Port of Hueneme borrowed banana boats and their chassis to take cargo diverted from LA

In late 2021 the ports of Los Angeles and Long Beach, which normally take about a third of US imports, were clogged and containers were stacking up. Nearby, the Port of Hueneme, a niche port that mostly handles cars and bananas, sits on 120 acres against LA's 3,200. Its CEO, Kristin Decas, said it was getting one to three inquiries a day from shippers who wanted to bring cargo through it to escape the congestion.

The obstacle was the chassis, the wheeled frame that carries a container off the dock. Chassis are generally owned by the shipping carriers, and there was a shortage at pretty much every port. Hueneme owned none, so shippers could not simply offload there unless they had the rest of the chain worked out.

Hueneme's answer was to extend its contracts with existing clients such as Del Monte and Chiquita, whose ships bring bananas, mangos and pineapples. They leased out space on those ships for furniture, clothes, toys and musical instruments. Del Monte's operations manager Ramon Rios said they were chartering vessels to carry others' cargo, 'like Uber for them'. It worked because those carriers had their own chassis to cart the containers away.

The port lacked chassis, so it let banana-line tenants charter their own vessels, with their own chassis, to carry other shippers' goods.

The binding constraint was chassis, which belong to carriers rather than to the port, and every port was short of them.

Del Monte and Chiquita already owned vessels and chassis, so the extra cargo needed no new equipment from the port.

Hueneme had the space and labour near the big ports, so what it lacked was exactly what its tenants brought.

The tenants' ships already called at the port, so adding other shippers' containers fit existing routes.

When the scarce resource is owned by someone else, partner with those who already hold it. The shortage was equipment, and the port's existing tenants had it.

Hueneme said it was busier than ever, with imports up more than 100% that year, even though it was not taking on new clients without their own chassis. About 200 chassis sat at the port, some dedicated to specific companies and some not shared.