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Journal of Commerce – Trans-Pacific Maritime Conference22 – Long Beach, February 27 to March 2, 2022 – RECAP

More than 2,500 global supply chain stakeholders from around the world attended this year’s conference. The attendee’s focus was clearly on getting a better understanding of the supply chain disruptions issues, potential solutions, and industry expert forecasts going forward.

Heard at the JOC 2022 Transpacific Maritime Conference

“80% of world’s port congestion happening in the United States.” – Peter Tirschwell, VP Maritime & Trade, IHS Market

“We need to make sure the contract negotiations don’t result in additional congestion issues. The negotiations will come at a critical time for the retail industry as the peak shipping season for the important holiday season begins this summer.” – Matthew Shay, CEO, National Retail Federation

Chinese-manufactured chassis have become 300 percent more expensive due to tariffs that were slapped on them last year, Ron Widdows, CEO, Flexi-Van Leasing said.

“The pandemic laid bare that we had a goods movement system that was creaking along during the best of times.” John Porcari, White House’s Port Envoy

“The number of IPI (Inland Point Intermodal) containers moving intact out of California, Nevada, and Arizona fell 30 percent year over year in the fourth quarter of 2021.” Intermodal Association of North America (IANA)

“Six years ago, we made a concerted effort to build our own end-to-end logistics because in our category, if you don’t control logistics, you can’t control the customer experience.” Nirai Shah, CEO/Co-Founder, Wayfair

“No one can blame the industry for having reported to that kind of demand explosion. Ten years of demand was packed in 18 months.” – Rahul Kapoor, VP Maritime and Trade IHS Market

“We don’t see the tide turn in 2022, infrastructure problems, labor constraints, high demand and reduced capacity will continue to trouble the market. Stakeholders in the industry don’t see much relief coming for shippers anytime soon. It will not get better and 2023 will be worse,” – Thorsten Meincke, board member for ocean and air freight at DB Schenker

TPM22 Take-Away: Global supply chains are unlikely to see relief from congestion, disruption, labor shortages and skyrocketing costs anytime soon. The new normal in global trade is here to stay.

SUGGESTION:  Conduct a 3PL Outsourcing SWOT Audit to confirm systems, people, and processes are focused and able to weather future supply chain storms. This audit will assess your company’s supply chain disruption vulnerability and risk exposure.

• Container Drayage Industry to lose an estimated 5,800 tractors on 1/1/23

According to Matt Schrap, CEO, Harbor Trucking Association, Long Beach, “It is estimated that there are approximately 14,500 tractors registered to haul containers in and out of the Ports of Long Beach and Los Angeles. The Ports’ Clean Air Program will ban effective January 1, 2023 all 2007 to 2009 engine drayage tractors (approximately 5,800 tractors) from continuing to work at the ports. This will be a 41% reduction in container drayage fleet.

•  Marine Terminals to Increase Peel-Off/Free-Flow operations

The marine terminals at both the Ports of Long Beach and Los Angeles announced recently that they are aggressively pushing to increase percentage of import containers handled via a peel-off or free-flow operation. This will reduce drayage driver turn times by 40 to 50%.

•  West Coast ILWU Contract Expires July 1, 2022

The International Longshore & Warehouse Union represents approximately 15,000 dock workers on the United States West Coast covering 29 Ports from Bellingham, WA to San Diego, CA. Their contract with the Pacific Maritime Association which represents approximately 70 ocean carriers, marine terminal operators and stevedores expires 5:00PM on July 1, 2022. Port congestion has highlighted the need for increased automation and efficiency. Beneficial cargo owners (BCOs) started diverting cargo to East and Gulf coast ports in December of 2021 as a contingency plan anticipating contract labor disruption.

•  SoCal Inland Empire Warehouse Development Record

Over the last decade (2012-2021) the Inland Empire added 180,559,805 total square feet of industrial real estate which was the second largest in the United States. Dallas-Fort Worth saw the most total industrial development at 208,619,324.

•  Knight-Swift Increases Less-than-Truckload (LTL) Services

Knight-Swift Transportation Holdings, the largest US truckload operator, plans to expand its newly acquired foothold in the less-than-truckload (LTL) sector in 2022 to better serve shippers and gain an even larger share of the overall trucking market.

•  Trans-Pacific Reliability Still Lagging

According to the JOC vessel on-time performance from Asia to the West Coast of North America improved slightly in January increasing 0.5 percentage points to 10.3 percentage. Sea-Intelligence is not expecting dramatic improvements in vessel schedule integrity this year, as congestion at key load ports in Asia and receiving ports in North America is likely to continue for some months.

•  Ports LA/LB Launching Clean Truck Fee

Effective April 2022, the ports will launch the new Clean Truck Fund Rate. The $10 per TEU / $20 per FEU fees to be paid by cargo owners is expected to generate more than $90 million in its first year. The money will fund zero-emission trucks with some initial funds for low NOx trucks. The approach is intended to balance the ports’ environmental goals with the economics of remaining competitive during the transition to zero emissions.