Shipping Ports Develop Creative Solutions to Supply Chain Bottlenecks

For the last 18 months, global trade has been affected by supply chain problems. Many U.S. ports have faced serious shipping container bottlenecks, which has slowed import traffic, delayed deliveries and increased consumer prices.

United States shipping port

According to the Global Port Tracker report, which surveys several major U.S. ports including Los Angeles/Long Beach, Oakland, Seattle-Tacoma, Houston, New York/New Jersey, Charleston, Savannah, Miami, Jacksonville and Fort Lauderdale, 2021 set a new record for both the largest volume and the fastest growth of container imports. In some months, imports grew as much as 65% year-over-year driven by increased consumer demand.

Some ports and importers are coming up with creative solutions to adapt to the surge.

Pop-Up Container Yards

To free up dock space, several ports are setting up pop-up container yards. Walmart turned an empty area near the ports of Los Angeles and Long Beach into a pop-up container yard to process incoming goods and hold empty containers, and in November 2021, the Georgia Port Authority announced it had allocated $8 million to setting up five pop-up container yards in Georgia and North Carolina to alleviate logjams at the port of Savannah. In January 2022, the port of Oakland followed suit, announcing that it will open a 25-acre pop-up container yard near the port.

Alternate Ports

The ports of Los Angeles and Long Beach handle 40% of the country’s container imports and have been among the hardest-hit by congestion, which has led some cargo owners and freight companies to seek out smaller ports, including the West Coast ports of Hueneme about 80 miles north of Los Angeles, San Diego, Portland, Oakland and San Francisco.

On the East Coast, alternatives to New York-New Jersey and Miami include Boston, Philadelphia, Baltimore, Jacksonville, Wilmington and Palm Beach, and the Gulf of Mexico has options including New Orleans, Gulfport, Mississippi and Mobile, Alabama.

Those smaller ports, unused to dealing with the large ships and cargo volume of major ports, have their own issues, including the availability of truckers, warehouse space and dock workers, but in some cases, these less-trafficked options can be a viable alternative to more congested ports.

Extended Hours

The Biden administration has encouraged some ports, including Los Angeles and Long Beach, to move to 24/7 operations to try to increase traffic capacity, turnover, and efficiency. Major companies including Walmart, UPS, FedEx, Target, Samsung, Home Depot, Stanley Black & Decker and Gap Inc. agreed to shift some cargo operations to off-peak hours, and truckers are given financial incentives to use night and weekend hours. The extended hours have led to 20% fewer container ships at the two ports waiting more than nine days at the docks.

Automation Technology

In an effort to improve operations, some ports are turning to automated solutions including guided vehicles, material-handling robots, and automated cranes.

According to a report by McKinsey & Co., automation could reduce port operating costs by 25%-55% and increase productivity by 10%-35%, in addition to making port operations safer and more efficient.

At least 40 ports worldwide now automate at least some of the processes in their terminals. One of them is the port of Houston, which uses the SmartMap and SmartStack process automation solutions developed by Kalmar Global, which help ports move containers more efficiently.

According to the National Retail Federation, short term import growth rates are slowing, which could ease supply chain issues somewhat, but volumes will stay near record levels in the first half of 2022. January is forecast to be up 8.6% year-over-year, with February up 4.2%, March down 3.3% and April up 2.5% percent. All this emphasizes the need for all links in the supply chain to find creative solutions to improve operations.