How ports can untangle the supply chain snarl

Port of Cleveland President and CEO William Friedman on the next supply chain challenge

At the NRF Supply Chain 360 conference and expo, attendees explored the modes and methods needed to build a stronger, more sustainable supply chain and ensure resiliency in challenging times. Learn more about the conference, held June 20-21, 2022, in Cleveland, here.

While the world was struggling with supply chain bottlenecks in 2021, the Port of Cleveland significantly increased its cargo volumes and was congestion-free.

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Friedman headshot
William Friedman,
president and chief executive officer, Port of Cleveland

In fact, the Port of Cleveland markets itself as an alternative to larger ports on the coasts that have seen congestion and delays, says President and Chief Executive Officer William Friedman.  Friedman will share lessons learned through the pandemic and his vision for the future at NRF Supply Chain 360, where he’ll join other maritime port leaders for a session on preparing ports for a 21st century supply chain.

Read on for more of Friedman’s recommendations on addressing the next supply chain challenge, including partnering directly with retailers.

The Port of Cleveland reported a 69 percent increase in tonnage across its docks in 2021 compared with 2020. How did the port handle the increase in volumes given all the challenges in the supply chain?

Our port was congestion-free in 2021 even with increased cargo volumes because we have ample capacity on our general cargo and bulk terminals. We market our port as a reliever to the congestion and delays at the large, coastal ports.

What efforts is the Port of Cleveland focused on right now? What lessons were learned through the pandemic?

We are working hard to expand our container service offerings. We are the only Great Lakes port handling containerized cargo thanks to a “disruptive” service we started in 2014 called the Cleveland-Europe Express, now operated by Dutch vessel owner the Spliethoff Group. This service connects Cleveland and Antwerp with intermediate stops in Canada. We expect strong growth again in 2022 on this service.

We are also working to add a feeder service connecting shippers with container lines calling Halifax or Montreal. We’re also seeking to start a cargo ferry across Lake Erie to better service the robust trade between Ohio and Ontario.

On the bulk cargo side, we are building a liquid bulk, ship-to-rail transload facility and will begin servicing tanker vessels carrying food-grade oleo products later this year. On the breakbulk side, we are a major steel handling port meeting the demand of manufacturers of autos, appliances, food and beverage cans, battery casings and other products. We expect steel volumes to rise in 2022. In addition, we have excellent facilities for breakbulk and project cargoes and usually see a good deal of “high, wide and heavy” cargoes such as transformers, yachts, industrial presses and the like.

What are some of the current trends facing the supply chain right now and what policies or strategies can help prepare for the next supply chain challenge?

The U.S. import and export supply chain woefully underperformed during the pandemic, yet the supply side (major ocean and rail carriers and freight intermediaries) made profits that seem downright obscene given the horrific service levels. This indicates to me a big problem with the healthy functioning of these markets.

Congress seems to agree, and reforms to shipping laws seem likely that may offer shippers some relief on unfair detention and demurrage and possibly on refusal or service on exports.

But in my view, this does not go far enough. Cargo flows are too concentrated in a handful of U.S. ports. This leaves the nation vulnerable to future demand and supply imbalances and shocks, which are inevitable. To rectify this, we must better utilize secondary ports that have capacity and in many cases are closer to the cargo origin/destination point, including inland ports. This will require a paradigm shift away from almost total reliance on mega-ships and mega-ports, which is of course the carrier business model today.

How can the nation’s ports be better prepared for future disruptions and what can retailers to do be a more strategic partner?

My port started a service between Cleveland and Europe as an alternative to the traditional U.S. or Canadian routings on this trade lane. The whole idea was to better serve U.S. heartland shippers, retailers included, that quite frankly get rotten service today from the carriers, intermodal rail included.

Many secondary U.S. ports, such as Cleveland, stand ready to partner directly with retailers to identify more ways like our Europe service to get your freight where it needs to go. The Great Lakes-St. Lawrence Seaway routing is a vastly underutilized marine highway that could be serving retailer shipping needs today if not for the reluctance of the big liner alliances to use the system.

Container ships could be bypassing backed-up ports and instead delivering containers directly to Cleveland, Detroit, Chicago and Duluth (Minn.) today, much more efficiently serving a huge segment of the Midwest market. It’s already happening in our port, and we can do more of it if retailers and other shippers use their market power to partner with us.

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