Stress at sea: Exploring port logjams

NRF 2022: How technology can add visibility and control to the supply chain

Ryan Petersen offered attendees of NRF 2022: Retail’s Big Show a tale of tacos, Twitter and truckers on January 16, but it was no lighthearted matter. Petersen, CEO and founder of Flexport, sat down with Jon Gold, NRF vice president, supply chain and customs policy, for “Logjam at the ports: What happens next?” on the UST Global Supply Chain Stage.

Gold, in opening the session, quipped that supply chain disruptions were “everybody’s favorite topic these days.” And the situation doesn’t appear to be improving anytime soon.

NRF 2022 event recap

Take a look at the NRF 2022: Retail’s Big Show event recap.

Flexport is a technology platform for global logistics, as well as one of the largest providers of freight forwarding services in the United States. But it also stands alone in the category as the only one founded after Netscape helped make the internet ubiquitous. Its advantage: use of modern technology from the start.

In terms of those tweets and tacos, Petersen was compelled by the “worrisome” concept that delays at West Coast ports were getting increasingly longer, even though the number of ships coming in wasn’t dramatically growing. He rented a boat to check it out and discovered empty berths and no unloading. Then he went to the unions — armed with those tacos — to get their perspective. Next up, the truckers. And everyone, he found, was pointing fingers at everyone else.

Petersen discovered that truckers were missing half of their appointments, and when they didn’t show up, the containers blocked everyone’s way. But the truck drivers couldn’t return empty containers. And the empties couldn’t be held in places like Long Beach, Calif., where truck yard regulations prevented them from being stacked more than a couple high.

Save our shipments

Tell Congress to save our shipments and address the crisis gripping America's supply chains.

He started a “Tweetstorm” about his findings, and within a day, the Long Beach regulations had been changed. A victory, sure. But with so many moving parts, the battle has raged on.

Technology can help in adding visibility and control. In a supply chain, Petersen said, “chain” is the key word, as many partners are involved with a container. But human expertise is also essential for providing perspective.

Flexport created its own metric, the Ocean Timeliness Indicator, which offers companies true transit time from the moment goods are ready to leave the exporter to when they’re collected from the destination port. That time period is “longer than it’s ever been,” Petersen said, over 100 days when it used to be around 30.

Even with good data, there are two large unknowns on the horizon. First, the current contract between the International Longshore and Warehouse Union and the Pacific Maritime Association expires in July. Negotiations could further disrupt the market; the two parties have long had a challenging relationship.

Supply Chain 360

The other happening of note, according to Petersen: The International Maritime Organization has implemented new measures requiring all existing ships to reduce their carbon emissions by 13 percent before the start of 2023. That happens, he said, by going “a lot slower … . I don’t predict good things will happen to the economy as a result of that.”

All the same, Petersen offered a glimmer of hope: Chaos, he said, creates opportunity for those who are agile.

Related content

How American Eagle Outfitters is rethinking the delivery box
 
AEO Chief Supply Chain Officer Shekar Natarajan on stage at NRF Supply Chain 360
NRF Supply Chain 360: Chief Supply Chain Officer Shekar Natarajan on shared logistics.
Read more
Kroger, Ocado Group grow with state-of-the-art fulfillment, personalization
 
Leaders from NRF, Kroger and Ocado speak at NRF Supply Chain 360
NRF Supply Chain 360: Redefining ecommerce distribution through technology-driven solutions.
Read more
Successful port strategies call for investment, flexibility and collaboration
 
Leaders of ports of Los Angeles, Houston and Cleveland speak at NRF Supply Chain 360
NRF Supply Chain 360: Executives from the ports of Cleveland, Houston and Los Angeles discuss supply chains of tomorrow.
Read more