By Linda Rouse O’Neill
Supply chain issues remain an ongoing concern for the healthcare distribution industry. In order to share information about these issues, HIDA convened a Shipping Work Group of supply chain and logistics experts among our member companies. This Shipping Work Group has met on a monthly basis to provide an industry-wide perspective on the medical supply chain.
Federal Maritime Commissioner Carl Bentzel recently met with the Work Group to talk about challenges in the current shipping landscape:
- At any given time, there are 160 ships off the coast of the United States. This represents a 27% increase in volume, and volume is not expected to abate until 2024.
- The size of ships is growing. Some now hold the container equivalent of 12,000 truckloads.
- To visualize that cargo, consider this: If a ship of that size is docked at the Port of Los Angeles, the number of trucks needed to unload it would form a line all the way to Las Vegas.
Fortunately, Commissioner Bentzel pointed to a new law passed by Congress, the Ocean Shipping Reform Act. HIDA supported passage of the Ocean Shipping Reform Act, and it was one of our key legislative priorities during our annual Washington Summit in June. The new law empowers the Federal Maritime Commission (FMC) to combat unfair trade practices in the shipping industry and addresses price gouging on container shipping fees by ocean carriers.
- The new law gives the FMC additional resources for enforcement and investigations. Staffing will be a key priority. Currently, the Commission has only 1 investigator for every $1 trillion in commerce. In comparison, the Securities & Exchange Commission (SEC) has 150 investigators for every $1 trillion.
- Many of the provisions of the Ocean Shipping Reform Act automatically went into effect when the bill was signed into law. This includes provisions to challenge unreasonable fees on detention and demurrage – fees that exceeded $2 billion last year.
- The FMC is now empowered to self-initiate investigations of ocean carrier business practices and apply enforcement measures.
Members of the Work Group shared additional observations:
- At the Port of Long Beach, the number of “long-dwell” import containers (waiting at terminal 9 days or more) is at the highest level since October 2021.
- Rail freight delays are making container backups at the ports worse. At the Port of Los Angeles, there are about 35,000 containers designated for rail on the docks. A normal day looks more like 9,000 units.
- Labor issues are an ongoing concern at West Coast ports – across all modes of transport. Contract disputes and work stoppages have roiled truckers, dockworkers, and railyard workers.
Both the insights of our members – and the opportunity to interact with federal partners such as the FMC – enables HIDA to better advocate for the interests of our industry. As we continue to unwind the bottlenecks in the medical supply chain, HIDA will remain at the forefront of these issues.
Linda Rouse O’Neill, Vice President, Supply Chain Policy & Executive Branch Relations