Many clashes are raging at the major US ports these days: the size of the modern containers ship versus the average port capacity, port operators and the trucking companies that service the ports, tension between the International Longshore and Warehouse Union (ILWU) and the port operators through their organization (Pacific Maritime Association), disputes with state and local government agencies, constant battles with the populations that surround the ports and complain about noise, congestion and so on. All of these confrontations are connected in some fundamental ways and nearly all of the disputes are rooted in the inability to keep pace with the changes in the industry.
Changes in the container shipping industry are driving the most pressing crisis. The ships hitting the ports are enormous—fully twice the size or more of the ships that used to arrive. The size and daily number of containers strains capacity. The number of containers from a single ship nowadays causes a need for whole new set of procedures, and technologies at domestic ports have not been able to keep pace. The huge shipping companies are now working with one another in ways they didn’t before and that creates complex demands for the railroads and trucking companies that service the ports. They have far more to sort and organize when there are dozens of different companies involved with every ship.
Port operators are also being pushed more by local and state government in California to be compliant with increased pollution regulations, which has been costly—it has also meant that trucking companies that are serving the ports have been required to invest in compliance, something many are not financially able make happen. Many have left the business altogether, exacerbating the capacity crunch.
Confrontations are happening at every port on the West Coast, though they are most serious loom in Long Beach and Los Angeles. Ports in Asia are far better managed and designed, which is making the US system creak. US restrictions on foreign investment in ports further complicate the issue. It’s creating a situation where most major players in port management are shifting to Asia as well as the Middle East.
- Chris Kuehl, PhD, NACM economist and Armada Corporate Intelligence founder