For any company manufacturing their products overseas, shipping logistics can be a big concern, especially when cargo ships are diverted from their intended port due to congestion at the terminal. When this happened to an APL Norway vessel two weeks ago, questions arose as to what could be the cause.
It doesn’t take much to find the answer. Any terminal operator will tell you that there has been a chassis shortage at the Los Angeles-Long Beach port complex all year, and it’s caused a fair share of the congestion issues. Container chassis are the wheeled frame or trailer that shipping containers are placed on for ground transportation.
When a terminal has a shortage of chassis, truckers are burdened with a delayed turn time. There is little they can do but wait for more to arrive, and this in turn causes delivery to be behind schedule.
Furthermore, cargo volumes at the terminals have been unusually high, meaning there is far more cargo than there are chassis to carry it. In fact, the increase in volume is so significant that some operations began storing their cargo on the ground rather than on chassis.
Why this shortage? Formerly, shipping lines owned and operated the chassis along with providing plenty of services to make operations run smoothly. However, most have sold their ground transportation supplies to counter financial struggles in the past few years.
Now, chassis are run by several equipment-leasing pools in the Los Angeles-Long Beach port, and these systems are overwhelmed with the sudden change in business. In order for things to run successfully, they have to create a more fitting service model that accommodates port operations.
Many consider this to be a chassis dislocation problem rather than a shortage. Due to the independence of equipment-leasing companies, quite often there may be a surplus of chassis in one terminal and a desperate shortage at the next, with no easy way to even these out.
Unfortunately for those businesses whose products are caught in the delays, there is little to be done but wait for these dislocation issues to be resolved by the equipment companies. As of right now, a transportation consultant has been hired and a report developed to offer recommendations, but no action can be taken at this time due to the prospects of a new labor contract.
ITI has extensive experience in outsourcing manufacturing to China, and is aware of the issues involved in shipping and transportation. Although there is little we can do to resolve the chassis shortage, ITI will stay informed and keep our affected clients updated as long as the matter persists.
If you have any concerns about the chassis shortage and what effect it may have on your products made in China, please call us today at (281) 242-7030, we’re happy to help.