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Top 25 Container Ports In The United States

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Archives, Global Logistics, Global Trade Daily, News, Ocean Ports, U.S. Ports, United states news

Top 25 Container Ports In The United States

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Imagine a major highway with poorly timed traffic lights. Everything slows down, causing delays and frustration. Ports in the United States are like those highways, and excellent container cargo operations are like well-timed traffic lights. They keep everything moving smoothly and efficiently.

Read also: May 2024 U.S. Containerized Imports Break 2.3M TEUs

This is important beyond port terminals because they are major economic hubs, handling a massive amount of cargo coming in and out, feeding the country’s consumer goods and industrial needs. Efficient operations ensure a smooth flow of goods, which keeps businesses running and shelves stocked. Delays at ports can disrupt supply chains and lead to price hikes for consumers.

Efficient port operations are also important beyond U.S. borders as the nation competes with other countries for international trade. Ports with fast turnaround times make the U.S. a more attractive destination for shippers. This translates to more revenue and jobs in the U.S. economy.

When it comes to gauging the top U.S. ports in the container sector, we must look at total twenty-foot equivalent units (TEUs) handled. Based on the size of a standard 20-foot long shipping container, a TEU is the standard unit used to measure the capacity of vessels and terminals. One 20-foot container is equal to one TEU and large 40-foot containers are counted as two TEUs.

Do you know who uses TEUs to determine the busiest container ports in the U.S.? None other than the U.S. Department of Transportation, whose 2024 Port Performance Freight Statistics Program Annual Report to Congress includes a list of the Top 25 Container Ports ranked by TEU. That list follows with Global Trade’s own analysis of why each port made the cut.

1. PORT OF LOS ANGELES, CA 

The busiest container port in the U.S. processes a massive amount of containers, moving more than 9 million TEUs annually. The operation is divided among seven major container terminals, each equipped to handle the loading and unloading of container ships. The Cargo Operations Dashboard web portal provides real-time data on various aspects of cargo movement, such as truck activity at terminals and vessel locations. For moving containers inland, the port connects to a vast rail network with six intermodal rail yards, a key route being the Alameda Corridor, a 20-mile express railway that zips containers directly to rail hubs in downtown L.A.

2. PORT OF LONG BEACH, CA

L.A.’s sister container cargo powerhouse also handles millions of TEUs annually. Unlike some ports that directly manage cargo movement, Long Beach operates as a “landlord port,” with private terminal operators performing the day-to-day operations of loading and unloading container ships at various terminals. The port caters to a diverse range of containerized cargo, with terminals specializing in different goods. This allows them to handle a wider range of imports and exports efficiently. The POLB is at the forefront of adopting sustainable practices, having implemented zero-emission cargo handling equipment like electric yard tractors, reducing dependence on fossil fuels.

3. PORT OF NEW YORK AND NEW JERSEY, NY & NJ

The largest containerized cargo port on the East Coast boasts a vast operation spread across six terminals and public berths, equipped to handle the world’s biggest container vessels. Like other major ports, NY/NJ prioritizes efficient cargo movement. Third-party logistics providers (3PLs) play a crucial role, offering services like consolidation (combining smaller shipments into full containers) and deconsolidation (separating a full container into individual shipments) to streamline the import and export process. The Port Authority of New York and New Jersey participates in the World Port Sustainability Program, demonstrating a commitment to environmentally conscious practices alongside the cargo handling operations.

4. PORT OF SAVANNAH, GA

Savannah boasts the largest single-terminal container facility in North America, covering over 1,300 acres and equipped to move millions of tons of containerized cargo annually. The port is well-equipped with 42 container cranes (with a target of 42 by 2028) and more than150 rubber-tired gantry cranes to handle the loading and unloading of containers swiftly. Savannah offers direct access to major highways (I-95 and I-16) and on-terminal rail facilities ensure seamless cargo movement. As the most westerly port on the Atlantic seaboard, Savannah offers shorter transit times for cargo destined for major inland markets in the southeastern United States. 

5. PORT OF VIRGINIA, VA 

Another major force in containerized cargo handling on the East Coast, Virginia has seen significant growth in recent years, with a focus on expansion and efficiency. They recently completed a $750 million expansion project that increased cargo capacity by 46 percent. Thanks to its deepwater channels and ongoing dredging projects, the port can accommodate the largest container vessels currently operating. The port utilizes semi-automated container terminals with advanced cranes to expedite cargo handling. Norfolk International Terminals is the largest terminal and will boast more than 90 semi-automated cranes upon completion of its expansion. The port offers excellent multimodal connections.

6. PORT HOUSTON, TX

The port boasts two state-of-the-art container terminals: the Bayport Container Terminal and the Barbours Cut Container Terminal. These facilities are equipped to handle the modern giants of container shipping efficiently. Port Houston is investing $750 million over five years (through 2027) to upgrade the Bayport Container Terminal’s infrastructure and capabilities—a commitment to handling more containers and larger vessels in the future. Houston’s extensive highway network and role as a major trucking hub in the U.S. contribute to the efficient movement of containers inland after they are offloaded from ships. The port also offers on-site rail connections for seamless cargo movement.

 7. PORT OF CHARLESTON, SC 

Charleston has seen significant growth in recent years, becoming the fastest-growing container port in the U.S. Major investments are being made to handle the largest container vessels. The Charleston Harbor deepening project, completed in 2021, allows the port to accommodate all post-Panamax ships (the biggest ones!) 24/7, boosting its competitiveness. The port’s container operations are spread across several terminals, including the North Charleston Terminal, the Wando Welch Terminal and the recently opened Hugh Leatherman Terminal. The South Carolina Ports Authority offers various tools like GO!Port, a system for tracking and tracing container cargo, providing real-time data and enhancing supply-chain visibility. 

8. PORT OF OAKLAND, CA 

Oakland has seen steady growth in container traffic, with a particular surge in imports in recent years. Terminals are equipped to handle this increasing volume efficiently. The port has strategically invested in infrastructure to accommodate the giants of the sea. Oakland routinely receives calls from ships with capacity for 14,000 containers and can handle even larger vessels with the necessary adjustments. Oakland prioritizes swift cargo movement. They boast some of the highest ship-to-shore crane productivity rates on the West Coast, meaning they can load and unload containers quickly.

9. PORT OF TACOMA, WA 

Among the largest deepwater ports in America, Tacoma is situated on Commencement Bay in Puget Sound, making it geographically well-positioned. The port serves as a vital gateway for cargo moving between Asia and the eastern U.S., with more than 70% of its international cargo directed toward these regions. Additionally, Tacoma handles around 80% of the marine cargo between Alaska and the Lower 48 States. Various sustainability programs are in place to reduce emissions from port operations and promote environmentally responsible cargo handling practices.

10. PORT OF SEATTLE, WA

The Port of Tacoma and Port of Seattle are managed by the Northwest Seaport Alliance, a collaboration that strengthens their overall container handling capabilities. The Port of Seattle handles millions of TEUs annually across several terminals. Efficiency is a priority there, with trucks and on-site rail connections ensuring swift movement inland. Sustainability efforts are also in place to balance economic activity with environmental responsibility.

