At the October Annual Port of New York-New Jersey Port Industry Day, Commissioner William P. Doyle of the US Federal Maritime Commission presented the keynote address entitled “Easing Port Congestion.” In that talk, he explained that port congestion has become such a concern to ports and shippers alike that the Commission was holding forums on the topic this fall: the first was held in Baltimore, the second in Charleston SC, and the last forum in New Orleans.
Mr. Doyle mentioned that port congestion is world-wide and reaching crisis proportions. Larger ships, stronger economies, weather related problems, labor uncertainty, and overdue upgrades/expansion to port infrastructure have all combined to generate more port congestion than ever before.
A recent Port Strategy article indicated that at the ports of Los Angeles and Long Beach, in particular, congestion has become a persistent problem with vessels frequently forced to wait at anchor for a berth. Although the terminals have extended open hours and hired more labor, the ILWU has been reluctant to supply the skilled workers to transport containers at the largest port complex in the US.
Landside congestion means harbor congestion. Container ship waiting times in San Pedro Bay was the longest in two years recently – the Los Angeles and Long Beach complex is the largest container gateway in the US. At any given time in late October, reported the Journal of Commerce, there were between nine and twelve ships waiting for a berth. In a separate article the JOC stated that the complex is experiencing the worst congestion in a decade. Ships maneuvering around anchored vessels increase the danger of collisions; tidal currents and wave action make tightly packed ships in a harbor area vulnerable.
Port operations in Manila have seen vessel turn times lengthen and costs go up. Port Strategy reports that Maersk Line has temporarily limited its shipments from the US to the Philippines to “an absolute minimum” to avoid congestion surcharges. Ports in Oman, India, Hong Kong, the Netherlands and the US are charging congestion surcharges as well, according to the European Shippers' Council. According to ShipsBusiness.com, some of the most congested ports include the Gulf of Suez, Dover Strait, Singapore Straits, Taiwan Strait, Malacca Straits. Moving cargo between vessel, truck and railway has become a nightmare in ports around the world.
In the container business, shortages of truck chassis, needed to move containers, appear to be a large contributor to port congestion, contends the Longshore Shipping News. The Long Beach Post, in October, wrote that truck drivers must drop a container in one area and the chassis in another. These split-moves cause delays and confusion that contribute to the congestion at LA-Long Beach. Multiple terminals and scattered chassis create a logistical challenge when truckers and shippers need to match the correct chassis with any given container. This is a new problem for US ports due to a recent change in the ownership of the chassis. These owners have just agreed to a new operational model (the gray chassis concept), planned for roll-out in February, 2015.
The Journal of Commerce reports that many container terminals in the Los Angeles-San Diego area are reaching 90 percent utilization, a number considered to be beyond capacity and to assure more gridlock. Recently, New York-New Jersey and Virginia terminals have refused the return of empty containers due to congestion, asking truckers to return those containers to off-dock sites. Los Angeles and Long Beach are considering using vacant lots near the port for off-dock storage as well as container repair.
Larger vessels (up to 14,000 TEU) contribute to increasing cargo volumes (up 4% over 2013) and longer load-unload times. Berth accessibility, yard and gate operations are stretched to their limits. Terminal operators will need to accept this fact and to address it. Terminal automation has been slow to arrive at ports, partly due to union reluctance to give up positions to new technology.
There are ports around the world with better productivity numbers and less congestion. Ports experiencing the worst congestion may be able to learn from them. A recent study by the Journal of Commerce identified some Latin American and some European ports as good examples of best-practices that can reduce congestion.
Most agree that more communication between all players at a port – shippers, terminal operators, unions, transportation groups – is needed to solve these problems in the long term. It is not uncommon for each of these groups to point to the others as the culprit. The Federal Maritime commission has now allowed discussion between these organizations, setting aside concerns about anti-trust matters, in hopes that congestion can be addressed and an overall solution can be found.
PortVision has been involved in a number of industry initiatives that incorporate AIS-based vessel tracking into a broader system for increasing transparency and supply chain efficiency for all waterway users. You can learn more at www.portvision.com.