1. Logistics

FMC to resolve the United States’ supply chain dilemma

Millions of dollars in holiday gifts and other products bought by Americans are stranded aboard massive container ships, waiting for a spot to unload at the ports of Los Angeles and Long Beach. Because of the volume of goods arriving from Asia, some of it has been rerouted to other ports in the nation. It’s caused a massive traffic bottleneck that no one appears to be able to disentangle, and it exposed serious vulnerabilities in America’s supply chain. What began as a shop-from-home spree during the epidemic has had long-term consequences. Retailers worry that unless the backlog is addressed, the holidays will be defined by bare shelves, higher pricing, and job losses.

The Federal Maritime Commission is beginning a number of new programs concentrating on container mobility as part of its efforts to enhance commerce flow and lessen the obstacles that shippers face across the United States. The efforts come as the port of Los Angeles said that it is practically bursting at the seams with empty shipping containers, blaming stacks of containers waiting to depart the port as the newest roadblock to decreasing terminal backlogs. Much of the FMC’s November monthly meeting concentrated on supply chain challenges and their influence on trade, as one might anticipate.

The FMC was informed on U.S. macroeconomic indicators and their influence on shipping, the health of the U.S.-International marine trades, vessel capacity, and pricing during the hour-long open session for the monthly meeting. The group went into a closed session to discuss revenue and price for ocean carriers, capacity, cancelled sailings, and port calls.
Commissioner Rebecca F. Dye will lead six supply chain innovation teams to explore and execute changes to the process and timeliness of container return and delivery to marine ports, as part of the FMC’s new efforts.

“Achieving double moves for truckers would improve trucker productivity and remove a constant source of conflict over container return as well as resolve problems with appointment systems and chassis shortages,” said Commissioner Dye. “Earliest return date confusion is a terrible problem for U.S. exporters. This reform would also remove the constant problem to U.S. agricultural exporters of demurrage and detention charges that are not in compliance with our interpretative rule.”

One of the teams’ aims is to concentrate on “double move,” in which trucks return a container and pick up a fresh one on the same journey into the port. To address exporter complaints about the instability of the deadline for transporting goods to a port, the teams will also strive to introduce assurance and predictability to the earliest return date procedure. They will concentrate on improving conditions in the ports of Los Angeles and Long Beach, as well as New York and New Jersey. Executives from each ocean carrier in an alliance, as well as the marine terminal operators that serve them, will be part of the teams. The teams’ first meetings will take place on December 1.

The FMC’s attention on containers comes as ports shift, noting the accumulation of empty containers as one of the most significant barriers to landing imports. During his monthly presentation on port operations, Gene Seroka, executive director of the port of Los Angeles, stated that the port is overwhelmed with empties and that they need to move them out of the yards to make more room.

“We’ve got about 65,000 empty container units sitting on the docks right now,” said Seroka. He told the media that it has climbed by 18% in recent weeks, adding that while shipping lines want to transfer the empties, more work is needed to get them out of the port’s yards.

On an ordinary week, the port repositions 90,000 empties, but according to Seroka, that figure is already up 30%, and they are arriving faster than they are departing.

Los Angeles has reported seeing what Seroka refers to as “sweepers” come in from the big cargo lines to assist empty the ports.

Six of these sweeper ships moved 17,500 TEU, with more ships on their way to move an additional 2,500 TEU on top of the ones loaded aboard boats before they left on their scheduled visits. While he stated that the port was making progress, with the number of long-well boxes decreasing, he also stated that they needed to increase their efforts to keep empty moving.

The FMC and port of Los Angeles took action after the Marine Exchange of Southern California reported that trends had shifted in the wrong direction at the start of this week. They established four more records on November 16, demonstrating that the pile-up is still growing. The San Pedro Bay complex had 179 boats either in port or waiting for terminal space, an increase of nine from the previous high.

The anchorages are still full, with 52 ships and another record-breaking 62 ships awaiting room. There are 35 containerships anchored and a record 51 waiting further out at sea. Twenty-six of those containerships are classified as mega, which means they each have a capacity of more than 10,000 TEU. Those ships alone are responsible for roughly 320,000 TEU. Another 34 ships, including 15 container vessels, are expected to arrive at the ports by the end of the week.

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