11. PORT OF JACKSONVILLE, FL

JAXPORT, as the port’s authority and the port itself are known, ranks first among Florida’s ports for containers. The Dames Point Terminal efficiently handles millions of TEUs with connections to major highways and on-dock rail for seamless cargo movement throughout the U.S. Southeast.

12. PORTMIAMI, FL 

Known mostly for cruise ships, PortMiami handles containers, too. Cargo moves efficiently through its container terminal with connections to highways and rail for regional distribution.

13. PORT OF SAN JUAN, PR

Puerto Rico’s main port prioritizes container cargo. Three major shipping lines call there, utilizing a “carousel” crane system to efficiently load and unload containers destined for or arriving from the U.S. mainland. 

14. HONOLULU HARBOR, HI

The O’ahu facilities not only handle container cargo, they recently expanded their container terminal capacity by 40% to handle increasing volumes and improve efficiency for island trade.

15. PORT OF BALTIMORE, MD

Baltimore boasts the No. 1 container terminal on the East Coast (Seagirt Marine Terminal) with super-post-Panamax cranes and swift container handling. They handle millions of TEUs annually.

16. PORT EVERGLADES, FL

The port has a reputation for efficiently moving millions of TEUs with quick ship turnaround and connections to highways and rail.

17. PORT OF PHILADELPHIA, PA

PhilaPort’s Packer Avenue Marine Terminal is the main hub for container cargo, with rail and highway connections for efficient inland transport.

18. PORT OF MOBILE, AL

Mobile boasts fast ship turnaround with 35 container lifts per hour and 45-minute truck wait times.

19. PORT OF ALASKA, AK

Alaska’s main cargo handler in Anchorage sees twice-weekly container ships delivering essential goods for most of the state.

20. PORT OF NEW ORLEANS, LA

New Orleans’ Napoleon Avenue Terminal handles more than 600,000 TEUs annually with cranes for mega-ships up to 10,000 TEUs.

21. PORT OF WILMINGTON, NC

The North Carolina port efficiently handles containers with seven cranes, including neo-Panamax models for large ships, offering easy access to highways for distribution.

22. PORT OF WILMINGTON, DE

The Delaware port boasts a 500,000 TEU annual capacity with four gantry cranes and efficient rail connections for onward transport.

23. PORT OF PALM BEACH DISTRICT, FL

Florida’s fourth busiest container port handles more than 290,000 TEUs with 24/7 on-dock rail for smooth container movement.

24. SOUTH JERSEY PORT CORPORATION, NJ

The operator of marine shipping terminals in seven New Jersey counties focuses mostly on breakbulk and bulk cargo, but it does have cranes for containers.

25. PORT OF BOSTON, MA

Boston’s Paul W. Conley Terminal specializes in container cargo, with gantry cranes and automated stacking cranes for efficient loading and unloading.

 

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Archives, Global Logistics, Global Trade Daily, Ocean Carriers, Ocean Ports

Common Problems Shippers Face At Destination

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If you want your business to thrive, you need to be able to plan for anything, including at-destination problems. We’ve compiled a guide on the common problems shippers face at destination.

Cargo weight limits and specifications

Interestingly enough, one of the common problems shippers face at destination is cargo weight. That comes in two different flavors, making things a bit more complicated for shippers. First, there are times when the container’s weight does not match the submitted paperwork. That can make it impossible for the cargo to transfer because of the allowable road weight limit, the ‘risk’ wrong papers carry, or simple limitations on the equipment required to handle cargo above a certain weight. The second problem is if the cargo is unevenly distributed in the container. That can cause many issues when moving the load out of the truck or vehicle. That, in turn, often leads to damage. And you don’t need to be well-versed in global trade to understand why that’s horrible for business. 

Damaged or missing cargo

Speaking of damaged cargo, or even outright missing cargo, it’s the next of the common problems shippers face at the destination on our list. When you are shipping cargo internationally, the reality of the situation is that it’s easy for it to sustain damage. Even if you take all the necessary precautions, that can still happen to you. And naturally, this can also make your entire shipment worthless. Damaged cargo is especially common when doing LCL shipping, as your cargo shares space with other people’s cargo within a container. Businesses do this to reduce expenses when they don’t have enough load to justify renting an entire container. That is also the most common scenario when your cargo can go missing, not because of any malicious theft but because it can easily get mixed up with other people’s cargo.

Problems with paperwork

While uncommon, your paperwork can be mislabeled, misplaced, or lost. Of course, losing a document is very difficult in the age of digital paperwork. But one such example that can happen is Bills of Lading. The original copy of the Bill of Lading is essential. And it is crucial to release your shipment on time and without hassle. It is best to ensure it is only handled by reliable channels and with great care. And this isn’t the only piece of paperwork that you need to worry about when you do international trading!

Customs taxes, duties, and penalties

Two primary sources of additional taxes, duties, and penalties are associated with common problems shippers face at destination. First, there’s the fact that shippers must comply with all the regulations related to importing cargo. If they fail to do so, they incur fines and penalties that cut into your profits. The second potential source of these troubles is limitations on goods by certain countries. Your goods may be outright contraband or require special permits. That is, of course, something you need to worry about ahead of time. So long as you carefully check the list of banned or restricted goods and prepare the required paperwork for all the needed goods, you should not have to worry about this coming up!

The cost of delays

Delays are insidious killers of profit. They are both common problems shippers face at their destination and are easily among the most expensive ones to take care of. First, because you are bound by contract to make deliveries of goods on time, you can alleviate that by planning for delays to an extent. However, due to the various problems with customs, paperwork, etc., which we’ve already covered or will cover, you can even go over these ‘generous’ promised delivery times. And then there are the fees you might need to pay for going over your rental period for the containers your goods are in. These pile on the expense delays imposed on you and further cut your profits. That is why you need to do everything you can, such as reducing truck detention times as much as possible.

Customs clearance

Customs clearance is a source of two different potential problems at the destination. First, of course, is the delay that a thorough customs check would impose on your shipment. It is not common for your goods to go through a thorough customs check. But it can and will happen if you regularly export or import. You completely counter the second problem through simple good judgment and full disclosure of complete shipment information. And it’s carrying goods that are not on your papers. That gets you in trouble with the customs officials, and you can bet that your shipments will be a target for detailed inspection for a long time.

Holiday-related delays and challenges

The final of the common problems shippers face at destination is, ironically, holidays. You must understand that when making international trade, export or import. You must account for the culture of the countries you work with and your own. Your well-planned delivery schedule can be thrown off because your shipment needs to pass through a country when it’s celebrating a national holiday and everything is closed. Planning for everything the first few times is annoying and stressful. But, once you’ve all the significant holidays marked out and noted in your schedule, they become a matter of routine. To get around the issue, you can use some methods to alleviate warehousing and fulfillment stress, such as smaller, faster shipments. 

Success through proper planning for at-destination problems

As long as you know the common problems shippers face at destination, you can plan for them and find ways to resolve them quickly. That is why planning is always crucial for anyone who wants to do international import or export.

