Speaking on a panel at the South Atlantic International Trade Conference, Maersk North America Regional Managing Director, Narin Phol discussed the current supply chain challenges in the United States and ways to confront them with a range of solutions.
“The current situation is a growth story in the US and the supply chain disruption you are seeing is a by-product of this growth,” said Phol, and added that the challenge is every part of the US supply chain needs to build more resilience and capacity to keep pace with consumer demand.
After the disruptions in ports and production in the Far East due to Covid-19 in early 2020 affected the normal flow of trade in the United States, now life in most of the States is returning back to normal.
The revived demand in American households contributes to the rise in US imports and 70% of Gross Domestic Products (GDP) in the American country is linked to consumer buying, according to Maersk.
Phol commented that the Danish shipping company applauds President Biden’s comments that highlight a full return to normalcy can only be obtained with the full support of all supply chain participants. “It will still take some time, but we are doing what we can to efficiently handle the current environment and look forward to a resumption of normal cargo flows and deliveries,” he said.
“Operational details still need to be worked out on 24/7 operations at the ports of Los Angeles and Long Beach. This level of operations is not an overnight, simple solution to implement and does not solve the broader supply chain capacity challenges and shortage of workers in trucking, warehouse and supply chain jobs,” explained Narin Phol.
Currently, APM Terminals Pier 400 in Los Angeles offers 20 hours of truck gate operations every weekday which entails 2,000 truck appointments a day and is also open on Saturdays. On 15 October there was a 49% no show factor for import containers on those 2,000 truck appointments and on Saturday it was a 50% no show rate.
“The company is working with the trucking community to address and resolve this situation,” said Maersk’s North America Regional Managing Director.
Other steps that Maersk has taken to alleviate capacity issues and distribution shortfalls are integrating assets in the supply chain.
“When you own and operate the supply chain assets and technology you have much better control and accountability of the supply chain and better agility with solutions,” noted Phol.
In addition, Maersk makes efforts to relieve the global logistics issues by adding 40% more vessel capacity into the trade between Asia and US trade, as well as expanding the port calls in the US East coast to create more supply chain routing options as an alternative to Pacific Southwest ports, according to a statement.
Furthermore, the world’s largest shipping line said it is expanding landside logistics with new warehousing and distribution locations in high demand areas to support cargo flow.
Acquiring an e-commerce logistics company to help customers grow in the direct-to-consumer space is also another Maersk’s step to confront the supply chain issues, by offering delivery within 48 hours to 95% of the US market and 75% of the market within 24 hours, helping small to medium-sized customers compete more effectively, according to an announcement.
“Maersk has transformed itself to become not just an ocean carrier and port operator but a full service, end-to-end logistics services provider,” concluded Phol in his speech.
