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Recent months have seen a massive flow of goods congesting West Coast ports, namely the Los Angeles and Long Beach California ports. This bottlenecking is quickly butterflying outwards towards a nationwide logistical impact. These congestions and related operational challenges are expected to last through November, though likely for much longer—possibly even into 2021.
A surge of ocean volume along with equipment shortages and operational bottlenecks could deepen shipment delays and lead times, potentially worsening the concerns we’ve already seen with on-land trucking for the holiday season.
There has been a surge of Asian imports into the Pacific Southwest (PSW) terminals. Year over year, the LA port’s weekly import volume has shown steep rises. There is a record volume of freight being processed at these terminals, and they’re not able to keep up with this incoming increase. We’re particularly seeing a lot of personal care shipments coming through from Asia to West Coast ports, especially following the slowdowns in Q2 and Q3 due to COVID-19. It’s not just an increase in volume from Asia, though.
We know that supply chains are highly interconnected, so there are a lot of variables that are causing these congestions. Some of these congestion challenges are also due to:
This isn’t just an issue for the PSW ports themselves. Any time there is an increase in volume, it strains the supply chain on the whole.
First, the slowdown is not only congesting West Coast ports, it is also causing massive upstream disruption and significant bottlenecks.
Second, this increased amount of volume then has to be transported and stored. If every step along the supply chain isn’t optimized for a sudden and drastic surge in freight volume, we’re going to continue to see massive strain for months to come until shifts are made to handle this volume efficiently.
These ports, and their subsequent supply chains, are thus facing serious operational challenges. So, what are they doing to better handle these logistical obstacles? The west coast ports are strongly encouraging dual transactions. This is when a trucker brings in a container (usually an empty one) and picks up a full container in the same trip. This creates a more efficient process while also reducing the use of equipment, which is especially important considering the chassis shortages as of late. Not conducting dual transactions means double the drivers and chassis are required to move the same amount of equipment, further contributing to port congestion.
Unfortunately, a lot of truckers are struggling with dual transactions because of a lack of receiving notifications by ocean carriers. Ocean carriers aren’t letting truckers know of empty receiving locations until a day before the transaction, and the pickup and drop-off locations might be at different terminals. This makes it challenging for truckers to plan dual transactions and routes in advance because they don’t know where their container is going to be.
In order for dual transactions to be successful, ocean carriers are going to need to provide advanced information on receiving location so truckers can guarantee appointments and optimize routes.
A lot of independent retailers are also considering moving more towards the use of multimodal brokerages, rather than doing it themselves. Multimodal brokerages, like Redwood Logistics, ensure that goods are transported efficiently across an optimized supply chain while utilizing multiple modes (like ocean and trucking).
Click here to learn more about the benefits of working with a multimodal brokerage to get your goods away from the congestion quickly and effectively.
Ultimately, it all comes down to a need for increased transparency throughout shipment modes and supply chain partners. We’ve seen a breakdown in communication, and the nationwide and global supply chains are feeling the effects. Some terminals, like the PSW ones, are working to promote efficiency by creating a better appointment and communication system for truck appointments, ocean carrier schedules, shipping delays, route optimization, etc. Blockchain tech is one of the most advanced and successful resources that streamlines communication and visibility between all partners, allowing for more optimized freight movement and planning.
Although equipment shortages, port congestions, high volume, and shipping delays don’t seem to be going anywhere any time soon, there’s hope that these challenges will force supply chain partners to open up the lines of communication towards a more streamlined and efficient shipping process from A to Z.