Cause and Effects of Southern California’s Congested Ports

LOS ANGELES – As of Nov. 2021, the backlogged cargo ships remain at an all-time high in Southern California as the supply chain crisis continues to overwhelm two of America’s busiest port complexes, Long Beach and Los Angeles. The two ports take in 40 percent of the nation’s imported goods. As of Oct. 19, more than 100 ships stay stuck waiting to unload thousands of containers outside the Port of Los Angeles and Long Beach, the backlog has left ships idling in the waters outside the ports for weeks, and the jam is expected to last into next year. 

 

“Major port gateways around the world have been experiencing unprecedented levels of congestion,” said Director of Media Relations for the Port of Los Angeles, Phillip Sanfield. “At the Port of Los Angeles, one of the most visible indicators of this congestion is the number of ships at anchor. Under normal operations, cargo ships do not have to wait at anchor; however, the backlog of ships started rising a year ago and is nearing an all-time high due to the current holiday surge.”

 

The COVID-19 pandemic shutdowns caused an increase in goods consumption that was further buoyed by stimulus funding, according to Sanfield.

 

“As a result, the Port [of Los Angeles] has seen extraordinary volumes throughout 2021 and has averaged 900,000 containers per month since summer 2020,” said Sanfield. “In spite of the best efforts of terminal operators and longshore workers, terminals remain beyond full capacity, as evidenced by tall container stacks crowding the tarmacs and the backlog of ships at anchor. The situation will likely persist until the import surge subsides and the flow of containers out of the terminals to inland locations and store shelves improves.”

 

Short-term solutions include convening with supply chain stakeholders to enhance system capacity, move towards a 24/7 operation, promote and share information, and closely monitor real-time system performance indicators through the Port Optimizer to assess the situation and develop policy and operational responses. The traditional models of forecasting freight volumes are inadequate to keep up with the past few years’ erratic trade flows (tariff or pandemic induced). A mid-to-long-term solution is to leverage real-time data spreads across the end-to-end supply chain to hold the potential for more powerful predictive capability and help prepare for future volume surges. The Port is modeling this with the Port Optimizer Horizon module, according to Sanfield.

 

The Biden administration has vowed to expand port operations to address the problems accumulating amid an overwhelming demand for imported consumer products and a shortage of trucks, drivers, and warehouse workers, according to The Guardian on Oct. 20.

 

On Oct. 13, President Joe Biden warned companies that he would “call them out” if they failed to “step up” to ease supply chain bottlenecks ahead of the holiday season. 

 

The U.S. president is facing uninviting opinion polls and a stalling legislative agenda. Biden is ambitious to preclude fresh political damage from choked ports, highways, and railways, resulting in higher prices and empty shelves. 

 

“I know you’re hearing a lot about something called supply chains and how hard it is to get a range of things from a toaster to sneakers to bicycles to bedroom furniture,” Biden said in an address at the White House on Oct. 13. “With the holidays coming up, you might be wondering if the gifts you plan to buy will arrive on time.”

 

Biden also announced that the Port of Los Angeles will follow Long Beach in expanding operations to 24/7, a system that most leading countries in the world operate by, except the U.S., until now. Prior to this change, the ports ran five days a week, closing at night and on weekends. This change will add 60 hours of operation a week. The nighttime operations are significant because it allows access to a less-trafficked time frame.

 

Biden says these changes will have the potential to be a “gamechanger.” 

 

“I say “potential” because all of these goods won’t move themselves,” said Biden. “For the positive impact to be felt all across the country of goods – Walmart, FedEx, and UPS – plan to intensify their round-the-clock operations to speed the shipment of goods across the country. Target, Home Depot, and Samsung are also increasing their work in off-peak hours.” 

On Oct. 13, Walmart, the U.S.’s largest retailer, committed to going all-in on helping move their products 24/7 from the ports to their stores nationwide. In addition, Walmart has specifically committed as much as a 50 percent increase by utilizing off-peak hours over the next several weeks. 

 

In addition, FedEx, and UPS, two of the U.S.’s biggest freight movers, have committed to significantly increase the number of goods they are moving at night. Their commitment to transition to 24/7 operations will help businesses of all sizes fill their shelves with goods faster and more reliably. 

 

“This is not called a supply chain for nothing,” said Biden. “This means the terminal operators, railways, trucking companies, shippers, and other retailers as well.” 

The COVID-19 pandemic has induced the supply chain issue as the rise in sales of durable goods spiked while a shortage of workers and transportation increased as well. 

Thousands of shipping containers sit on cargo ships offshore, waiting to be unloaded at Los Angeles and Long Beach ports.

Biden met with executives from the Ports of Los Angeles and Long Beach on Oct. 13 as well as from companies, trade unions, the National Retail Federation, The American Trucking Association, and the Pacific Maritime Association. 

The Biden administration cannot promise that there will be no holiday disruption because of the backlog, said White House press secretary Jen Psaki to reporters. The full address can be found at https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/10/13/remarks-by-president-biden-on-supply-chain-bottlenecks/.