Looking ahead to the peak retail season, ITS Logistics released its forecast for the ITS Logistics US Port/Rail Ramp Freight Index.
The index reveals that pre-retail-peak season shipping activity has brought moderate volume increases to most markets, but a lack of equipment has stressed import volumes at origin.
Additionally, due to the overseas import origin equipment shortages, shippers are having to book into new North American entry points outside of their current supply chain network.
“Despite having a lack of equipment, North American inland transportation is still not experiencing significant operational challenges as a result,” said Paul Brashier, vice president of Global Supply Chain for ITS Logistics, in a statement. “That said, as it relates to North American entry points, the equipment shortages are causing shippers some moderate disruption this month. This is especially true in the last 7-10 days of July. Volumes should increase as we move into August and peak volumes move from docks at import origin to the U.S.”
This month, the Port of LA container volumes increased by 14.4% due to strong trade activity, which was amplified by the early peak season, threats of a labor strike at both the East and Gulf Coast ports, and consistent consumer spending.
The first half of the year saw the handling of 4.7 million TEUs, which was more than the same period last year.
As for the current threat of a labor strike, with only 70 days left in the International Longshoremen's Association (ILA) current contract, discussion remained stalled, as the union’s strategy was to resolve all local jurisdiction contracts and then commence negotiations for the master contract.
“Labor disruptions have the potential to adversely affect operations in the U.S. and Canada,” continued Brashier. “As of now, there is not a high probability of a prolonged strike on the US East/Gulf Coast and Canada, but the threat of a strike is causing shippers to move their booking pairings back to the West Coast to avoid both regions.”
Numerous vessels are blanking calls at some of the smaller to medium-volume ports in the U.S., which is negatively impacting exports. When paired with the equipment imbalance, this will continue to create a challenge for exporters into Q4 of this year.
