Transcript Port Congestion McKenzie Schwitzer Kaleigh Martens Justin Beckman

Port Congestion
McKenzie Schwitzer
Kaleigh Martens
Justin Beckman
Yong Sun Yoo
Introduction to Port
Congestion
The Causes of Port Congestion are
Many and Varied
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Increased Demand for Container Shipping
Port Constraints
Poor Management
Strikes and other work related problems
Too many vessels are being directed at a port
The construction of the vessel
How containers are loaded and unloaded
Scheduling
Truck driver shortage
Pollution
Major influencing retailers on congestion
Increases in Demand for Container
Shipping
► Increases
in International Business over the
past years has created more demand for
ocean shipping
► Cost savings from cheaper labor, lower cost
of resources, operating efficiency, and
increased global promotion of trade with
trade agreements like NAFTA
► Important to many companies to remain in
a competitive market
Constraints on Port Capacity
► Problems
with limited location
 Too many vessels are being directed at a port
and the port has to service all types of vessels
 The construction of the vessel also has a lot to
do with the way containers are loaded and
offloaded on to the vessel
 The general size of shipyard
 Demand for service
 Infrastructure and inland transportation
Poor Management
► Poor
management and planning is another
factor that leads to delays and backlogs
► There is a high turnover of management at
the container terminal
► Casual workers
 Workers that are casual they do not receive
substantial employment benefits
 no training and lack of experience
Ship Size
► Benefits
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of larger ships
Able to carry more cargo
Economies of scale
Universal containers
Problems with ship size
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The ship travel speed
There is limited port usage
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Terminal size
Water depth
Port equipment-larger cranes
scheduling problems
Truck Driver Shortage
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Hard to find drivers
Low rate of pay
Rate of turnover is more than 100%
Long hours and weekend work
Traffic tie-ups
Delays on highways because of congestion and bottlenecks
on highways cost the trucking industry an estimated $7.8
billion in 2004
Truck driver shortage
 There are not a sufficient amount of truck drivers to drive the
trucks after the shipments have been delivered to the ports
West Coast Port Congestion
► Dramatic
increase in imports from Asia
 Due to cheaper labor = cheaper product
► Labor
Shortages when unloading ports
Labor Problems with West Coast
 International Longshore & Warehouse Union members &
tentative contracts
 Slowed down their work
 Not enough people are working late shifts
► Most
people are being overworked whether they work at the
terminal or drive a truck
 Aren’t enough drivers to drive the trucks once products
are brought into the port
 Aren’t enough rail lines either
► Forces
major delays & problems of not having products when
needing them
Problems with Ports
Pollution
► Cargo
ships using
heavy bunker fuel
► Diesel powered trucks
► People living under the
smog near LA & LB
ports tend to have
respiratory &
cardiovascular
problems
Problems with Port Pollution
► International
Longshore & Warehouse Union
(ILWU) has launched a campaign to clean
up the air pollution
 Want to have ships reduce harmful emissions by
reducing idling times
 Wants cleaner fuels for terminal equipment
 Wants 20% reduction of ship pollutants by 2010
 Shipping companies & terminals have said they
are working hard to help
Electronic Truck ID
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2003 – Long Beach
introduced a new wireless
truck ID system
 Increase safety, security, &
efficiency
 Immediately transmits
information as soon as a
truck pulls into a marine
terminal & is supposed to
reduce time trucks are there
to pick up or drop off
containerized cargo
 Will help reduce emissions
created by idling trucks as
well
Offpeak Program
► Began
in July of 2005 due to port congestion on
the West coast & the 40% increase in imports
between 2000 & 2004
► Helping to move more activity from both ports
from conventional business hours to off hours
► Any shipper who moves cargo between 3AM-6PM
is assessed an $80 TMF (40ft. Container) & a $40
TMF (20 ft. Container) on Monday-Friday. No fees
for shipments outside these hours.
► Also doing this to reduce smog during normal
business hours
Offpeak Program
► Paul
Sherer (spokesman for Offpeak) has
said that a 1/3 of the shippers have moved
to off hours.
 Truck drivers enjoy this because they are now
able to make more runs during the day
 More than 1 million trucks trips have been
diverted from peak daytime shipment to offpeak
Diversion of Cargo
Due to high container
growth, tight capacity &
rising fuel costs at LA and
LB shippers and carriers
are being routed to other
ports
► Most shippers & carriers
are re-routing to the East
coast, but some are going
to Northern California
ports
► LA and LB had previously
handled 40% of all imports
from Asia
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Major influencing retailers on
Congestion
Walmart--- sell highest volume of products.
► Loss of business devastating during the Christmas holidays.
► Build Distribution Centers allowing to ship through canals
to avoid Pacific Coast Ports.
► Home Depot has also adopted this strategy as a retailer.
► Sears is an example of a retailer who has shipped to the
east coast ports to avoid congestion problems in the west.
► Problems for retailers all centers around Just in Time
Inventory
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Problems for Just In Time Inventory
► If
products have to sit for 4 to 7 days this
may result in loss of business.
