How Pop-Up Ports Help Prevent Supply Chain Disruption
New Idea to Prevent Supply Chain Disruption
With all the supply chain disruption that has occurred during and after the COVID-19 pandemic, many lessons have been learned that are now being brought to bear on preventing future disruption. These lessons have been vital in creating and supporting lifelines within a disruptive supply chain to improve risk management. Improved supply chain resilience has enhanced responses to crises to keep essential items such as food and medical supplies stocked and available for consumers.
Did you know that 90% of the worlds global market is transported through sea trade?
Large container ships are responsible for carrying freight to seaports around the world. Ironically, over the past two years, as supply chain disruptions have occurred, the importance of these large container ships has become apparent. With global trade and the global economy in upheaval from these disruptions, the public has become aware of the need for improvements to prevent future recurrence.
Many issues can arise that disrupt sea trade, such as the Ever Given container ship blocking shipping traffic in the Suez Canal. This disrupted supply chain operations in the Middle East and subsequently the world, a supply chain management nightmare. Other issues such as the increase in e-commerce sales and direct-to-consumer service have increased the volume of shipments. The increase in shipping volume has altered supply chain planning as well as that for transportation and logistics. When supply chains are disrupted at the ports, the entire world feels the impact.
Here is What Happens when Supply Chains are Disrupted at the Ports
- Ships transport containers to ports around the world.
- Ships arrive and need to be unloaded. The shortage of labor and chassis as well as infrastructure issues means that containers cannot be moved in a timely manner.
- The shortage of truck drivers fuels the back up of moving containers away from ports.
- Containers are moved to temporary storage, increasing the dwelling time at ports.
- Because the containers cannot be moved, they remain at the port and are stacked up forcing supply chain disruption.
- Ships continue to arrive at terminals and wait to be unloaded.
- Containerships waiting for berth spaces to open wait at anchor.
- Containerships that arrive in the harbor cannot be anchored due to congestion and delays in unloading the vessels.
- Ships end up getting diverted to other ports. This can cause disrupted supply and issues to transportation and logistics arrangements that have already been made, delaying goods from reaching their final destinations.
What is a Pop-Up Container Yard?
Pop-up container yards, also known as pop-up ports, are small inland ports where containers are brought by rail and truck. These freight containers sit in pop-up ports inland, away from seaports until they can be delivered to their final site. The added tactic in the supply chain model effectively brings seaports close inland and assists freight owners and 3PLs in their shipping and warehousing needs. It also is important in building supply chain resilience.
Pop-up ports allow shipping containers to be placed near main transportation routes. This not only helps to alleviate port congestion also serves to mitigate some supply chain risks. This additional element to the U.S. supply chain model has enabled companies to bring product closer into shipping routes and get products to customers faster. This innovative venture is useful to supply chain operations by making use of old railyards and under-utilized real estate and is being funded with the support of local, state, and federal governments.
How Does the Infrastructure Law Help Prevent Supply Chain Disruption?
Last year, The White House Action Plan was released. In it the Biden-Harris administration acknowledged that U.S. ports and waterways were crucial to the success of the U.S. economy and announced a landmark $17 billion dollar investment. It is the single-largest federal investment for U.S. ports in history and hopes to help bring forth a new operating model in that will improve supply chain risk management. Funds from the Bipartisan Infrastructure Law will be used to improve infrastructure at:
- Coastal Ports
- Inland Ports
- Land Ports of Entry, also known as Border Stations
In the United States only four ports rank in the top 50 in global usage. The low ranking is highlighted by bridge and depth limitations that restrict port ability to compete as it limits the size of the vessel that can access the port. Due to infrastructure problems, only a handful of U.S. ports have the logistical capacity to deal with the largest container ships such as post-Panamax vessels and their freight. This has significantly disrupted supply and supply chain planning and caused shipping companies to utilize alternative sourcing Today, these larger vessels are often used to transport freight as they have greater capacity to transport more containers. As cargo volume has increased and larger shipping vessels are being used, shipping container traffic has had to be routed and rerouted to a small number of U.S. ports.
A key action point from the Bipartisan Infrastructure Law pointed to the need for improvements to one of the busiest U.S. ports. The Port of Savannah in Georgia was funded $8 million dollars to improve and create infrastructure-relief projects such as pop-up ports. The investment helped the Georgia Port Authority create five pop-up container yards in Georgia and North Carolina by transforming active inland ports. The plan presented by the White House details how the Port of Savannah would move containers on trucks and along railways. These transportation measures will help to move shipping containers closer to their final destinations to free dock space and speed the flow of goods. The Port of Savannah leads the nation in containerized agricultural goods such as dairy, fresh produce, and other raw material, making the pop-up yards an integral part of the plan.
Key Action Points in the Bipartisan Infrastructure Deal
- $240 million in funding to launch the Port Infrastructure Development Grant.
- $4 billion in funding to the U.S. Army Corps of Engineers to develop docks and repair coastal port and inland waterway infrastructure.
- $3.4 billion in funding to update and enlarge inspection facilities for international trade
- $475 in additional funding for port and marine highway infrastructure
The state of California is taking the use of pop-up freight containers seriously and building supply chain resilience. The largest port complex in the nation, located in Los Angeles/Long Beach, California has incorporated pop-up container yards into its operating model to alleviate the impact of supply blockage. Walmart has even developed real estate near the ports in LA and Long Beach into pop-up ports.
The state has also combined efforts with online on-demand warehouse marketplace Chunker. This partnership will facilitate construction of six pop-up ports. These ports will act as inland logistics hubs and will be able to manage over 20,000 shipping containers in addition to the 5,000 they are currently managing. The Port of Oakland also announced plans to open a pop-up freight port to house raw materials and agricultural goods. The 25-acre pop-up port will be used to directly improve truck turn-around times and lessen bottlenecking.
Other Pop-Up Ports Operating around the Nation Include:
- Salt Lake City, Utah
- Atlanta, Georgia
- Chicago, Illinois
- Charleston, South Carolina
- Norfolk, Virginia
- Seattle, Washington
Managing supply chains worldwide requires innovation, flexibility, and collaboration between logistics companies, investors, governments, and consumers. With the Port of Shanghai currently closed due to COVID-19, the war in Ukraine raging, and the continued popularity of online shopping, the foreseeable future is full of stress on supply chains.
A digital transformation through automation is reshaping supply chain management with the latest era of technology. With tools like artificial intelligence and machine learning, provide hope that long-term supply chain challenges can be resolved. With what seems like an endless occurrence of supply chain challenges, what is needed is increased visibility across global supply chains. Although years away from a digital transformation, gains in supply chain visibility have been achieved and this has proved to be helpful.
In the short-term, supply chain management efforts have relied on ingenuity to lessen supply chain disruption and remediate challenges in global supply chains. This includes the use of pop-up container yards to help alleviate port congestion and solve end-to-end supply chain disruption.
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