The NDTO has reported on the ongoing supply chain issue in 2021 but thought it would be prudent to provide an update on these continuing challenges.
We continue to see reports from the Port of Los Angeles/ Long Beach (the US’s largest ports) with a sea full of cargo ships waiting to dock. To aid in congestion, the White House requested ports to shift hours to be open 24/7. While the assistance at the ports is well-intentioned, there are still many struggles beyond the ports that continue to compound and have a downstream impact. Moving our focus inland, more issues are coming to light as the supplies and containers make their way past the ports onto US soil.
Let’s take a look at what is happening beyond the ports. This will show that the ports are not the only problem, but the issue is part of the whole story of supply and logistic chains throughout the US. Once one problem gets better, another amplifies downstream in the supply chain. Essentially the bottleneck is being pushed along the whole chain.
Once containers arrive at ports, containers need to be moved to a delivery destination. Now that the ports are open 24/7, FedEx and UPS have also committed to overnight operations to move cargo, but the rest of the cargo needs to be moved. More people and equipment are necessary to do that. Because the ports now have more working hours, the rest of the supply chain would need to adopt more hours to accommodate the increased movement across the board.
Trucks with associated drivers are the primary delivery method for moving containers out of the ports. The US has been experiencing a shortage of truck drivers for several years and is now feeling the pressure more than ever. Even if drivers are found, training a truck driver for a Commercial Drivers License (CDL) takes anywhere from seven weeks to six months, depending on the program. The chassis used to move the containers are the attachment with wheels to a truck that holds the container for overland transport. Chassis have been backed order for nine months or more. Distribution centers have also been congested with cargo that is slow to unload and making the return of chassis for resue slower, which impacts the chassis shortage. Under normal conditions, chassis are returned within four days, but the return has been well over 15 days more recently. The reloaded chassis are often filled with agricultural goods and shipped back overseas, but with the rush of needing chassis, many are shipped outside of the US empty. This practice leaves more goods in the US and skyrockets pricing for anyone trying to fill containers and export. With limited drivers, limited chassis, and timing delays, the overland truck transports cannot keep up with the influx of cargo from ports.
Rail and intermodal facilities is another method of moving goods overland in the US. Railyards and intermodal facilities are essentially inland versions of ports, and they have struggled to keep up with the high demand. Inland facilities in the Midwest like Chicago were not able to quickly transfer containers from rail to delivery trucks. Typically these facilities have an order to stack and sort containers for movement. With the large influx of containers, there was no logical place to put them all, and frustrated truckers would drop off their loads (often empty) wherever there was room in the yard. In many cases, this dropoff would block other containers (like double parking a car), and many yards quickly became disorganized. In July 2021, Union Pacific halted all inbound trains from the west coast for two days to untangle the double-parked containers and chassis. Reports surged that outside of Chicago, there were 25 miles of rail waiting to be unloaded. Bottlenecking the inland rail yards and truckers from moving anything as intended caused increased delays across the US.
In predictable times, all of these pieces come together like a well-oiled machine, but the whole system is impacted when something breaks. Equally, when something speeds up, like the extended hours at the ports, the rest of the chain also needs to speed up. If that does not happen, the chain continues to suffer. Some can be done in the future to help mitigate the chaos, but those projects are often not quick fixes. Railyards and ports are also considering opening some abandoned yards for warehousing and infrastructure and technology upgrades, which will take time to get the system running more smoothly. Many experts are saying that time and patience are the cure for these issues to stabilize and that the supply chain and shipping issues will start to ease in February or March 2022. The NDTO remains hopeful that these challenges will improve in the near future.
References:
Congestion, Weather and Chip Shortages Cloud Rail’s Outlook: Cowen
From Computer Chips to Wine Bottles, the Supply Chain Mess is Disrupting Idaho in a Big Way
Inside America’s Broken Supply Chain
Norfolk Southern Reports Record Earnings, but Crew Shortages Affect Service Levels
Speeding Up Flow of Cargo Through Ports Only Addresses a Small Part of the Problem
With the Holidays Ahead Supply Chain Issues Will Get Worse Before They Get Better