Dry Van Report: US imports keep rolling in, adding to the stockpile of empty containers


Importers desperate to keep away from West Coast port congestion and disruptions attributable to labor disagreements look to have made the proper name relating to cargo routing. One of many extra vital traits which have developed over the past 12 months is the import shift away from the West Coast and in direction of Gulf and East Coast ports. Causes for the shift cited by importers included minimizing provide chain disruption throughout this 12 months’s peak transport season attributable to port congestion and the expiration of the Worldwide Longshore and Warehouse Union (ILWU) contract on July 1, 2022.

Information reported by the Journal of Commerce (JOC) would recommend shippers are spot on with their considerations of a repeat of the 2014-15 contract negotiations during which ILWU locals “took motion on their very own initiative to disrupt cargo actions to advance varied native agendas, inflicting six months of disruption earlier than then-Labor Secretary Tom Perez mediated a settlement in early 2015.” JOC stories that contract negotiations have entered a brand new and probably extra unstable part, probably disrupting cargo actions throughout top-level negotiations between the union and employers.

In response to the JOC, a union representing safety guards at Los Angeles and Lengthy Seashore ports approved a strike final week following three years of negotiating for a brand new contract. Regardless that the safety guard union contract is separate from the coast-wide longshoreman contract, dockworkers would seemingly honor any safety officer picket traces, thus shutting down port terminals. 

Import volumes on the West Coast have been lowering for varied causes, and in keeping with IHS Markit/PIERS, import volumes in August had been down once more on the West Coast, lowering by 2.9% m/m, nevertheless, west coast quantity is up 3.9% y/y as we begin to lap the numerous port slowdowns of 2021. The East and Gulf Coast volumes proceed to pattern larger; the East coast was up 8.2% m/m and 13.0% y/y, and the Gulf coast elevated 1.6% m/m and 11.8% y/y for the month of August.  

All charges cited beneath exclude gasoline surcharges except in any other case famous.

Final week, the railroad strike menace was sufficient to ship shippers to the truckload market simply in case the railroads and unions couldn’t attain an settlement earlier than the “cooling off” interval expired final Friday. President Biden introduced that an settlement had been reached pending union member ratification got here as welcome reduction to nearly everyone concerned, with solely minimal affect noticed on spot charges on key intermodal lanes. On the high-volume lane from Los Angeles to Chicago, the place no less than 30% of all intermodal strikes happen, dry van spot charges decreased from $0.07/mile to $1.67/mile and are $1.14/mile decrease than the earlier 12 months. Hundreds moved on that lane had been up 47% final week, however this was partly attributable to a return to regular ranges given the quick week following the Labor Day Weekend. 

Final week was a return to comparatively regular transport patterns after the quick work week after Labor day. A rise in dry van load posts elevated 13% w/w; whereas that is down from 2021 ranges, dry van load publish quantity is 41% larger than in 2018.  Truck posts additionally noticed a rebound from final week and had been up 14% w/w. Consequently, the truck postings had been incrementally extra vital than the out there masses, and this drove the dry van load-to-truck ratio (LTR) to lower by 1% from 3.64 to three.60 final week.

Dry van spot charges have seen a comparatively flat pattern this month, and the nationwide common dry van linehaul price dropped $0.01/mile final week to $1.82/mile. In comparison with the highest 50 lanes which averaged at $2.24/mile, the nationwide common was $0.42/mile decrease final week. Dry van linehaul charges are $0.63/mile decrease than the earlier 12 months’s spot price surge however are nonetheless $0.21/mile larger than the common of pre-pandemic years.

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