By Augusta Saraiva (Bloomberg) —
Two years into the crisis that disrupted global supply chains and as US ports prepare for an earlier peak season, more than half of the truck gates at the busiest hub of Los Angeles are still going unused, its chief said.
During normal business hours, an average of 53% of gates are free, with truckers generally preferring to arrive in the middle of the day, resulting in less activity at other times, Executive Director Gene Seroka said at a conference in Tacoma, Washington.
The choke point is one of many bottlenecks in the complex global supply-chain web that has contributed to delays and shortages of some goods and faster inflation worldwide. While truckers and operators have collaborated to iron out logjams through extended hours at the Western Hemisphere’s busiest port spurred by months of elevated cargo arrivals, any additional stress just as the operation works through what’s set to be its most active month of June could stoke problems further.
“When peak season comes in, or rushes of cargo, you’ve got to be able to use this available time better,” Seroka said in an interview.
Port of Los Angeles Reports Third-Busiest Month Ever in May: ‘No Precipitous Drop’ in Ships Leaving China
At the height of the crisis last year, California’s twin ports of Los Angeles and Long Beach — which handle about 42% of all US containerized trade with East Asia — announced they would be moving to 24-hour longshore operations and would extend gate hours for truckers, who move about 70% of the US’s freight tonnage.
At the Port of Long Beach, a third of truck gates go unused on average, said Executive Director Mario Cordero, who has long been a proponent of around-the-clock operations to drive efficiency.
“You just can’t snap your finger and expect people to go 24/7,” he said in an interview Thursday. “But I think we’re going to get there a lot sooner than what it took e-commerce to evolve.”
Truckers don’t feel encouraged to go in during off-peak hours because other parts of the supply chain — including distribution centers — often don’t operate around the clock, said Matt Schrap, chief executive officer of the Harbor Trucking Association.
Port bosses are also concerned about warehousing constraints. Seroka said it’s a metric he keeps his eye on, noting the vacancy rate at Southern California facilities is less than 0.5%, with the lack of availability particularly acute in the Inland Empire counties of Riverside and San Bernardino.
President Biden Signs The Ocean Shipping Reform Act Into Law
“We can’t build these facilities fast enough, and even though we boast 2 billion square feet from the shores of the Pacific now out to the desert region of Southern California, we’ve got to turn that cargo out faster and have enough space under roof to manage all of these consumer and manufacturing products,” he said at a monthly briefing this week.
Staffing at the port-side terminals also contribute to the inefficiencies. They tend to be less staffed at night, and because the extended hours aren’t fixed, truckers fear being shut down while on- or offloading.
“As a human being, it doesn’t interest me to go at one in the morning, to sit in the marine terminal for two or three hours, with the ultimate fear that you might get shut out in the middle of a transaction,” Schrap said in an interview.
Expanded, consistent gate hours could result from the ongoing labor-contract discussions underway between the International Longshore and Warehouse Union and the Pacific Maritime Association that represents employers, according to Cordero, an initiative Schrap’s organization supports.
“When you run a business, predictability and certainty are of the utmost importance,” Cordero said. “As consumers, could you imagine whether it’s a restaurant, whether it’s Target, that you don’t know day to day what the hours of operation are,” he said, adding “that’s all the truckers are asking for.”
© 2022 Bloomberg L.P.
Sign up for our newsletter