As you may already know, the congestion in the west coast is a logistical nightmare, and it is proving not only a problem to the LA and Long Beach ports, but also retailers across the United States. To provide a better picture of the increased growth in the overall retailer economy, the Ports of LA and Long Beach have handled 17% more imported containers until now compared to 2018, which was previously the highest recorded in exports and imports.
Moreover, many ports nearby are either not equipped for such large containers, or simply too small to accommodate this influx. Going this route wouldn’t be ideal for the longer haul, which many speculate will carry into next year. Even though it would bring them opportunities that they wouldn’t otherwise have. Even with the recent 24/7 operating hours in west coast ports, the problem now relies on the trucking, freight railroads, warehouses and shipping hubs. In the midst of it all, long haul truck drivers are in short supply.
While more truck drivers are quitting for better opportunities, the trucking industry needs 80,000 more drivers. This is a high order since the nature of the job requires people who can drive long hours, and can handle extended periods away from home. But, that might not be the only reason why there are shortages for truck drivers. Bob Costello, Chief Economist for the American Trucking Association, estimates that they will have to recruit 1 million new drivers due to retiring drivers within 9 years. In addition, President Biden’s COVID-19 vaccine mandate is possibly pushing further discouragement for future drivers. Rallying drivers to protest. Lastly, President Biden’s labor secretary, Marty Walsh “attributes shortages [in the job market] to the virus, its unprecedented times, and workers rethinking what they want.” With ports lifting fees for nighttime, and weekends, the lack of truck drivers is still looming.
Due to the congestion, many asian retailers are opting for intra-Asia trade. This shift might be a better move for maximizing revenue, says General Manager Tommy Hsieh of Wan Hai Lines. This way, cargo is shipped to the east coast rather than the west coast ports which will give both the shipper and retailers more flexibility.
Especially, with the west coast Ports now charging Congestion Dwell Fees that started November 1, 2021. With $100/day per container for cargoes that remain on a terminal exceeding eight days. Furthermore, $300/container by day 10, and finally, $1,500 by day 13. With these fees and limited land to store the cargo containers, companies have to find another way to deal with this logistical crisis.
Even with this alternative route, the cost of transportation has increased to new heights through recent years. However, at PNPLINE we will use everything we have to get the lowest prices for all your transportation needs. From Console (sharing container space) to utilizing our expert freight forwarding team to support and give real time solutions to our clients. By having and providing many different options, PNPLINE will give users and customers the best course of action to deliver the freight shipments.
Additionally, west coast congestion will only get worse over time, with 72 ships still waiting to be berthed to port. And railroad transportation being run to capacity. Dominic Pino wrote for the National Review, ”The LAX/LGB rail operations from all terminals and the off dock ramps continues to deteriorate as demand exceeds capacity, therefore inland moves by rail can suffer considerable delays.” Furthermore, the berthing stats from DHL looks to only get worse as time passes during this holiday season. Estimating an average 13-22 days delay from November 4, 2021, trending even longer delays every week.
This is affecting everyone, even big ecommerce conglomerates such as Amazon has been under pressure with its brand and investor trust waning under this logistical nightmare. Among other things, Amazon has been investing heavily in fulfillment, technologies, and marketing throughout the year. As Amazon CEO Andy Jassy said to the company, “It’ll be expensive for us in the short term, but it’s the right prioritization for our customers and partners,” Which is definitely true looking back at where Amazon started and is now. But, even the giant has to keep up with the current challenges. Investing heavily on workers for their warehouses and deliveries. It’s likely that with corporate giants leading the way for a competitive advantage, the congestion will continue with no end in sight.
During December 1, 2021 to January 31, 2022 the Traffic Mitigation Fee “PierPass fees” will increase. The PierPass was created in 2005 to reduce traffic, as well as, air pollution. This will also include trucks that use the terminal between 7am and 5:59pm. For PNPLINE the increased charges are as follows: $98.23 (20ft container) & $176.46 (40ft container) as PNPLINE’s Fixed Rates. At this time, moving containers during off-peak hours will result in normal TMFs “PierPass Fees” that will be $54.21 & $88.42 respectively during Night & Weekends.