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Reducing Port Congestion, Speeding Cargo are Focus of DOC Report Recommendations

Thursday, January 19, 2017
Sandler, Travis & Rosenberg Trade Report

As part of its 21st century U.S. port competitiveness initiative, the Department of Commerce recently issued a report that documents operational best practices that leading U.S. ports and supply chains have implemented to overcome challenges associated with increasing vessel sizes, trade volumes, and industry complexity. Noting that the efficiency and productivity of U.S. seaports and their connecting infrastructure are crucial to the country’s global economic competitiveness and that port slowdowns and congestion are having significant effects on U.S. economic and job growth, the report makes the following recommendations.

Working groups. Stating that efforts to resolve challenges have been complicated by limited communication through the port community, the report urges ports to establish comprehensive working groups with broad stakeholder participation to serve as forums for productive communication and collaboration. Those ports that have already done so have found that working group discussions often result in better system and cargo flow visibility, predictability, and reliability; better use of advance analytics, planning, and forecasting; and the ability to ensure that sufficient manpower, equipment, and yard/terminal space is available and in place prior to vessel and cargo arrival. The report states that because the complex and interrelated nature of supply chains means that port operations and cargo movement can often be affected by unrelated operational or infrastructure breakdowns before cargo arrives at or leaves the port, discussions should include the full range of stakeholders.

Toward this end, the DOC announced in October 2016 a new program under which it will form strategic partnerships with interested ports and local business and supply chain organizations to convene regional roundtables to discuss key issues.

Information sharing. Some seaports have developed or are developing digital port community information sharing technologies, known as port community systems or port platforms, that allow secure, reliable, and cost-effective communication of pre-arrival cargo data to help ports and stakeholders handle increasingly large container vessels and cargo volumes. Other ports have implemented portals that provide post-arrival terminal and container status data, including information such as container availability, vessel schedules, first/last cargo pickup and delivery cutoff dates, gate transaction details, and empty container return locations. Stakeholders say they want these technologies to capture and share a standard set of maritime cargo operational status data elements that are being used by U.S. ports.

The DOC states that it is implementing a strategic partnership with the University of Southern California to improve the digitization of U.S. supply chains and the market availability of port community information sharing technologies through conferences and hackathons.

In addition, three private-sector teams working under a Federal Maritime Commission initiative concluded in December that a national portal providing critical information to supply chain actors would help address port congestion and related bottlenecks. The FMC intends to conduct additional work on this topic in 2017.

Operational improvements. Best practices in this area that a number of ports have already implemented include facilitating container chassis availability, expanding the use of common chassis pools, improving planning and scheduling through truck appointment systems and other measures, implementing more efficient queuing and container storage methods, and expanding gate hours at ports and terminals.

Worker skills. Investment in the training, retention, and expansion of the port, trucking, and supply chain workforce is needed to equip workers to adjust to changing vessel sizes, cargo flow demands, and innovative technologies. A number of seaports are working with local high schools and universities to resolve maritime and logistics workforce shortages.

Private sector partnerships. Public-private partnerships should be expanded to improve port operations, infrastructure, and information technology. The report notes that maintaining reliable and predictable operations and financial stability within the port community create a more attractive environment for such investment.

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