Author Bio

James Buckley worked as an export and shipping analyst before changing his focus to analyzing moving trends and data. James now works closely with usamovingreviews.com experts.

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Archives, Global Logistics, Global Trade Daily

Declining Trade is Testing Shippers’ Patience, Pockets, and Commitment

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As global trade declined during the second half of 2022, in response to severe economic headwinds in many countries and the continued effects of the Covid-129 pandemic, the GSF/MDS Transmodal Container Shipping Market Review reflected the impacts on the activity and fortunes of shippers of unitized goods in international trade.

The latest edition of the Container Shipping Market Quarterly Review published today, reports data from the third quarter of year – a time of marked increases in consumer and producer price inflation, historically large increases in interest rates by central banks and high levels of stock inventories in many importing countries. Global energy prices edged higher amid disruptions to supplies arising from the Russian invasion of Ukraine.

However, the impacts of widespread ‘lock-downs’ and stay-at-home orders in China to contain the spread of Covid-19 do not appear to have significantly affected export volumes according to its national trade statistics. 

Key highlights of the Review include:

  • Trade volumes of goods capable of being transported in containers continued the decline observed at the end of Quarter 2, but the drop in overall volumes was much less than that reported by the container shipping sector. This is attributed to commodities, such as coffee, scrap metal and plywood, that can also be carried in bulk or semi-bulk form, switching away from containerized movements where shipping rates remain relatively high.
  • Despite falling for a second quarter, carriers’ unit revenues (earnings per container moved) were still 2.8 times higher than pre-Covid rates whereas unit operating costs have only risen by a factor of 1.5 over the same period. Cost pressures have largely been higher charter rates and a slow rise in fuel costs that has since receded. Container shipping lines remain highly profitable despite a falling market.

Figure 4.1

  • Spot rates fell by a fifth during the period, leaving many shippers ‘burnt’ by their decisions to commit to long-term contacts earlier in the year and questioning the many sources in the industry who confidently predicted that disruptive congestion and capacity shortages would continue through 2022 and beyond.

Figure 3.1

  • Adding to shippers’ frustrations, service levels remained at historic lows, with the predictability of arrivals still at only 85 per cent, meaning 1 in 6 sailings arrived later than normally expected.

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Figure 7.1

  • The modest improvements recorded in the number of scheduled port calls made, at 90 per cent, is a welcome positive that can be partly attributed to the rising number of sailings that were ‘blanked’ during the period and didn’t sail at all, so easing the pressure on intermediate ports. Many of these saw an improvement in the proportion of expected capacity actually calling at the port s monitored but the proportion of lost capacity is still at historically high levels.

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Figure 7.2

Mike Garratt, Chair of MDS Transmodal said:

“In quarter 3 2022 we saw the mean rates charged by the major lines continuing to suppress the proportion of container traffic they carried while the role played by new entrants was small. During quarter 3 we have seen several of these recent entrants leave the market as spot rates have fallen sharply, while leaving mean rates paid much higher. With a combination of stagnant demand and few ships now being delayed by port congestion, one would expect competition for shippers’ business to lead to a recovery of the share of the overall cargo market carried by container.”

James Hookham, Director of Global Shippers Council, commented:

“The quarter saw the downturn in volumes recorded at the end of Quarter 2 turn into a sustained decline – conditions that have not been seen in the container shipping market for over ten years. Many shippers are experiencing the behavior of the market under such conditions for the first time.

“Blanked sailings, slow steaming and other capacity management measures will add to the catalogue of frustrations accumulated over the previous 30 months of record high rates and poor levels of service”.

“The widening gap between spot rates and contact prices agreed six months prior to these data will anger shippers further and demands a flexible and immediate response by carriers if their dream of securing a majority of their business on contract ted terms is to be achieved.”

“The big question going into 2023 will be how much of their diminished volumes will shippers commit to renegotiated contracts and how much will they reserve for the spot market, which is expected to fall to below pre-Covid levels in the next few weeks?”

“Countering this trend will be efforts to manage capacity through ‘blanked sailings’ However, the extent to which spot rates are being supported by this permitted co-ordination between consortia partners is playing out just as competition authorities in Europe and North America are evaluating existing anti-trust measures and considering possible options for the future”.

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Archives, Global Logistics, Global Trade Daily, News

Shippers Still Find Ocean Freight Booking for Shipper Owned Containers (SOCs) Challenging

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Digital adoption challenges leading to a lack of transparency, visibility and trust emerge as three key struggles for container logistic companies to book shipper-owned containers according to a survey by Container xChange, an online platform for container logistics and operations.  

To examine the pain points of the current state of ocean freight booking, Container xChange joined hands with the Copenhagen Business School and surveyed with 137 freight forwarders and NVOCCs spread across the globe.

While the majority of freight forwarders shippers and NVOCCs use online quotation solutions, 83% find the need for better digital infrastructure in the future, pointing to digital vessel schedules and intuitive booking interfaces as the most impactful digital transformations in times to come.

Christian Roeloffs, co-founder and CEO, of Container xChange, shared that, “Lack of transparency and standardized digital processes has fueled inefficiency and mistrust for a very long time in the logistics industry. These struggles are further worse for shipper-owned containers where no carrier takes care of processes. This hinders the adoption of SOCs in the market. The survey corroborates with the state of the industry at present, but it is encouraging to understand how so many players are looking forward to Digital vessel schedules and intuitive booking interface for instance.”

“With the adoption of digital tools, all of this could be streamlined in a manner that there is a standardized procedure for all users. With digitization being at the crux of the whole booking cycle, the industry could become more efficient with streamlined vessel schedules, intuitive booking process, avoid scammers and gain trust in counterparties with vetted partners.” Roeloffs added.

Compared to Carrier-owned Containers, Shipper-owned Containers in principle provide more flexibility and can help users avoid hefty fees like demurrage and detention. However, the market has yet to fully adapt to SOCs in the same way as COCs when it comes to digital solutions. SOCs, being a fairly new concept, don’t have digitized slot booking processes and have a huge opportunity to connect to the fragmented ocean freight marketplace.

When it comes to ocean freight slot booking, Shipper-owned container users struggle more with getting accurate quotations, and confirmations of available capacity and end up booking with 5-10 shipping or feeder lines since there is no schedule reliability. Whereas Carrier-owned container users do have the liberty of getting administrative tasks like trucking, offloading, unstuffing, and so on taken care of and have digitized slot booking solutions in place, plenty of players still conduct the process manually with loads of emails and phone calls.

The main findings of the survey were:  

  • More than 70% of the respondents find a lack of trust in their counterparts
  • Out of all the companies surveyed, 83% of them ranked digital vessel schedules on an importance level of 4 or 5, while 77% ranked intuitive booking interface in the same way. But industry players also want to have their document checklist and uploads visible and easy to use, as well as operational contact information ready at hand.
  • We observed that 84% of our participants still source quotations via email and phone, while 78% of them use the same outdated processes to place a booking.
  • At the same time, the fact that 60% also use online quotation solutions such as shipping companies’ online booking interface (e.g., Maersk’s platform) shows that a market for digital SOC ocean freight booking exists.

