reason that Rule 34 would come into play in our realm. Wikipedia defines Rule 34 as, “An Internet maxim which asserts that Internet pornography exists concerning every conceivable topic.” Now, here we are amid the shipping crisis being presented with the above offer. Yes, I redacted the company info as this seems both scammy and scummy … enter at your own risk.
Intermission
WTT this week
Wednesday — Gatik and Ryder’s big plans for autonomous delivery; building a marijuana delivery network; and an on-the-ground look at the ports of NY/NJ with Brad Gilette, Head of Operations at Gatik, Colin Landforce, chief technology officer at Unrivaled Brands and Pink Transportation L.L.C.’s NJPortGirl.
Friday — Bloodlines and building a ghost cattle company in a big rig with Adam McDonough, vice president, Truckload-North American Surface Transportation at C.H. Robinson, Jeff Beckham and Rian Beckham of Kingsgate Logistics, and The Freight Bambino.
Catch new shows live at noon ET Mondays, Wednesdays and Fridays on FreightWavesTV, FreightWaves LinkedIn and Facebook or on demand by looking up WHAT THE TRUCK?!? on your favorite podcast player.
Now on demand
House of a 1000 Customs Rejects
know what you shipped last summer
Biggest issue drivers face in ’21
Parking — We asked trucker Taylor Barker about the good and bad of trucking in fall of ’21, and the answer is the same as every other season: a lack of parking. A narrative that adds insult to injury for drivers who are being told there is a driver shortage yet they can’t even find a place to park. Here’s what he had to say.
Subscribe to the show
Or simply look up WHAT THE TRUCK?!? on your favorite podcast player.
All FreightWaves podcasts can also be found on one feed by looking up FreightCasts wherever you get your podcasts.
Want a new WHAT THE TRUCK?!? shirt or hat? Check out the swag store.
One love,
Dooner