Circumnavigating the choke points

Shippers and ocean carriers are using a combination of hard work and creativity to avoid congestion at West Coast ports.

By James A. Cooke, Executive Editor -- Logistics Management, 10/1/2005

Mark Kusuplos is doing his best to avoid the ports of Los Angeles and Long Beach. As manager of global logistics for Guardian Industries Corp., one of the world's largest manufacturers of flat glass and a major U.S. exporter, he ships 3,000 to 4,000 containers a year to Asia, Europe, and Africa, mostly through Pacific Southwest ports.

Kusuplos has shifted 10 to 15 percent of that cargo away from Los Angeles and Long Beach to harbors in the Pacific Northwest, including Seattle and Vancouver. The reason, he says, is the continuing congestion at Southern California ports and connecting railroads.

Guardian Industries is hardly alone in its efforts to disperse its cargo among other ports. Many importers and exporters are reconsidering their ocean shipping patterns as they seek alternatives to West Coast ports and connecting rail services that are jammed to capacity. In fact, an exclusive survey of ocean shippers conducted by Logistics Management found that 56 percent of respondents have already diverted some of their containerized cargo to other regions.

Shippers are asking their ocean carriers for help in avoiding delays caused by overcrowded facilities. In response, some carriers are adding service to additional ports of call. At the same time, they continue to work with terminal operators to expedite cargo handling. And although conditions reportedly have improved in recent weeks, the problem of clogged container and rail terminals is not expected to go away quickly. "There is no single answer to the congestion issue—just using experience and operational ingenuity to manage it," observes Barbara Yeninas, spokesperson for Evergreen America Corp., the U.S. agent for Evergreen Marine, Hatsu Marine, and Lloyd Triestino.

Victims of Success

Imports worth $718 billion and exports valued at $229 billion passed through U.S. ports in 2004—nearly $1 trillion of cargo shipped in the equivalent of 38.5 million 20-foot containers (TEUs). Trade volumes hit those levels after years of steady growth, and that trend is expected to continue. "If future growth follows this history, container volumes will triple every 10 years, reaching 80 million TEUs by 2015," predict Penn State researchers in a recent report on port capacity. (See Figure 1, at right.)

It's no wonder, then, that U.S. ports are straining under the workload. Crowded waterfronts often mean that ships must wait to unload containers, only to face a shortage of trucks and rail cars for moving shipments inland. Port congestion has resulted in longer vessel turnaround times and shipment delays. Such holdups can disrupt supply chains, causing stock-outs on retail shelves and shutdowns of manufacturing operations. Continued...

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