Port of Long Beach Evolving to Snap Supply Chain Logjams
The Port of Long Beach is a massive hive of around-the-clock activity that connects U.S. consumers to the world marketplace, including ag products like grain, fertilizer, crop protection products and machinery. And in the last few years, it’s been a critical pivot point in supply chain disruptions that have challenged countless businesses and consumers, including ag retailers like Grow West.
More than $200 billion in cargo — 90 percent of it coming from or going to east Asia — passes through the 3,500-acre port complex and its 10 piers and 80 berths every year. That’s around 78.5 million metric tons of cargo in around 9.4 million container units. Six of the port’s 22 shipping terminals are devoted to handling dry bulk materials, with five for liquid bulk materials. The remaining 11 terminals handle container shipments, rolling stock and “break bulk” material like lumber and steel. In all, this capacity makes the Port of Long Beach the second-busiest port in the U.S. and part of the ninth-busiest port complex — alongside the Port of Los Angeles — on the planet.
The Port of Long Beach is part of the supply chain for many products California growers need. Today’s logistical hurdles at the Port of Long Beach and others around the world are part of the interconnected race to get products to and from consumers and producers around the world. But they’re just one variable in the longer equation of getting things like fertilizer and crop protection products from overseas producers to the growers’ fields, orchards and vineyards.
“It’s all one complex chain and takes a lot of planning, especially in the ‘last mile’ in getting products to our growers,” said Grow West Vice President and Chief Operating Officer Lucas Schmidt. “Our role in addressing the problem starts with moving away from a just-in-time buying mentality. Earlier planning helps prevent surprises from shipping delays, even if it’s from something happening across the world in Shanghai, China. We’re constantly working to overcome and alleviate the challenges and make sure our growers have what they need, when they need it.”
Why the port’s been so disrupted
The region where the vast majority of the Port’s cargo is destined or originates — including China, South Korea and Taiwan — is home to major raw material manufacturers and exporters of ag products like fertilizer and crop protection products. When global supply chains were stretched and broken by the COVID-19 pandemic, the Port of Long Beach was on the frontline of navigating — literally and figuratively — some of the most challenging circumstances for labor and trucking shortages in global product movement. It’s a fight that’s not over, and one that stretches all the way to the farm gate.
“A surge of imports that began in July 2020 has complicated the supply chain for many U.S. exporters and importers, especially those in agriculture. The surge was due to a shift in spending patterns in the U.S brought about by the COVID-19 pandemic,” according to Port of Long Beach Media Relations Manager Lee Peterson. “Specifically for agriculture exports, this has resulted in difficulty in promptly obtaining empty containers, as shipping lines were moving to get empties out of West Coast terminals and back to overseas destinations, as a means of reducing congestion in the ports.”
What port authorities are doing to evolve
The import surge and the complications resulting from macro-level variables like the COVID-19 pandemic have pushed port leaders to make changes to break up the logjam that’s sometimes left Panamax vessels waiting offshore for weeks before docking at the terminal. Managing vessel traffic and creating new efficiencies have been key targets for updating facilities and operations. It’s a massive, long-term investment that Peterson said will ultimately ease congestion and restore the movement of goods and products. These improvements are part of a $2.6 billion investment aimed at “enhancing marine terminal productivity, delivering greater efficiency to our customers and improving the sustainability of our operations,” Peterson said. Those investments in the port’s strategic infrastructure over the next decade include:
- On-dock rail projects to help speed cargo through the port complex. “In addition to helping to speed cargo through the port complex in general, on-dock rail is beneficial for agricultural exporters in particular, as it aids in the shipment of overweight loads,” Peterson said.
- A traffic management system in which vessels will be able to “take a number,” creating order for inbound traffic and preventing congestion at the port. “In late 2021 we began to allow ships leaving Asia to take a number, slow steam to the port complex and wait their turn about 150 miles off the coast,” Peterson said. “This eased at-anchor crowding, improved navigational safety and most importantly, reduced coastal emissions.”
- A “Supply Chain Information Superhighway” will create new efficiency and cargo movement visibility by enabling shippers to make scheduling, planning and payment decisions prior to arriving at the port. Peterson said this will speed the movement of cargo from the port to the broader supply chain and to its destination.
Short- and long-term port activity outlooks
Shipping logjams, traffic jams and other supply chain hitches won’t disappear at the Port of Long Beach immediately. Peterson said he expects a challenging remainder of 2022, with some disruptions lasting into 2023. But continued innovation and management evolution will help ease those frustrations in the long term.
“The outlook for the rest of 2022 is for continued high levels of imports as retailers meet upcoming demand for the holiday shopping season. We do expect the empty container availability to reach equilibrium, providing more availability to the shippers who need them,” he said. “In the long run, we support transitioning the supply chain to more 24/7 operations at the Port and beyond. Without expanding our terminals or building new facilities, we could not handle more cargo even by operating 24/7.”
Further down the supply chain and closer to the farm gate, Schmidt recommends growers stay in communication with their ag retailer to stay ahead of potential issues that could disrupt product availability. Working with a partner you trust enables you to sustain and grow your operation well into the future.
“Who has your best interests in mind? It’s so simple yet so complex at the same time,” Schmidt said. “I just think these are the times when you should think about your partnerships, who you trust and where you want to do business. Trust is a huge component to the kind of planning that enables everyone to stay on top of challenges like the supply chain today.”
Peterson encourages any shipper who needs assistance in managing vessel logistics to contact the Port of Long Beach Business Development Division by phone at 562-283-7750.