A flood is predicted for Charleston Harbor – no water, but ships.
West Coast ports are looking forward to July 1 and weeks late: the day marks the deadline for the International Longshoremen’s Worker Union contract.
The last contract negotiations in 2014 closed ILWU ports for four months, according to Jason Haith, director of global freight forwarder OEC Group Louisville. At the time, 24 ships were waiting for a chance to dock.
A few weeks ago, Haith reported that 180 freighters were stranded off the west coast, not including ships waiting at the docks. It also ignores the annual slinky effect caused by Chinese New Year, “probably the largest human migration on the planet where hundreds of millions of people leave cities and return inland to make visit their families,” he said. .
Most of its customers diverted imports to other parts of the country, to Houston, Savannah and Charleston.
Haith thinks the Port of Charleston is primed for growth, but the West Coast typically concentrates 60% of incoming US volumes.
He worries that eastern ports like Charleston will soon look like Los Angeles as ILWU union negotiations heat up.
“I really think there are volume increases heading their way, and their biggest challenge will probably be how to handle all the business that’s coming in now,” he told GSA Business Report.
Importers using eastern ports experience delays of more than a month just to get cargo to distributors and pay up to $25,000 in total import costs, Haith said. Four years ago, most East Coast importers paid around $3,500. Some logistics companies cannot pick up imports at the Port of Charleston for three or four weeks after the containers are unloaded.
“They had a really hard time getting the containers out of the port and delivering them,” Haith said. “It has a lot to do with the chassis.”
There is no shortage of chassis in circulation. But there is a shortage in the number of chassis available for use at the terminal – and not waiting to be unloaded into a short-staffed warehouse or transported to the terminal by a coronavirus-swamped fleet.
Solutions, not weather reports
The SC Ports Authority will be the second port system in the nation to create its own chassis pool program to meet this demand, according to chief operating officer Barbara Melvin.
When launched in 2023 with a $200 million investment, the pool will house thousands of chassis that can be leased from the Port of Charleston Terminal. Seed capital will come from port revenues, she said.
“We’re trying to use the latest technology to see how we can redesign the sash pool model,” said Port Authority sash pool manager James Caudill. He added that the new chassis, built by Dorsey Intermodel, will be wired with GPS tracking technology. “GPS technology seems simple, but you can use something like this to predict future problems.”
The data could be used to help streamline inventory management or provide business information to port customers.
Besides the Port of Virginia, the first port to develop its own frame pool, many eastern ports participated in the South Atlantic frame pool.
Palmetto State’s closed-loop pool is expected to improve the efficiency and availability of logistics companies, and also open frames for other nearby port systems.
“That’s really the biggest benefit for the supply chain,” Melvin said.
Prior to launch in 2023, the Port Authority will phase out its use of leased chassis from the South Atlantic Pool with over 11,000 purchased chassis which will be fitted with smart technologies.
On Jan. 24, the Port of Charleston received its first shipment of more than 700 chassis after a 40-day voyage on the Liberty Promise from Vietnam, according to the port system. Another 1,600 are expected to arrive in February as the Port Authority builds up its inventory. These chassis will be available for long-term rental contracts until launch in April 2023. After that, they will be available for a daily rate.
The rates will soon be made public, according to the port authority.
“We go through all the steps to prepare them to provide [for] people who need 20-foot gear right now,” Caudill said. “And then as we go through this year, we’re going step-by-step through transition areas like Greer and Dillon. That will take the strain off the South Atlantic chassis pool.
The chassis pool is just one of the places the Port Authority sees room for growth as more ships reroute from congested West Coast ports to Charleston.
“We see more with the chassis, whether it is a large warehouse space, a workforce available to work in logistics, the availability of truck drivers”, as well than the ability to move containers out of marine terminals, Melvin said.
State support for the construction of a dual-serve rail facility will go a long way in helping the port keep pace, she said. When completed, it will increase the port’s capacity to over a million lifts. The Harbor Deepening Project, which is expected to make Charleston Harbor the deepest harbor in the Southeast, is scheduled for completion in September.
“Even when we run into supply chain issues like we see today, we need to keep working with our shipping partners, keep coming up with solutions instead of just having weather reports on the problem,” a- she declared. “Sometimes you have to bite the bullet and do what we do with the chassis pool. You don’t have to be afraid when you invest a billion dollars in a new terminal. You need to have a long-term view of what is needed in the supply chain to be successful.
Contact Molly Hulsey at 864-720-1223.