In what some might call “disruptive capitalism,” New Orleans port officials are trying to lure some of the transoceanic shipping that currently bobs for days, even weeks, on the high seas, waiting for a berth in one of the U.S.’s mammoth coastal ports.
“We’re asking, ‘How can the Port of New Orleans assist this supply chain disruption?’” said Todd Rives, the port’s chief commercial officer. “Right now, we’re more of a niche port but we are ready and able to expand.”
The need for expanded port facilities has been clear for months, as vessels bound for Los Angeles, Long Beach, Savannah, New York and other coastal ports wait for berths to free up. All terminals are open in most of those ports, but the backlog is so great that even Los Angeles, servicing 24 vessels a day, can’t keep up with the demand, according to port spokesman Phillip Sanfield.
The clogged ports look like an opportunity to New Orleans port officials, who have embarked on a series of moves to try to pick up some of the business, starting with a speech Mr. Rives gave in Atlanta this month urging the Council of Supply Chain Management Professionals to consider adding New Orleans port calls.
The port is also fanning out at other conferences and stepping up its social media campaign to lure customers.
“We have been specifically working on targeted customer engagement, particularly with importers as well as the ocean carriers,” said Jessica Radusa, a spokeswoman for the Port of New Orleans. “We are attending and pitching our capabilities at conferences as well as speaking engagements. We have also been focusing on targeted social media outreach to these partners and scheduling increased port tours to our customers and new partners who are interested in doing business here.”
New Orleans is a much smaller operation than its overcrowded competitors. Yet even those smaller numbers offer a glimpse into the gigantic scale of international shipping.
The New Orleans facilities include 40 berths, 20 million square feet of cargo-handling area, six ship-to-shore cranes (with four more set to arrive at the end of November) and more than 3.1 million square feet of covered storage area.
Those numbers pale in comparison to the massive Los Angeles and Long Beach ports, the nation’s largest that combined handle some 40% of all U.S. shipping.
But immense size hasn’t prevented dozens of vessels from floating in the Pacific waiting for a berth to open. Last week, the Port of Los Angeles announced it would operate 24/7 in an effort to shrink the backlog, joining Long Beach, which made a similar move last month.
“The average wait time now is 10 days,” Mr. Sanfield said.
And that’s just the tip of the congestion.
“Our warehouses are filled to the max, just brimming, and we are only seeing half of the 15,000 truckers registered to serve the port with any regularity,” he said.
That figure refers to the short-haul truckers, Mr. Sanfield noted. The picture isn’t much better with those that haul containers across the country. A driver shortage has grown more acute since it began in 2005, according to the American Trucking Associations.
“Prior to the pandemic, our industry was short more than 60,000 drivers,” said ATA chief economist Bob Costello. “The shortage of drivers, coupled with a number of other issues ranging from shortages in trucks and truck parts to increased demand across the country, has put a lot of stress on the supply chain. We’re seeing that stress off the coast of California as container ships idle waiting to be unloaded.”
Long a port that handled trade with Central and South America, New Orleans is a longer trip for trans-Pacific vessels that would have to transit the Panama Canal. But now that the cost of shipping from Asia has soared — a 40-foot container now costs more than $20,000 to ship from China to the U.S., up from $3,167 in August 2020, which at the time was a 10-year high — that may not be the biggest consideration these days, he said.
“We have open berth capacity, yard capacity and we have rail,” Mr. Rives said, noting shippers have access to rail heads that can move goods in any direction.
“Memphis, Dallas, Chicago,” Mr. Rives rattled off destinations. “If a Shanghai-to-Long Beach journey takes 11 days and there’s 21 more days of waiting, well, you can go from Asia to New Orleans and I’ve got no rail congestion.”
The same is true for trans-Atlantic journeys. On Wednesday, The Maritime Executive reported two of the world’s biggest shipping lines, Hapag-Lloyd and CMA CGM were suspending port calls to Savannah because of delays unloading.
Much of the supply chain problem began with COVID-19 shutdowns and the resultant stimulus checks and pent-up demand that set off a buying binge, according to officials at several ports.