| Press Releases: | |
| News Release For Immediate Release Contact: William Jacobson 510-651-5100 x208
Recent articles in major news sources have indicated increasing delays of offshore shipments to domestic U.S. ports. USA Today (Oct 28, 2004), The Wall Street Journal Asia and Logistics Management (December 3, 2004) all reported the concerns of U.S. retailers in relation to this increasing port congestion. U.S. hunger to increase imports of materials and goods from abroad is causing greater congestion and straining current port resources resulting in delays. Domestic retailers are feeling the stress of a heated economy and expected strong Christmas season. The congested ports are responding with slower transfers and delayed shipments to expectant distribution centers. To counter the crowded ports and delivery delays, retailers and manufacturers have had to resort to earlier production and shipping schedules. Efforts to drive domestic just-in-time initiatives are being hampered with delays for incoming parts. Ports are struggling to move the volume for a number of key reasons including backups by overland truck and train. Despite new resources being added to counter the increased import traffic, the system is still overloaded today. Anticipation is that this will continue with the added burden of increasing pressure by the U.S. Department of Homeland Security to secure the ports and ensure container security for the heavy load of shipments. According to Daniel Machalaba and Bruce Stanley of The Wall Street Journal, two California Ports, Long Beach and Los Angeles, are currently handling greater than 40% of the cargo-carrying steel container shipments to the U.S. and about two thirds of all shipments from Asia. These ports have experienced a 10% jump from the year prior by handling 8.5 million cargo containers in the first eight months of the year. Beyond physically moving that volume of vehicles through the congested ports, problems were compounded by the failure of the ports to hire adequate dock workers. Asian shipments to U.S. bound retailers for year-end holiday sales start mid-April then peak between August and the end of October. Many companies have shipped products three plus weeks earlier this year than in the past to compensate for potential port backups. Ron Widdows, Chief Executive Officer of APL Ltd., a unit of Neptune Orient Lines Ltd., in Singapore stated, "The problem is going to be with us for quite some time." when responding to the issue of growing snarled traffic in congested ports. According to the article, Shippers Report Negative Impact From West Coast Port Backup, published in Logistics Management, shippers do not expect the port problem to disappear quickly; in fact, 65% of the respondents the publication polled expect the port backup to extend well into 2005. Beyond looking for new ports to expand entry into the U.S. some overseas
manufacturers are looking toward the U.S. as a link in the supply chain. Certain
Asian companies are completing production operations in the U.S. to reduce warehousing
and rehandling costs. Considering the costs of shipping completed product to the
U.S., domestic product completion makes sense in reducing costs of "shipping
air". Products already packaged simply take more space in a container versus
shipping only the actual product. Completing packing in the U.S., where the final
product can be produced and shipped Alan Lo, Director of the ocean division for Expeditors Hong Kong Ltd., stated that he expects many Hong Kong shippers to switch to air cargo this year to expedite products to U.S. retailers prior to Christmas. Lo remarked that air shipping can cost 10 times as much as ocean shipping and can "definitely" consume shipper's profits. Resources for more information: Shipping
News West
Coast Ports Logjam Cleared; Cargo Backed Up OnDocks
| |
|
| |