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The Problem With Port Congestion: How It Affects The Trucking Industry
Ports are the lifeblood of global freight shipping. In recent years we have seen how the state of container ports can have serious ramifications for the global economy. When there is increase demand, more cargo is shipped and without proper management, this can lead to port congestion. Congestion at the ports affects not only importers and businesses, but also truck drivers. If you've ever had to deal with customs, ports or delays at the border, then you know just how hard drivers really have it. Truckers are overworked, underpaid and often overstressed, and the state of the ports only further intensifies the effects of their work. To truly understand how to improve efficiency in trucking, we need to understand how port congestion contributes to issues in the industry.
We all know how important ports are to shipping and logistics. In trucking, the numbers really do count, both in time and amount of money spent on fuel. Driver shortages are not so much the issue when it comes to port congestion, rather it is the fact that driver’s time is being wasted waiting in que at the ports or at customs. In understanding how ports affect the trucking industry, we can better understand how to utilize drivers skills and input on these matters, thus helping address some of the issues within the industry and supply-chain.
The Drayage Process
There is a journey cargo goes through prior to pickup at the ports. Cargo will usually land at a port, and then the owner of the cargo will need to pick up the cargo and move it to the specified location. This is where trucks come in, as cargo owners need to find truckers to haul their cargo from the port to either a warehouse or other location. When these parts are all running smoothly, then the supply chain is moving smoothly. Unfortunately, sometimes issues do occur and the drivers may be the first to pay the consequence of any backups or issues.
What Causes Port Delays or Congestion?
There are many factors which can contribute to delays at the ports. Aside from delays in loading and unloading cargo, it is important to note that consumer demand, weather, production schedules, weight limitation, market schedule or holidays can result in backlogs and delays at the ports.
In recent years, we are also seeing lack of access to chassis contributing to a build up of containers which stay at the docks or ports for longer periods than expected. Chassis demand has been high due to maintenance requirements and many ocean carriers are pulling out of the business, creating a shortage and thus increased price and demand. Further, when there is an increase in consumer demand, the imports also increase, which can flood the ports that are already lacking in space or equipment, and cause a backlog. More containers coming in than going out, causing delay.
Trucking and Port Congestion
There has been increased demand for truck drivers in recent years, as low wages and treatment of drivers have pushed a lot of drivers to retire or leave the industry. Retention issues and inability to find drivers will continue to contribute to congestion within the supply-chain as well.
As we saw last year, there have been a few factors contributing to port congestion and issues within the supply chain. The decline in truckers meant that fewer trucks were available to pick up loads at the ports and hours of service limitations kept this number low, as more trucks were needed to haul freight. Protests like #AB5 this year also illustrated the significant truckers have in the supply chain. With a few days strike, port operation began to back up and we saw signs of congestion incoming.
Why Port Congestion is an Issue:
Regardless of why ports may get congested, the consequence is that the consumer or the driver may have to pay the price. Businesses which need to get product out into inventory may face delays or even shortages, so consumers do not receive their goods on time, and some seasonal goods may not even be arriving in due time. Truck driver’s time is also not used efficiently, and many can lose money A truck which is waiting in line due to port congestion is losing time on the road and business is slowing for the customer. There is a limited number of trips a trucker can do in a day if ports are congested, as the turnaround time becomes longer, which is critical for both owner-operators and company drivers.
Shipments which would normally take two days, now are now increasing, sometimes doubling or tripling in the time needed. It takes many drivers time to get a container out of a terminal, then another day to come back and return the empty, which is depleting their business and profit possibilities.
Port issues also make it difficult for shippers and freight forwarders to coordinate logistics of the shipments, because we have containers sitting at the dock for longer periods, requiring customs approval or even additional documentation. Cargo owners run out of free time on their containers and it becomes costly to manage. With high volume of shipments, it becomes an even more difficult task to now coordinate these delayed shipments. The cost to shippers or forwarders may also increase, as they are charged for the goods sitting at the port terminals after a certain period (demurrage and detention fees), cutting into their bottom line.
So How Do We Address Some of the Issues With Port Congestion?
Port congestion appeared to be improving around summer last year, but we are now leaving the holiday peak season, and we have seen how longer shipping times and higher shipping costs have been impacting consumers and the industry. While there is a lot to fix in the global market, there are some small steps which may be taken to improve matters tied to port congestion and the trucking industry.
Improving The Communication Network
A potential solution in addressing shipping and congestion issues is to enhance communication between shippers, carriers and drivers. We’ve seen the availability of short term contracts rise during this period, which further reinforces the significance of a strong communication network. Using one platform to streamline the import and export process, can help alleviate a lot of the disruptive influence port congestion and instability in the supply chain has had in recent years. Using a platform like Zipments.io, drivers can also have more control or autonomy; with real-time tracking of their border crossing status, or streamlined communication with brokers and shippers when needed.
Addressing Driver Shortages
Congestion at terminals and large volume of freight requiring trucks is leading to a problem in finding drivers, but also balancing the logistics in order to make work efficient for the drivers. Drivers are willing to work, rather it can take hours to wait at the ports to pickup a container, so not much is getting released to the driver to be able to continuously profit off of. It can take upwards of two hours to clear a truck at terminals, and the long lines are not incentive for drivers to continue to work, as they are losing money in the waiting times. Developing a new strategy using technology to simplify logistics and provide drivers with more autonomy is essential. Adding more drivers is important, but so is creating opportunity for them to work efficiently, instead of losing money waiting in que. Drivers need more incentive and a better use of their time, so utilizing technology to increase efficiency for them will help balance some shortages we have been seeing in recent years.
One obvious way to reduce delays and issues with port congestion is to give freight more time, meaning getting the logistics and shipping completed earlier or ahead of time, so that it can reach its destination on time. Some companies can utilize their own networks and foresight in planning ahead to ship time sensitive cargo a little earlier. Using 3PLs is one way businesses can get ahead of their lead times or potential schedule changes. While this may not be the move for everyone, it does contribute to the efficiency of cargo being distributed.
Digitizing Ports and the Shipping Process
Paperwork processing and documentation are one of the ways ports continue to lag behind, because it takes time to ensure all documents are filled out correctly, processed and ready. Delays in international cargo tie down to issues with documents, taxes or duties, which can easily be fixed with the use of technology to automate and process some of these essential components of the shipping process. Digitizing ports can allow for more visibility and thus planning to efficiently handle incoming cargo. Meanwhile automating some of the tasks using machinery like cranes can increase efficiency.
Using cloud based data networks, shippers and logistics professionals can collect real-time shipping data, tracking and even choose the best ports or warehouses based on the evolving data presented. Real time visibility into where the shipment is can allow earlier intervention in the shipping process or better logistics planning overall, where some cargo can be rerouted to a less busy port, to help balance out the influx of imports.
Trucking routes are changing, as our global economy demands more goods and services get shipped. Port congestion puts additional strain on industry. As the ports get congested, truck drivers are sidelined from their loads. We need to look at container buildup and even capacity for trucks to park at ports, as a way to address some of the delays which may be occurring. If a container is delayed at the port, it can lead to delays throughout our supply chain. However, taking a few measures to change how things are done, can make life easier for drivers and. by effect. customers as well.