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For millennia, seaways and ports have been the beating heart of global logistics. However, there are rare moments in history when there is an interruption so significant that everything grinds to a halt across the board. The events of 2020 were undoubtedly one of those instances.
The issues could have resonated for years, but ports in southern California are tackling the problem head-on with innovative measures that are already seeing congestion ease as a result. This is especially good news just ahead of the height of the 2021 holiday season when retailers rely on an influx of stock on the road, headed to their storefronts to satisfy consumer demand.
Things are moving quickly as several factors have come together to break the logjam at some of the busiest ports in the western hemisphere. Key factors include fees for idle containers, improved docking procedures, more storage for empties, and switching to 24/7 services.
Let's take a look at how California's ports went from being backed up to breaking their previous record in containers moved.
This one is a bit of a hot topic. The latest reports say it has been put on hold, as its mere existence has spurred most companies to take immediate action to get their goods moving again.
There is one proactive measure that is helping decongest the ports is in the fastest way possible: additional fees.
The prospect of a compounding fee of $100 per day, per container, is exactly the kind of prod that the port authorities hoped it would be. By initiating this new fee for companies who still have containers sitting at ports beyond a specific time frame, the port of Los Angeles has cleared a quarter of the idle boxes in record time. The response to the proposed fee has been so significant that there is no rush to apply penalties that will ultimately be passed down to the consumers.
Indeed the whole point was to encourage importers to ensure timely removal of containers from port facilities and not simply to turn a higher profit. To the credit of port executives, the idea worked phenomenally, pushing recovery speed into high-gear. However, making room in the dockyards was only one factor in the complex equation of this bottleneck.
Until the backlog is wiped out there is a steady stream of fully loaded ships that are finding wait times of nearly two weeks at anchor before slipping into a harbor spot.
One of the measures being implemented to relieve those wait times, rather counter-intuitively, is to make certain vessels wait offshore.
According to an announcement made on the 11th of November, this will not affect the ships that were already in line. Moving forward, however, ships will be instructed to anchor further from shore and given an arrival slot based on the date of their last port call. Whereas in the past a ship catching a favorable wind and getting to the destination quicker was seen as a good thing, to rebalance the flow of goods in and out of California's busiest ports might have to go slower to be quicker.
There are also the added benefits of safety and environmental concerns that are combated by this new queue system. Having numerous ships floating at anchor within a small area is inviting disaster if left unchecked, so spreading the holding locations further offshore will keep vessels separated, reducing the likelihood of an accident.
Environmentally speaking, idling ships near the coast impact the local ecology more the longer they sit. So not crowding the ports will eliminate the extreme strain facing California's precious coastline.
Another component of the changes that are aiding the decongestion is the sourcing of off-dock storage facilities for empty containers just to open up space. While this is undeniably expediting cargo pass-through, it's a temporary measure, as the new yards are at risk of hitting capacity themselves.
However, with the aforementioned increase in traffic off the docks, there is a good chance that the natural rhythm of global commerce will catch up and get all those unused boxes back into the rotation before further storage is required. But this is reliant upon being able to get goods on the road and headed into company warehouses or on storefront shelves in a timely fashion.
International shipping never sleeps, but until recently the ports of Los Angeles and Long Beach did every night, an issue that has been dealt with by the commencement of 24 hours a day, 7 days a week service. Although only a handful of companies have taken advantage of the extended operating hours as of yet, it has quickly proven itself to be superior to the old ways.
As a result, there is an entirely new shift to be staffed which will undoubtedly open the door for those just starting their career in logistics, as it will create a number of new jobs to be filled. Now to find the truck drivers needed to haul all those goods to their final destinations.