Congestion, Chassis Shortages, and a Lumber Fire – Issues the West Coast Ports Face

 

Congestion, Chassis Shortages, and a Lumber Fire – Issues the West Coast Ports Face

 

West Coast port executives have admitted that big ships and carrier alliances are contributing to terminal congestion, equipment shortages, and excessive truck turn times.  Although the executives of the ports of Los Angeles, Long Beach, Oakland, and Tacoma have no direct control over the operations of shipping lines, terminal operators, chassis providers, railroads, or truckers, they agree on needing to take a proactive approach in bringing all of their tenants and stakeholders together to make the ports “facilitators of trade.”

 

Chassis shortages became an issue this year as a result of the shipping lines exiting the chassis business by selling those assets to equipment leasing companies.  It is now up to the trucking companies to rely on chassis pools and leasing companies to provide the equipment however, the demand is high and the chassis availability is insufficient.

 

The current congestion in the Ports of Los Angeles and Long Beach is also being amplified by larger vessels calling at the terminals.  Larger vessels mean more containers, causing some that have already been offloaded to be “buried” by others coming in after them.  This can cause some containers to be delayed by a week or two, while others may move normally simply because they were placed on top of the “pile.”

 

On top of congestion and chassis shortages, the Port of Los Angeles closed its terminals and the Alameda Corridor at 8:30 a.m. today due to air quality concerns resulting from a lumber fire at the port.  The TTI terminal at Long Beach was also closed for the day, but hopes to reopen tonight at 6 p.m.  It has been reported that a welding torch ignited World War II-era pylons soaked in creosote at the Pasha break bulk terminal around 6:40 a.m. this morning.  No injuries have been reported at this time.

By Marisol International

 

 

LA PORT AND CHASSIS CRISIS UPDATE

LA PORT AND CHASSIS CRISIS UPDATE

LA and Long Beach ports are continuing to face severe congestion, from both increased peak season volumes, as well as chassis shortages and dislocation.   Almost every ocean carrier has divested themselves of chassis ownership over the last several years, which has led to truckers increasingly struggling with chassis availability from third parties. 

The problem is varied.   Some terminals are running short or completely out of good order working chassis, either due to high demand or due to the chassis being out of service and in need of repair.   Some terminals have surpluses which can’t be used because the chassis owners don’t always maintain a sharing agreement with other terminals.  Additionally, those chassis that are in the pool are frequently in use for longer amounts of times as containers wait to be unloaded at busy distribution facilities.  Some terminals have stopped taking appointments altogether, and others won’t give appointments until containers are on wheels.

Warehouses are backed up in many cases and are unable to unload containers in time causing them to be stuck “on wheels” at these facilities, instead of being returned with the empties back to the terminal.

While carriers in the past would assist with last free day issues resulting from a lack of chassis, the divestiture and large scope of the problem is trending towards carriers becoming increasingly unwilling or unable to intervene with the terminals to extend free time.  

We are noticing that certain terminals are turning carriers away even after they’ve been on line for hours.

In addition to delays, these problems have hit truckers pockets. Carriers are increasing base rates by 20%. They are also charging for dry runs (when turned away at the port) and increased waiting time at the ports in an effort to compensate drivers who are dealing with the long delays and inability to pick-up containers. They are offering sign-on bonuses as well as the increased wages to attract more drivers to assist with the increased volume.

The current policy of free drops in the LA/LB drop zone is not being honored by many truckers, and shippers are having to pay additional drayage charges when empties are not available for return.

We will continue to keep a close eye on the situation and as always position ourselves to handle your drayage requirements in LA/Long Beach.

Asian container ports struggle with the worst congestion in 20 years

Brett, Damian.  “Asian container ports struggle with the worst congestion in 20 years” Source: JOC | Wednesday, 10 September 2014 | Lloyd’s Loading List.com

Asian container ports struggle with the worst congestion in 20 years

“”Congestion at key Asian ports is the worst it has been over the last 20 years and the situation looks set to continue, according to two executives from one intra-Asia carrier.

Speaking to Containerization International, MCC Transport chief executive Tim Wickmann and chief commercial officer Naresh Potty said that schedule reliability was becoming increasingly difficult to maintain because of the congestion, which began around March.

Mr Potty named Manila as the worst-performing port but said that Hong Kong, Shanghai, Qingdao, Incheon and Cat Lai in Ho Chi Minh City were also badly affected.

Hong Kong congestion is causing particular issues for carriers, they said.

Mr Wickmann said the problem appeared to be partly caused by the complicated nature of vessel-sharing agreements, with cargo for several carriers being carried on a single ship that then needs to transfer to each of the carriers’ feeder, barge and intermodal service providers.

This has greatly increased the number of inter-terminal transfers.

“I have to say that I have been in this business for more than 24 years and I don’t think I have experienced anything as operationally challenging as I have over the last six months,” said Mr Wickmann.

Costs

He added that the congestion is increasing costs because vessels were having to wait for days outside terminals.

“The way we have been overcoming this is by omitting ports,” said Mr Wickmann. “You start by waiting, and after two or three days you wonder how you will get back on schedule.

“So you take fewer moves than you were planning in certain ports and this affects vessel utilization, or you simply omit calls.”

Mr Potty added it was difficult for short-haul carriers to speed up services to make up the lost time because the shorter transit times allowed for less flexibility than longer-haul services.

“It also creates a snowball effect where you still have the containers in the port waiting collection and by omitting ports you just worsen the situation in the transshipment ports,” Mr. Potty said.

“The cost for us is also not exactly cheap as the port charges us on a per daily basis for storage depending on how long the container sits there.”

Mr Wickmann said that MCC Transport, which offers both feeder and intra-Asia services, has also taken the step of adding ships to services in order to create extra buffer time at terminals, but this increased the cost of running a service.

Asked whether it is possible to implement a congestion surcharge, the two said it would be difficult because of the competitive nature of the intra-Asia trade and because the level of congestion between the terminals at a particular port varies, meaning not all carriers will apply a charge.

“Customers need to get used to the fact that fast transit times are a thing of the past because services with fast transit times don’t have a congestion buffer and that means that every time there is a delay we can’t meet our schedules,” said Mr Wickmann.

”Instead of looking for a fast transit time when everything goes well, which is happening less often, they should look for a schedule they can trust.”

Mr Potty said the problem could get worse, as the typhoon season has yet to get under way and intra-Asia volumes are growing by around 6%-7% per year. “”