An Update on U.S. Ports And Supply Chain Challenges

The year 2021 was a difficult year for ports across the U.S. 2021 saw all-time highs in cargo moved, unloading wait times, and overall congestion. However, things are already looking up this year. Consumer demand during the pandemic impacted the U.S. supply chain in many ways. In addition to port backups, truck driver workforce shortages and rail congestion also slowed the shipping lanes through the country.

At the end of the first quarter of 2022, the largest port system in the country – Long Beach and Los Angeles – which accounts for 40% of imported goods, was down to 69 ships waiting to unload, from 109 ships anchored at the start of the year. Shipping delays are continuing in the U.S., but progress is being made in our ports and consumer demand is decreasing after a busy holiday season.

One way ports are meeting increased demand is by adding capacity. Seattle has already opened a new port terminal this year, increasing capacity by 40%. On the east coast, Savannah, Jacksonville, and New Orleans are adding additional container storage capacity. The Port of Savannah currently has no unloading backup. This is because of new storage capacity for goods unloaded and waiting for transport.

With new warehousing needs popping up at ports across the country, the warehousing industry saw huge demand increases in 2021. In addition to increased consumer demand during the pandemic, warehouses experienced an increase in the need for storage space from companies that were experiencing logistics challenges. As supply chain issues – from shortages of labor to surging gas prices – impacted shippers, warehouse providers were needed to store additional cargo and meet dynamic shipping requirements. As a result, warehousing prices have increased steadily across the country.

At the end of May of this year, The Biden administration announced the appointment of a new official to focus on U.S. ports and supply chains at a federal level. Retired General Stephen Lyons will take over the role of Port and Supply Chain Envoy to the task force to battle supply chain disruptions caused by the pandemic, replacing John Porcari, who was the first envoy appointed last August.

Ret. Gen. Lyons will work with transportation officials, the White House, and companies to “address bottlenecks, speed up the movement of goods, and help lower costs for American families,” according to the administration.

“The Biden-Harris Administration has made tremendous progress on addressing the supply chain disruptions we’ve seen as we recover from the pandemic,” said Lyons in a statement. “I look forward to rolling up my sleeves and continuing to engage industry, labor, and port stakeholders to improve the fluidity of our supply chains, cut down on shipping costs, and ultimately save money for the American people.”

The administration did make some progress on easing the backlog at ports under Porcari’s leadership. A major focus has been the ports of Los Angeles and Long Beach, with results as noted above. Also, the ports have announced they would once again delay implementing a “dwell fee” threatened on companies that allow shipping containers to sit on the docks for more than nine days. The fee would start at $100 and increases by $100 each day a container remains on the dock.

The fee policy was crafted in coordination with the White House, and it’s been consistently delayed since it was announced in late October due to what officials say is steady progress. Cargo sitting on docks for extended periods has declined by 48% since then, the Port of Los Angeles announced Friday.

Yet the supply chain is still bogged down due to months of backed-up products, the war in Ukraine and demand for critical goods — all factors contributing to persistent high inflation in the United States. Last year, former port envoy Porcari told Spectrum News that the recent progress at ports was partly due to private companies “pulling in the same direction” in a way they never had before. He also said the pandemic was a wake-up call for Americans about gaps in efficiency in the supply chain.

“As Americans, we have gotten used to our goods movement chain functioning without having to think about it twice,” he said. “During the pandemic, we found out we don’t have that luxury.”

The bipartisan infrastructure law passed in November includes $17 billion for port infrastructure and waterways, though the administration highlights those potential improvements as long-term, since the law’s spending is meant to stretch over five years.

Overall, the outlook for the Supply Chain industry and for US ports has improved markedly in the first half of 2022, and all indicators point toward continued improvement. The number of available supply chain jobs is close to a 20-year high. A quick online search shows a huge number of openings at Amazon, Apple, Flipkart, PepsiCo, Procter & Gamble, SpaceX, Target, Tesla and many more of the world’s best companies. Across all areas of supply chain, people are finding employment quickly, so supply chain is becoming more and more attractive as a career. In recruiting for supply chain managers and executives companies will, on the one hand have a rich supply of candidates. On the other hand many of these candidates will be entry-level and with salaries high and growing, higher-level executives can be expected to be amenable to moving.

Locating and recruiting executives for this important area and sorting out great candidates from the merely adequate can be a difficult process. Outsourcing the search for and vetting of candidates is likely to produce the best results. An effective recruiting partner will know how to identify the right combination of skill and experience to find the top candidates and to convey to them what is needed by the hiring company.

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