A reporter rented a boat and toured the Los Angeles/Long Beach Ports to find out the root cause of the problem (brilliant!). The biggest issue is that empty shipping containers are clogging the space, limiting the ability to offload new goods. He said in 3 hours he only saw a dozen containers offloaded. Of the more than 100 cranes, only 7 were operating.
Here are the details as posted by Ryan Peterson on Twitter:
Yesterday I rented a boat and took the leader of one of Flexport's partners in Long Beach on a 3 hour of the port complex.
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First off, the boat captain said we were the first company to ever rent his boat to tour the port to see how everything was working up close. His usual business is doing memorial services at sea. He said we were a lot more fun than his regular customers.
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The ports of LA/Long Beach are at a standstill. In a full 3 hour loop through the port complex, passing every single terminal, we saw less than a dozen containers get unloaded.
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There are hundreds of cranes. I counted only ~7 that were even operating and those that were seemed to be going pretty slow.
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It seems that everyone now agrees that the bottleneck is yard space at the container terminals. The terminals are simply overflowing with containers, which means they no longer have space to take in new containers either from ships or land. It’s a true traffic jam.
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Right now if you have a chassis with no empty container on it, you can go pick up containers at any port terminal. However, if you have an empty container on that chassis, they’re not allowing you to return it except on highly restricted basis.
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If you can’t get the empty off the chassis, you don’t have a chassis to go pick up the next container. And if nobody goes to pick up the next container, the port remains jammed.
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With the yards so full, carriers / terminals are being highly restrictive in where and when they will accept empties.
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Also containers are not fungible between carriers, so the truckers have to drop their empty off at the right terminal. This is causing empty containers to pile up. This one trucking partner alone has 450 containers sitting on chassis right now (as of 10/21) at his yards.
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This is a trucking company with 6 yards that represents 153 owner operator drivers, so he has almost 3 containers sitting on chassis at his yard for every driver on the team.
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He can’t take the containers off the chassis because he’s not allowed by the city of Long Beach zoning code to store empty containers more than 2 high in his truck yard. If he violates this code they’ll shut down his yard altogether.
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With the chassis all tied up storing empties that can't be returned to the port, there are no chassis available to pick up containers at the port.
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And with all the containers piling up in the terminal yard, the longshoremen can’t unload the ships. And so the queue grows longer, with now over 70 ships containing 500,000 containers are waiting off shore. This line is going to get longer not shorter.
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This is a negative feedback loop that is rapidly cycling out of control that if it continues unabated will destroy the global economy.
More Details in continued in thread below:
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