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Back-to-school gear floods in as congestion jams supply chain

AS annual back-to-school inventories flood in, clogging container yards, rolling stock, trucks and warehouses, here's a Bloomberg survey on how things stand.

The Port of Los Angeles has recently enlisted help from the White House to clear a backlog of rail-bound containers that's tripled since February, taking up space on its docks and causing congestion. As of Monday, there were more than 28,000 rail-container units on the ground, about two-thirds of which had been waiting to be picked up for nine days or more.

The country's major railways are also struggling on the labour front, as two years of unsuccessful negotiations with their unions could force federal intervention to prevent a strike that could cripple already-strained supply chains.

The more than 115,000 rail workers operating on 30 railways will be able to strike as soon as July 18 after the union rejected a binding mediation offer from the National Mediation Board.

More than half of the truck gates at the Port of Los Angeles are still going unused on average due in part to the inconsistent staffing and operation hours at the terminals and distribution centres outside of the port, on top of the lack of warehouse space.

Moving about 70 per cent of America's freight tonnage, truckers don't feel encouraged to go in during off-peak hours because parts of the supply chain often don't operate around the clock, said Harbour Trucking Association CEO Matt Schrap.

Before the bottlenecks emerged, truckers could pick up containers in the early morning and then store them at truck yards until space opened up at warehouses. But these sites are now "full of empty containers and chassis".

The vacancy rate at Southern California facilities is now around 0.3 per cent, with the lack of availability particularly acute in the Inland Empire counties of Riverside and San Bernardino, said Port of Los Angeles executive director Gene Seroka. adding that in normal times, the vacancy rate stood five per cent.

"We can't build these facilities fast enough, and even though we boast two billion square feet from the shores of the Pacific now out to the desert region of Southern California, we've got to turn that cargo out faster and have enough space under roof to manage all of these consumer and manufacturing products," he said.

Also the contract covering 22,000 dockers across 30 west coast port expired July 1. The International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), which represents 70 employers, said that "neither party is preparing for a strike or a lockout".

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Back-to-school gear floods in as congestion jams supply chain
Back-to-school gear floods in as congestion jams supply chain

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