Recently I read about the saga at the Port of LA. According to Ryan Petersen, the chief executive of logistics company Flexport, the real bottleneck at the Port of LA was actually storage space. The article reported:

“In a full 3 hour loop through the port complex, passing every single terminal, we saw less than a dozen containers get unloaded,” he wrote. There were plenty of cranes, he observed, but nearly every spot holding containers was filled. With empties clogging the available space, new containers carrying goods from sea or land had nowhere to go.

A few thoughts:

  1. Kudos to Ryan who actually bothered to go into the field, collect first-hand data, and try to identify the root cause of the problem. Where are the government officials, or leaders at the Port?
  2. I do not know whether space was the real culprit here, but it may well be. Ryan followed the logical step. He looked at the unloading process, and asked why there was very little action there. The response was that there were no trucks. And why were there not trucks? There were no space to unload the empty containers on those trucks.
  3. A bottleneck can come from any number of inputs in the supply chain process: labor, material, space. Any single one of them falling short will cause the entire chain to crash. This is the ‘minimal principle’ that I have iterated again and again.
  4. If you do not identify the real bottleneck, it will not help at all if you spend resources at other places. For example, there were suggestions of sending in military troops to help unload the ship. But if the space problem is not solved, the troops will not be able to do much at all.

Using the spreadsheet tools we recently discussed, we can see the effect of speeding up (or slowing down) processing speed is non-linear.

For example, speeding up from 3 days of unloading a ship to 2 days can reducing waiting time from 6 days or almost zero day.

Now the question is if the Port of LA can truly speed up. It is not about just extending hours or sending troops in to help. It is about identifying the true bottleneck(s) and alleviating them.

bottleneck