Are you prepared for the coming Containergeddon or Portpocalypse? If not, you better audit your organization’s program for managing container drayage, as the experts predict significant port delays once the backlog of containers hit our shores. Bill Mongelluzzo recently wrote in the Journal of Commerce that a perfect storm of containers will potentially wash up on our shores in late April as spring and summer merchandise, delayed by the coronavirus pandemic, arrives along with the back-to-school retail freight. Back-to-school season is normally a time of heavy retail container volume.
Do you rely on your freight forwarders to manage domestic container drayage for your company? Does your company manage domestic port drayage internally? If so, how many carriers do you work with at each port? If you or your freight forwarder rely on one or two carriers at each port, how many drivers does each carrier have to pull containers? What are your carrier’s plans if the expected bottlenecks come to pass? These are all important questions to ask yourself and your provider or carrier.
I compiled the list below of potential port issues when the expected container volume increases occur:
- General driver shortage due to container volumes.
- Carriers are unable to secure a ramp/pier appointment for pick-up or return within the allotted free time because of heavy volume, resulting in storage fees.
- Port congestion may result in carriers pre-pulling containers off hours to meet consignee delivery requirements. Additional charges for pre-pulling and storage of a container are assessed.
- Additional costs are incurred when a carrier is not given a return appointment for an empty container on the same day it is devanned. Extra charges are accrued for stop offs and storage.
- A chassis shortage, both rentals and carrier owned.
- Drivers running out of service hours.
- Container storage yards and carrier terminals at capacity.
- Consignees that require appointments for delivery. It would be beneficial for consignees to allow flexibility of delivery based on container availability at the port.
- A shortage of hazmat and tanker endorsed drivers.
- Containers unavailable, as they are buried in the shipyards due to the volume of containers off the new, larger ships.
- Major delays picking up and delivering containers due to heavy port congestion, as the back to school season combined with the backlog from the coronavirus pandemic clogs ports.
Global Port Tracker estimated a 12.3% decrease in container volumes in February and forecasts an 18.3% decrease in March year-over-year. They forecast an increase in container volume of 9.3% in May and 9.6% in June. Gene Seroka, executive director of the Port of Los Angeles is quoted as stating “The pendulum is going to swing back. The ports of Los Angeles and Long Beach, through their joint supply chain optimization group, are working with carriers, terminal operators, BCOs, labor, truckers, and railroads to move the empties back to Asia now while import volumes are still low.”
What can you do to reduce the potential port delays and additional costs associated with port bottlenecks? Develop a plan of attack. Below are steps to take to better manage the expected container volume increases:
- Increase your carrier base in key choke points. We see two primary chokepoints as Los Angeles/Long Beach CA and Chicago IL.
- Poll your primary carriers or freight forwarders within the next two weeks on their strategy to handle the predicted volume increases.
- Secure fleet size data to insure your overall driver pool is large enough to handle increased volumes.
- Increase communication with all key carriers in your heaviest volume ports before bottlenecks occur.
- Discuss a reduction in freight payment days-to-pay to partners who treat you as a Shipper of Choice.
- Ask your freight forwarders and customs brokers to notify you as early as possible of estimated container arrivals.
We believe if the above steps are taken, it will result in an improvement in your container drayage management program.
Because of our client’s concerns of potential port bottlenecks throughout the United States due to the coronavirus pandemic and back-to-school season, Kinetic Supply-Chain Services audited our policies and container drayage management program. Based on the results of the audit, we believe our program is well-positioned to deal with expected port congestion when and if it occurs in the second quarter of 2020. That is not to state that our program can overcome all obstacles at the ports, but our team is prepared to take the necessary steps required to move volumes as expeditiously as possible.
Please feel free to reach out to me with any questions or help with the predicted influx of container volumes at [email protected] or (866) 572 7552.
Read the March issue of TransDigest: VOLUME XXV, ISSUE NO. 265, MARCH 2020