was asked earlier about the ILA, slowdown, and contract, so I put together the following to share. Negotiations started early, and another meeting is coming up June 5-7 to do local negotiations. Everyone is expecting that the contract will be done in plenty of time to give BCO’s the assurance that there will be no disruptions.
Why do the east coast and gulf ports not want any disruptions?
- They have seen their percentage of containerized cargo go from 22% to 35% and they don’t was to risk their gains going back to the west coast
- Major investments have been made on the east coast and no one wants to jeopardize those. Deeping the Savannah River & Raising the Bayonne Bridge to accommodate larger ships.
I was recently at the Port of Savannah and the officials there do not seem overly concerned either. If negotiations get tense there could be a “slow down”, but I don’t foresee any major disruptions. As for a comparison to 2013, I don’t feel it will be a slow down close to what was seen in 2013. We have a subscription to the JOC, so I attached an article that will give you further detail.
From our perspective I wish there was more disruptive news to provide, because we would like nothing more than to trans-load all of your cargo in Long Beach and truck across the country. Fortunately for the BCO’s I don’t expect this particular issue to cause many, if any delays. I do still see capacity being a concern in the 3 rd and 4 th quarter though. Even if there are no disruptions at the port, the amount of cargo still outweighs the number of trucks and drivers. Truck capacity, ELD regionalization, and chassis will likely be the issues to contend with. Its important to keep educating the BCO’s that 90% of the drayage market is comprised of Owner Operators. That means they pick and choose which work they take.The driver’s choice generally comes down to how much the load pays.
Another note on the potential congestion side is that ships keep getting bigger, but the terminals are still the same size. For example, when I was in SAV last week we saw a 14,000 TEU OOCL ship. There are still the same number of free days and the same time to unload as smaller ships, which generates congestion. I saw the longest lines ever in SAV last week. Was it due to the larger ship?? Quite possible. Also keep in mind that with more cargo coming off the ships and containers in the community longer due to ELD, chassis pools may get depleted.
That is my state of the union and opinion on East coast ports this 2nd day of May, 2018. This may be of help when explaining certain situations to clients. If you ever need assistance or further information, please feel free to reach out to Port X Logistics at any time – askus@portxlogistics.com