Category Archives: Infrastructure

West Coast Port Backlogs Could Hold Up Holiday Season

Retailers are getting nervous as gridlocked West Coast ports struggle to move containers. The problems have been building for the last two months, something that has really taken retailers, shippers and the ports themselves by surprise. There was no doubt that everyone was expecting delays this year, but no one saw them lasting this long and no one has a plan for an immediate fix. As of Oct. 22, there were 10 vessels anchored outside the Los Angeles/Long Beach breakwater, waiting to move into berths. Five of those were cargo containers, which is very unusual according to Capt. Kip Louttit, executive director of the Marine Exchange of Southern California – a sort of traffic controller for ships. Some shippers have begun rerouting their vessels through the Panama Canal toward ports on the East Coast, where congestion is less of a problem. That move comes with its own obstacle though, as the Canal is currently going through expansion plans and can’t handle ships that carry more than 8,000 20-foot cargo containers. Bigger and bigger ships carrying 12,000 and 13,000 containers are now becoming the norm on the Trans-Pacific route from Asia to the West Coast, which is contributing to the congestion problem. One of the biggest problems stems from the chassis pool though. “Chassis” are the wheels that are attached to the containers in order to move them. Shipping lines themselves used to provide them, but in order to cut costs, handed over the business to independent contractors. Unfortunately, there seems to be no logistical coordination between the various entities that are needed to move the cargoes. Chassis supplies are scattered around with no rhyme or reason, with some terminals having none while others are oversupplied. Trucks arrive at a terminal to pick up their loads only to find there is no available chassis, which means they have to drive to a terminal to find one. As if that weren’t enough of a delay, when they get back they sometimes find their container blocked by new cargo containers that got stacked up while they were off chasing down a chassis. You can see the problem building here, right? All of the cargo stacks growing higher and deeper until containers that arrived a week ago are completely inaccessible. The Port of Los Angeles is looking at extra space outside the docks to move some of the containers to in order to ease the congestion and terminals have hired temporary workers to move containers around during overnight hours. There is also the issue of the ongoing labor dispute between the International Longshore and Warehouse Union and the marine terminals and cargo carriers. Their contract expired on July 1 and there are concerns that workers will stage walk-outs as the negotiations continue to go no where. As of right now, retailers are looking at a two to three week delay in receiving their containers, which means that many of their holiday inventories may not be in stores until mid to late November.