SHENZHEN, China – Frustration at delays at Los Angeles-Long Beach boiled over at the TPM Asia Conference in Shenzhen on Thursday, with shippers showing exasperation at the weeks it can now take to liberate containers from the largest port complex in the Americas.
“I don’t care about how long it takes a ship to cross the ocean. When it gets to the other side, I want my cargo. I don’t want to be told, ‘Oh, it went to LA.’ And then it might be 17 days before I get it off the docks,” said Rick Smith, vice president for global transportation at Sears Holdings.
The topic of what could be the worst gridlock to hit LA-Long Beach in decades was a dominant theme in a panel on shipper-carrier relationships on Day 2 of the 8th annual TPM Asia Conference organized by JOC Group. The questions asked from the audience revealed the growing frustrations by shippers at the delays being faced at the ports. In an interview, one large import beneficial cargo owner, who did not want to speak on the record, said, “what I am seeing is a port that has historically been reliable is becoming much more uncertain. When we try to bring product in to LA-Long Beach, we’ve seen two to three delays, therefore we reverted back to our East Coast strategy.”
The BCO said about LA-Long Beach, “it’s daily phone calls, trying to pressure either the carrier to advise us on the status, or the cartage agent to tell us if we’re waiting on a chassis, that kind of stuff.”
The gridlock at LA-Long Beach developed gradually this year and has been largely unrelated to still-unresolved West Coast longshore negotiations. Called “almost a perfect storm” by Maersk Line North Asia CEO TIm Smith, the problems are blamed on a combination of lack of chassis and drayage drivers who have been leaving the trucking industry because of the inability to complete enough trips in a day to earn a living.
The problems are being compounded by much larger mega-ships in the trans-Pacific offloading thousands of containers at a time, lack of terminal automation and alliances that call multiple terminals. Completing the “perfect storm” is recent slowdowns by members of the International Longshore and Warehouse Union, who have been working without a contract since July 1 but until recently had not disrupted cargo movements.
In a presentation at TPM Asia, INTTRA Chief Marketing Officer Sandra Moran presented data derived from millions of carrier status messages showing that it’s taking significantly longer this year to move import containers from the ship to the gate than it did last year.
Problems in the U.S. rail network are also a factor, with the railroads still struggling to recover from last winter’s storms and balancing lower-profit intermodal freight with higher-paying energy and other cargoes.
Rick Smith said the situation had deteriorated to the point that in the upcoming contract year he may negotiate into contracts penalties on carriers to ensure cargo is delivered on time, or incentives for the achieving the same result. This would be for a percentage of Sears’ cargo that is time sensitive, he said. He complimented the Matson trans-Pacific service, which is faster than most carriers and uses a dedicated terminal that isn’t experiencing the same level of congestion as other LA-Long Beach terminals. But the Matson service uses small ships. Smith said, “To my Matson friends in the audience, if anyone asks you if you have space, you’re full.”
The import BCO said Savannah, the primary port where he diverted goods, has performed “flawlessly,” to the point that some of his goods are being shipped via rail back to the West Coast. The costs are higher than shipping through the West Coast ¬ 30 percent higher, he said, not counting the westbound intermodal ¬ but it’s worth it to keep the product flowing.
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