Ports Backlog A Symptom Of More Complex Problems

This week’s Courier Herald column:

President Biden announced this week that California’s clogged ports will be operating on a 24/7 basis to reduce the backlog of ships and cargo that has become the focal point of our nation’s broken supply chains.  While often left out of the discussion, Savannah’s container port was the subject of a New York Times piece published a couple of days earlier, noting some of the same stresses and backlog.

Georgia’s ports and their relentless growth over the past couple of decades has been an unqualified and consistent success story.  The expansion planning has always been steps ahead of market demands.  That was before the entire world’s economy was turned off and is now experiencing anything but a smooth restart.

The Times had a bit of detail on the state of Savannah’s container operations.  The number of containers sitting at the port – waiting to leave inland by truck or train, or waiting to be loaded onto a ship for export – are fifty percent higher than usual.  This is slowing down port operations and the speed of which ships can be unloaded and reloaded, causing a backup of ships waiting to dock that has extended as high as nine days.

The basic problem here isn’t the traffic itself, but the fact that customers aren’t picking up their containers in a timely manner once they are here.  To understand why that’s a problem, you need to understand a bit of why Savannah’s design has been the key to its success.

The Port of Savannah has almost two miles of continuous dock space, the longest on the eastern seaboard.  This allows all ships to be loaded and unloaded into the same yard – a large rectangle of land that has the ships on one side, and rail yards and truck entrances/exits on the other. 

In between, cargo containers are stacked as they enter from one side, waiting to leave on the other.  The design allows for an inherent efficiency that usually means the containers may only have to be touched from two to three times before they are matched from a ship to a waiting truck or train.

With the center yard at capacity, containers are stacked higher.  This means having to move more containers every time the one at the bottom is finally called up for exit. 

There’s not a single issue causing this backlog.  Many links in the nation’s supply chain appear to be broken. 

Securing enough truck drivers has been a problem for decades. Back at the worst point of the post-housing crash recession with the state suffering double digit unemployment, there were still thousands of truck driver positions going unfilled.  Today, with employers everywhere offering signing bonuses and higher pay virtually everywhere, finding someone wanting to drive a truck that can also pass a drug test is exponentially harder.

There are more complex issues at play as well.  The supply chain isn’t just the movement of finished goods, but also of materials and parts used within the manufacturing process. 

Many manufacturers have their own warehouses full of partially finished goods, still waiting on one part from a corner of the globe that is stuck somewhere in the system. 

In the 1980’s, most American manufacturers switched to a “just-in-time” manufacturing system, where parts needed to produce a good arrive just before they are needed on an assembly line.  The decades since have seen increased globalization, where these parts literally come from all corners of the world.

That was the most efficient way of doing things until it wasn’t.  Systems and processes that became more reliant on specialized and highly precise logistical movements of goods and people are now fundamentally and horribly broken.

There’s not an easy nor a quick fix here.  The ability to predict when an ordered good will arrive at a store or be delivered to our homes will be a guessing game for quite some time.

The takeaways here are two-fold.  The solution to the backlog at the ports isn’t at the ports themselves, but that those moving goods and services within the U.S. have to figure out how to execute their logistics more efficiently and predictably.  For those of us on the consuming end, best to plan important purchases as far in advance as possible. 

There’s just over two months until Christmas.  You are likely already behind on securing many presents that need to be under your tree.