Jan 8, 2021

LA Struggles; The Domino Effect of Congested Ports

Supply Chain
Logistics
freight
United States
Laura V. Garcia
3 min
The Port of Los Angeles is becoming congested due to global supply chain issues caused by COVID-19. What’s the knock-on effect?
The Port of Los Angeles is becoming congested due to global supply chain issues caused by COVID-19. What’s the knock-on effect...

Gene Seroka, Port of Los Angeles executive director, said cargo volume was up 50% in the second half of 2020 compared to the first half—and that it’s become common for loaded ships to have to wait, anchored at sea until a dock opens up for unloading.

“The port is strained,” he said. “We’re shipping back two times the amount of empty boxes then we are American exports across our docks.” Seroka said the increased volume is all due to “the change in the American consumer,” explaining that during the pandemic, “we’re not buying services, we’re buying goods.”

The Domino Effect

Volume at the Port of Los Angeles is expected to be up an average of 88% YoY in the first two weeks of 2021 — a sign that swelling imports have yet to let up. However, the increase in import volumes has not been met with increased human resources, operating capacity or assets. Labour shortages due to the pandemic, chassis shortages in Southern California caused by increased “street dwell” times, and delayed vessel arrival contribute further to the ongoing congestion. In short, increased volume without increased capacity creates a bottleneck not easily resolved.

“Terminal operators have been forced to stack containers higher and wider in the container yards, which has delayed the release of import containers from the port complex for the final delivery leg to inland destinations,” says Sara Alkawari, Supply Chain Risk Intelligence Analyst at Resilience360, “As yard utilization has averaged above 80 per cent, the terminals’ capacity to both store and move containers to distribution centres and rail ramps has been severely disrupted. Furthermore, reduced storage capacity at warehouses is likely to lead to further challenges and extended container and chassis dwell times.”

The congestion at the ports has also disrupted trucking operations as turn times for trucks — the time to drop off and pick up a container within the terminal premises — have increased by 33 per cent from June to September. The number of trucks needing over two hours to complete the turn has also steadily increased, impacting the overall productivity at the ports.

Finally, as containers remain in the yard for longer, shippers have faced detention and demurrage surcharges by ocean carriers and marine terminals as well as higher spot rates and surcharges for intermodal shipments by rail carriers.

In a December 30th press release, Maersk announced the steps they are taking to address the U.S. export and logistical issues: 

  • Maersk is working with stakeholders to address U.S. export and congestion challenges stemming from an ongoing surge in imports at U.S. seaports.
  • Maersk is working with stakeholders to address U.S. export and congestion challenges stemming from an ongoing surge in imports at U.S. seaports.
  • Maersk has been holding meetings with the Federal Maritime Commission, the Agriculture Transportation Coalition and the Harbor Trucking Association.
  • Maersk has not provided specifics on exactly how it plans to improve export flow, but it did outline its goal of improving the rate of dual transactions at APM Terminals' Pier 400 in Los Angeles, noting that 65% of its transactions are already dual transactions.

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Jun 24, 2021

Kuehne+Nagel cuts carbon footprint by 70% for Honda China

Kuehne+Nagel
CarbonNeutral
supplychain
Logistics
2 min
Road-to-rail logistics solution will reduce carbon emissions at the automaker by 70%, stripping 16,000 tonnes of CO2 from its supply chain

Around 16,000 tonnes of CO2 has been cut from supply chain of Honda's China-based manufacturing division through a road-to-rail transformation in partnership with logistics leader Kuehne+Nagel

The programme was developed through KN Sincero, the joint venture between Swiss headquartered Kuehne+Nagel and Chinese automotive logistics firm Sincero, established in 2018. 

KN Sincero worked with Honda China to develop an integrated solution to convert much of its domestic long-haul trucking to train lines, using regional hubs to improve supply chain performance and further reduce carbon emissions. The programme delivered consolidations as well as value-added services, including sorting, scanning, repackaging, GPS track and trace, and recyclable container management. 

"Kuehne+Nagel has always been a supply chain partner that we can rely on, to help us improve our supply chain performance whilst also achieving our environmental goals,” said Mr. Jiang Hui and Mr. Takuji Kitamura, Joint General Manager of Wuhan Dong Hon, the logistics affiliate of Dongfong Honda Automotive. 

After six months of shifting to the road-to-rail model, new supply chain reliability and efficiencies are expected too trip 16,000 tonnes of carbon emissions annually. The carbon savings represent an enormous 70% reduction in total. 

"Automotive is one of the most important sectors in contract logistics, particularly in China, the world’s largest automotive market,” added Gianfranco Sgro, member of the Management Board of Kuehne + Nagel International AG, responsible for Contract Logistics. “I am glad that Kuehne+Nagel and Honda share a common vision of service, innovation and sustainability.”

Kuehne+Nagel’s Net Zero Carbon programme 
 

Kuehne+Nagel announced its Net Zero Carbon programme in 2019 with a dual purpose to reduce CO2 output in its own logistics operations, as well as partnering with organisations to minimise their own impact on the planet. Kuehne+Nagel reached carbon neutrality globally in 2020 throughout its own, direct emissions, and is now focused on developing its capabilities to serve partners. 

Dr. Detlef Trefzger, Chief Executive Officer of Kuehne+Nagel International AG, said the programme is “a package of measures to fight CO2 emissions and provide sustainable and innovative supply chain solutions – hand in hand with our suppliers and customers”. 

As part of the initiative, Kuehne+Nagel established its own nature projects in Myanmar and New Zealand, and invested in ‘nature-based’ carbon dioxide compensation projects to strip harmful emissions from the environment. It is committed to being CO2 neutral for shipments in its network of transport suppliers by 2030. 
 

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