Waiting for that holiday gift from your online shopping cart? He could be stuck in a seaport
A gargantuan crane tears a rust-colored container off a cargo ship almost as long as three football fields, and drops it onto a truck with a metallic groan. The maneuver is repeated thousands of times, day and night, here in the busy port of Houston.
Roger Guenther, the port’s executive director, looks through his dark glasses late last month as the truck pulls away and disappears into a canyon of steel crates stacked as tall as a five-story building. Another truck quickly pulls into place while waiting for the next steel box filled with the endless merchandise Americans buy with one click and “add to cart.”
âWhen everyone stayed home and got stimulus checks, they started buying,â Guenther said. “Because they weren’t going on vacation, going to restaurants, or buying services, they started buying furniture, bicycles, and home improvement items.” Her voice fades.
Evidence of the pandemic-fueled online shopping orgy is evident here at Port of Houston – the sixth largest container port in the country, and the first in total waterborne tonnage. All the available space is taken up by multi-colored container towers that are stranded here until trucks can arrive to transport them, for example, to a Walmart distribution center. The same thing is happening, to a greater or lesser degree, at every container port in the United States, from Los Angeles to Savannah, Georgia. Supply chain infrastructure – hampered by the pandemic slowing down and lack of space and workers – was not prepared for the consumer goods tsunami.
Up to five to 10 ships sitting outside waiting for a berth
âWhat you see at our port and many other ports across the country is that this increase in imports is really straining the supply chain,â Guenther said. “It fills our terminals, fills all of our extra space. Container terminals become the warehouse for all this cargo.”
He says their container cargo is up 16% in 2021 compared to 2020. They have been able to absorb the surge due to the recent expansion; however, the “dwell time” of containers awaiting pickup doubled from four to eight days.
In Asia, manufacturers shut down for weeks as the Delta variant toured the world earlier this year. For example, orders for Nike sneakers will be months late due to safeguards due to shoe factory closures in Vietnam. In Houston, the port pile-up is exacerbated by a shortage of truck drivers and trucks to transport the containers. Without enough trucks to get the steel boxes off the job site, there isn’t enough room to temporarily store the containers arriving on the freighters.
âWe had up to five to ten ships sitting outside waiting for a berth,â Guenther said.
Safeguarding at Port of Houston reverberates throughout the community
One day in late October, there were two container ships at anchor in the Gulf of Mexico off Galveston Island awaiting unloading because there was not enough space at the container terminal. They were waiting for the moment when they could call a pilot to board the ship and guide them through the murky Houston channel to the port.
“We are crowded on days like today,” said Chad Prejean, second officer of the Houston Pilots Association. “But we’re very, very consistent with our traffic here.”
The Port of Houston is in better shape than the Port Complex of Los Angeles-Long Beach, which receives 40% of shipping containers who enter the United States because they are the shortest distance to Asia. Regularly, more than 100 ships are anchored in San Pedro Bay off the southern California coast awaiting a berth. Port authorities threatened a fine shipping companies if they let their containers “stay” too long in crowded sea terminals.
Nevertheless, the safeguard of the Port of Houston reverberates throughout the vast logistics community of the industrial east of the city. They are all making more money because shipping costs have skyrocketed – in some cases doubled – but the supply chain deadlock has also resulted in huge headaches.
Global chassis shortage is another issue in supply chain slowdown
“So it’s a container,” said Randall Morris, COO of Canal Cartage Company, a short-haul trucking and warehousing company, pointing to a bright yellow 20-foot-long container. âThey’re basically like Legos. They sit on top of each other on the ship and they lock them up. When we go to port, they pick up this thing and put it on our frame. A chassis is basically a piece of steel with wheels. “
Unknown to those outside the Byzantine world of supply chain logistics, chassis are essential to the global movement of goods. These are the metal frames on which the containers are placed and which are then transported by truck to the retailer. And there is currently a global shortage of chassis, most of which are made in China. This is yet another problem in the supply chain slowdown.
âWe probably have around 250 (chassis) on order,â Morris explains, âthat have been on order since last year and they just can’t produce them fast enough.â
The consumer who clicks on “add to cart” is not the only one to suffer; supply chain workers do it too
The global supply chain can be compared to a professional orchestra playing a stimulating symphony.
âAnd if a piece falls,â Morris continues, âlet’s say the maestro turns up the tempo and no one is ready for that, it all falls apart. And that’s basically what happened.â
The consumer who’s pissed off about not receiving their personalized decorative pumpkins on time for Halloween isn’t the only one suffering. Josh Maddox, a 32-year-old warehouse supervisor at Canal Cartage, says their warehousing business was particularly busy a few weeks ago.
âI haven’t seen my kids for four days, which is very unusual for me,â says Maddox, standing in the warehouse as forklifts speed past. âI’m home at night. I can at least see them for a few hours before I put them to bed. But you come home at 7, 8, 9 at night and that makes things difficult for sure. ”
Short-term solutions to the backlog have no immediate impact
As the supply chain made national news last month President Biden asked the ports of Los Angeles and Long Beach to remain open 24 hours to relieve the backup. The Port of Houston has also tried to stay open late and open on Saturdays, but that’s not a quick fix. BJ Tarver, CEO of Gulf Winds International, a Houston-based trucking company that works closely with the port, says the extended hours are great in theory.
âBut I don’t know if it’s an immediate impact,â Tarver says. âYou have to have an infrastructure that can support 24 hours a day, right? Drivers therefore have to restructure their lives to be able to withstand this. Your customers must be open to receive and unload it. It is not something that happens immediately. . ”
A longer-term solution is for shipping lines to consider other ports, says Margaret Kidd, director of the Supply Chain & Logistics Technology program at the University of Houston. The Port of Houston has its challenges, she says, but they have a lot more space available than ports in Southern California.
The backlog in the country’s seaports will get worse before it gets better
âWhat we really need to see is that supply chain managers are diversifying their ports of entry for imports,â she says. “I mean, it’s a classic risk mitigation strategy. Texas Gulf Coast ports, Southeast Atlantic ports, Florida ports are all natural choices.”
At the Port of Houston, most of its imports also come from Asia, although freighters have to navigate 5,574 additional nautical miles through the Panama Canal to reach the Texas coast. But with California’s overcrowded ports, Houston expects its container traffic to continue to grow, along with Americans’ insatiable appetite for online goods.
The supply chain bottleneck at the nation’s seaports will get worse before it improves, with retailers expecting increased inventory for the Black Friday rush.
Todd Stewart, president of Gulf Winds International, made this comparison: âHave you ever tried emptying a swimming pool with a garden hose? That takes time.