The current state of the logistics industry is best described as chaotic. While the video above is rather tongue-in-cheek, it highlights the desperation felt by many in the industry.
The Port of Oakland continues to be by-passed. Meanwhile, the ports of Los Angeles and Long Beach had a record 73 ships at anchor. That number represents approximately 40% of the vessels in the TransPacific trade.
The resulting influx of cargo in LA/LB is causing a shortage of terminal space in Southern California, and terminals are routinely closing off the ability to return empty containers…they just do not have space for them. Cargo volumes and empty return shut outs are resulting in a significant chassis shortage. The chassis shortage exacerbates the terminal space issue…can not pick up the next loaded container without a chassis and can not get your hands on a chassis unless you can return the empty. The outcome is slower moving cargo and increased demurrage and detention charges.
Railroads continue to meter container traffic to the interior as rail yards in Chicago and Memphis are over capacity.
Truckload capacity, which is already tight, is being taxed even further. The long transit times from Asia to the West Coast, the by-passing of other ports of call, the metering of rail traffic are all increasing need to transload ocean containers into dry vans and driving up truckload demand and pricing.
On the other side of the Pacific, COVID continues to cause logistics issues. Vietnam remains closed, and the Ports of Shanghai and Ningo had 154 vessels at anchor as result of their past closures.
To make matters even more challenging, China is short on energy and is metering power to many factories resulting in shorter work weeks and shorter work days.
Is it any wonder large retailers like Costco, Wal-Mart and Amazon are chartering their own vessels?
Will we be able to stave off a “toilet paper” Christmas?