Potential labor disruptions at U.S. East and Gulf coast ports, which handle billions of dollars in trade monthly and about 43% of all U.S. imports, plus “heavy pre-tariff shipping” pending the outcome of the U.S. election are two challenges the supply chain industry is facing now, noted ITS Logistics in its US Port/Rail Ramp Freight Index for September.
On the positive side, “demand and rates for transpacific freight from Asia are normalizing, signaling the end of peak season for shipping ocean containers,” according to the Nevada-based third-party logistics (3PL) firm, which each month releases an index that forecasts port container and dray operations for the Pacific, Atlantic and Gulf regions, and highlights ocean and domestic container rail ramp operations for the West and East inland regions (see below).
“While labor disruptions are unlikely, shippers should keep a pulse on how this evolves throughout the month,” said Paul Brashier, Vice President of Global Supply Chain for ITS Logistics. “There are also reported issues with lingering rail congestion and operational slowdowns, so taking this into consideration, we have chosen to keep September rail modes at an ‘elevated’ concern status. Shippers should keep dray-off, transload, and one-way trucking operations in place as peak shipping season comes to a close.”
According to the 3PL firm, ports management and the International Longshoremen’s Association (ILA) are currently negotiating concerns around the use of automation that have the potential to result in a strike by workers threatened for Oct. 1. “ILA leader Harold Daggett confirmed in a letter that workers ‘don’t want any form of semi-automation or full automation’ and that the United States Maritime Alliance (USMX) members should have agreed with unions before investing in new equipment,” ITS Logistics said. “The USMX, on the contrary, has pledged to maintain the existing contract language around automation, which directly confirms that ‘there will be no fully automated terminals and no implementation of semi-automated equipment or technology/automation without agreement by both parties.’”
In addition to automation concerns, ITG Logistics said, the ILA “scrutinized pensions, inadequate healthcare provisions, and the use of cameras in workstations as a measurement of control versus matters of safety.” Regardless of the outcome of this current wave of negotiations, “this labor battle has impacted logistics providers, ports, and railroads globally and is part of a trend of more ports considering automation as a step in elevating new logistics solutions,” according to the 3PL firm.
Concluded John Brashier: “As we wait for the negotiations to come to a close, industry professionals should keep in mind that we will see a few weeks of elevated demand for inland dray, rail congestion, and other operational issues in September as containers make their way through the North American supply chain. With the labor issues in Canada subdued, operations in North America are mostly stabilized.”
