The worsening vessel congestion at the nation's busiest seaport complex will delay normal product replenishment and the deliveries of early Spring merchandise but will not impact the flow of holiday cargoes, as much of those products are already in U.S. commerce, the head of the National Retail Federation's (NRF) supply chain and customs policies said yesterday.
The emailed comments by Jonathan Gold come as 13 ships—eight container vessels and five bulk carriers—remained anchored outside of the Ports of Los Angeles and Long Beach as of 7 a.m. local time, the last update that was available. The backlogs are the biggest at the port complex in two years. Phillip Sanfield, a spokesman for the Port of Los Angeles, said in an email yesterday that peak-season cargo should continue to flow through the complex for a few more weeks.
Gold's remarks, if validated, would underscore the importance of efforts by retailers to pull forward their orders and deliveries in the wake of various challenges confronting the ports this year. Many retailers acted earlier than normal after concluding that contract negotiations between the International Longshore and Warehouse Union (ILWU), which represents 13,000 West Coast dockworkers at 29 seaports, and the Pacific Maritime Association, representing ship management, would not quickly produce a new collective-bargaining agreement to replace the six-year pact that expired July 1. Operations at the ports have not been affected by the stalemate and, by all accounts, negotiations have been cordial. Still, many retailers decided to take no chances with their holiday shipments and brought freight in early.
The consensus is that the current backlog is largely caused by the short supply of chassis equipment, the frames on which containers rest as they are drayed by truckers from the port. Chassis imbalances have become the norm in recent years as steamship lines, which traditionally made chassis available to truckers free of charge, began exiting the business, leaving chassis provisioning largely in the hands of pooling or leasing companies that have struggled with making the equipment available when and where it's needed. At Los Angeles, the problem has been compounded by an 8-percent year-over-year increase in volume, some of which was likely caused by the pull-forward of cargo due to concerns about the labor negotiations.
The adjacent Port of Long Beach is looking at operating its own chassis pool so it can provide needed supply during peak periods during the year, according to Lee Peterson, a spokesman for the port. The ports also want the Federal Maritime Commission (FMC) to allow them to discuss solutions to these and other issues, Peterson said. The FMC would also be required to approve potential cooperative measures.