Supply Chain Crisis Easing Up?

Written By BlabberBuzz | Saturday, 27 November 2021 23:45

Mario Cordero, executive director of the Port of Long Beach, California, reported to CNBC’s “Squawk Box” on Wednesday that the twin ports of Long Beach and Los Angeles are making progress in addressing the backlog of cargo ships and containers.

“I think we’re moving forward with some progress and hopefully, as we move into the next six months, we’re going to continue to mitigate the scenario that we’re seeing here,” Cordero told host Becky Quick.

The twin ports account for some 40% of sea freight entering the United States. Fines of $100 a day per container left on the dock, referred to as “Container Dwell Fees,” were announced on Oct. 25 to address the unprecedented accumulation.

Carriers would have a maximum of nine days to move containers by truck before fines start accruing and six days if transporting by rail. Since the announcement, the twin ports have seen lingering cargo containers reduced by 33%, which has yet to be imposed.

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During the first days of the month, there were roughly 60,000 cargo containers at the ports for over nine days, which would make them subject to a fine, American Shipper data reviewed by Marine Insight showed.

According to Cordero, there are still close to 61 cargo ships outside the twin ports waiting to unload, which is much lower than the record of 111 on Nov. 11 reported by Insight.

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However, once the ships are unloaded, it has led to a new litany of problems, with surrounding neighborhoods being used for storage, trucks idling for hours in residential streets and even property damage.

After a shipping container fell off a big rig truck’s chassis and crushed a car Tuesday, officers with the Los Angeles Police Department were in Wilmington keeping a close on Wednesday’s traffic. Though there were no injuries, the accident occurred in a neighborhood where residents have been complaining about heavy congestion and safety issues.

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Cordero insisted in the CNBC interview that more must be done to address the supply chain issue in the future.

“There are truckers, marine terminal operators, warehouses, railroads, and port authorities,” explained Cordero, adding that a lasting solution would entail “a real collaborative effort” from all parties.

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A plan from the Biden administration that would have established 24/7 operations at the Port of Los Angeles fell through last month. According to The Associated Press, the port's executive director, Gene Seroka, announced during a Nov. 16 briefing that they had “24/7 capability,” but a shortage of truck drivers and nighttime warehouse workers.

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