SAN ANTONIO, TEXAS (NITL ANNUAL MEETING) -- A burning issue for shippers is the congestion on West Coast ports, which means what’s happening at Los Angeles/Long Beach?
The port of Los Angeles claims progress on throughput, but improvements are isolated. Added labor has been beneficial from the standpoint of getting ships unloaded, but the next bottleneck is at the gates. Port officials suggest that looking at the number of labor teams working the cargo is a good measure of how the effectiveness of port operations has improved. That’s encouraging when you look at ships at anchor outside the harbor because it addresses the need to process the ships that are docked. But without increased gate hours, the freight doesn’t get off the port property.
The Port of Los Angeles acknowledges the problem and is dealing with it sequentially, but a related issue that comes into play is the fact that warehouses are not open to receive goods even if they clear the port.
Despite the best efforts of the port, one shipper approached the port’s booth on the Transcomp show floor and asked when he could expect to see his freight. His breakbulk cargo was sitting on a ship in that was anchored in the harbor. On further discussion, it was clear the port was Long Beach and, though the Los Angeles official attempted to diffuse the argument by pointing this out, he admitted that it wasn’t just Long Beach’s problem.
Asked how he was dealing with the problem, the importer said he was diverting shipments to Stockton and building terminal capacity there.
How serious is the problem? Pacer Stacktrain had planned to debut a new container with a composite floor at the show but the container that was bound for the show was hung up on a ship at anchor outside the port. It substituted another container for the display, but the fact remains that the company’s freight is sitting at anchor when it should be sitting on the show floor.
It’s difficult to separate the problems at Long Beach and Los Angeles because of their proximity. Also, the proposed solutions often take both ports into account. Shifting containers between ports to build trains by destinations is one example. How well is that facilitated if some of the cargo that would build that intermodal train is at anchor outside one of the two ports?
Alternatives abound, but the time to execution is an issue. The Port of Corpus Christi’s La Quinta project is at the funding and politics stage and, without fast approval, they could miss a big part of the opportunity to lure eastbound freight from the West Coast to Corpus Christi via the Panama Canal.
Corpus Christi faces stiff competition from Houston, but that could be a shifting of the problem from L.A.-Long Beach to Houston rather than a solution because Houston is constrained on landside connections.
In addition to claiming a smoother transition from water to land transportation, Corpus Christi is developing a ferry operation between the Texas port and the Mexican port of Vera Cruz. Passenger traffic is a significant part of the justification for the ferry, but cargo is also part of the plan. One question that is raised by combining passenger and cargo traffic in this manner is the impact of increased passenger screening under US-VISIT.
Still, Corpus Christi’s plan has plenty of space for deconsolidation/cross dock facilities that could allow importers to receive goods for various markets and breakbulk on the port facilities without the need to transport the goods even a few miles inland. This could make Corpus Christi a regional solution with a larger reach than the immediate market. Add the fact that the whole port facility as proposed would be a foreign trade zone and the value to importers is increased.
Supporting Corpus Christi’s strategy are recent releases from NYK lines indicating the ocean carrier has ordered eight new container ships with a capacity of 4,900 twenty-foot equivalent units (TEUs). These ships would be capable of transiting the Panama Canal, thus avoiding West Coast ports in favor of U.S. ports on the Gulf of Mexico or East Coast. This is in addition to eight 8,100 TEU ships, all planned for delivery around 2007.
The Port of Corpus Christi argues the Asia-Gulf Coast lane may add sailing time, but the quicker transit through the port and into domestic distribution can provide a net advantage to importers.
The big question that remains to be answered is, can these and other changes be completed in time to provide viable alternatives for U.S. importers? Or, will volumes have shifted or dissipated before the capabilities come online?