The holiday shopping season is upon us, and Black Friday sales were up 30 percent compared to last year. Longshore, trucking, rail, and warehouse workers have been working the past several months to move more goods than ever before. That progress is apparent in today’s version of the White House’s twice-a-month supply chain tracker.
Today’s edition coincides with new momentum at the Ports of Los Angeles and Long Beach. This week, the companies operating the ports will eliminate fees for night and weekend pickup of containers. That means that containers moved off-peak can be moved for free – creating a further incentive for companies to utilize these hours. One of the largest international carriers has also agreed to begin providing $100 discounts on containers that are quickly picked up and twice that amount if picked up during the night and weekend. Finally, the Department of Transportation will extend flexibility on the number of hours truck drivers can drive through the end of February.
Companies have continued to keep up with historic demand as Americans continue to purchase more goods and fewer services than normal because of the pandemic. Census data released last week show that at the end of October, the inflation-adjusted value of goods on retailers’ shelves and in their warehouses was 2.6 percent higher than last year and was actually above pre-pandemic levels when excluding automobiles. Similarly, data from IRI show that goods sold at grocery and drug stores were in stock at essentially pre-pandemic levels. These data confirm what retailers have been saying ahead of the holiday season. Wal-Mart has noted its inventories are up 11 percent compared to last year, and Etsy has said that its small business partners “are less concerned about supply chain challenges this year than they were last year.”
We continue to see historic amounts of goods entering the country. Preliminary data for the first half of November show that the Ports of Los Angeles and Long Beach are on track to break their previous 2018 annual record for loaded imports and have, through the first half of November, moved 16 percent more containers than over the same period in 2018.
The Ports of Los Angeles and Long Beach are not the only ports that have stepped up compared to their 2018 performance. Looking at the top four container ports in the country—Los Angeles, Long Beach, New York-New Jersey, and Savannah—the number of loaded containers imported is 21 percent above 2018 over the same period. Ports across the country have been succeeding as a whole at moving more goods than ever, and the Administration’s port action plan will help accelerate the investments at our ports from the Bipartisan Infrastructure Law.
The Ports of Los Angeles and Long Beach—which handle 40 percent of the country’s containerized imports—continue to show improvement in moving containers out of the docks and into warehouses. Last month, the Ports of Los Angeles and Long Beach announced they would begin charging the private-sector ocean carriers $100 per day for containers that dwell on the docks for too long with the fee increasing by $100 for each additional day that a container remains at the port.
The number of long-dwelling containers—those on the docks for 9 days or more—has fallen by 41 percent in the month since the fee was supposed to be imposed on November 1st. The ports have announced that they will postpone charging the fee because of this progress. This reduction in long-dwelling containers frees up space on the docks so ships can unload faster, trucks can maneuver faster, and goods can get to stores faster.
More progress ahead
Today, fees will be waived for truck drivers picking up containers at night and during the weekend. The Federal Maritime Commission gave the greenlight to this change today and fees (part of a system known as “PierPass”) will begin to be waived over the next few days. This will provide a financial incentive for truck drivers to pick up containers at night—when trucks move 25 percent faster in the port—and during the weekend, bolstering the move toward 24/7 operations, increasing efficiency, and reducing emissions in the surrounding community.
France-based CMA CGM, the world’s 4th largest shipping line, announced today that they will provide $100 discounts on containers that are picked up within 9 days and $200 discounts if they are picked up at night or during the weekend. This move will increase velocity, improve efficiency, and expedite getting goods on shelves. They will also help cover the cost of the Fenix Marine Services terminal at the Port of Los Angeles expanding to 24/7 operations. This is a sign that ocean carriers are finding ways to support the move towards 24/7 operations and clear port congestion. This year has brought historic profits for the industry—in the third quarter they made $48 billion which is 9 times more than they made the previous year — suggesting more companies can find ways to help clear the current supply chain bottlenecks.
These moves toward 24/7 operations are reinforced by the U.S. Department of Transportation extending flexibility on the number of hours truck drivers can work through the end of February. This flexibility applies to movement of medical supplies, food, gas, building materials, and more. This flexibility is paired with additional safety related reporting requirements that will allow DOT to monitor driver work hours.
And with prices for shipping dropping 20 percent in November, retailers will hopefully be able to begin passing on those savings to consumers soon.
As Americans shop this holiday season, they can take comfort in knowing there will be goods on shelves thanks to the hard work of longshore, trucking, rail and warehouse workers.