Dive Brief:
- The annual Supply Chain Management Review (SCMR) survey of 3PL CEOs revealed that in 2015, labor disputes had caused delays, re-routing, marooned shipments, and other issues. In 2016, a follow up survey revealed the effects of the 2015 complaints, the magazine reported last week.
- As a result of the 2015 conflicts, numerous customers were now diversifying their port usage; six out of 14 CEOs surveyed stated that customers had moved to East Coast ports; others stated they shifted from ocean to air freight, increased sourcing from Mexico or worked with 3PLs to develop contingency plans.
- Disruptions often impose long-term costs on shippers and lead to changes in supply chain planning for the shipping community, with resulting impact on ports, ocean carriers, and labor.
Dive Insight:
At the recent American Association of Port Authorities conference in Washington, D.C, Nyariana Maiko, CIO and director of information management for the Port of Long Beach cited four KPIs for ports relating to their supply chain partners: reliability, visibility, predictability and data integrity.
She mentioned that, in speaking to stakeholders, many were concerned that ports were a black box of movement where they were unaware of potential delays or risks that could happen. After all, a supply chain manager knows how to plan for a late shipment ... but it is impossible to plan without the right information.
No wonder, then, that several major crises in West Coast ports over the past years (e.g. labor strikes, port congestion) have encouraged shippers to look for alternate solutions. Ports are supply chain partners, too, and if they cannot deliver their product (reliable transfer of product) and communicate potential disruptions, they will inevitably lose business.
The SCMR survey shows how, and East Coast ports are reaping the benefits of increased distrust among shippers. East Coast ports continue to thrive thanks to the expansion of the Panama Canal and their own dredging and refurbishing efforts to accommodate post-Panamax ships. The East Coast will not steal the West Coast's lion share of imports, but it certainly can threaten it in the long-run.
Meanwhile, West Coast ports are working to catch up by being leaders in technology. In October, the Department of Commerce, along with the USC Marshall Center for Global Supply Chain Management, formed a partnership to improve and increase global competitiveness. The Port Community IT Systems Exhibition and Technology Challenge symposium at USC gathered port representatives, supply chain organizations, academics and policy leaders to explore a variety of digital innovations to increase port efficiency, transparency, and reliability.
To further invention and creative problem solving, startups and students also competed for $15,000 in prizes for innovations in applications and information. The Department of Commerce's endorsement and partnership with the West Coast ports signals the national importance of such initiatives, and the ports' determination to remain viable.