The ocean freight market is still walking the old roads with slow manual processes. To get quotations and bookings, the industry still struggles with swift and easy processes. Outdated and manual processes also remain prevalent with companies still carrying out bookings via e-mail and phone.

For the slot booking process, instant booking and capacity confirmations were deemed the most important. And yet, many players are below satisfied with said service they receive.

Working on digital solutions to streamline the industry pain points, Adrian Degode, Senior Product Engineer, at Container xChange said, “The shipping industry is becoming increasingly digital but the biggest thing missing is trust. The caveat remains to be bringing all the solutions under one platform that simplifies the lifecycle of ocean freight spot booking while ensuring trust and transparency.”

“To enable the industry with an end-to-end solution, Container xChange is building a dynamic Ocean Freight Marketplace with transparent rates and trustworthy partners for Shipper-Owned Containers, where users get guaranteed slots on the vessel and supplier-guaranteed payments. From getting up-to-date vessel schedules and freight rates for your shipping routes to choosing and booking the best offer from trustworthy partners within minutes, the platform will bring a wide array of capabilities.”, he added.

Key findings of the survey 

  • From quotation to booking, 40.9% of companies regularly place bookings with 5-10 shipping or feeder lines
  • When choosing a carrier, schedule reliability (77%), capacity availability (80%) and fast quotation (69%) were found to be the most important
  • In the quotation process, trust in counterparts (70%) also ranks as important, while satisfaction in this category is low-medium
  • To get both quotations and bookings, email and phone are still used as the main medium (75-85% of the time)
  • In the booking process, instant booking (76%) and capacity confirmation were deemed most important (79%), but currently, up to 32% of respondents are not satisfied with those two capabilities in existing solutions.
  • When booking online, digital vessel schedules (83%) and an intuitive booking interface (77%) were evaluated as the two most important factors overall

 About Container xChange 

The container is one of the most impactful innovations in history—using standardization to power globalization and lift billions of people out of poverty. But contrary to the standardized container itself, most processes in container logistics have not been standardized nor innovated — and are still frustratingly complex, manual and error-prone. Combined with thin margins, this makes it difficult for logistics businesses to survive and thrive.

Container xChange is the leading online platform for container logistics that brings together all relevant companies to book and manage shipping containers as well as to settle all related invoices and payments.

The neutral online platform…

  1. connects supply and demand of shipping containers and transportation services with full transparency on availability, pricing and reputation,
  1. simplifies operations from pickup to drop-off of containers,
  1. and auto-settles payments in real-time for all your transactions to reduce invoice reconciliation efforts and payment costs.

Currently, more than 1500+ vetted container logistics companies trust xChange with their business—and enjoy transparency through performance ratings and partner reviews. Unlike limited personal networks, excel sheets and emails you rely on, Container xChange gives its users countless options to book and manage containers, move faster with confidence and increase profit margins.

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DRY BULK PROFITS SURGE TO MULTI-YEAR HIGHS DESPITE PANDEMIC-RELATED DEMAND AND DISRUPTIONS

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Heading into the 2021 holiday shopping season (a.k.a. the strongest part of the year), dry bulk owners could already celebrate a very profitable year with the temporary factors helping the market stay strong expected to continue providing support in 2022.

DEMAND DRIVERS AND FREIGHT RATES

The dry bulk shipping industry continued in late 2021 to enjoy a bumper year, with average earnings continuing to outshine any profits made in the past couple of years. As is often the case, Capesizes (the largest dry bulk ships) are taking the spotlight, with recent earnings peaking above $50,000 per day. A much more consistent and stable increase is recorded for Handysize and Supramax ships. These saw average earnings rise to $33,087 and $36,832 per day on Sept. 3, 2021. On the same day, a Panamax ship could expect to earn $32,445 per day.


 

Time charter rates underline the current strength of the market, with charterers currently paying double, if not 2.5 times as much, at the end of August compared with the start of 2021. A one-year time charter on a Capesize ship at the start of the year would have brought owners $16,500 per day. By Aug. 27, the figure was $32,750. Supramax ships have recorded the largest increase, with one-year time charter rates rising by 179.3% since the start of the year to $29,500 per day.

The high freight rates can be partially attributed to the restrictions and problems at ports due to the pandemic, which are tying up ships for longer than usual. On Sept. 1, 2021, 674 dry bulk ships had been waiting in China for two days or more. On the same day in pre-pandemic 2019, only 287 dry bulk ships had been waiting this long (source: Oceanbolt).

As an example of what this means for an individual trade, Oceanbolt data for ships sailing from Port Hedland, Western Australia, to Qingdao, China, shows that the average time for the journey (including waiting time at the load and discharge ports) has risen by 22.7%. In July 2021, it took an average of 33.5 days, while in July 2019 it could be completed in 27.3 days.

As well as congested ports, the recent pick-up in Brazilian iron ore cargoes to China has helped lift the Capesize market. In August, 21 iron ore cargoes were offered on the spot market, compared to 11 in July and the highest weekly number of cargoes since April (source: Commodore). During the first seven months of the year, Brazil exported 198.8m tons of iron ore, a 10.8% increase from 2020 and up 1.0% from 2019. However, it remains 15.0m tons lower than the record-high exports of 213.7m tons that were recorded in the first seven months of 2018.

China has received 65% of Brazilian iron ore exports during the year to date (through September 2021), with volumes on this trade growing by 6.2% over this period. Here, volumes of iron ore have grown compared to 2018, as China has taken a larger share of the total. This is clearly good news for dry bulk demand; the larger the share heading to China, the higher the ton mile due to the long distance.

There has also been strong growth in grain exports from the world’s largest exporters. Grain exports from the biggest exporters grew by 6.3% to a record 162.0m tons in the first six months of 2021. The driver of this growth was the U.S., which has seen its grain exports rise by 39.3%, jumping from 51.3m tons in the first half of 2020 to 71.5m tons. In contrast, exports from Brazil and Argentina have declined. Brazilian exports are down by 0.3% to 61.5m tons, while those from Argentina have fallen by 26.3% to 29.0m tons.

American coarse grains exports have seen the highest growth, up 19.2m tons (+67.1%) in the first seven months of 2021 compared to the same period in 2020. These additional volumes are the equivalent of an extra 257 Panamax loads (75,000 tons). Just behind in terms of volume growth are U.S. soy bean exports, which had a strong off-season, with exports in the first six months of 2021 amounting to 17.8m tons, a 7.8% increase from last year.

The new U.S. marketing year began in September, and exports of soy beans will have once more increased. Compared to the start of the 2020/2021 marketing year, outstanding sales are much lower, currently standing at 17.8m tons, compared with 29.4m tons on Sept. 1, 2020. While more sales will soon be added to the current level of outstanding sales, it is unlikely that volumes in the 2021/2022 season that is now under way will reach the 60.3m tons of soy beans that were exported in the 2020/2021 season.

