ITS Logistics today released the June forecast for the ITS Logistics US Port/Rail Ramp Freight Index. This month the index reveals that all markets have stabilized for ocean and rail container demand. ITS encourages supply chain professionals to be aware of significant volumes entering the US West Coast via Seattle-Tacoma (SEATAC) and Los Angeles and Long Beach (LA/LB) and for inland point intermodal (IPI) legs to be canceled.
“Port and rail operations have normalized, and volumes have reduced due to extended dwell times for containers in Asia awaiting export,” said Paul Brashier, Vice President of Global Supply Chain for ITS Logistics. “Despite this positive news, we are keeping a close eye on the current conditions, which could quickly change in the coming months due to the potential for International Longshoreman Association (ILA) strikes at US East Coast ports. The potential impact of these strikes on the US West Coast ports is a matter of concern. It's crucial for supply chain professionals to monitor this situation closely and be prepared for any potential disruptions.”
This month, the ILA, representing 85,000 port workers along the eastern seaboard and Gulf Coast ports, requested substantial wage increases for its members. The union, citing the high profits of container lines, suspended contract negotiations with the US Maritime Alliance (USMX), which represents employers at East and Gulf Coast ports. The dispute centers around the automation of port operations, with ILA leadership setting a stern boundary with respect to remuneration in the new labor agreement due to begin on October 1.
According to reports, the ILA is vying for wage increases in excess of the 32% rise the International Longshore and Warehouse Union (ILWU) obtained for its members at US West Coast ports last year. This occurred during its six-year agreement with waterfront employers, and last summer, the ILA indicated that a 40% increase in both wages and benefits was secured by its Great Lakes district.
“The potential for ILA strikes at US East Coast ports could challenge that region if a deal is not reached this year,” continued Brashier. “This will drive volumes to the US West Coast as some shippers may hedge to avoid the US East Coast. Dwell times at origin in Asia for export have also increased significantly. While this is muting inbound volume and leading to improved port operations, at some point, ocean carriers and non-vessel owning common carriers (NVOs) will increase capacity to capture surging trans-Pacific rates.”
Due to current freight being behind schedule, it will drive through the quickest ingestion point in the supply chain. ITS encourages industry professionals to monitor significant volumes entering the US West Coast via SEATAC and LA/LB and the cancellation of IPI legs. These occurrences will increase transload and one-way trucking demand from those locations.
ITS Logistics offers a full suite of network transportation solutions across North America and comprehensive distribution and fulfillment services capable of reaching 96% 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.
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