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