U.S. port’s supply chain fix challenge: selling 24/7 shifts

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LOS ANGELES, Oct 14 (Businesshala) – The Port of Los Angeles is starting the hard work of convincing terminal operators, importers, warehouse owners and trucking firms to move more cargo at night.

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“It’s not a single lever we can pull to open all the gates today,” executive director Jean Cerocca said on Thursday.

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On Wednesday, the White House called on stakeholders including retailers Walmart (WMT.N) and Home Depot (HD.N), logistics firms United Parcel Service (UPS.N) and FedEx (FDX.N) and electronics supplier Samsung (005930). collected. KS). The companies pledged to use more overnight workers to ease backups at the Los Angeles and Long Beach port complex, which is the No. 1 gateway for trade with China.

“We’re trying to squeeze every minute, every hour of efficiency out of this port,” Serocca said. Most of the work is currently done during the day, although some parts of the operation already run 24/7. The White House said adding overnight shifts could double the time available to move cargo and union leaders onboard.

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COVID-19 spurred demand for consumer goods, closing factories and ports. Shortages of workers from truck drivers to warehouse workers are driving up the cost of goods, contributing to product shortages, and raising alarm about a worsening global supply-chain crisis.

The “global supply chain” was crumbling before the pandemic, said John Porcari, port envoy for the White House Supply Chain Disruption Task Force.

He said the health crisis laid bare vulnerabilities in the brittle global supply chain made for predictable, on-time cargo flows. In many cases, it’s “your grandpa’s infrastructure we’re working with.”

tension on each

The ports of Los Angeles and Long Beach lag behind Chinese rivals in terms of port efficiency, according to rankings prepared by the World Bank and IHS Markit.

Port terminals in China typically operate 24/7, many tasks are automated and labor slowdowns are rare, said John Monroe, a US-based shipping industry consultant.

Cerocca and Porcari stressed that improvements in the US supply chain will not come at the flip of a switch. He said that every link needs to be changed to reduce the impact of unintended consequences.

The White House efforts announced Wednesday are expected to move only 3,500 additional containers per week at night — a tiny fraction of the 120,000 containers already moving each week.

Meanwhile, 62 container ships are waiting to unload some 500,000 containers at Los Angeles/Long Beach – and another 25 are due in the next three days.

Serocca said those ships are carrying parts and components for U.S. manufacturers as well as seasonal goods for retailers who are racing stock for the November 26 kickoff of the make-or-break holiday selling season.

According to Panjiva, the extended hours at Los Angeles/Long Beach could benefit Honda Motor Co. (7267.T), which is hit by automotive chip shortages, and Mattel (MAT.O), which buys holiday toys in stores. is under pressure. Supply Chain Research Unit of S&P Global Market Intelligence.

And the effort raises the question of where to put all the stuff.

According to CBRE Group (CBRE.n), a commercial real estate services firm, the Greater Los Angeles area reported a record low vacancy rate of 1% for warehouses and other industrial space during the third quarter.

“If we increase capacity at the port, we will still have to find places to temporarily store goods in warehouses,” said Douglas Kent, executive vice president of the Association for Supply Chain Management.

Reporting by Lisa Bartlin; Editing by Lisa Shumaker

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