Header: Ships docked offshore waiting to offload at the Ports of Los Angeles and Long Beach. Credit: Tim Rathmannn
In August of this year (2021) the White House announced that John D. Porcari will be the Port Envoy to the Biden-Harris Administration Supply Chain Disruptions Task Force. Its initiative was to address supply chain disruptions and acknowledge the fact that the biggest bottlenecks are at the ports. Did you know that 40% of containers come through the combined ports of Los Angeles and Long Beach?
If you recall from a previous article, “California Oil Spill – Understanding the Components – Part 1” that the port is experiencing an unprecedented amount of “cargo congestion” which backed up goods being transported to middle America and throughout the country. In October of 2021, the Port of Los Angeles got approval to expand to a 24-hour, seven-day-a-week operation as part of an effort to relieve pandemic-related supply chain issues and clear record-breaking backups of container ships at the Ports of L.A. and Long Beach. This was due to an order from the White House. Under the new program, ports will charge carriers $100 per day per container that stays too long (greater than 9 days) at the terminal. The collected fees “will be re-invested for programs designed to enhance efficiency, accelerate cargo velocity, and address congestion impacts,” port officials said when announcing the fees in October.
This goods movement chain has now lead to moving record volumes from the ports to the stores. In the early days of the pandemic, people ordered more quantities and ordered earlier than normal in a panic. It has now caused an overabundance in items shipped and the shipping companies were using the port as basically a free warehouse, often for 30-45 days or more. Check out this photo below of all of the shipping containers at the Port of L.A. taken last month.
WHO OWNS THE SHIPS THAT ARE WAITING TO BE OFFLOADED?
Top Three Companies (as of data that was collected in December 2021):
- Nippon Yusen Nippon Yūsen Kabushiki Kaisha, also known as NYK Line, is a Japanese shipping company and is a member of the Mitsubishi keiretsu. The company has its headquarters in Chiyoda, Tokyo, Japan.
- Dampskibsselskabet Torm TORM based in Copenhagen, Denmark, is a shipping company that owns and operates product tankers. The Company’s product tankers carry refined oil products such as gasoline, jet fuel, naphtha and diesel oil.
- BOREALIS MARITIME LTD Borealis Maritime is a privately owned shipping company founded in 2010. It provides a comprehensive range of integrated services associated with the management of maritime assets, both for private and institutional investors. London.
HOW HAVE THE PORTS BEEN OPERATING FOR THE PAST TWO YEARS?
We took a deep dive into the statistics for the Port of Long Beach and found some very interesting facts regarding total loaded/unload containers as well as the number of empty containers being transported. The data is based on Twenty-foot equivalent (TEU) units/containers. Since January 2019, there has been an overall increase in volume but the data shows a significant volume decrease in the Spring of 2020 when the world went into lockdown. For the Port of Long Beach, an average of 334,693 containers per month were offloaded inbound and an average of 12,243 were loaded on the outbound. During the same time frame, there was an average of 10,346 empty containers offloaded inbound but an average of 219,640 empty containers loaded for outbound.
THE QUESTION NOW IS: ARE THERE ENOUGH TRUCKS ON THE ROAD AND TRAINS ON THE TRACK TO HANDLE THE SUPPLY CHAIN IMBALANCE?
According to Mr. Porcari, as mentioned in a recent interview from NPR, there is enough adequate rail capacity from the west coast to the heartland. Where the next bottleneck exists is that there continue to be truck driver shortages. How is the White House addressing these issues? They have offered paid apprenticeship programs to help train workers to get a commercial truck driver’s license. This is much different from the norm because previously, people had to train to become truck drivers at their own expense.
Longer-term structural problems in supply issues need to be addressed which is the goal of the Bipartisan Infrastructure Law and Build Back Better to build a goods movement system to serve our children and grandchildren better.
FOLLOW US AS PART 2 WILL FOCUS ON TRUCKING AND RAIL DATA IN SYNC WITH THE PORTS OF LONG BEACH AND LOS ANGELES.
If you have questions about California offshore and onshore oil and gas operations, geological mapping, or petroleum engineering help, Riviera Unconventionals, LLC can help you. Grand River Analytics LLC is the #gismapping part of this and together they can work with you to understand issues like this spill and hopefully help prevent these issues in the future.
Tim Rathmann – Rivera Unconventionals, LLC
Daniel Armine – Grand River Analytics, LLC
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