In releasing its July forecast for the ITS Logistics U.S. Port/Rail Ramp Freight Index, ITS Logistics warned that the threat of an East and Gulf Coast ports strike could adversely affect U.S. and Canadian operations.
This month, 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. In addition, 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. “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 seven to 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 L.A. container volumes increased by 14.4 per cent due to strong trade activity, which was amplified by the early peak season, threats of a labour 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 20-foot-container equivalent units, which was more than the same period last year.
As for the current threat of a labour strike, with only 70 days left in the International Longshoremen’s Association (ILA) current contract, discussions remained stalled, as the union’s strategy was to resolve all local jurisdiction contracts and then commence negotiations for the master contract.
“Labour disruptions have the potential to adversely affect operations in the U.S. and Canada,” said Mr. Brashier. “As of now, there is not a high probability of a prolonged strike on the U.S. 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.
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.
(Photo of Port of Los Angeles)
