Eureka! We’ve found it!
When Frank Divona of Metropolitan Stevedore Co. said; “It’s the perfect storm”, he wasn’t describing one of the hurricanes that besieged the Southeastern States this past month. “Everywhere you turn around, some group is having a problem”, he said. He was referring, of course, to the disruptions at every point in the supply chain caused by congestion all along the chain. Jean Godwin of the AAPA summed it up nicely when she stated that, “It’s like trying to fit a 16-inch pipe into a 4-inch opening”. She said that about four years ago, by the way. She’d probably describe it as a 24-inch pipe nowadays, and she could hardly be accused of exaggerating because one of the news services just issued this discouraging report about the hopeless conditions on the West Coast:
“US West Coast Ports – Congestion: No relief is in sight from the heavy congestion at the ports of Los Angeles (LA) and Long Beach (LB). Although more than 2,000 casual workers have been hired, most ships are sitting idle through 7 or 8 shifts (3 – 4 days or more) before their allocation number comes up and labour can be assigned. As at yesterday, there were some 89 ships in port including around 45 at anchor. LA/LB ports are currently using the USCG-approved ‘contingency anchorages’ located off Huntingdon Beach, where there is room for 12 ships to be anchored. If the harbour runs out of room at these ‘contingency anchorages’ they will begin assigning ships to occupy ‘drift boxes’ located south of the Precautionary Area – where ships will be instructed to maintain their position inside the boxes. These ‘drift boxes’ have been approved by the USCG. All ships assigned to such boxes will be officially logged in as having ‘arrived’ by the Marine Exchange just as if they had anchored offshore in one of the USCG-approved anchorages. Port time at present is averaging 8 days, with some vessels showing a 10-day turnaround time.”
Vessels encounter no delays when crossing the Pacific. They arrive at their destinations right on schedule, but then they’re forced to wait for a week or more before they can be serviced. Mr. Nicola Arena, President of Mediterranean Shipping Co. in the U.S., noted that where projections were inaccurate in other areas of the supply chain, shipping lines correctly forecasted this growth and were able to introduce the appropriate amount of capacity to accommodate this growth. “Now”, he added,“it’s time for other entities to do the same.”
Because there’s no reason to doubt Mr. Arena’s statement, let’s give some thought to his reasoning. If the shipping lines could predict exactly the rate of growth; and if the shipping lines could prepare in advance the amount of capacity required to accommodate this volume of shipping; and if the shipping lines own the major terminals in the U.S.; and if the shipping lines, therefore, are in a position to make the necessary adjustments within these terminals to enable terminal operations to accommodate the increasing volumes … then why don’t the shipping lines step up to the plate and relieve the incredible pressures that are straining every link in our delicate supply chain?
Our search for the weakest link has ended.