Peter Schneider, president of T.G.S. Logistics, joined DriverReach founder and CEO Jeremy Reymer on this week’s episode of Taking the Hire Road to unravel what’s causing the port congestion at Los Angeles and Long Beach.
Both San Pedro Bay ports have experienced gridlock the past couple of months on both the land and ocean side of operations. Congestion has been dipping but remains elevated. In late November, 61 ships were awaiting berths at the ports, the Marine Exchange reports.
Schneider said it’s not uncommon for ships to wait up to 30 days or more to make berths. In fact, one ship has been out in the open for 44 days and counting. But why have things gotten so bad, especially in Southern California?
Part of the mess can be attributed to the new lines that have been added to the ports the past several months on top of the already congested weekly traffic. Schneider said that six new steamship lines now service Los Angeles. He points to high import rates as the explanation for why the ports are seeing new ships — a big reason being that the Southeast Asia-U.S. West Coast trade route is the second-largest trade lane in the world, behind only the Asia-Europe lane.
“Because these new services came in with no contracts, they are basically at the mercy of the terminal that will see them,” Schneider said. “So that’s why they’re just sitting out there for weeks and weeks without any berth space.”
How to alleviate the bottlenecks in Los Angeles has been the million-dollar, perhaps billion-dollar, question. Many have called for the ports to simply operate around the clock. While this sounds like a productive idea, Schneider said it could work, just not now. He reasoned that there’s currently not enough union labor let alone cranes to offload the cargo in a timely fashion.
However, the main reason for yard congestion continues to be the vast numbers of empty containers at the ports and all over Southern California. Schneider said there are around 8,000 containers on chassis in trucking yards throughout the region, which he said translates to 15%-18% of the Los Angeles-area chassis pool not being used.
“The biggest bottleneck right now is that there’s too many empties on the dock,” Schneider said. “Some of the terminals have between 60% and 80% empty containers on dock, which doesn’t give them enough space to bring in more import cargo.”
Rather than work longer hours, Schneider argues that the best place to start would be to evacuate the empty containers from the terminals as well as the chassis yards across Southern California.
“I don’t think it’s going to get better anytime soon until something’s done to mitigate the bottleneck, which I’m going to tout it again: Relieve the empties from the terminals,” Schneider reiterated. “Evacuate those empties and then you’ll see an automatic-like opening of the flood gates for service.”
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