West Coast Container Traffic Adding Strain to Supply Chain
West Coast ports will continue to face challenges into December, according to the recently released ITS Logistics US Port/Rail Ramp Freight Index.
“Container traffic entering the West Coast is still challenged today and experiencing volumes booked to avoid the Red Sea issues and East/Gulf labor union activity, which continues to test capacity in those markets,” said Paul Brashier, vice president of Global Supply Chain for ITS Logistics, in a statement. “This, coupled with the recent strike in Vancouver, will challenge U.S. West Coast operations as shippers find safe harbor here."
As reflected in the data, U.S. East and Gulf port demand increased drastically as operations reopened post-strike in October and have since moderated.
While ramp operations throughout the U.S. rail infrastructure are running smoothly, the additional dwell time at U.S. entry, coupled with earlier issues pertaining to getting capacity at origin in Asia, is forcing many companies to dray-off and transload.
Companies are also prioritizing sending truck goods further east one way into their supply chains, driving domestic truckload rates up out of the West Coast. This is all occurring as the nation prepares for the recently elected Trump Administration to come into effect.
“We now must focus attention to how potential tariffs proposed by the newly elected Trump Administration could impact supply chains, shipping costs, and overall trade dynamics in the months ahead,” continued Brashier. “In late 2018, tariffs implemented by the Trump Administration caused a significant amount of vessel and container diversions, congestion, and overall supply chain headwinds that, at the time, led to the most significant challenges ever to North American supply chains. Shippers moved billions of dollars in goods to get ahead of those tariffs.”
From that event, supply chain professionals learned that the inland portions of the container lifecycle mattered and drove the majority of costly, unplanned accessorial fees and costs. As a result, shippers determined that controlling their inland transportation, onboarding capacity with operations throughout North America, and having access to container visibility platforms were the keys to protecting their organizations from catastrophic inflated supply chain costs.
