Unless you just started your first logistics job today, you’ve heard about the chaotic situation at the ports of LA/LB.  It’s a lot more likely that you have not only heard about it, but that you have felt its impact to your supply chain, budget, and sanity.

After enduring weeks of slow moving freight through West Coast ports, Trans-Pacific carriers have reinstated the initially rebuffed port congestion surcharge (PCS). The PCS will apply to all cargo that is in-gated at origin on or after November 26, 2014.

For the the latest on port congestion surcharge, please read Carriers Reinstate West Coast Port Congestion Surcharge Amidst Delayed ILWU/PMA Labor Talks.

What are the factors contributing to West Coast port delays?  This is where it gets complicated.  Between carrier, operational, and terminal issues, you have a plethora to choose from, depending on what position you’re defending.  In reality, it’s actually a combination of all three.

How?  Here’s the breakdown:

Carrier Issues
  • Larger vessels arriving with more cargo to load/unload at one time
  • Volume increase of about 5%
  • Alliances delivering freight on terminals throughout the port and confusion on where to pick up and deliver containers
  • Despite the alliances reducing the number of ships, vessels tend to all arrive within a short time span, as opposed to spread throughout the week
Operational Issues
  • A chassis shortage still exists
  • The chassis rental system requires additional time and moves per delivery, which further reduces the daily dray capacity
  • New Clean Air program requirements have reduced the number of available trucks
  • Driver compensation has been reduced because of congestion and this makes hiring additional drivers difficult
  • Lines, lines everywhere.  Lines at port, at the rail, and at the chassis pickup locations
Terminal Issues
  • Gate hours remain restricted
  • Union is not providing enough crews to effectively handle the larger vessels
  • Worker productivity has decreased significantly in terms of containers handled per hour
  • Automation of port tasks are being fought by the union as it threatens worker positions
  • Union is conducting additional safety checks on trucks and chassis arriving inside the port which further slows the process

Four significant actions must occur to restore the West Coast port efficiency:

  1. Labor issue must be resolved
  2. “Gray Pool” of chassis must be established
  3. Port must increase capacity dockside to increase the overall unloading/loading volume
  4. Automation must be instituted at all chokepoints to move trucks through gates at a faster pace

Hopefully you enjoyed my analysis.  I’d love hear what you think. Leave a comment below!

Love this blog?  Click here to subscribe with only your email address.