Aftershocks continue at West Coast ports as supply chain works toward solutions
Staffing dispute shuts Oakland's biggest terminal for a day; Plan unveiled at
Los Angeles to speed cargo flows; Long Beach loses status as number two port.
It may not come as a surprise given the massive cargo backlogs and bad blood that have built up through the fall and winter, but three weeks after West Coast waterfront labor and management reached a tentative five-year collective bargaining agreement, the situation is still not stable.
At the Port of Oakland, a dispute over staffing levels between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) shut yard and gate operations at the Oakland International Container Terminal, the port's main terminal, on Wednesday. By Thursday, the terminal was operating normally, according to Mike Zampa, a port spokesman. Oakland is believed to be the only one of the 29 West Coast ports represented by the ILWU experiencing lingering labor issues.
PMA said on its web site that ILWU Local 10, which works the terminal, refused to allow yard crane operators to work unless management agreed to staff each crane with three workers instead of the normal ratio of two workers per crane. All other terminals at Oakland operate at a 2-to-1 worker-to-crane ratio, PMA said. The ILWU local was unavailable to comment.
Meanwhile, the Agricultural Transportation Coalition, a group that represents U.S. agriculture and lumber exporters, quoted in a note today an executive for a major importer that cannot unload all 12 of its containers from a ship in Oakland, and is being hit with $1,540 in demurrage, or detention, for failing to return one of the containers to the terminal within the allotted "free time" grace period. The importer, according to the group, said its truckers have queued up daily, but as of this morning had only recovered five of the boxes. The group quoted the executive as saying that importers should be granted "unlimited" free time for equipment returns because it is the fault of labor and management, not the user, that cargo is being released and delivered late.
The group, whose members were hit especially hard by the dispute because they weren't able to get many of their goods to overseas buyers, quoted a California rice exporter as saying all Oakland exporters are going to "permanently lose customers and business" as buyers find, and remain with, suppliers from other nations. Exports account for about 55 percent of Oakland's traffic mix due to the port's proximity to the prominent growing areas of California's Central Valley.
Down the coast at the Port of Los Angeles, the nation's busiest seaport, a "peel off" program has been launched. Under this plan, loaded containers belonging to high-volume customers are taken from the vessels and brought to a dedicated yard near the docks for transport to inland distribution centers. Upon arrival, the boxes are stacked in a block, drayed to a yard less than a mile away, and then sorted. The same trucks return to the terminals to retrieve the next inbound box, while carrying back with them empty containers to be staged for export traffic.
The program, which began February 25, will help clear the backlogs at Los Angeles while improving cargo flows, said Gene Seroka, the port's executive director. It will also increase truck turns, a key component in expediting goods movement and reducing congestion, supporters said.
"We have found an efficient way to get containers to their destination that is beginning to pay off," Seroka said in a statement. "We're acting on our pledge to our customers to harmonize the supply chain and make it work better. Permanently."
It will likely take Los Angeles and the adjacent Port of Long Beach until late April or mid-May to clear away all of the backlogs that developed as operations there slowed to a crawl late last year and through the first six weeks of 2015.
The port is involved in the project with stevedoring company The Pasha Group; drayage firm Total Transportation Services Inc. (TTSI); several marine container-terminal operators, and a core group of major retailers. The model is likely to be implemented throughout the entire port, which covers 43 miles of waterfront.
Long Beach loses ranking
The dramatic decline in containerized traffic knocked the Port of Long Beach from its long-held perch as the country's second-busiest container port, according to data released yesterday by consultancy Zepol Corp. Long Beach had held the number two position for 11 years, according to Zepol.
The Port of New York and New Jersey, which has long ranked third, jumped into the second spot by virtue of an 8-percent year-over-year gain in container import traffic through the end of February, Zepol said. By contrast, traffic at Long Beach dropped 20 percent year-over-year, while volumes at Los Angeles fell by 19 percent. Traffic is measured by twenty-foot equivalent units, or TEUs.
By contrast, container traffic at New York and New Jersey rose by 34,000 TEUs year-over-year. Traffic at the Port of Houston rose 29 percent, or 31,000 TEUs, while volumes at the Port of Savannah increased 20 percent, or 40,000 TEUs. East and Gulf Coast ports benefitted from moves by U.S. importers throughout 2014 to divert their cargoes to those ports via the Panama or Suez Canals. Importers did so to ensure goods were in U.S. commerce before the holiday buying season.
Zepol, which surveys 19 U.S. ports and one in San Juan, Puerto Rico, said overall import volumes through February fell 5 percent year-over-year. The drop-off was attributed to the decline at the southern California ports, which combined handle about 40 percent of the nation's containerized imports.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.