FLEET NEWS

Around three-quarters of the dry bulk deliveries expected for 2021 arrived, adding 26.7m DWT of capacity and bringing the total fleet to 934m DWT. BIMCO expected the fleet to grow to 940m DWT over the subsequent months, result in fleet growth of 3% for the calendar year.

Of the 26.7m DWT delivered so far this year, half came from the 61 new Capesize ships, of which 51 have a capacity of 180,000 DWT or more, with 10 of these exceeding 300,000 DWT.

At the other end of the lifecycle, only 4.8m DWT of capacity has been demolished. BIMCO expected demolition by the end of 2021 to reach around 7m DWT, less than half of what was removed from the market in 2020, as the earnings potential for ships has incentivized owners to keep their ships sailing. This once again proves that the strength of the freight markets has a much greater influence on demolition than steel prices.

The summer months saw the dry bulk orderbook grow by 67 ships, as 5.7m DWT was ordered in June through August. All but one will be delivered in 2023 and 2024. The orders include 2.3m and 2.5m DWT of Capesize and Panamax ships, respectively.

Including all orders, the orderbook currently stands at 53.9m DWT, a significant decrease from 71.6m DWT in August 2020 and 97.8m DWT in August 2019, as ships have been delivered faster than new ones are being ordered.

OUTLOOK


In what was seasonally the strongest part of the year for dry bulk—fall/winter—the market looked promising, and operators had already been recording solid profits for the year.

While countries enforce quarantine and testing requirements, and ports face sudden disruptions due to local and regional outbreaks, the congestion that is draining the market of capacity will continue to support earnings in the dry bulk market. The market is expected to stay strong into 2022 until the factors that are currently beneficial to the market such as congestion and pandemic related delays, spill-over from the red-hot container market, stimulus driven demand and strong growth in the manufacturing sector become less so.

In the longer term, however, the underlying volumes may be less supportive. After strong growth in the first half of 2021, the Chinese government seems keen to clamp down on the steel and other heavy industries to limit emissions. One big question is how strictly these measures will be enforced and whether they will start to constrain economic growth. The two largest dry bulk goods imported by China in terms of volume, iron ore and coal, both fell year-on-year during the first seven months of 2021. Iron ore imports fell by 10.5m tons (-1.5%) and coal imports were down by 30.4m tons (-15.0%). Imports of both of these goods stood at a record high in 2020, and as government restrictions come into play, it seems increasingly unlikely that these levels of imports will be repeated.

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Peter Sand had been the chief shipping analyst for more than 10 years when Copenhagen, Denmark-based BIMCO, which is one of the largest international shipping associations for shipowners, published this report in September. That same month, Xeneta announced that Mr. Sand had joined the Oslo, Norway-based market analysis company.

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Archives, Global Trade Daily, News

BEST CARGO YEAR EVER AT SOUTH JERSEY PORTS

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The South Jersey Port Corporation closed out 2021 with an all-time record-breaking cargo volume of 4,636,097 tons, a 54% increase over 2020, breaking the previous record by 6%.
“That’s the best in the history of the South Jersey Ports and we’re expecting 2022 to be a very strong year that may top 2021,” reported Andy Saporito, Executive Director and CEO of South Jersey Port Corporation at the monthly meeting of the Board of Directors. “This milestone is a testament to the skilled workers and partners who keep goods moving through the supply chain while our team seeks solutions to improve efficiency, attract business and build for the future. The ongoing collaboration with SJPC’s labor force and industry partners lifted the port to this extraordinary record during the challenging time of the Covid-19 pandemic,” said Saporito.
The dramatic increases in tonnage came from nearly all the SJPC’s prime cargo sectors: steel, plywood, recycled metals, cocoa beans, cement, and gypsum. The lone laggard, sand exports, is expected to increase as the national infrastructure plan is implemented. Rebounding steel imports led the way with 2,399,076 tons, a 141% increase over 2020. The majority of this increase occurred at the Paulsboro Marine Terminal which moved 1,760,018 tons of steel slabs. Plywood import tonnage increased by 98% totaling 220,812 tons demonstrating the Camden terminals as a premiere plywood portal on the East Coast. Cocoa beans totaled 76,108 tons, a 36% increase verses 2020 totals. Exports of recycled metals increased by 10% and cement increased by 8%.
The number of ship days was 960 days compared to 549 ship days in 2020, a 75% increase. “Ship days is the number of days a ship is loading or unloading at its terminal” explained Kevin Duffy, Assistant Executive Director / Chief Operating Officer. “We’ve worked hard to ensure we continue to operate safely and efficiently to move the increased cargo and have space to meet our customers’ needs”.
Brendan Dugan, Assistant Executive Director / Director of Business Development, expects the cargo activity at South Jersey Ports to remain strong for the foreseeable future due to the national infrastructure plan and New Jersey’s leadership role in the $109 billion offshore wind industry. EEW Group, which is building a $300 million manufacturing plant at the Paulsboro Marine Terminal to provide the massive steel monopiles for the offshore wind farms along the entire eastern seaboard, will ultimately require 150,000 tons of imported steel annually to meet their customers’ demand.  To build on this momentum, SJPC is conducting a study of the Port of Salem, which is a smaller port just down river from Paulsboro that could become an important supply port for the local offshore wind support services industry.
“The challenge is to build the infrastructure to grow the port while operating more efficiently to meet current demands,” said Dugan.  South Jersey Ports received a $6 million grant to upgrade the rail infrastructure at one of their Camden terminals and a $9 million grant for wharf infrastructure improvements at the Salem Terminal. “We identified an old building that we might refurbish to put another 40,000 square feet of storage space online and meet long-term customer demands.”
“We continue to focus on upgrading technology and automation to optimize the fluid movement of cargo through our terminals and to ensure our customers’ storage and inventory needs are met”, added COO Kevin Duffy.
The South Jersey Port Corporation was created in 1968 to operate marine shipping terminals in the South Jersey Port District, consisting of seven counties: Burlington, Camden, Gloucester, Salem, Cumberland, Mercer, and Cape May. The South Jersey Ports is a national leader in bulk and breakbulk cargo, shipping and receiving to and from Africa, Asia, Latin America and Europe. Their four international seaport facilities in South Jersey handle more than four million tons of bulk, breakbulk and containerized cargoes annually.
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Archives, Global Logistics, Global Trade Daily, Ocean Ports

PORT BRANDING AND USER EXPERIENCE ARE KEY NOW MORE THAN EVER

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Every day seems to bring about more bad news at our nation’s ports. In September, the government reported that auto sales fell because of chip shortages that left car dealers with few vehicles to sell. 

Now, more than ever, how a port communicates with the public and the businesses that rely on it is crucial, especially into the holiday shopping season. That port communication goes beyond just a well-designed website to include apps, social media, email alerts and newsletters all working together to communicate with one voice.

So, how should ports begin to think about their brand and their messaging to the public? 

