Description
U.S. Container Port Congestion and Related International Supply Chain Issues: Causes, Consequences, and Challenges
(Port) Congestion Costs
Increases in transportation costs caused by congestion hurt the U.S. economy and the nation’s international competitiveness. Cargo and supply chain interests, particularly those that depend on just-in-time performance, are substantially affected by congestion. Trucking costs are particularly susceptible to the effects of delays brought about by congestion because those delays directly reduce driver and truck productivity. Ocean carriers also suffer higher costs arising from delays and when those delays accumulate they may ultimately lead to ships and cargo being diverted to other competing ports, including foreign ones. Delays caused by congestion increase supply chain costs directly by causing inbound and outbound freight distribution costs to rise. These delays also indirectly increase supply chain costs by forcing importing and exporting companies to increase order fulfillment lead times and hold greater inventory levels. Such delays result in lost revenue due to slowed production, spoiled and unsaleable cargo, missed sale opportunities, increased stock-outs, and delayed introduction of new products. In addition, such delays may reduce U.S. international market share in various economic sectors and reduce U.S. GDP. Depending on the extent, duration, and nature of these delays, the national indirect cost impact of congestion is likely to surpass by a wide margin the direct impact of delays on freight distribution costs.
Causes (from the report)
Cargo growth; Investment constraints; Larger ships; Ocean carrier alliances; Vessel bunching; Chassis shortages, supply imbalances and dislocations, and interoperability issues; Terminal performance; Gate operating hours; Free time; Drayage truck supply; Labor availability; Inadequate communication and lack of broad-based collaborations.
Which of the above causes do you think is the most critical? How can it be addressed? Give examples if available.
Post a 350+ word (approximately one page) response using APA intext and endnote citations.