Current State of the Ports of LA and Long Beach

Just ahead of Thanksgiving and Black Friday, Maersk representatives shared the company’s perspective on the current state of the neighboring ports in Los Angeles and Long Beach with the Harbor Trucking Association’s Productivity Committee.

Import volume is expected to continue through November. A slight decrease is expected in December, not due to demand but because of capacity and labor challenges. Q1 2021 is expected to continue with strong demand at least until Chinese New Year in February. Volume is expected to pick up after the holiday.

Shortages of Containers, Space, and Labor

Maersk pointed out issues with transporting goods from both ends of the Pacific. In Asia, there is a shortage in vessels and containers, with no containers available for lease until July. 

In LA and Long Beach, there is a shortage of skilled union labor, shortage of dock space at the terminals, and shortage of chassis. Vessels generally sit in the lineup for 2-4 days before they can be worked, and truck turns continue to rise. Depending on the terminal, 20-50% of transactions take over two hours. 

For Maersk, this may mean blank sailings in December, as the company does not want vessels sitting in the lineup for several days. Its primary focus is getting empty containers back to origin, collaborating with terminals to make it easier to return the empties, and turning vessels faster once they arrive into LA and Long Beach.

These challenges echo the larger problem with overcrowding at the ports. This past weekend, Bloomberg reported that nearly a dozen cargo vessels were anchored just south of Los Angeles as the ports were at maximum capacity for containers. Federal regulators are investigating the source of this and similar roadblocks in ports. Like Maersk’s report, the Bloomberg article cites the shortage in empty containers as a cause of delay.

On our end, we’re working with terminals to ensure we’re able to get appointments and make goods available more rapidly. However, shippers and carriers moving goods through the Ports of LA and Long Beach should plan for delays. For shippers, this may mean keeping customers informed of possible delays. For drivers, this may mean bracing for long waits at the port.

Four Takeaways from Home Delivery World

Last month, Home Delivery World took place on the internet, connecting hundreds of supply chain leaders for a series of panels, discussions, and even a few (virtual) happy hours, if you knew where to look.

Home Delivery World Logo

While the discussion covered everything from white glove delivery service to track & trace technology, our team in attendance came away with four critical themes that will shape the supply chain in 2021 and beyond.

  1. Home delivery is here to stay– It’s trite that a room full of professionals who make their living overseeing home deliveries agree that home delivery will be critical for the future of the supply chain. However, it’s also crucial to really delve into the shift we’ve seen, especially as a result of COVID-19. While companies like DoorDash and Instacart were pushing the envelope of what types of goods are supposed to be deliverable, the global pandemic has turbocharged the shift to home delivery, with everything from stand up desks to toilet paper expected as available, almost immediately.
  2. Logistics just became part of the UX– In the new “deliver everything” view, it’s critical for brands to think about the actual delivery as part of the customer experience. There was a great mention of how much negative feedback on Amazon product pages has nothing to do with the product, and everything to do with the delivery. “The driver left it on my doorstep without ringing the bell, and my package was stolen.” “The box my glass coffee pot came in looks like someone played soccer with it; big surprise, the coffee pot is shattered.” “I love the product, but the ETA changed a half dozen times, and I had to give this to my mom a week after her birthday”… the list goes on.
  3. It isn’t just pricing that’s complicating this peak season– Every peak season is different, but this year’s iteration is bringing a wide range of atypical issues. On the one hand, many truckers are canceling agreements because they can find more money for a similar load elsewhere. Others see that they might have extra room in a trailer and pick up an extra bit of freight to really fill the truck (and improve their margins). This would be fine, except when shippers pay for FTL, they don’t expect to see their goods potentially damaged by someone else’s goods. These issues have been particularly prevalent for some of the newer companies that have removed the storefront experience from their operations, such as exercise equipment companies and mattress sellers. This capacity crunch is being exacerbated in port cities by tremendous (often record-level) imports.
  4. APIs and stitching are the future, and the future is now– “In the last seven months, we’ve moved the supply chain ahead 10 years.” The idea of digital transformation has been discussed for years, but the necessity of touchless delivery, coupled with the frantic pace of change required to get goods where they were needed, has dramatically increased digitization efforts. In the coming months and years, an onslaught of connected systems and IoT infrastructure will increase the number of points generating data, meaning more systems will need to be stitched together to understand and interpret the meaning of the flood of new information.

The organization behind Home Delivery World did a tremendous job adapting a traditionally in-person show into a digital setting (their own digital transformation?) , and kudos are deserved for a wonderful set of panelists and fireside chats.

If you were at the show, what were your impressions? If not, what other shows should we hope to meet you at?