As of mid-December 2021, there were some 101 ships waiting for berth space at the Port of Los Angeles and Long Beach. What’s more, the congestion being experienced on the US East Coast isn’t isolated to this region. Ports around the world are reporting strong congestion issues throughout the last months with no end in sight. By talking to several terminal operators in the Ports of Los Angeles and Long Beach, we’ve come to understand that many of them are operating at over 90-95 per cent of their terminal’s designed yard capacity, and some are even exceeding the design capacity, finding space wherever possible to accommodate the significant overload of inbound containers.
In order to resolve the capacity issues, the City of Long Beach temporarily waived enforcement of stacking-height limits in late October 2021. This has allowed terminal operators to increase their stack heights from a maximum of two-high stacks to five-high container stacks for a 90-day period. To the public, this is likely perceived as a positive outcome, but to the terminal operators, it brings an entirely new set of challenges and risks to manage and mitigate.
When you peel back the layers to the congestion challenge, one realises that it isn’t simply about port capacity. The entire supply chain is congested. The average dwell time for inbound containers is up across the board at both maritime and intermodal facilities.
“Ports around the world are reporting strong congestion issues throughout the last months with no end in sight.”
The main inputs and contributions are:
- Container dwell time has gone up across the board, and the impacts on terminal operations are significant. It’s clear that the broader supply chain congestion is a challenge that must be addressed; however, in the short-term, maritime and intermodal terminal operators need proven solutions to help them resolve their capacity issues now. This is where optimisation, specifically yard optimisation, comes to the forefront of the conversation.
- The correlation between stack height and rehandles has been carefully studied, documented, and tested over the past three decades. If we take the scenario in Long Beach as an example, prior to the city extending stack heights, it would be expected that a terminal would experience two rehandles to extract an import container. By increasing the stack height potential to five high, the expected rehandle rate increases to just over three moves – a 50 per cent increase in cost and a 33 per cent decrease in equipment productivity. Therefore, simply stacking higher doesn’t alleviate the issue.
- Firstly, you must have the equipment at hand that can stack higher. As an example, most straddle carrier yards will still be very confined due to hardware limitations.
- Secondly, add to this equation a highly unpredictable drayage call schedule (which results in unpredictable dwell times for containers and poor stack designs), and you have the perfect recipe for poor yard operations, unproductive equipment, and high operating costs.
- Expanding the yard outwards (i.e., more stacks) may result in fewer rehandles, but it comes at a comparable decrease in equipment productivity due to increased travel distances for both loaded and unloaded moves.
- The only real short and long-term solution to resolve the challenge of managing high yard utilisation is to improve the decision-making around container placement. To achieve this, Operations Research (OR) based algorithms have proven their worth for over 20 years, and more recently, Artificial Intelligence (AI) based algorithms are further enhancing the significant gains already possible.
- Improving the utilisation of ship-to-shore (STS) cranes to allow for quicker turnarounds of backlogged vessels is the primary challenge for most maritime ports affected by the current congestion. In this sense, some optimization tools like INFORM’s Yard Optimizer increases the productivity of equipment peripherally to the yard, such as STS cranes or rail cranes, by ensuring good yard stacks have been made prior to and during peak operations.
“The only real short and long-term solution to resolve the challenge of managing high yard utilisation is to improve the decision-making around container placement.”