By Arthur Chen       Photo: Andrew Coop 

Cheap chassis causes the current deadlock from ports, railways to land transportation! Just like vehicle chips accounted for 3% of the total car cost, but no inventory reserved makes the car production shut down!

Starting in July this year, more than a month earlier than before, traditional Thanksgiving, Christmas and other holiday sales commodities have moved . Import shipments to the US have surged.  Congestion at the Port of Los Angeles is severe. The serious shortage of chassis has slowed down inland transportation turnaround time that makes difficult for imported containers to be forwarded from the port to warehouses then to the retail stores afterward. It is forming a congestion chain reaction. The line of ships with full of thousands of containers waiting to be unloaded off the Los Angeles/Long Beach Port is getting longer and longer. According to the latest statistics from the shipping industry at the Port of Los Angeles, the number of container ships lined up outside the Port of Los Angeles/Long Beach has increased to 72, exceeding 450,000 TEU, and there were only 33 ships at 34 weeks. This shows that the congestion of container transportation isn’t improve but getting worse. In the previous week, only 56 container ships were waiting for berths at anchorages, and another 31 container ships were operating at berths in the port area. The Los Angeles Port Company announced on Tuesday that the average time for ships to berth was 8.5 days. According to IHS Markit, Long Beach port accounts for 50% of US imports from Asia. At present, many proportions are time-sensitive seasonal products for sales in among Oct through Dec. Many importers have been urging local freight forwarders day and night to find a way to pull out containers from port. Unfortunately, many containers were mistakenly placed in the transfer waiting area. As a result, it took 3-4 weeks to get available chassis to retrieve containers. The angry voice of abandoning goods from end users has constantly heard.

For cargo owners could see the carriers web message indicating that the containers have arrived at the ports ( also including the inland railway terminals), but they just unable to pick up their containers. They wondered why? Experienced shipping analysts pointed out the slow action for trucks pick-up and containers delivery may be caused by different reasons, such as the shortage of truck drivers and trailers; lack of chassis and insufficient storage capacity of the warehouses; and containers offloaded in the wrong areas etc., all factors mixed together leaded to a chain reaction. The port representative also responded to this phenomenon and said, “It is obvious that the problem of supply chain congestion continues to worsen. This problem cannot be attributed solely to the relevant ports and terminals. If the importer truck delivery is not as timely as usual, the terminal will be unable to do anything.”  It sounds like he kicked the ball onto the cargo owners and the ground forwarding companies who cooperated with.  Honestly speaking, the part where cargo owners and freight forwarders could do to make the whole process of transportation running in smooth is limited. It is mainly caused by the disability to effectively digest a large number of containers in a short time in the ports and railway container terminals, and the serious short of the basic chassis. Shipping lines has given up to involve in the operation of chassis at terminals, ports and warehouse since a few years ago. The port authorities should really invest in these cheap equipment if they could foresee years ahead. When extreme events occur then we see management short-sightedness is shown. It is the main factor to cause port congestion and unable to pick up containers at ports and railway terminals.

Unfortunately, the unprecedented volume of imports in the port for 14 consecutive months has caused ships congestion, and the bottleneck of the port warehouses as well as the container terminals of the inland railway hubs have caused the ports to become more congested. It will take at least 6 months to see a glimmer of hope that things will return to normal. Some industry analysts said for at least 6 months, it will not show initial signs of relief because of the trans-Pacific shipping capacity is insufficient, (I personally disagree on this statement, because the liners already have variety of new purchased and chartered ships to join, and the newly purchased and chartered containers are more than last year. An increase of 6%. Theoretically, as long as the waiting time for ships is reduced to less than 2 days, the capacity can be replenished.) and the shortage of chassis. However, the pressure for importing large number of seasonal goods will keep on slowing down the speed of goods passing through ports, railway and warehouses. The shortage of chassis is not only in Southern California, but also in the southeastern ports of Savannah and Charleston, as well as inland rail hubs such as Chicago, Memphis, and Kansas City, causing ground traffic congestion too.

Let me pull out some news on web for reference --  Mike Wilson, CEO of Consolidated Chassis Management, said that in the southeastern US, the street dwell time for chassis has increased from 6 days to approximately 15 days. Wilson said that the congestion of warehouses in the southeastern US, coupled with the shortage of truck capacity and chassis in the region, makes it difficult to transport imported containers from ports to warehouses, and also difficult to transport from warehouses to retail stores. Tim Denoyer, vice president and senior analyst at ACT Research, said that the nationwide pressure on the supply of chassis in the United States is very high, and it is likely to go on until 2022. In the past two years, they have underinvested in chassis. In addition, the tariffs imposed by the Trump administration during the Sino-US trade war are still in effect. Denoyer said that the U.S. International Trade Commission imposed nearly 200% more stringent anti-dumping and countervailing duties on Chinese made transport equipment this spring, which has actually prevented the import of chassis vehicles from China. China is the world's largest producer of containers and chassis. From these information, we know that a cheap chassis equipment has caused the current deadlock from port congestion, railway and land transportation! Just like vehicle chips accounted for 3% of the total car cost, but no inventory reserved makes the car production shut down!

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