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When Will West Coast Ports Really be Up and Running?

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West Coast ports may have returned to relative normalcy since the dockworkers and port owners settled on a five-year labor contract, but the months worth of backlog will hardly be cleared overnight. Port estimates say conditions won’t even start to return to standard before the next four to eight weeks.

At the Los Angeles port on Wednesday, a total of 87 ships were in port during the day’s first shift, 38 were being loaded or unloaded and 49 are sitting idle, some of which have been waiting to be worked on since as far back as Jan. 17.

Comparatively, at the same time last year, prior to the contract negotiations, 23 ships were in berth at the nation’s largest port and 18 were being loaded or unloaded, meaning only five were idle. And none of those five were waiting more than a week to be worked on, according to an LA port spokesperson, who added that, “The number of idle ships should typically be pretty low ranging from between three to 10 ships that are not working.”

Tony McGee, CEO of HNM Global Logistics, who also sits on the Department of Commerce’s Advisory Committee on Supply Chain Competitiveness, said his company had product that was supposed to be in at the end of January that is now slated for March.

“Coming off Chinese New Year, with that two weeks of nothing on the water, that should give us a little time to get caught up,” McGee said, but it won’t be enough to entirely banish the backlog.

Los Angeles and Long Beach port stakeholders are, however, pledging increased levels of cooperation and new supply chain logistics initiatives at the ports that process 43 percent of the nation’s imports.

“Now that our ports are moving again we plan to redouble our efforts to invest in port infrastructure, increase trade and ensure that we remain the best place to do business on the West Coast,” Long Beach mayor Robert Garcia said in a statement. “We are still the largest and most efficient port complex in the country.”

The harbor commissions of both ports have requested approval of a cooperative working agreement to tackle supply chain issues like greater collaboration in the development of chassis supply and storage solutions, greater vessel call coordination, reduced truck turn-times, and solutions to help address congestion related to marine terminal operations, a Port of Long Beach statement noted.

“With an agreement in place, the ports of Long Beach and Los Angeles can focus on velocity, efficiency and environmental sustainability,” Port of Long Beach chief executive Jon Slangerup said. “Together, we will quickly re-establish our gateway as the most efficient route between Asia and North America.”

McGee said the way forward is going to be about much more than just a settled labor contract.

“If we don’t do something with the infrastructure, if we don’t do something with the chassis shortage, if we don’t do something with the workforce, it’s really going to cripple our economy,” McGee said. “Any one of these things is holding us back from becoming efficient in terms of the supply chain.”

Beyond the labor contract talks, the sector is struggling with chassis availability, accommodating bigger ships—which are 30 percent larger and take at least twice as long to load and unload—and facing the shortage of available truck drivers.

President Obama recently proposed a six-year, $478 billion infrastructure plan that would increase funding for transit by 75 percent, and McGee said the aforementioned areas are where some of that money should be spent.

The problem with chassis, for example, is not that there aren’t enough as some make it seem, it’s that they aren’t being managed properly, according to McGee.

Carriers have been offloading ownership of chassis to third party leasing companies in an effort to cut costs, leaving chassis supply influx. At times, ships arrive and no chassis are available to work them. But the inefficiency may really be in tracking down the chassis.

Because the chassis are now managed by multiple companies, the sector needs an electronic system, something that works like Uber, McGee said, that can sync the chassis and make them available as needed.

With regard to the larger vessels, Trans-pacific ship size increased 16 percent to 6,250 twenty-foot equivalent units (TEUs) in 2014, a number triple that of 20 years ago. In 2015, growth in TEU is forecast to hit 6.4%, and in 2016, 6.6%. “The infrastructure needs to be improved to handle the bigger ships,” McGee said, as they are built to be more efficient and are keeping costs down for importers who can use less vessels to ship goods.

Truck drivers are falling fast as many aren’t keen on waiting around to deliver goods when ports are congested, labor they don’t get paid for if they can’t offload or pick up as planned. Stakeholders in the sector will have to work on ways to grow the workforce.

“There are a number of issues that are going to continue to plague us,” McGee said.

Despite the settled labor contract, HNM is still advising clients to ship goods to the East Coast or to Vancouver and have them railed back down. McGee’s advice to brands? “Make sure you have excess inventory on hand and contingency plans if you do have more delays on the West Coast.”

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