A flurry of government activity to alleviate crippling port congestion and its economic ripple effects is more likely to have long-term value in structurally changing a broken system than quickly reducing the cargo crunch in time for Christmas, reports Freight Waves.
Many supply chain initiatives and rules aimed at the ports are being pushed, or implemented, by the U.S. government despite the global freight transportation system being mostly owned and operated by the private sector.
The gridlock triggered by the pandemic is so bad that business leaders who typically favor a loose regulatory environment welcome targeted government intervention. The involvement of the president and governors has raised the profile of port problems, but some policies are more symbolic than concrete, at least in the short term.
In the process, industry players and government officials are raising expectations for quick fixes when in reality progress should be measured in months and years.
Stakeholders are finally coming together in a more serious manner to solve problems with goods movement that have been two decades in the making. Results will take time.
Supply chain politics
President Joe Biden last summer formed a Supply Chains Disruptions Task Force to address port and trucking dislocations stemming from record volumes of imports during the pandemic. John Porcari was named port envoy to manage discussions with ports and industry groups.
Administration officials have repeatedly touted how the White House helped broker an agreement for 24/7 operations at the ports of Los Angeles and Long Beach, the funnel for 40% of ocean imports, and got commitments from several big-box retailers and express carriers to take more containers at warehouses during the night to help spread out traffic.
They pushed the ports to impose a $100 fine for containers that dwell longer than eight days for truck moves and five days for rail moves, with the fee increasing in $100 increments per day until discharge from the terminal.
The proposal is controversial because the fees are to be assessed on ocean carriers, which don’t control most inland deliveries and almost certainly will pass them on to import customers struggling to find trucks or chassis — or get an appointment at crowded marine terminals.
Logistics specialists say the immediate problem that needs addressing is how to reduce the piles of empty containers hogging up terminal space and the chassis that support containers for road transport.
Surge in container numbers
On Monday, the Los Angeles and Long Beach port authorities delayed collection of the late-pickup fee for the third consecutive week, citing a 37% reduction in excessive container overstays. Internal data shows the number of containers stored beyond the approved time has plateaued since mid-November.
That’s not to say there hasn’t been progress. It just depends how it’s measured and messaged.
Since the extra storage fees were proposed Oct. 25, the number of containers lingering for nine or more days is down to a combined 44,919, through Monday. But the improvement has stalled, with a mere 1.2% reduction in overstays from the prior week. Meanwhile, the White House is showing on its website that the backlog declined 7.4%.
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Source: Freight Waves