As an agency specializing in branding and user experience (UX), we learned much through several key projects with the Port of Long Beach (POLB). The challenge was identifying and enabling key user tasks for each of the Southern California port’s audience segments. We designed a role-based dashboard that delivered an effective and streamlined user experience. Meanwhile, an improved content structure and organization made the port’s thousands of information resources easier for users to find and access.

What follows are tips for ports to improve the user experience of their websites and how best to work with an agency to achieve that.

Tip #1 – The Bar is Low, Which Creates Opportunity

Most port websites are average at best in terms of design, UX and content. The bar is very low. That creates a distinct opportunity for those ports that want to establish digital leadership. Thinking in terms of their “brand” presents numerous challenges for ports for many reasons, not least of which is the number of stakeholders involved. While working with POLB, we had a team of approximately 50 core stakeholders that were involved in most of the important reviews and decisions. Additionally, we worked with teams representing all of the port’s different internal groups: marketing, community relations, environment, security, IT, etc. 

Managing, coordinating and communicating with a large, diverse group of stakeholders and constituents is both art and science. Any port should make sure their agency partner has experience with this kind of “crowd control.” Because if not, it can quickly derail a project and add time and cost. A certain amount of political savvy also comes in handy as most port-related projects require some degree of coordination with the harbor commission and local government agencies. 

Tip #2 – Ports are More Democratic than Private Companies, That’s a Good Thing

Ports and all of our public-facing clients tend to be far more democratic than our private sector clients. That means they’re open to trying new things as long as there is consensus, rather than decisions being driven by one owner or a small team of partners, who can easily fall into group-think.

Of course, the democratic approach requires a little more time but we feel like we get better input and results working this way. This approach does, however, require some additional time in the schedule but delivers the advantage of creating a deep and comprehensive understanding of the input we receive from employees, partners and stakeholders. 

Tip #3 – Role-Based Resources

Most ports and their websites are accessed by the same types of users: truckers, port/dock workers, cargo owners, shippers, etc. Developing role-based entry points (i.e. “Click here for Trucker Resources”) will help users connect with the right content quickly. While we see that some ports make efforts to include these types of customer-oriented pages, they are often light on content and functionality that actually enhances the customer experience. It’s also crucial these pages are mobile-friendly since most port workers are accessing the website from a phone or tablet while in or around the port facility. 

Most port websites have hundreds, if not thousands of documents, forms and permits. When these informational resources are difficult to find, it will generate a high volume of unnecessary calls to the port’s call center. Making sure these basic items are easy to find and easy to access will go a long way in eliminating unnecessary customer frustration and calls that could have otherwise been avoided with a better customer experience online. 

This trend in the digital world—the idea of customer self-service—is critical in delivering the right experience online. So, make sure that all of these content elements are well-organized and easily accessible to customers of all types. Not only will this deliver a better experience for those customers, it will also create operational efficiency for ports that are always looking to do more with less. 

Tip #4 – Harbor Commission and Port Politics 

Let’s face it: Ports are political entities, so when you bring in creative partners, it’s vital to choose one that has experience working directly with port commissioners and who understand the nature of the port approval process. Our work with the POLB required frequent meetings with the harbor commissioners to keep them abreast of project decisions and developments. We also coordinated our efforts with the City of Long Beach mayor’s office and the various municipal organizations that fall within the city’s domain. 

That also means making key presentations in forums like public access TV and radio to discuss the strategy with the public. Knowing that this will be a part of the project and approval process allows us to plan ahead and tailor our approach to the unique needs of whatever harbor commission and/or port we are working with.

Tip #5 – Don’t Forget the Port is a Place 

Most ports are large, sprawling areas that encompass a vast amount of physical space. Given this fact, it’s somewhat ironic that many port websites lack an effective port map. For the POLB, we looked at a wide range of map styles and map data sources to identify the right blend of design and information. 

Ultimately, we ended up creating a semi-customized approach (as opposed to simply using Google Maps or MapQuestion right out of the box) so the map could be tailored to the specific needs of POLB customers. 

Tip #6 – Think Long and Hard About Content Volume and Content Migration

Most port websites contain a significant volume of content and have hundreds if not thousands of pages. One of the most critical aspects of any port website redesign is the content migration process. Because this process involves many different groups within the port deciding what content to migrate to the new site vs. content to retire or replace, it can take a significant chunk of time. 

Starting this process earlier in the project lifecycle is critical. In fact, getting the migration rolling at the beginning of the project makes the most sense. Most of our private sector clients don’t have nearly as much content nor does the content review for those private-sector clients generally involve as many stakeholders or checkpoints. With ports, there are communication guidelines, content accessibility/usability standards, regulatory reviews, legal reviews and stakeholder reviews. So, it’s best to get the migration going as soon as possible to ensure that it doesn’t hold up the rest of the design and development activities.

No one knows what the future holds for our logistical supply chain, but ports can ease the stress on everyone who interacts with the port by taking the time to think creatively and strategically about the experience their customers will have online. Think about it as more than just a website: It is a customer web portal. If those customers are coming to your site for information and leaving more stressed and no less informed, then your site is an epic fail. And that’s a fail you can’t afford as the economy continues to rebound.

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Jason Widmann is director of Strategy, Creative and UX at Stellar Agency, a digital design shop based in El Segundo, California, that focuses on the design and development of digital products, services and platforms.

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Archives, Global Logistics, Global Trade Daily, Ocean Ports

TRADE WINDS AHEAD: U.S. PORTS FACE THE CHALLENGES OF TODAY AND TOMORROW

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Port managers have tried, mightily, to cope with the pandemic’s shockwaves. They have been simultaneously caught up in an avalanche of challenges: trade wars, the pandemic, port congestion and labor and shipping container shortages. Providing as they do the key infrastructure to international trade and the global economy, shipping and ports are estimated to handle more than 80% of global goods trade by volume and over 70% by value. 

International maritime trade volumes were estimated to have fallen by 4.1% in 2020, but all of the expert projections suggest that they’ll not recover at any time before the end of this year. During the pandemic, ports have had to adjust to the reality of lower volumes, worker shortages, the implementation of occupational health and safety measures for dockers and shore personnel, and the adoption of teleworking and remote operations for office workers.

The shock of the COVID-19 pandemic has left no port unaffected while exacerbating certain existing challenges. Ports have been heavily impacted by developments in the shipping sector, where some shipping lines have gone into “survival mode,” affecting container and cargo markets, with knock-on effects that may be felt for years to come. The volatility may push some ports to reassess their business models.

Although the pandemic has strengthened the case for further investment in digitalization and innovation, ports are under intense pressure to reduce costs and be more attractive to the supply chains that use their infrastructure. For example, a survey commissioned by the International Association of Ports and Harbors found that 69% of surveyed ports indicated that the majority of their investment plans had been delayed or amended.

Port officials across the country are not wallowing in the gloom and doom. They don’t have time to. No, they are looking ahead to a 2022 filled with strategies to cure (or at least address) what ails them . . . and lies ahead.

Wanted: Congestion Relief 

At Morgan Stanley’s ninth annual Laguna Conference, a virtual gathering in mid-September of transportation and logistics industry leaders, Expeditors International of Washington’s management was quoted stating that they had never before seen capacity “so scarce in both air and ocean at the same time.”

