May 15, 2015 | Industry Insights

Supersized Ships Overwhelm U.S. Ports

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Though the crisis on the West Coast has passed (to some degree), congestion at U.S. ports remains a pressing issue – one that is only going to get worse without a substantial improvement to port logistics and capacity.

The Port of Virginia is an excellent case in point. Built to handle large volumes of cargo, the port was having trouble in late April processing a surge of containers from three large ships at dock, a report from The Wall Street Journal says. The overload resulted in a mile-long backup for truckers to enter the terminal and a 13-lane wide, 10-truck deep traffic jam once inside the terminal.

In Newark, N.J., a shortage of chassis has resulted in lines stretching for miles, and in Los Angeles and Long Beach, supersized ships are adding to delays still not completely resolved from the long labor dispute that slowed cargo processing on the West Coast.

And more pressure is coming. The expansion of the Panama Canal is slated for completion in 2016, allowing ships carrying up to 13,000 containers to travel eastward, up from 5,000 currently. The volume of U.S. container trade with Northeast Asia is projected to more than triple by 2040, according to a 2013 Department of Transportation study cited by the Journal.

Port bottlenecks are crimping the amount of goods truck drivers can move, with one firm telling the Journal its trucks have seen a 50% daily reduction in cargo moved because of port congestion. The delays are also introducing significant unpredictability into the retail end of the logistics chain. Retail logistics coordinators find themselves overstaffed on some days because the containers they expected can’t get through then understaffed or on the hook for overtime pay when the floodgates open.

Some foreign ports rely on unmanned cargo-handling machines, with United Arab Emirates port Jebel Ali having invested heavily in megaship service. In the U.S., the Georgia Port Authority is spending $1.5 billion over the next 10 years to improve cranes, storage and other infrastructure at the port, and the state is plowing $120 million into road improvements near the port. The port operates smoothly and regularly handles large vessels, the Journal says. It began investing in upgrades about a decade ago and has added a next-generation computer system that provides real-time locations of containers to maximize truck retrieval efficiency. It also purchased the tallest cranes on the markets and is building storage on undeveloped inland property to house empty containers so more space is available for cargo near the dock.

While New York, New Jersey, Virginia and other ports are making upgrades, the pressure from outsized container ships is stressing truckers and port workers. Container misplacement by dockworkers trying to clear space adds to confusion and delays, and older machinery at U.S. ports is prone to equipment breakdown with many pieces routinely taken offline to undergo repairs or maintenance.

Wear and tear on vessels and trucks from all the delays could be a hidden loss exposure for shipping and truck owners. The effects of the stress and frustration on drivers is also a hazard to consider since truckers might try to make up for lost time when finally loaded and on the road. It’s highly likely that the cargo industry needs to add these considerations into their risk management planning, including guidelines for drivers’ health and welfare and fleet maintenance.

At Roanoke Trade, we can help you with more than just insurance products. Our specialists will help you understand how ongoing and upcoming events and trends could affect your company’s chances of financial losses. Combining our excellent risk management with our superior cargo insurance can help you protect your shipping enterprise from financial calamity.

We invite you to learn more about us, our experienced talent in this highly specialized area, our creative solutions, and the value we will bring to you and your clients. Please contact us at 1-800-ROANOKE (800-762-6653).

Source: Wall Street Journal


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