Solving the congestion issue at the Port of Los Angeles has been on the to-do list of the Biden administration for months. Yet despite the victory of saving Christmas, the congestion problems at the nation’s largest port have not improved.
According to Port of Los Angeles officials, the land capacity at the port is 90%, which means there are too many trucks and people to move around efficiently; 70% is considered optimal for efficient trade flow.
Global transport and logistics company Kuehne+Nagel has been following the disruption and has created its own disruption indicator to keep its clients informed. The indicator measures the cumulative waiting time (in days) for twenty-foot equivalent units (TEUs) based on vessel capacity in these key ports.
For example, a 10,000-TEU vessel waiting 12 days equals 120,000 TEU Waiting Days, according to the company’s metrics. While the waiting days are a splashy headline, the data is invaluable. It casts another spotlight on the dysfunction at the ports.
When you take a closer look at the waiting time, the Port of Los Angeles and Port of Long Beach are ground zero for the global container congestion contagion.
“The U.S. ports are responsible for approximately 80% of the global disruption,” said Otto Schacht, EVP of sea logistics for Kuehne+Nagel. “When you look at the Port of Los Angeles/ Long Beach, they make up the majority of the delays. A normal situation is when the indicator drops below 1 million TEU Waiting Days. You are at 12.07 million TEU Waiting Days.”
The reasons behind the congestion conundrum are many and well known: lack of skilled manpower, a driver shortage, congestion at the terminals, distribution centers and warehouses, and ocean carrier restrictions.
American Shipper has learned the weekly calls between White House officials and port participants have turned into lobbying sessions, with some companies having government representatives on instead of CEOs or logistics management.
How can you have constructive talks if not all principals are on?
Kuehne+Nagel’s latest data just reinforces the fact that the pipes of trade are all connected and impact each other. The Port of Los Angeles and Port of Long Beach are essentially the largest hairball in the system, and the ripple effects are being felt around the world. The sluggishness of trade has had a direct impact on inflation.
The United Nations Conference on Trade and Development recently released its median time in port hours. The chart below shows the metric of time measured while at berth.
Between the slow steaming, loitering and port processing, imports are snarled.
Using ImportGenius, American Shipper found Halloween items are still coming in. Spencer Gifts had 12 containers arrive in the ports of Long Beach and Savannah, Georgia, in January containing Good Guys and Chucky Dolls.
Thankfully for the company, the dolls have shelf life for another Halloween. To borrow a phrase from Chucky, “A true classic never goes out of style.”
Additional data from project44 is also waving the red flag of more congestion ahead. It shows container dwell times are red across the board at most U.S. ports. Seattle is particularly bad at 13.66 days at the point of loading and 19 days at the point of delivery. Dwell times are triple where they were in December and January.
Solutions such as data sharing and automation have been met with resistance. We have seen the benefits of better utilization of data, with Walmart and UPS working with the terminals in picking up containers.
It can be done.
Why is it not done across the board?
Bottom line: More collaboration is needed to dissolve that nasty trade hairball.