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How Empty Containers Exacerbate the Pressure on U.S. Supply Chains

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The chronic shortage of truck drivers is plagued the supply chain in the United States, making it difficult for companies to obtain the products they need. However, when Matt Schrapp recently visited a truck yard near two California seaports, Los Angeles and Long Beach, he saw 20 trucks idle.

The scene pointed out another factor in the delivery of goods in the country: empty containers. When they were sitting at the port waiting to return to the exporter, many people took up the space on the chassis-the driver needed a special trailer to pick up the complete container arriving from Asia.

“This really makes the job difficult,” said Schrapp, the head of the Port Trucking Association. “Because we can’t get these chassis, we are actually sending people home.”

The issue of empty containers has become a top priority for port operators, ocean carriers and the Biden government as they are working to repair the supply chain that has been stretched due to the surge in consumer demand.

Gene Seroka, executive director of the Port of Los Angeles, said this week that there are 65,000 empty containers on its terminal, up from 55,000 a few weeks ago. Data from three large enclosure pool operators show that 90% of the enclosures in the port are now in use, up from 75% in January.

At the same time, this week the number of container ships anchored outside the ports of Los Angeles and Long Beach hit a new record of 86.

This situation began earlier this year, when containers were stranded in the middle of the country because some truck drivers did not want to transport empty containers back to the coast. According to supply chain experts, full load can make more money.

Industry executives said that in response, shipping groups began to move containers closer to the terminals, which intensified the accumulation around the ports.

Caitlin Murphy, chief executive of Global Gateway Logistics, a freight forwarding company based in Missouri, said that since May, she has struggled to transport goods inland from Los Angeles and Long Beach by train.

“Normally, loaded containers should be transported by rail to inland points; they don’t do this anymore,” she said, because the shipping group that owns or leases the boxes “hopes that these containers can be shipped back to Asia.”

She urged the Biden administration to pay more attention to keeping rail services running smoothly, rather than focusing mainly on seaports. “Cutting the railroad blocked the supply chain,” she said.

Keith Winter, the chief executive of Crane Worldwide Logistics, another freight forwarding company, also expressed her concern, saying that ocean carriers have become more conservative in providing time for rail transportation of goods, which restricts container delivery. The normal flow of inland hubs.

Michael Farlekas, chief executive of E2open, which produces sea booking software, said that the shortage of containers in the US inland has in turn affected exporters, who usually use empty containers to load goods for the international market.

According to a recent report by the New York Times, more than 80% of the containers exported from the Port of Los Angeles in September were empty, up from about two-thirds in September 2020 and September 2019.

Lisa Ellram, a professor of supply chain management at the University of Miami, pointed out that the United States used to have more “empty” containers until 2018 stopped exporting recyclable materials to China. “This helps return to China,” she added, because the US imports more than exports.

But she added that the “chaos” of the port itself—with tens of thousands of importers, thousands of truck drivers, nearly 20 different terminal operators, and very little centralized control—is part of the problem.

Southern California port operators tried to clear the container stacking area and announced in late October that they would impose a surcharge on containers that stay in their facilities for too long, and the fines would increase from $100 per container per day.

Although these surcharges will not take effect until Monday, Seroka said this week that the number of containers affected by these surcharges has fallen by about 29%.

He added that the ocean carrier has arranged six “sweepers” to receive approximately 17,500 empty containers of 20-foot equivalent units, and the other two are on the way. Biden’s Transportation Minister Pete Buttigieg welcomed them on Twitter, but Schrapp and others said more work needs to be done to clear the backlog.

The biggest challenge for truck drivers is to be more bureaucratic, Schrapp said: If there is no appointment to return the empty container, the driver will not be able to free up the chassis to fill a full container. But terminal operators in the port complex will not accept empty containers without knowing that a ship is about to arrive to remove it.

Elleram said the Port of Los Angeles is working hard to provide incentives for truck drivers to bring an empty container with them every time they pick up the goods. She said: “They must allow time to endure more delays.”

If it cannot be repaired quickly, Schlapp is worried that drivers who make a living by shuttle cargo in and out of the port will find other jobs. “This is ridiculous,” he warned. “If they can’t find a job here, they are in great demand. What prevents them from looking for another driving job?”

Video: WTO Director-General says supply chain problems may last for months

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