► Sitting at ports results in large warehouse
costs for retailers
► It also costs ship owners a large amount of
money to have their assets sitting loaded at
ports. (Turnaround time is poor)
More problems tied to Just in Time
Inventory
► Example
►The
Union Pacific Railroad
►Loosing half of their employees due to retirement
►Many containers are being loaded onto railcars
►Hiring new employees results in high training costs in
order to have a effective and efficient workforce
Port of New York/New Jersey
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Ability to improve capacity of port by:
► Dredging (most terminals to 45 feet)
► Larger vessels to call at the port
(for this to be effective ports must remain congestion free)
► This leads to more capacity for ships
► Reconfiguration of the port terminals
► Virtual inspection system (allows quicker movement through
the gate
► Ability to weigh and take pictures of trucks
► Expansion of physical infrastructure
► Faster more efficient movement of goods
► Additions of new cranes and other equipment to improve
efficiency
Port of New York/New Jersey
(continued)
Dramatic reduction in turnaround time for trucks
► Reduction from 6 hrs in 2004 to around one or
one and half hours in 2005
► The completion of a new ExpressRail terminal in Elizabeth
► Provides on-dock or near-dock service at the
terminals
► Containers are easily put on trains within the
terminal or just outside of
► 2nd part is creation of a storage facility allowing
the number of trains serving the port to increase
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Statistics of East Coast Ports
► 16.2
billion TEU’s on the West Coast
► 11.8 billion TEU’s for the Top six container
ports in the East. (NY/NJ, Charleston,
Hampton Rds, Savanna, Miami, and
Montreal)
► Container volume on the East coast only
exception being NY/NJ has been measured
and the ability to scale growth initiatives to
meet demand.
Relieve Port Congestion
► Port
Development
 Expand capacity: New port, Dredge
 Expensive, time-consuming, environmental
problem
► Extended
Gate Hours
 Allows use of roadway capacity during offcommute hours.
Relieve Port Congestion
► Congestion
Pricing
 Deter use of port, roadway, and rail capacity
during peak traffic hours
 Freight can move more quickly without causing
so much friction with the urban environment
 e.g. PierPASS program
► Off-Dock
Container Yard
 Allowing container storage dwell time to be split
across more facilities
Relieve Port Congestion
► Expanded
Rail Connections
 Expanding rail connectivity, including rail operating
yards, mainline access tracks, and switching and routing
tracks
 Allow more efficient placement of railcar resources
against demand, and more efficient train movement
across the entire system
► Fast
Rail Shuttles
 Deployment of rapid inland rail shuttles, moving
containers between the port area and inland rail
complexes
 Reconsolidation and distribution can be done more
efficiently than in the tight confines of the port
Relieve Port Congestion
► High-Speed
Gates
 Automated high-speed gates that rely on optical
character recognition, digital imaging, and other
technologies to speed truck processing and integrate
truck/terminal operations
 Speed truck movement and make off-peak truck
movement more effective and economical
► Integrated
Maritime and Rail Movement
 Tighten the linkage between the maritime movement
and the rail movement
 Rail cars can be made available when containers are
ready, and containers are ready to move when rail
equipment is in place.
Sources
► Thomas
Ward, Port Congestion
Relief:Attacking the Entire Chain, JWD
Group, a division of DMJM Harris
(http://www.dmjmharris.com/media/4437.p
df)
► Patrick
Alderton, Port Management and
Operations, LLP, 2005
Works Cited
Armbruster, William “Polishing the Apple” Traffic World
24 October 2005: 20-26.
Broder, John. M. “ At Nations Ports, Cargo Backlog Raising Question of Security.”
New York Times 27 July 2004: 12.
D’Innocenzion, Anne “Cargo Backup to affect holidays”- Toys, other items stuck in two
ports. Chicago Tribune 15 November 2004: 1.
Dougherty, Geoff “New Routes For Freight.” – Alternative shippers move full stream
ahead find other ways to move freight. That’s boosting some all-water shipping
services and or air cargo volume, spurring new rail networks. Chicago Tribune
27 June 2005: 1.
“Electronic Truck ID for West Coast Ports.” December 2003. http://www.caltradereport.com/eWebPages/front-page-1071171246.html.
Guido, Daniel W. “ With So. Calif. Ports Jammed, Others Jockey to Gain Overflow.”
Transport Topics 30 May 2005: 11-12.
Hays, Constance L. “US Retailers Feel the Pinch of Cargo Caught in Transit Snags.”
New York Times 26 October 2004: 1.
Johnson, Eric. “Ports’ Pollution Outpaces Politics.” Region Growing Ship Traffic
Exacerbates Problem- Policy Progress Slow, Long Beach Press 27 February
2005: A1.
MonGelluzzo, Bill “LA-LB Reports Volume Gain.” Traffic World 31 October 2005:
39.
O’Reilly, Joseph “East Side Story: Oceans New Direction” June 2005 Inbound Logistics
22 February 2006
<http://www.inboundlogistics.com/articles/features/0605_feature01.shtml
White, Ronald, D “US Ports Stormed by Wave of Imports”- Cargo Container Traffic
“Shipping’s Dirty Cargo.” March 2006. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/03/04/BUGCQHIA0D1.DTL&hw=port&sn=003&sc=617.
Swells to Record, Raising New Concerns about Congestion. Chicago Tribune
6 February 2006: 1.
“West Coast Port Congestion Addressed with OffPeak Program.” January 2006. http://www.recyclingtoday.com/news/news.asp?ID=8984&SubCatID=12&CatID=3.
“West Coast Cargo Flow Recovers.” August 2005. http://www.labournet.net/docks2/9908/recover.htm.
Sources
► http://www.sfgate.com/cgi-
bin/article.cgi?f=/c/a/2006/03/04/BUGCQHI
A0D1.DTL&hw=port&sn=003&sc=617