Looking to the future, Expeditors expects the environment to “remain unsettled as long as constrained capacity and other disruptions, such as port congestion, the uneven lifting of pandemic-restrictions and rising fuel costs continue to impact the movement of freight.” 

A month after that conference, a backlog of ships remained idle off the Southern California coast waiting for their turn to dock, a visual that beachgoers had taken in for the past several months before. And federal regulators at press time were investigating whether the cause of a massive, beach-clearing oil slick was caused by a container ship anchor ripping into a pipeline. 

On Oct. 12, 58 container ships were at anchor or adrift off the shoreline, according to the Marine Exchange of Southern California. The following day, President Joe Biden announced a deal to keep the ports of Long Beach and Los Angeles open 24/7 to alleviate the severe bottlenecks. 

Providing more time for trucks to pick up and return shipping containers to improve freight movement and reduce delays through the port complex is the main strategy of the Biden plan, although exact details were still being worked out at press time. As Biden and Port of Los Angeles Executive Director Gene Seroka both mentioned, systemic change of such magnitude will necessitate many supply chain stakeholders to work in tandem.

“The significance of today’s announcement is the commitment from industry leaders responsible for moving goods on behalf of American consumers and businesses to open up the capacity needed to deliver,” wrote Seroka in an email, as reported by the online news site Long Beach Post. “It’s a call to action for others to follow.”

That call is certainly not being ignored by Seroka’s partner in maritime, Port of Long Beach Executive Director Mario Cordero, who wrote in a statement of his own, “Before this unprecedented cargo surge began, we believed 24/7 operations were the future. After all, consumers can shop online at any time, whether it’s at 4 p.m. or 4 a.m., and 24/7 is already the standard at our partner ports in Asia. The supply chain truly never stops now.”

Indeed, a month before Biden blew into town, Total Terminals International container terminal on Pier T in Long Beach launched a pilot program that makes it easier for trucks to access the facility during the overnight hours.

“Our waterfront workforce is moving cargo as quickly as possible as we continue to collaborate with stakeholders from throughout the goods movement industry to develop solutions for our capacity challenges,” says Long Beach Harbor Commission President Steven Neal. “This cargo surge is anticipated to last well into 2022, so we need to start thinking of new ways to meet the expected growth in goods movement and rising consumer demand.”

Labor Pain Relief, Too, Please

An insatiable demand for new products is part of the blame for port congestion, which is complicated by “the overarching challenge on the labor front,” J.B. Hunt officials reported during the Laguna Conference. “There are times when certain ports or terminals close for periods of time, creating significant whipsaws in the supply chain. The sooner that cargo can get into warehouses or on the shelf, the sooner capacity is freed up, and that is a major component of what is going on in the system.”

Officials from competitor Werner Enterprises echoed that “on the supply side, the driver issue is expected to remain a problem for a while (potentially exacerbated by vaccine mandates–management estimates less than half of the broader driver population is vaccinated) and the equipment problem looks to actually be getting worse.” 

However, there is some silver lining to all the gloom and doom. An especially strong holiday shopping season to end topsy-turvy 2021 may lessen the sting of expected underperformance into at least early 2022, the Werner team reported. 

Union Pacific officials, who are also dealing with slow unloading of containers due to port and driver labor issues, noted that “while there are structural issues in that system, there is also capacity to staff up and get trucks in place. The West Coast ports are also looking to put things into place (automation, union deals, etc.) to get the network moving smoother.”

Investment in new technology seems to be the answer to everything along the supply chain these days, and the port’s portion is no exception. San Francisco tech company Vector claims its electronic bill of lading solution can get drivers in and out of facilities more quickly, to the tune of 43 minutes of drive time. 

How huge is that? Mega-huge. According to David Correll, co-director of the Massachusetts Institute of Technology Freight Lab, if drivers get just 12 minutes back toward driving, the “truck driver issue” could be solved.

Rebuild, Remodel, Rehabilitate, Rebound 

Biden pivoted during his 24/7 announcement to promote his landmark infrastructure bill, which includes $17 billion for port infrastructure, or the “biggest investment in our ports in our history.”

However, with Republicans balking at the bill’s $4.5 trillion cost (at this writing) and infighting among Democrats over whether to trim or not to trim the price tag to make it more palatable, the legislation remains tied up in Congress (ditto).

It’s a shame, to hear Seroka tell it. He claims West Coast ports have experienced more than a decade of underinvestment by the federal government and that had better change to address the influx/lack of movement of cargo. 

Of course, ports around the country are not waiting on the government to make major infrastructure improvements. For a deeper dive on many of these, see the story elsewhere in this issue by Mary Scott Nabers, president and CEO of Strategic Partnerships Inc. But for improvements with an eye toward sustainability, we look to the Utah Inland Port Authority (UIPA), whose board of directors recently approved the creation of a funding mechanism for six new projects that will reduce current air emissions and improve rail access for in-state businesses. 

A new transloading/cross-dock facility adjacent to the Union Pacific Intermodal Railyard will offer international and domestic cargo stakeholders a cost-effective and efficient inland alternative option by leveraging existing infrastructure and Union Pacific’s services and proximity to the rail ramp in Salt Lake City, according to the UIPA. An investment-grade business case analysis commissioned by the UIPA identified at minimum the three California port gateways—Los Angeles, Long Beach and Oakland—for the transloading facility to compete with for international cargo volumes.

The transload facility will be constructed with eco-friendly building materials and include sustainable construction technology, increased water and energy efficiency, reduced waste and emissions and improved indoor environmental quality, according to the UIPA.

The port authority is also seeking to acquire an easement across a privately-owned landfill to open up rail access north of Interstate 80, an existing rail spur and test track that connects to a short line, and the blessing of Salt Lake County officials to provide additional freight connectivity by building out 7200 West from State Route 201 to 700 North.

The UIPA is working with partners to develop a renewable fueling station for private and/or public use that will serve hydrogen, electric and liquid and compressed natural gas vehicles, and with the Department of Homeland Security to reassign agents to Utah for a customs bonded facility with rail access, loading docks for bonded warehousing and storage capacity.

“All these projects are designed to address gaps currently in Utah’s logistic system, which is the primary role of the port authority,” said Jack Hedge, UIPA executive director. “Providing this underlying infrastructure supports the entire ecosystem of the jurisdictional area–from a logistics standpoint, to the environment, to the community–everyone benefits.”

Let’s Be Careful Out There

The Jacksonville Port Authority (JAXPORT) also has coming improvements aimed at maintaining the Florida facility’s ranking as the 10th busiest container port in the U.S. by TEUs and among the nation’s top vehicle-handling ports. But JAXPORT also has security on its mind, as demonstrated by a new program that brings together tenants, vessel operators, rail and intermodal stakeholders, key vendors, and local public sector organizations.

To address a national priority initiative of the U.S. Coast Guard Sector Jacksonville Captain of the Port, JAXPORT has partnered with the nonprofit Maritime Transportation System Information Sharing and Analysis Center to form a new cybersecurity information sharing cooperative called the Northeast Florida Maritime Information Exchange (NEFL-MIX). 

