Small businesses remain at risk from West Coast port disruption
The congestion has caused importers and exporters billions of dollars in extra transportation expenses for rerouting shipments, using more expensive modes, and storage, as well as lost revenue associated with factory slowdowns, cancelled orders and lost sales. Those costs could continue to mount until terminals and longshoremen get back to full speed and clear the cargo for delivery to warehouses across the nation.
It could take six-to-eight weeks for the Port of Oakland and other West Coast ports to recover from the cargo backlog, the Oakland Port Authority said in a notice posted on its website on Saturday.
The Port of Long Beach, which is at more than 90 percent capacity, will need four to six weeks to dig out and get operations back to normal, Chief Executive Officer Jon Slangerup said late last month, in a podcast interview with Michael Regan, founder of TranzAct Technologies, a freight audit and payment service provider. That projection has likely increased due to worsening of conditions since then.
"We have hundreds of thousands of containers stacked up on top of each other, five high, occupying hundreds of acres of land where typically we are just moving that stuff through. And we have those acres to maneuver the containers, bring the truckers onto the terminal grounds and move them out very quickly," he said.
A critical part of the relief operation will be rail transport, but a BNSF Railway official recently said it would take several weeks to retrieve additional locomotives stored across its western network and re-position them at the ports.
Expect spot rates for truck transportation to temporarily skyrocket, Larry Gross, a senior consultant with FTR Associates, warned in the freight forecasting firm's recent newsletter.
On the positive side, factories are closed now for a week or two in China because of Chinese New Year. That means the flow of inbound cargo will temporarily subside and give terminals time to concentrate on processing the containers that have already arrived.
Small businesses, lacking the resources to utilize alternative routes and avoid West Coast ports, have been especially hard hit by the port disruption and several voiced their frustration Friday during San Francisco radio station KQED’s morning talk show,“Forum.”