Global supply chain issues that worry the Federal Reserve plagued the country’s busiest ports last year. A new report from the World Bank and S&P Global Market Intelligence has ranked the efficiency of more than 350 ports around the world based on how long ships waited in port last year. Los Angeles and Long Beach, which handle more than 40% of all ocean imports to the United States, came in last in terms of efficiency.
Most of the other major ports in the United States – New York, Savannah, Oakland – were also in the bottom half of the list, behind the best performers in the Persian Gulf and Asian countries.
Last year was not a normal year. US ports handled record amounts of imports as Americans stuck at home went shopping. There were also larger structural differences, said Nick Vyas, professor of supply chain management at the University of Southern California.
“There’s huge trade union involvement in what actually happens in the ports and what doesn’t,” Vyas said.
He said US ports generally don’t operate 24 hours a day, unlike some of the higher performing ports on the list.
Last fall, at the height of the shipping backlog, President Joe Biden moved LA and Long Beach to 24/7 operations, but that didn’t quite solve the problem, said John Martin, founder of Martin Associates, a transportation consulting firm.
“There was no space at the terminal because you couldn’t get the containers out,” Martin said. The port complex has little room to expand, and Southern California warehouses lack the space and manpower to handle shipments around the clock.
“You have warehouse vacancy rates below 1%, which is unprecedented,” Martin said.
But there are many efficient ports, particularly in Asia and Europe, that have even tighter spatial constraints, according to Christopher Tang, professor of supply chain management at UCLA.
These ports use more sophisticated technology to quickly move goods in and out – automated cranes, sensors, tracking – all powered by artificial intelligence.
“We are really very behind. By decades. I am not joking. We are way behind,” Tang said.
The bipartisan infrastructure bill commits $17 billion to modernizing ports.
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