Date: Friday, December 10, 2021
The Port of Long Beach reported Thursday it handled 8.6 million shipping units through November, smashing its all-time annual volume record before the year is done amid relentless consumer demand for imported goods. Next door in Los Angeles, the port director said using the National Guard to evacuate containers is still an option if more cargo lingers beyond its move-by date and terminal congestion worsens again.
Officials at the San Pedro Bay ports this week trumpeted how the threat of hefty fees on long-dwelling container motivated shippers to stop using valuable marine terminals as makeshift warehouses, citing a 37% drop since Nov. 1 in containers that sit for nine days or more for local truck moves or six days if going by rail. On Monday, the Los Angeles and Long Beach ports postponed for a fifth time assessing the surcharge, which starts at $100 and increases by $100 increments per day.
Gene Seroka, executive director for the Port of Los Angeles, confirmed during a Washington Post online event that the White House in October explored the possibility of utilizing National Guard troops to drive trucks with containers amid a perceived shortage of operators, or help with unloading. The port chief said only 50% of appointments for container exchanges are being filled because of what he estimated is a shortage of 3,000 to 4,000 truckers in the area.
Trucking industry representatives dispute the notion of a local shortage, saying drivers are not showing up because they don’t want to wait hours in line and then get turned away for missing an appointment time. Chassis to carry containers are also in difficult to secure for trips to the port.
“We talked about that [the National Guard] with state and federal officials. I told them what kind of numbers we needed and nothing has materialized to this point,” Seroka said. “It was also our backup plan If our penalty fee didn’t work to get these aging containers out of the port that we were simply just going to use National Guard or military drivers to pull those containers out, put them on property far away from the port and allow those importers to collect them when they wanted to, at a cost of course.
“But still, if that opportunity would present itself we would take it right away,” Seroka said.
One reason that container overstays at the ports have recently declined is that large importers, such as Walmart (NYSE: WMT) responded to the gridlock by renting land and setting up temporary storage yards where containers are shuttled before getting stacked with the rest of cargo waiting on docks for delivery. The port authorities are also setting aside vacant land to use as overflow sites for loaded and empty shipping boxes. Long Beach, for example, this year has activated more than 130 acres in several parcels, including 70 acres at Pier S, to provide relief to the private terminal operators.
John Drake, vice president for supply chain policy at the U.S. Chamber of Commerce, pushed against the National Guard idea, saying it would create unintended supply chain disruptions elsewhere.
Many members of the National Guard are truck drivers and would get pulled from their day jobs and “their normal routes to serve the Port of L.A. or Port of Long Beach. So I’m not sure if that would result in a long-term solution or even a short-term solution,” he said during the program. “You might see a drop in congestion at the Ports of L.A. and Long Beach, or wherever those drivers are shifted towards. But I think on the back end, you would see a decrease in service and delivery for those routes those drivers were pulled from to serve.”
The threat of the storage fee, even if not implemented, appears to have prompted enough movement of containers that had been sitting for long periods, improving the fluidity of cargo and equipment. But the effect appears to be wearing off, as the exodus of overdue boxes has slowed in recent weeks.
Officials and private sector operators are trying so many tactics to restore some levels of efficiency that “it’s hard to separate out which intervention is resulting in which outcome,” Christopher Koontz, deputy director for development services at the city of Long Beach, told FreightWaves.
Last month, the city relaxed zoning rules for 90 days to allow properties already approved for container stacking to place four in a stack instead of the normal two to free up more storage space where possible.
The Port of Long Beach said it has processed more than 8.6 million twenty-foot equivalent units year-to-date, 18.3% greater than the current annual record of 8.1 million TEUs, set last year. The November volume of 745,488 TEUs represented a 4.9% decline from last year, but ocean shipping analysts say that is because cargo owners anticipated major delays throughout the transportation system and shipped many goods far earlier than normal for the holiday season. Imports dropped 5.3% to 362,394 TEUs and exports fell 6.4% to 109,821.