New World Drayage Challenges and Opportunities in Logistics

The rise of e-commerce has led to a significant increase in the number of containers being transported through ports, creating a surge in drayage demand.

Drayage, the process of moving containers from ports to inland terminals or warehouses, is becoming increasingly complex due to growing congestion and labor shortages.

One of the main challenges in drayage is the limited availability of chassis, which are essential for transporting containers. According to the article, chassis are in short supply, with some reports indicating that there are only 15-20% of the required chassis available.

In addition to chassis shortages, drayage is also facing labor shortages, with many ports struggling to find enough drivers and dockworkers to handle the increased volume of containers.

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The world of drayage shipping is always changing, and it's essential to stay informed to navigate these shifts. A tentative six-year contract between the ILA and USMX has been agreed upon, preventing strikes at US East and Gulf Coast ports. This deal balances job protection with port modernization, ensuring industry stability.

The Lunar New Year is just around the corner, starting on January 28th. Businesses will begin to slow down or halt production for the holiday, so importers and exporters should take this into account to plan their activities accordingly.

A potential ILA dockworker strike on January 15 is anticipated due to firm stances on port automation. If the strike extends beyond 15 days and coincides with the Lunar New Year, it will result in a substantial backlog.

Shippers are frontloading cargo because of the Lunar New Year, strike threats, and potential tariffs, resulting in a 9% year-over-year increase in US imports.

Here's a quick rundown of the key events affecting the drayage industry:

The global shipping container market is facing significant supply constraints due to diversions in the Red Sea, Asian port congestion, and unpredictable demand surges.

Freight rates are rising significantly, making it harder for shippers to navigate the market.

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Spot rates remain high, but overcapacity concerns persist due to record deliveries of new ships.

The pandemic era taught us the importance of data-driven decision-making, technology adoption, and a focus on sustainability.

Shippers must adapt to volatile market dynamics and invest in innovation to stay ahead.

Here are some key factors contributing to the supply chain challenges:

These factors add complexity to the market and require shippers to be more strategic in their decision-making.

The global shipping container market faces supply constraints due to diversions in the Red Sea, Asian port congestion, and unpredictable demand surges.

To adapt to volatile market dynamics, shippers must invest in innovation and data-driven decision-making, as emphasized by lessons from the pandemic era.

In the US, imports from Asia show a slight YoY gain in September at +1.4%, up from August's -14.7% YoY, with a significant portion of this freight landing on the West Coast.

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Trans-Pacific ocean carriers are increasingly using Mexico's Port of Lázaro Cárdenas as an alternative route to reach the US Midwest, bypassing the draft limitations of the Panama Canal.

Here are some key statistics on the benefits of intermodal transport:

India's dockworkers have set a strike deadline amidst a wage dispute, which could have significant implications for global supply chains.

A strike in India could start on December 17 if wage revisions aren't implemented by December 15. This strike could cause significant delays.

For North American freight, even a one-day strike can cause a backlog taking four to six days to clear.

The potential for a strike in India highlights the importance of timely wage revisions for dockworkers.

A one-day strike in India could potentially disrupt supply chains for weeks or months.

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The Port of Baltimore is getting ready for a boost in maritime traffic. A temporary channel has been opened to allow "commercially essential vessels" to enter and depart the port while the Francis Scott Key Bridge is being reconstructed.

This new channel provides a deeper and wider path for ships, with a controlling depth of 20 feet, a horizontal clearance of 300 feet, and a vertical clearance of 135 feet. This will enable a wider variety of vessels to access the port.

Approximately 15% of the port's pre-collapse commercial activity is expected to resume with this opening. Officials are working towards opening the full channel by the end of May to restore most maritime traffic to one of the East Coast's busiest ports.

Here's a brief overview of the new channel's specifications:

In related news, the Port of Portland will be halting container service at Terminal 6 as of October 1.

Rail container dwell times at the Los Angeles and Long Beach terminals have been steadily on the rise since January, with March's dwell time up 67% from January to 7.02 days.

This uptick in dwell time correlates with imports from Asia arriving at LA/LB increasing by 29.7% in the first quarter compared to the same period last year, reaching 1.96 million TEUs.

The ports of LA, Long Beach, and Savannah reported a dip in volumes from February to March due to the timing of the Lunar New Year, but they demonstrated resilience with substantial YoY increases in both imports and exports.

Here's a breakdown of the March volumes for each port:

The Port of Los Angeles, in particular, experienced significant growth in exports, with a 47.3% increase compared to March 2023.

The Port of Savannah is currently battling a backlog of vessels, with 16 ships stacking up in recent weeks. This is due to a string of closures, but fortunately, shippers say there has been no significant impact yet.

The Port of Savannah's Container Discharge Dwell time is currently 2.37 days, which is in line with where it has been through the summer. This is the shortest of the major ports across the country.

This backlog is a result of recent closures, but it's not the only issue affecting the port. International port congestion is also causing problems, with issues in the Red Sea contributing to the congestion.

Here's a breakdown of the current situation:

The Port of Savannah is working to clear the backlog, but it's unclear how long it will take. Shippers are advised to prepare for potential delays as the situation is expected to linger through mid-November.

Personalizing your customs brokerage strategy with drayage and port-to-door solutions can make a significant difference in your logistics operations. By aligning the right capacity to meet your specific needs, you can ensure reliable ocean freight capacity and competitive rates.

Drayage procurement involves working with a network of pre-qualified drayage carriers to meet your organization's needs. With long-term carrier relationships and a vast network of 3,000+ preferred dray carriers, you can trust that your FCL and LCL/consolidated cargo will sail reliably across major trade lanes.

To ensure seamless shipping experiences, it's essential to choose a drayage expert that provides unmatched visibility across modes and safety standards compliance. This can be achieved by working with a company that offers regionalized services, diversified routes, and a network of preferred dray carriers.

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A reliable drayage service provider can help you reduce complexity in your international shipments and focus on what matters most. With simple transport solutions, you can solve even the most complex challenges in your logistics operations.

Here are some key benefits of partnering with a reputable drayage service provider:

By considering these factors and partnering with a reliable drayage service provider, you can ensure that your logistics operations run smoothly and efficiently.

New World Drayage can be a complex and time-consuming process, but with the right knowledge and preparation, you can navigate it more efficiently.

The cost of drayage can vary greatly depending on the distance and mode of transportation, with an average cost of $100 to $200 per container.

Drayage is typically the responsibility of the shipper or consignee, but it's essential to clarify who is liable for the costs in your contract.

The drayage process usually takes 1-3 days to complete, but it can take longer during peak seasons or in areas with high demand.

It's crucial to have a clear understanding of the drayage process, including the costs and timelines, to ensure a smooth transition of your goods.

A dockworker strike in India could cause significant delays, with a potential backlog taking four to six days to clear.

A one-day strike in North America can disrupt supply chains for weeks or months.

If wage revisions aren't implemented by December 15, a dockworker strike could start on December 17 in India.

This highlights the importance of timely wage revisions to avoid disruptions.

ILAs entrenched positions on port automation may lead to a strike on January 15, further exacerbating congestion delays.

In the context of new world drayage, it's essential to monitor port congestion and potential strikes to ensure timely deliveries.