(RENO, NEV.) – ITS Logistics, today released the April forecast for the ITS Logistics US Port/Rail Ramp Freight Index. This month the index forecasts how the lack of empty container return availability is negatively impacting shipping for beneficial cargo owners (BCOs). In addition, the escalation of negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) is negatively impacting the ports of Los Angeles (LA) and Long Beach.
“There is a lack of empty return fluidity at US ports—especially in LA and Long Beach,” said Paul Brashier, Vice President of Drayage and Intermodal for ITS Logistics. “In most cases, dual transactions and off-hours/off-port termination facilities are the only options for truckers to return empties.”
In 2020, when shippers were being warned of severe congestion at the LA and Long Beach Ports, the Federal Maritime Commission (FMC) made recommendations to have truckers return empties to the terminal of origin to facilitate more dual moves. The Harbor Trucking Association (HTA) also championed the improved use of dual transactions to aid in alleviating the drayage and chassis shortages at the time.
“Three years ago, not incorporating dual transactions meant that more drivers and chassis would be required to move the same amount of equipment,” continued Brashier. “Having only two options to remove empty containers is inefficient and will only increase trucking and detention costs to BCOs. Operations will also be strained at terminals and current reports show that MSC containers are becoming the most immediate concern.”
According to Statista, the Switzerland-based shipping firm MSC has a 17.5% market share in container traffic. As the world’s largest ocean freight line, they recently confirmed with CNBC that freight orders would rebound once inventory levels declined in the US and Europe, to enable trade volumes to increase. While ocean freight bookings continue to be heavily dependent on manufacturing orders, shipper confidence has declined in part because of ILWU and PMA negotiations escalating. This has caused a continued loss of market share in the LA and Long Beach Ports, but MSC expects the ocean container market to grow in the second half of this year.
“ILWU work slowdowns this month in LA and Long Beach are the opening salvo in what will be tense ILWU and PMA negotiations over the next couple of months,” continued Brashier. “This was the first major public display of how far both parties are apart and has moved the Pacific Region to a severe concern on the index. Ultimately the region is experiencing labor disruption on top of empty container termination restrictions.”
Currently, ILWU does not have the leverage it once had, and volumes are significantly less due to economic factors and lost market share to the Gulf and East Coast ports. Shippers should avoid West Coast Ports for the next two months, and add additional dray capacity immediately across North America.
ITS Logistics offers a full suite of network transportation solutions across North America and omnichannel distribution and fulfillment services to 95% of the U.S. population within two days. These services include drayage and intermodal in 22 coastal ports and 30 rail ramps, a full suite of asset and asset-lite transportation solutions, omnichannel distribution and fulfillment, and outbound small parcel.
The ITS Logistics US Port/Rail Ramp Freight Index forecasts port container and dray operations for the Pacific, Atlantic, and Gulf regions. Ocean and domestic container rail ramp operations are also highlighted in the index for both the West Inland and East Inland regions. Visit here for a full comprehensive copy of the index with expected forecasts for the US port and rail ramps.
About ITS Logistics
ITS Logistics is a premier Third-Party Logistics company that provides creative supply chain solutions with an asset-lite transportation division ranked #23 in North America, the #11 drayage and intermodal provider, a top-tier asset-based dedicated fleet ranked #39, and innovative omnichannel distribution and fulfillment services. With the highest level of service, unmatched industry experience and work ethic, and a laser focus on innovation and technology–our purpose is to improve the quality of life by delivering excellence in everything we do.
The post ITS Logistics April Port Rail Ramp Index appeared first on Industry Today.