Global supply chains are buckling, driving up prices, creating shortages and frustrating consumers. If at any point in the past 7 months you looked out to sea from the LA-Long Beach container port complex, the largest in the U.S., you would see the problem: up to 40 container ships anchored, with nowhere to go. There’s no space in the clogged ports. To put it another way, you’re looking at as many as 100,000 containers—holding everything from running shoes and home electronics to frozen seafood and furniture—waiting to be unloaded and then shipped to factories, stores and homes across the country.
U.S. ports are severely stressed, a problem that won’t disappear with the pandemic, writes The Wall Street Journal (June 3, 2021). Not one U.S. port was represented in the top 50 container ports globally in productivity performance. Why? The answer comes down to a complicated transportation market. Capacity is deployed according to shifting company and investor calculus, a complex system of handoffs between land and sea that has long resisted coordination.
There are no solutions in sight. In Asia, ships are worked 24/7, or 168 hours a week, compared with 16 hours a day, or only 112 hours a week, at LA-Long Beach. Terminal gates used by truckers to deliver and receive seaborne containers operate only 88 hours a week, vs. 168 in Asia. For larger ships, it takes 24 seconds on average to move a container at the Chinese ports, vs. 48 seconds at LA That leaves the port system chronically vulnerable to unanticipated volume surges.
Longshore labor relations also hinder improvements in productivity. A decades-long history of toxic labor-management relation has led to huge cost increases that discourage operators from expanding work hours, limit their ability to automate terminals, and end in avoidable delays during contract negotiations. And there is no sign that this labor-management paradigm will change with the new pro-union presidency.
Classroom discussion questions:
- Why does productivity lack at US ports?
- What can the US do to unclog ports?