The global pandemic has been felt worldwide. Many of our usual habits have been turned upside to slow the curve. Since many retail stores were forced to close their brick and mortar locations, people have turned to online shopping in droves. Although online shopping can be a convenient and safe alternative, it’s affected the U.S. logistics and international supply chain like never before. Let’s explore some of our industry’s current challenges and how the pandemic and record cargo volumes are compounding these issues.
Record-Breaking Cargo Volumes
First, we’re seeing reports of record cargo volumes coming from port authorities on all coasts. They have noted an increase in cargo moving through their facilities for many consecutive months now. For example, in October alone, Global Port Tracker found that America imported 2.21 million containers, not TEU’s, into major US seaports. That’s almost an increase of 18% in comparison to October 2019!
Another issue felt everywhere is the lack of available labour. COVID-19 has significantly impacted labour availability and caused a major shift in procedures to ensure the health and safety of the people who are working. In LAX/LGB, terminals cannot secure enough dock labour to manage vessel operations/discharge etc., in the usual time. Typically, Vessels that took three days to discharge & load are now taking more than five days! Warehouse operations have also been impacted by the labour shortage. They now struggle to receive, unload, and load containers in the average velocity of pre-pandemic days. Sadly, it’s expected to worsen in California as a result of new rules put in place to try and curb a rise in cases of the virus.
Moreover, vessels docking at major ports now need to wait days before they can berth and begin discharging and loading operations. These delays are causing severe issues for export cargo because the Earliest Receiving Dates (ERD) are continually being changed. In turn, these changes impact the truckers’ ability to deliver export loads and their ability to pick up import containers from the same terminal with the same chassis. This also affects terminal appointments for truckers not being used. These U.S. port delays are also causing problems overseas because the volume is building up in export terminals waiting for the delayed vessels to arrive. Unfortunately, this results in blank sailings and begins to cause congestion issues at overseas ports.
Port, Terminal, and Ramp Congestion
These congestion problems are occurring at all ports. Some have even begun to provide Saturday gates as a way to try and relieve congestion. However, this only helps if there are chassis available to mount containers, drivers on duty to move the containers and warehouses/D.C.’s open to receive them. Several facilities are operating at almost maximum velocity and, as a result, may not be able to accept empty containers, which further compounds the problem. What’s more, congestion partially causes vessels arriving at berth to be delayed
or even diverted to other terminals because of a lack of capacity.
Since container volumes are breaking records, the availability of chassis’ are becoming scarce. This is because loaded containers on chassis are not being unloaded as quickly both because of the labour shortage and also because of extremely tight inventory levels in D.C.’s and warehouses around the nation. Although chassis providers are ordering more from the manufacturers located in China, the wait time is approximately 6-9 months, meaning there is no quick fix.
Equipment Shortages in Asia
Of course, labour shortages are also affecting driver availability throughout the USA, but this is especially felt at the ports. Standard availability in LAX/LGB is presently 3-4 weeks out, while at other West Coast ports, it’s at least seven days. Even East Coast (E.C.) ports have a week wait time before drivers are available, and it’s only going to worsen as volumes shift from West Coast to East Coast ports. Fortunately, there are more drivers available at Mid-West rail ramp locations, but considering railroads only allow 2 days of free time, it’s actually quite critical. East Coast ports also face infrastructure challenges, vessel discharging delays, lack of driver availability, and labour shortages. This impacts cargo volumes and services to and from non-Asian trades more so than on America’s West Coast.
King City Northway is Here to Help
Since landside infrastructure cannot keep up with increased vessel size and the volumes this brings, the challenges being faced by everyone involved in logistics and international supply is not something that can be fixed quickly. Insufficient warehouse / D.C. space causes importers to delay the unloading of containers, which causes higher dwell times for containers and chassis. This then impacts the movement of cargo already in the supply chain.
Therefore, it’s evident that everyone has a role to play to improve cargo flow, and no one party can take on these challenges alone.
That’s why we at King City Northway are continuing to work diligently to make sure your cargo moves as efficiently as possible despite the current issues. However, if you have any questions or concerns, please reach out to us! You can call us at 1-800-335-5394 or visit our website. One of our customer service representatives will be happy to assist you with all of your freight forwarding needs!