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Thursday, Dec 7, 2023

Ports of LA and Long Beach Take New Steps to Reduce Congestion Amid Record Amounts of Cargo

Several measures recently implemented to ease congestion at the San Pedro Bay port complex, coupled with the winding down of the busy holiday season for the shipping industry, appear to be paying off.
The local ports announced last week that they will delay implementing the Container Dwell Fee directed at ocean carriers, citing significant improvement in clearing containers that have been idling on docks awaiting pickup — a 20% decrease at the Port of Long Beach and 25% at the Port of Los Angeles.

“We’re encouraged by the progress our supply chain partners have made in helping our terminals shed long-dwelling import containers,” Port of Long Beach Executive Director Mario Cordero said in a statement. “Postponing consideration of the fee provides more time while keeping the focus on the results we need.”

The measure, which was set to go into effect Nov. 15, would charge ocean carriers $100 for every container dwelling nine days or more if cargo is scheduled to be picked up by truck. For containers moving by rail, fees would kick in after a container has dwelled for six days or more. The fee would also increase $100 per container per day until the cargo leaves the terminal.

Port of Los Angeles Executive Director Gene Seroka summarized other efforts in place to battle the cargo congestion during a virtual news conference held Nov. 16. He said the port has been operating about 19 hours a day, and as the cargo levels began to surge, his team “implemented flex hours, opening the gates a little bit earlier, staggering lunches, working a little bit later in between the day- and night-side shifts.”

“While offering the 24/7 capability here at the port, it is that effort to try to get this entire orchestra of supply chain players to get on the same calendar,” Seroka said, adding that out of 125,000 companies that import their goods through Los Angeles each year, only 21 have signed up to pick up cargo during the extended hours.

Seroka also explained that the “orchestra of supply chain players” he was referring to also includes the local warehouses that traditionally operate during the daytime and whose owners and managers are contending with labor shortages that are preventing them from adding nighttime shifts.

“We’ve got to get these folks expanding their hours, making these opportunities for jobs — which are good-paying, between $19 and $25 an hour — a reality,” he said. “There are about 400,000 warehouse jobs open throughout the country right now and about 8,000 just in our small area here in Southern California.”

Seroka also brought up trucking-related issues, such as federally mandated limits on the number of hours truckers can be behind the wheel in a day and a shortage of drivers, as another hurdle to syncing everyone’s calendars and getting the cargo off the docks as quickly as possible. He said that, according to the American Truckers Associations, there’s a shortage of about 80,000 drivers right now, but there are “numerous folks with commercial driver’s licenses” who are “leaving this industry to work in other sectors or other segments of our economy.”

“We’ve got to get them back into this port drayage system and give them the service that they need,” Seroka said. “They’re paid by the turn, traditionally, so let’s get them in and out of the port swiftly, so they can deliver the goods. These are our first- and last-mile ambassadors, and we have to treat them as such.”

When asked about some 80 cargo ships still at anchor at the entrance of the San Pedro Bay, Seroka said the dockworkers are processing about 17 ships a day and that nearly two-thirds of ships waiting to be unloaded are “much smaller vessels averaging 5,000 TEUs (twenty-foot equivalent units) or less, and they represent newcomers to the trade.”

Federal support

Transportation Secretary Pete Buttigieg joined Seroka during the news conference and provided an update on cargo congestion relief efforts at the federal level.
“We recognize that while supply chains are mainly private sector and rightly so in America, there are moves that the administration can and must take to help,” Buttigieg said.

He said his team is working with the Georgia Ports Authority to provide federal funds to create pop-up container yards in Georgia and North Carolina to transfer containers by rail and truck further inland and free up dock space.

The Port of L.A. has implemented a somewhat similar effort to deal with a slew of empty containers awaiting transport to Asia, according to Seroka.

“We’re (stacking) empties at near-dock facilities, so we can bring the chassis and trucks over to the marine terminal, check for roadability and then (send them) off with their import container,” he said. “We’ve got to keep this velocity going.”

Gov. Gavin Newsom, who visited the Port of Long Beach Nov. 17, is working on identifying other properties to temporarily store excess shipping containers. The list is expected to be finalized by Dec. 15.

The ports are also getting help from sweeper ships that have picked up just under 20,000 TEUs of empties in recent weeks while another 65,000 TEUs remain, Seroka said.

Buttigieg addressed trucking industry issues as well and said the Transportation Department is working with states in “cutting red tape to make it easier to attain those (commercial driver’s licenses)” but added “that to truly address driver shortage, you got to make truck driving a more attractive and more well-paid profession. … This includes things like paying drivers for all the times they’re away from home, providing better access to facilities, and trucks that are equipped with the latest safety technology.”

Newsom meanwhile announced that Caltrans will begin issuing temporary permits allowing trucks to carry loads that are 8,000 pounds heavier than the current 80,000-pound limit on highways and freeways connecting ports and distribution centers throughout the state. He also directed the Department of Motor Vehicles to add Saturday testing hours at its Fullerton, Montebello and Winnetka locations, which will enable the agency to process more commercial driver’s licenses. 

Infrastructure bill impact

Buttigieg also touted the $1.2 trillion infrastructure bill President Joe Biden signed into law Nov. 15, which he referred to as “a once-in-a-generation set of investments, including $17 billion to improve infrastructure in our ports and our waterways.”

“We are rapidly working to unlock the potential of this deal with 45-day, 50-day and 90-day deliverables per the president’s plan, as well as the resources to improve roads and bridges that we know are such a big part of the puzzle here and billions of dollars into our programs to improve freight, rail and the handoffs between all of the different points,” Buttigieg said.

Seroka’s counting on “about a half a billion dollars” to fund projects at the port that are shovel-ready, including “rail and road connectors, densifying the on-dock rail, fortifying and expanding the use of land.”

“Activating that property (is) so vital to managing this surge of import cargo and being able to triangulate the opportunities for empty returns, chassis movement and the pickup of imports to go out the gates,” Seroka said. “We’re ready to go, and this opportunity now just gets us moving that much faster.”

The Port of Long Beach has moved 7,884,565 TEUs of cargo during the first 10 months of 2021, up 21% from the same period last year, and is on pace to move more than 9 million TEUs by the end of this year.

Dockworkers and terminal operators at the Port of Los Angeles processed 9,072,917 TEUs of cargo from January through October, a 15.4% year-over-year uptick.

“We’re estimating to finish 2021 handling about 10.8 million TEUs, far more cargo than any other port in the Western Hemisphere has ever handled, and improving on our previous best record of about 9.5 million TEUs in 2018 by about 14%,” Seroka said.

Mediha DiMartino
Mediha DiMartino
Mediha DiMartino covers retail, manufacturing and the ports. She can be emailed here.

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