“Cybersecurity is a critical part of supply chain security,” says JAXPORT CEO Eric Green. “We are thrilled to launch this important initiative to protect our maritime community from cyber threats and ensure that our port-related businesses can continue to do the important work they do to keep cargo moving and people working throughout Northeast Florida.”

JAXPORT’s involvement does not surprise Christy Coffey, vice president of Operations with for the Maritime Transportation System Information Sharing and Analysis Center. “They have been influential in the design of our Information Exchange program and an active contributor to our [center] since inception,” she says, “so it’s rewarding to see the NEFL-MIX become reality. This busy port has included a diverse group of stakeholders in their cybersecurity information exchange. We know that under JAXPORT’s thoughtful leadership, the NEFL-MIX will positively impact both cybersecurity preparedness and response.”

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Archives, Departments, Dispatches, Global Trade Daily, News

YES, VIRGINIA, THERE IS A DESANTIS CLAUSE

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Where some see a stocking full of coal, others see opportunity. Take Florida Governor Ron DeSantis—please! That might be the sentiments of officials at congested seaports outside of the Sunshine State. For instance, there are the ports of Los Angeles and Long Beach, California, where, at press time, Christmas presents remain stranded in around 100 vessels waiting for docks. While the intervention of President Joe Biden has led to plans for 24/7 loading and unloading of containers at impacted terminals in Southern California and elsewhere, challenges remained (again, at time of publication) to implement the strategy. Some have even suggested that open-all-day-and-night operations fail to address the real problems, like the lack of truck drivers and already packed-to-the-brim warehouses. 

And so, against that chaotic backdrop, DeSantis announced on Oct. 19 that Florida seaports have open capacity, can meet holiday demand and—hey, all you shippers muttering “Bah humbug”—come on down.

“Year after year we continue to invest in our seaports, in infrastructure and in workforce education to make sure our supply chain is resilient,” said Da Gov, who was flanked by officials from Port Everglades, Port Tampa Bay, Port Panama City and host Port of Jacksonville (JAXPORT). “I’m especially proud of Florida’s seaports. They are crown jewels in our state.”

Yes, and those jewels have been shined with $1 billion in state investments since 2019, according to his office. Controversial because of his ties to former President Donald Trump and the supposed “steal,” DeSantis may have distanced himself even more from certain other attendees of U.S. governor conventions by suggesting shippers and out-of-state businesses should choose Florida.

“While other U.S. ports are just now announcing around-the-clock operations, in Florida many of our ports are used to serving Florida farmers, families and businesses with 24-hour operations,” he said. “As the rest of the nation faces rampant inflation and businesses stare down unprecedented supply chain problems, our message is this: Florida is here, we have capacity, we have incentive packages to help businesses who want to move here and we are going to make sure Americans get their Christmas Gifts this season.” 

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Archives, Global Logistics, Global Shippers 101, Ocean Ports

Dear Shippers, It’s Time for Creativity

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To offset many of the problems we are encountering today ― inflationary pressures, port delays and labor shortages ― shippers must think and act differently to ensure resilience. To be successful, leaders must take a new, more creative approach to minimize today’s adversities to increase revenues. Here are some new ways companies are successfully mitigating the plethora of challenges facing global trade today:

1. Creativity Within Modes and Port Selection: Presently, more than 100 container ships await dock space at the Los Angeles and Long Beach ports1, and the World Container Index price for 40 ft. containers stands at $9,669.472, 276% higher than a year ago. Shippers are not only struggling to secure capacity due to port inefficiencies but are paying premium prices even when they can secure containers. Once reserving container space, shippers then have to deal with long lead times. The door-to-door transit time for a container from China to Chicago is now 73 days versus 35 days in pre-pandemic times.

Minimizing the impact on your organization will require teams to think more creatively and collaboratively. For example, in the past, when Coca-Cola could not supply their production facilities due to limited vessel space, they refused to accept the current situation as their only option. Instead, their procurement and supply chain teams collaborated to leverage a nontraditional method of shipping. They decided to ship their manufacturing materials via bulk vessels typically used to ship dry cargo3. Coca-Cola safely shipped their products by securing the materials using plastic wrap and unloading at noncongested ports to avoid excessive demurrage fees being levied on shippers. Their priority was to keep the product lines running, and they accomplished it by actively seeking out alternatives.

Organizations need to think more broadly and explore the feasibility of using all available options, such as Coca-Cola did. Also, they must consider avoiding the West Coast ports whenever possible, as other ports, such as those on the East Coast, are currently less congested.

2. Seek Unconventional Partnerships: The boost in e-commerce sales and the growing driver shortage have negatively affected domestic trucking capacity. The result is like what we see in ocean shipping: premium prices and increased lead times. In pre-pandemic times, consumers took advantage of quick and reliable e-commerce delivery channels made popular by the likes of Amazon. Now, however, they are left hoping their products arrive within their expected delivery window, as shipping delays continue to become more common.

Understanding that customers have an insatiable appetite for fast and reliable delivery, Home Depot found a way to offer added convenience to its e-commerce business. Home Depot will become the first retail client in Walmart’s new delivery-as-a-service business called GoLocal. According to a Home Depot spokesperson, by leveraging Walmart’s existing delivery network, Home Depot will offer same-day and next-day delivery in select stores, with plans to expand by the end of the year.

In a market where capacity is hard to come by, Home Depot expanded its options by leveraging new partners who had capabilities that spanned beyond their own while offering convenience to the customer. As a result, they will reach more customers than before at lower costs to the consumer. Stephanie Smith, a senior vice president of supply chain for Home Depot, said, “This partnership brings us even closer to our goal of offering same-day or next-day deliveries to 90 percent of the U.S. population.”4 Seeking partnerships, even from those who may be competitors, is an excellent way to reduce the consumer’s expenses. Also, shippers should begin exploring alternatives in last-mile delivery to increase customer satisfaction, including added convenience and reduced shipping costs.

Difficulties in the supply chain are impacting shippers and consumers alike. On the one hand, consumers are experiencing inflation in certain products; on the other hand, shippers see their profits eroded. From either end, this situation is far from ideal. Labor shortages and capacity constraints are but two of several factors are contributing to higher costs. Organizations will have to wrestle with whether they will pass some of these costs on to consumers or allow them to affect margins. Either way, to overcome this dilemma, shippers must get creative to offset rising costs.

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Alex Hayes and Derrick Lopes are Senior Associates at GEP, a leading provider of procurement and supply chain solutions to Fortune 500 companies.

1 https://apnews.com/article/business-california-los-angeles-long-beach-shipping-ffbbf935495b0bbea064bcbb1ce330cb

2 https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry

3 https://www.businessinsider.com/coca-cola-uses-bulk-vessels-amid-shipping-crisis-2021-10

4 https://www.forbes.com/sites/walterloeb/2021/10/11/could-home-depots-partnership-with-walmart-lead-to-other-close-working-arrangements/?sh=25aebd867b88