With the logjam at LA/Long Beach, the threat of empty shelves on Black Friday and 60 Minutes doing a piece on the industry, I’m offering myself up to answer any and all questions about the container shipping industry.
I work at a modestly sized East Coast terminal, so my experience is not directly with what is happening out in LA, but I get to see what is happening here, and it is unlike anything anyone in the industry has seen in their careers.
Awesome! Thanks for starting this! What’s different about now compared to a couple years ago? When did the craziness begin?
It really started to hit us late last year. The first change is that dwell times are way up. When boxes used to sit for 2-4 days on average before leaving the terminal, it started to crest 5-6 days then 7-8 days and now it’s 10+ days. This helps our bottom line because storage charges (called demurrage) which used to be a small revenue stream are now much bigger.
The second change is that volumes are up. We had one terribly underutilized facility (~20% capacity) that is now scrambling to flatten nearby parcels of land and demolish buildings to free up space for all the new business that wants to call there. In 2020 we were negotiating for non-container business to use our empty space, and now we’re bursting at the seams.
Why are dwell times up? (May require speculation, sorry judge)
My guess is lack of truck drivers.
Speculation a-plenty these days. Our guys say there is no space at the warehouses. I believe the quote was “the warehouses are full, the warehouse parking lots are full, the empty lots near the warehouses are full” That could be due to not enough truckers to bring warehoused goods to stores, not enough personnel to unload/load those trucks, or just more volume than our system was designed to handle, who knows for sure?
And they keep ordering. Businesses who have hundreds of containers of goods sitting dead on anchored ships and stuck in terminals are ordering more stuff. Panic ordering.
An interesting thing I learned just yesterday, the lead time to buy a new forklift, a modestly sized one we would use to move little 1 person mobile offices around, the type you’d use in a warehouse… 18 months.
I was just listening to a Planet Money on this. They compared LA/Long Beach to the ports of VA and a big difference is that in LA the shipping companies own and control all the trailers that will move the containers from the port, and in VA the ports own them which makes them fungible from one ship to the next. Which model does your port work on?
A friend of mine works at a railroad intermodal yard in suburban Chicago, where the containers are taken off of railroad cars, mated to trailer chassis, and then sent off via truck to their next destinations.
She tells me that one of the issues for them right now is not having enough of the trailer chassis, and that’s causing a backlog for the railroads, as they are running out of space for the containers at the intermodal yards – it’s gotten bad enough that a couple of the Chicago-area intermodal centers had put temporary embargoes on new trains bringing in additional containers in recent weeks, because they literally had no place to put more containers.
Most of our truckers lease them from a third party. We don’t control or manage the chassis pool, as long as the chassis is roadworthy we are not involved.
Does your port ship out by railroad? Everyone seems to be talking about container ships to trucks, but I haven’t seen much discussion about getting the containers out of the port by railroad.
But if the real bottleneck is at the warehouses, that’s a different problem.
Does your port have any priority system - such as medicine before perishables, perishables before clothes, and so on?
No priority system, though if someone shows up with an empty chassis and says “Please give me container 8675309, it has insulin for orphans” they get that container. Which container goes out the gate is driven by the customer, not the terminal.
Trains are a little different, about 15-30% of our volume goes in and out by train. We have more say in which containers get loaded, but are expected to move long waiting boxes, rather than letting them languish because other boxes are easier to get loaded. Train volume relies quite a bit on rail car availability, if the railroads don’t send us cars, containers can’t move. As @kenobi_65 mentioned, the RRs are in control of what we get and what we are allowed to move.
I know it’s not your port, but in Los Angeles, there are stories about the truck drivers waiting hours just to get out of the port with containers. What’s that all about? It seems like it should be easy to receive the container and then drive to whatever warehouse (granted they are stacked now as well). Is there some bottleneck that prevents a loaded truck from leaving the port, or returning to get another? Perhaps inspections/security?
Dude.
Where’s my shoes?
Yes, wait times. One of our locations has a problem with wait times. Let’s take a stack of import containers, it’s 5 containers wide, 3 high, and X long. You want a container and drive up to the location you were given. The machine approaches the stack, and depending on where your box is located within the stack, may need to move 0, 1 or 2 boxes to free up the right container, which they will then deliver, then put the moved boxes back.
Today, that stack is 5 high, many more moves are needed, on average, to deliver every box. It takes longer for each move, and we need to deliver a record number of containers, as overall volumes are at a record high. In an ideal world, we would feed in truckers to match our ability to service them, so wait times are short, but that only means the trucks would be idle somewhere outside the terminal. They tend to flood the terminal early and have to wait until it’s their turn to get serviced.
It would also be ideal to deliver the ‘first box’ in the stack, just grab the easiest one to deliver… deliver it… then go to the next truck. But that means trucks are getting virtually random containers, with no idea where they need to deliver, or who the box is for.
@Bosda_Di_Chi_of_Tricor I don’t know where your shoes are, but you better hope they’re not coming through Vancouver, mudslides just knocked out their rail connections.
Yeah that is what I thought was happening, but based on what you mentioned earlier the trucks are expecting a specific box with a specific destination (get box 8675309 and deliver to Jenny). I can see how that would slow things down. A lot. Why isn’t a pool of drivers used, where any random driver would receive the next box in the stack, and then given the destination for the box electronically? I assume each box is known by number or bar code or QR or whatnot - could the driver scan that info to determine where to deliver?
You’d have to get all of the brokers, distributors, and importing retailers to set a standard rate for delivery. Many of these entities use in-house transport. Some containers go straight from the yard to recipients hundreds of miles away. The drivers also have to have documentation and clearances for the specific container they are sent to pick up. The container on top may not be cleared by customs before the ones on the bottom.
Ahh. Makes sense now.
Thanks for starting this thread. Very interesting.
We take so many things for granted, until we don’t have or can’t get them.
What kind of software lets you keep track of which container is where in the yard and where in a stack?