ITS Logistics September Port Rail Ramp Index: Potential ILA Strike on East and Gulf Coasts Fuel Peak Season Uncertainty
ITS Logistics today released the September forecast for the ITS Logistics US Port/Rail Ramp Freight Index. This month, the index reveals two challenges for the supply chain industry: potential labor disruptions in the U.S. East and Gulf Coasts and heavy pre-tariff shipping pending the outcome of the U.S. election. On the positive front, demand and rates for transpacific freight from Asia are normalizing, signaling the end of peak season for shipping ocean containers.
“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.”
The U.S. East Coast and Gulf Coast ports handle billions of dollars in trade monthly and about 43% of all U.S. imports. 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 October 1. Just this weekend, 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. 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, the ILA also 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 rails globally and is part of a trend of more ports considering automation as a step in elevating new logistics solutions.
“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,” continued Brashier. “With the labor issues in Canada subdued, operations in North America are mostly stabilized.”
ITS Logistics offers a full suite of network transportation solutions across North America and distribution and fulfillment services to 95% 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, LTL, 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.
Source: ITS Logistics