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Blog
Port Update Jan 2015

As know, West Coast dockside labor and management negotiations and significant infrastructure issues have resulted in the worst West Coast port crisis in decades.

Negotiations between the Pacific Maritime Association (PMA) -- which represents employers at 29 ports -- and the International Longshore and Warehouse Union (ILWU), which represents 20,000 dockworkers – have significantly impacted merchandise supply chain.  As a result, for the past two months, all of us in the industry have had extreme challenges getting containers off the vessel, into the warehouse and out to end users on time  (and without OT labor).

To give you an Executive Summary of what is going on – and to help plan for the next few months.

The Port of Long Beach opened a 30-acre depot for the temporary storage of empty containers.  The facility on Pier S will run to at least March 31 2015.  The idea is to provide more space to place empty cargo containers, remove their chassis and use them to pick up new loads of incoming cargo containers.

The four companies that control 95% of the chassis at Los Angeles-Long Beach (over 100,000 chassis)  agreed to develop a neutral chassis pool.  Phased roll-out began on February 1, 2015.  The assets of the four chassis pools will be interoperable, which means that a trucker pulling a container and chassis can pick up or deliver the equipment at any of the 13 terminals in the harbor without regard to which pool serves a particular shipping line or terminal.

The negotiations appear to be easing into a final agreement.  Spokesmen for both factions (PMA and ILWU) disclosed that the issue of maintaining cargo chassis has been addressed, thereby easing the way toward a final agreement.

When an agreement is reached, however, there will be an additional 30-day period to allow time for the ILWU to ratify.

The bottom line:

Overall, we feel that the situation is getting better and we should see a quicker – 5 to 7 day -- turn of containers at West Coast ports in the coming months.

We will continue to keep you updated on this evolving issue and its potential impact to your programs.

 

 

 
DOES THE PILE-UP AT THE PORT AFFECT MY MERCHANDISE?
I received many calls last week inquiring about the delays at the Ports of Los Angeles and Long Beach and the potential impact to projects in-work.

Given our "brief, brilliant and gone" approach to keeping our clients up to date, here is an EXECUTIVE SUMMARY of what is REALLY going on at the ports in Los Angeles:

BOTTOM LINE:

Ships are being held at the Ports of Los Angeles and Long Beach for up to one week due to overloaded of infrastructure and shortage of trailers. Inbound merchandise may take 7-10 days longer to arrive during October and early November.

IMPACT:

Since 40% of all US imports arrive into these ports, the delays could undermine retailers' ability to receive and stock product and promotional materials in time for the crucial holiday season. Manufacturers, retailers and logistics experts may also divert freight to other ports, resulting in lost revenue to Los Angeles and the Port Authority, now and in the future.

THE BAD NEWS:

According to port officials, the current congestion is the worst crisis in a decade at the ports. "We have a melt-down on the harbor. Every day it gets worse," says Robert Curry, president of a LA-based trucking firm that serves both ports.

THE GOOD NEWS IS:

The delays will wind down by the second week in November. Port officials are clearing space by moving empty containers and broken chassis to off-site locations. In the immediate future, they plan to purchase and supply additional chassis given peak periods. Finally, we're not the only ones: other ports are facing similar issues.

THE BETTER NEWS IS:

If Kelly Direct finds that the delivery deadline of your inbound product is impacted – or even potentially impacted -- we will notify you immediately, present a solution and get into action.

 
YOU MAY ALREADY HAVE SUPPLIERS IN PLACE BUT.....

 

You know that Kelly Direct manages fulfillment programs.

 

But did you know we manage up to 10 steps -- including fulfillment -- in the supply chain process?

 

Our supply chain flowchart shows the disciplines in our wheelhouse to get merchandise from the point of manufacture through the returns/liquidation process.

 

  1. Sourcing merchandise
  2. Source packaging
  3. Source collateral
  4. Inbound Freight
  5. Warehousing
  6. Assembly/Kitting
  7. Payment Processing
  8. Outbound Shipping
  9. Onsite Management
  10. Returns/Liquidation

 

All merchandise distribution projects incorporate at least some of these disciplines. However, we’ve never had a program that needed all of these.

 

Whatever your project requirements are, Kelly Direct applies unmatched experience and service to  execute the services you need.

 

Should you have solid vendors in place -- and we hope you do!- we will easily integrate with them to ensure the seamless flow required to get your merchandise to your customer. Should you be less than satisfied with existing vendors, we can help you assess their facilities, capabilities and pricing and offer alternatives that may be able to save you time and money.

 

 
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