“The major backlog at one of America’s busiest ports has been worsened by strict zoning laws that limit where empty shipping containers can be stacked after being unloaded.
Until officials in Long Beach, California, issued an emergency order this weekend to temporarily relax those rules, it was illegal for trucking companies to store more than two shipping containers on top of one another in their yards. That’s contributed to a massive bottleneck at the terminal yards of trucking companies serving both the Port of Los Angeles and the Port of Long Beach—a bottleneck that’s being felt in supply chain shortages across the whole country.”
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“There doesn’t seem to be any safety-based reason for such a policy, as shipping containers are routinely stacked higher at other ports and while being carried across the open sea. Long Beach’s prohibition on stacking more than two-high is “an aesthetic measure intended to preserve visual sightlines in the neighborhood,” according to The Maritime Executive, a trade publication.
Those rules won’t be enforced for the next three months under an emergency order issued this weekend. Now, trucking companies and warehouses will be allowed to stack up to four containers vertically—effectively doubling their capacity. “The city will work during the next 90-day period to assess the situation and effectiveness of this solution and any impacts on the surrounding areas,” Long Beach officials said in a statement.”
“When you think of the U.S. manufacturing sector, you likely think of General Motors and U.S. Steel, faceless megaliths with armies of disciplined workers. But it’s more like Yellowstone National Park, an intricate ecosystem of small and specialized players, their fates closely intertwined. “If you look at anyone who is a node in a supply chain—a manufacturer, or sub-manufacturer, or raw materials extractor—each of those entities may be partnering with many different customers, as well as many different sub-suppliers beneath them,” says Karen Donohue, an expert on supply chains at the University of Minnesota’s Carlson School of Management. “Their solvency is potentially dependent on the weakest link in both of those networks. And that’s what makes prediction difficult.” A 2018 survey by the consultancy Deloitte found that 65 percent of more than 500 procurement leaders from 39 countries had a hazy view, at best, of their supply chains beyond their most important suppliers.”
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“Professional Instruments’ primary customer is a small company in New Hampshire whose ultraprecision machine tools are crucial for manufacturing in the medical device, defense, consumer electronics, and automotive fields. “It’s almost impossible for someone to anticipate the knock-on effects of some businesses being closed down because they’re deemed nonessential, because they’re suppliers for companies that are deemed essential,” says the company’s recently retired former CEO, who requested anonymity to discuss sensitive business matters. “You build a quarter-million-dollar machine, but if you can’t get one $150 component off the shelf, you can’t put it into production.””
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“Zoom out further, and the pandemic’s global nature becomes palpable. The future of the New Hampshire company is also uncertain, thanks in part to closures abroad. It has representatives in several countries (including South Korea, Japan, and Taiwan, all of which have implemented lockdown measures) and customers in many more. “Representatives might need to come from the U.S. to help install the machines,” says the former CEO. “But with global travel being affected, how are you going to get that equipment installed? You still need those people to travel. These machines don’t install themselves.” In March the company opened a training center in China, but “whether that center will be utilized for some time remains to be seen.””