Will 2015 be the year that the finger-pointing ends and stakeholders seriously address physical integration of modes and processes in the U.S. supply chain infrastructure?
No question is more important for U.S. global trade, as more than a dozen container ships sat at anchor in Los Angeles-Long Beach harbor awaiting a berth in late 2014, with cargo piling up in terminal yards with average truck turn times of two hours or more.
The problem is not entirely demand-driven. Cargo spikes seen in 2002 during an earlier longshore lockout, and in 2004-05 amid a record surge of China imports, were proportionately worse.
The challenge this time is the inability of outmoded infrastructure and business processes to respond to a sudden, healthy uptick in traffic, especially after three years of anemic trade growth, and associated industry cost-cutting.
It is easy to blame larger ships, mega-alliances and terminal consolidation; rail and truck capacity shortages, equipment management inefficiencies and labor-related terminal productivity constraints. All play key roles. But to stop there avoids a needed examination of how transportation modes, shoreside services and cargo interests interconnect for the door-to-door move.
Public-private harbor infrastructure investment — in deeper channels, longer berths, faster cranes with longer reach, preferential truck lanes and roadways, improved rail grade separations — is a good start. Beyond that, cargo interests need to sit down at one table, examine best practices in place worldwide, envision a seamless goods movement system and reverse engineer from there.
Over time, cargo growth will naturally accelerate, labor differences will subside and Panama Canal expansion will be completed, producing a more competitive environment for all U.S. gateways. Now is the time to see the bigger picture and act.
Brian M. Conrad, Executive Administrator, Transpacific Stabilization Agreement; Transpacific Stabilization Agreement — Westbound