LPS Industries Offers Advice to Businesses Coping with US Port Congestion
Communicate, Act Now, Source Domestically, Cut Waste
MOONACHIE, N.J., OCTOBER 18, 2021 – LPS Industries, a vertically integrated flexible packaging manufacturer, is successfully coping with the backlog of container ships at US ports. The company has faced challenges in securing sufficient raw materials, arranging for its logistical needs, and getting products to clients in a timely way. As most of the American industry faces these problems, LPS Industries offers lessons for other firms.
With businesses rushing to replenish stocks running down in the pandemic, demand has surged but the ability of the supply chains to manage is inadequate. Los Angeles and Long Beach account for more than 40% of all US imports. They are currently working at only two-thirds of their capacity because of worker shortages. The result is as many as 100 cargo ships waiting their turn to be unloaded, sometimes waiting up to 3 weeks or more. Nike has said it now takes 80 days to get a cargo container to the US from its Asian factories; pre-Covid, it took just 40. Recent federal intervention increasing port operations to 24/7 may help to lessen the backlog. However, continued shortages in moving containers over land will continue in the short to middle term. All of this means higher freight costs for the buyer and ultimately the consumer.
Paul Harencak, VP of Business Development & Technical Services, who will be addressing the Association for Corporate Growth New Jersey on the topic, explained, “There is a backlog at the Ports of Los Angeles and Long Beach that is affecting most businesses in America in one way or another. We have managed the problem at LPS Industries, and we have discovered a few things almost any company can do to ease the strain. Communication is the easiest and most effective activity of all. Talk to your suppliers about deliveries, delays and deadlines. Without that discussion, you cannot effectively respond to any bumps in the road. At the same time, you need to communicate with your employees. They are on the front lines of manufacturing. They need to know their job is a critical component to delivering product.”
Mr. Harencak also said, “Additionally, every firm out there should be seeking help now from well-connected logistics and custom brokers. These people have information and connections that can prove invaluable in overcoming the challenges ahead.
“In particular, they can help you source many of your needs domestically. Whenever possible source in North America. Avoid congested shipping ports. With freight rates skyrocketing, it may even be cheaper than overseas.”
He further added, “Increasing your inventory goes against much of the just-in-time shipping we are used to doing in many industries because warehousing affects margins. But it is better to have what you need in a warehouse where you can get to it, rather than off a cargo ship that isn't going to arrive just-in-time, or anytime soon.”
Finally, Mr. Harencak stated, “Reduce manufacturing waste! Every dollar of waste is a dollar that can’t be sold. When the supply chain is tight you cannot afford to waste raw materials. Get more out of what you have. When the congestion problem ends, you will still have those efficiencies in place.”
About LPS Industries
LPS Industries LLC, a woman-owned family business, is a leading ISO 9001:2015 certified flexible packaging manufacturer and converter with a distinguished history of providing creative solutions for its customers for over 60 years. With cost-effective products in flexible packaging, hazardous material packaging, shipping envelopes and supplies, and industrial bags and envelopes, LPS Industries can meet the need of most any packaging requirement. LPS Industries is a diversified manufacturer and leader in the flexible packaging industry providing packaging solutions to many market segments such as medical, food, transportation, electronics and agriculture. For more information, visit our website at www.lpsind.com