The supply chain disruptions caused by COVID-19 highlighted the need for the entire supply chain to move to 24/7 operations to ease congestion by using what have been considered the off-hours. For example, at our port alone, there are 168 hours in a week and our terminals are generally operating about half of that time. That’s a lot of productivity we’re not accessing — our trading partners in East Asia already operate their supply chains 24 hours a day. The reality is, at most US seaports, especially on the important trans-Pacific trade corridor, there’s not a lot of room to build new facilities. The pandemic has taught us we need to better utilize the terminals we have, whether that’s working longer hours or shifting more of our containers to on-dock rail services.
As far as what hasn’t changed, even in crises, seaports must invest in the future. For our port, during the Great Recession, we were preparing for big ships. During the pandemic, we built a replacement bridge for an aging span that had been carrying 15% of US waterborne cargo, and we completed construction of one of the world’s greenest container terminals. Now, we’re making investments to modernize our rail infrastructure to accommodate the next few decades of growth.
Given the disruptions of the COVID-19 pandemic, I think a challenge will be to better prepare for extreme events. Managing the flow of cargo and deploying the right resources in the right way while keeping workforces healthy will continue to be a challenge.
For example, an issue that continues to surface during these events is the lack of chassis and rail cars. During the congestion we experienced in 2014, we created a “pool of pools” to allow for interoperability of chassis, which immediately helped to alleviate supply issues. While the pool of pools could likely be adjusted, one major change we’ve considered is a truly gray chassis pool, with a neutral operator. Additionally, the growth of inland ports can continue to alleviate capacity constraints at marine terminals.
Lastly, we’re facing a transformation in the next decade as governments around the world require the adoption of cleaner technologies. Those ports which have already been focusing on sustainability will have a competitive advantage. Sooner rather than later, many of the large trade gateways will require their supply chain partners to operate at the highest green standards as we come to terms with what we all have to do to fight climate change.