Digital Edition

August 17 2020

Issue link:

Contents of this Issue


Page 11 of 63

12 The Journal of Commerce | August 17 2020 Cover Story Truckers and marine terminals in late July said a shortage of chassis has re-emerged in the ports of Los Angeles and Long Beach owing to a recent cargo surge, though a top intermodal equipment provider (IEP) to the port complex said there are enough available chassis, just not necessarily in the right locations. All parties point to excessive dwell times at warehouses in the region as the primary cause of the equipment dislocations, and an issue the entire supply chain must address. The shortages, caused by a spike in imports coupled with extended equipment dwell times at warehouses in the region, should work themselves out by the end of August if the import surge wanes, truckers and marine terminals told The Journal of Commerce. They noted that equipment imbalances always seem to surface when cargo volumes spike owing to seasonal factors, or when retailers rush shipments to get ahead of import tariffs, as they did last year. Drayage operators said they struggled to secure sufficient chassis to move containers to and from the 12 container terminals in the Los Angeles-Long Beach port complex. "In general, for our members, there is no equipment," Weston LaBar, CEO of the Harbor Trucking Association, told The Journal of Commerce. Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles, said marine terminals don't have enough chassis available for the delivery of import containers to truckers. "We've had a chassis shortage for the past three or four weeks, with last week being the worst," he said. McCorkle noted that whenever the demand for chassis varies from what would be considered the average needs of the transportation com- munity throughout the year, chassis shortages occur. This year, the IEPs "right-sized" their fleets for the reduced demand owing to the coronavirus disease 2019 (COVID-19), but they were slow to react to the current surge in imports, he said. According to DCLI, the issue is a chassis dislocation problem rather than an actual shortage of equipment in the region. Ron Joseph, DCLI's executive vice president and chief operating officer, said as of July 22 there were about 27,000 chassis available across the complex's 12 terminals. To ensure efficient cargo flow, there should be more than 30,000 chassis at the terminals, Joseph said, but he added that 27,000 cannot be called a "crisis." Joseph said chassis dwell times at warehouses and manufacturing plants had ticked up in recent weeks, which keeps the equipment out of circulation. According to the Pool of Pools website, the so-called street dwell time in the previous four weeks averaged more than five days, with four days or less considered to be necessary to meet equipment needs in ocean freight at Flexport, expects a short-lived increase in imports in late September before factories in China close during the first week of October for the annual Golden Week celebra- tion. Poskus said he doesn't foresee this "mini-peak" lasting beyond late September. Month-over-month improve- ments this summer and fall, how- ever, don't disguise the fact that on a year-over-year basis, import volumes will be down through November, according to the National Retail Fed- eration (NRF), which each month publishes Global Port Tracker with Hackett Associates. The uneven demand during the COVID-19 pan- demic has caused retailers to be "conservative" in placing orders for traditional holiday-season merchan- dise, Jonathan Gold, vice president for supply chain and customs policy for the NRF, said in the July Global Port Tracker report. "The challenge is that we have customers that we've been sup- port-ing all along, and then you have customers that basically went blank in the second quarter and now have come back and want their full allocation retroactively. That pro- vides a challenge as ship capacity is not that flexible," he said. The trade appears to be sta- bilizing now, however. The US inventory-to-sales ratio is building, which indicates that retailers may be nearing the end of their inventory replenishment, Rooney said. The inventory-to-sales ratio at the end of May was 1.51, compared with 1.40 in May 2019, according to the US Cen- sus Bureau. Furthermore, a surge of tradi- tional holiday-season merchandise doesn't appear to be coming. "I don't see a traditional peak season this year," Rooney said. Nerijus Poskus, global head of Chassis issues re-emerge at LA-LB port complex By Bill Mongelluzzo

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - August 17 2020