Solving Port Congestion Issues Essay

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Congestion at the sea ports in the United States has reached an all-time high. Just as the functioning at a port is multi-faceted, the genesis of the problems that are occurring at these ports is multi-faceted as well. Whether it be the sheer amount of ships and cargo that are moving in and out of the ports, the logistics of keeping the ports operating smoothly in general, labor union/worker squabbles with management up to and including slowdowns, strikes and other stoppages, or whether it be a port's general lack of sufficient facilities, the effects rendered by port congestion are extensive and effect literally millions of people in way or another. This report shall explore what is causing these issues, what can be done, what is being done and there will also be some personal analysis on the part of the author of this report.

American Seaport Congestion Issues

Conditions in many U.S. seaports are currently critical due to the large amount of ships going through them on a daily basis. Congestion can lead to a series of other problems as port managers need to get actively involved in addressing the risks associated with dealing with a larger number of boats. The flow of cargo through U.S. seaports is particularly important for international maritime trade and the well-being of the American system thus greatly depends on it. Ports on the western coast of the United States in particular are more exposed to congestion-related issues. The most affected ports are in the Los Angeles area. The fact that the Los Angeles ports handle approximately 40% of the nation's imports means that it can be especially tricky for a container to reach a particular pier by the time that it is supposed to arrive (Jula & Leachman, 2011).

Literature Review

A great deal of analysts have come to agree that congestion at ports in the Los Angeles and Long Beach areas has reached a never-before-seen state. Containers are having to wait anywhere from days to weeks in order to reach their destination. Some have attributed the problem at least in part to labor squabbles. Indeed, one person was quoted as saying "both shippers and longshoremen have accused each other of intentionally slowing operations to gain leverage in contract negotiations that began last May" (Wells, 2015). The fact that more and more ships come into the ports while the number of trucks available is relatively the same makes matters even worse (Wells, 2015). One of the most intriguing things about the congestion in the Los Angeles seaports is the fact that it was expected to happen. Many individuals working in these environments have observed how problems began to build up years before. Even with this, it seems that port authorities were not able to gather the resources required for them to effectively deal with labor issues in the area and this only made things worse. This holds true even taking into account that disputes between individuals working in the docks and shipping companies make traffic more difficult and workers in general less willing to play an active role in improving matters. One source close to the matter was quoted as saying "many attendees at the summit said the problems of congestion have been building for years at local ports, which were having problems before a nine-month labor dispute between dockworkers and shipping companies" (SCPR, 2015).

This makes it possible for someone to understand how there is no one solution to the problem. The congestion results from a combination of factors involving port workers being unhappy with their working environments, shipping companies being unwilling to invest more resources in ports as a consequence of not being provided with good conditions and the fact that there is more cargo arriving to the port every day.

In spite of issues it has encountered as a result of congestion, the West Coast continues to dominate U.S. ports when it comes to the amount of resources flowing through it every day. This proves that it would be essential for port authorities on the West Coast to restructure their agenda in order to be able to maintain their position and to have better results in general (SCPR, 2015).

Lessons about port congestion and how to manage or abate it have obviously been learned from the history of the Los Angeles ports as well as the history of other ports both in the United States and abroad. In looking at other avenues of academic research when it comes to port congestion, port logistics and general labor union and supply chain principles, some topics become prevalent in the peer-reviewed and academic spheres.

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Just as one example, the use of information services and information technology in general has been found to be extremely useful to fetter out trends and patterns that perhaps a laymen or casual observer might miss. Even a seasoned professional might be unable to discern pain points in a port's logistics and overall way of doing things. This is where things like data mining and analytics come into play. For example, such analytics and analysis has largely, both person-based and computer-generated, has focused on things like throughput capacity and the turn round of ships as they progress through ports. However, there is a newer focus on things like load balancing between the different port avenues. Further, many have looked at the topic of the development of logistics toll policy. One study was conducted on this subject specifically because it was wanting to be known what effect tolls had on the logistic choices of customers. Of course, the toll itself would be an issue in such a decision as well as the value proposition realized by the customer after they make their choice. If their shipment gets bottled up due to port congestion at a port like those in the Los Angeles area, this will obviously have a bearing on what decisions the customer makes in the future in terms of when they ship, what they ship and what ports they use to do their shipping. Further, as shown in the first appendix, the concepts of supply, demand, marginal cost and average cost all play a part in determining where one falls on the volume and cost axes (Chen, Chen & Han, 2015).

Another approach that has been used to deal with port congestion has been the broader use of supply and demand in the form of market pricing. Precisely this has occurred in the past when it comes to Port Botany in Sydney, Australia. Like the ports in Los Angeles, Port Botany has been a point of major congestion in the past. Like the Los Angeles ports, it is a port where import containers are transferred to trucks and/or trains but there has often been a massive amount of congestion while this process has been ongoing. However, it was found that rail service was being severely under-utilized and it was realized that this avenue could be harnessed in a way to get cargo flowing more freely and more efficiently rather than insisting on the status quo and thus allowing congestion to fester. Further, the government authorities regulating Port Botany decided to implement an administered price system to help regulate supply and demand. However, they were also sure to stand at the ready and use a Vehicle Booking System (VBS) if conditions worsened and/or were otherwise not as efficient as they could or should be given the resources and transportation options that happened to be available (Cox, Mahoney & Smart, 2009).

Another perspective that has to be taken into account is a historical one. Indeed, the use of ports to move goods is not a new invention and has been around for many years. Indeed, port congestion was a problem was manifesting as far back as the 1920's. Precisely that was seen in Great Britain following World War I. In 1919 and 1920, there was an "unusual boom" of shipments that occurred in a relatively short time frame and it put a huge strain on the ports in Great Britain. Just as is seen nowadays, some of the major reasons for the port congestion of those days included the complicity of the British government but the railway system in place at the time was also a problem. An example of government neglect and/or malfeasance was the coal controller regulations of those days (Aldcroft, 1961).

Speaking of countries outside of the United States and their ports, the United States surely does not have a monopoly when it comes to ports that are extensively used and extremely busy. Indeed, the port of Busan was found to be the third busiest port in the entire world as recently as 2002. Located in South Korea, the port is indeed one of the most advanced and substantial hubs in that part of the world, that being the greater Southeast Asia area that includes Vietnam, the Koreas, Japan and China. Much like Los Angeles, they discovered that higher volume means higher profits but it also means higher….....

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