The U.S. Federal Maritime Commission (FMC) on June 17 identified four key areas where the container shipping industry in the San Pedro Bay port complex of Southern California can overcome current supply chain disruptions.
In late March, the FMC tasked Commissioner Rebecca Dye to lead a handful of industry representative-based “innovation teams,” with the goal of developing regional guidance to improve the transport and logistics flow of container traffic during the COVID-19 pandemic and beyond.
Dye recently concluded a round of discussions with the port directors of Los Angeles and Long Beach, ocean carrier chief executives, marine terminal operators, longshore labor leaders and the FMC innovation team members to identify trouble spots for handling containers in the region.
Empty 53-foot container volume inbound by rail to L.A. has surged since mid-May. Thus, 53-foot containers are out of balance:
Even before the spread of COVID-19 across the U.S., shippers and drayage truckers had become frustrated with the requirements for returning empty containers within the Southern California port complex. A potential solution to this logistics problem would be for the truckers to return empty containers at the terminal from which they were retrieved. The FMC said this would allow truckers to make dual moves and reduce the number of chassis required.
The FMC said shippers and drayage truckers should be given notice of terminal gate closures by the marine terminal operators no less than three days, and preferably seven days, before the closures occur. “At no time should a closure occur mid-shift,” the agency said.
Notices of blanked, or canceled, sailings from the ocean carriers during the COVID-19 crisis should be posted prominently on their websites. Notices regarding bypassed ports should be made available to shippers and drayage truckers at least 72 hours in advance, the FMC said.
Outbound from L.A., domestic intermodal volume has outperformed international intermodal volume:
Dye’s discussions with the industry also determined that ocean carriers and marine terminals in the San Pedro Bay area should collaborate on their export cargo receiving timelines.
The innovation team for the region recommended that FMC form an advisory board of ports, ocean carriers and marine terminal operators “in the interest of fostering and promoting greater collaboration across those three industry sectors,” the agency said.
Dye said her work with the regional innovation team in San Pedro Bay will continue, and she will soon hold similar discussions with innovation teams in the Port of New York & New Jersey and Port of New Orleans.
The Southern California ports’ market shares have declined during the past year:
“As we move forward into the third and fourth quarter of 2020, greater collaboration between ocean carriers and marine terminals will be critical to avoid cargo disruption and support a thriving American economy,” she said in a statement.
As a result of the FMC Fact Finding 29 innovation teams’ early work, the agency on April 27 issued an order to temporarily allow service contracts to be filed up to 30 days after they take effect to provide relief to shippers and ocean container carriers impacted by the coronavirus pandemic. This relief will remain in place through Dec. 31, the FMC said.
The FMC has authority under the 1984 Shipping Act to make certain regulatory adjustments. However, the agency said the work related to the innovation teams is not a requirement of the Shipping Act or its own regulations.
Import volumes stronger at the Port of L.A. than at the Port of Long Beach in mid-June:
FreightWaves SONAR offers the most essential rail and intermodal data available, with daily updates on rail and intermodal pricing and volumes. Additionally, compare rail market trends against other modes of transportation to gain a comprehensive view of logistics markets. Users can react faster than ever to changing market conditions, giving them an advantage never before seen in freight. To learn more and schedule your personal free trial, click here.