Shippers and carriers are urged to be proactive and take advantage of pre-pandemic levels in the meantime -
ITS Logistics, today released the March forecast for the ITS Logistics US Port/Rail Ramp Freight Index. This month the index forecasts that the lack of an agreement between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) is still cause for concern within the industry as West Coast ocean bookings are being impacted.
“The ILWU has lost leverage because of the low volumes on the West Coast, which further solidifies the stance that PMA is taking in negotiations in the near term,” said Paul Brashier, Vice President of Drayage and Intermodal for ITS Logistics. “With volumes where they are now on the West Coast and the diversions to the East, the ILWU is not in a strong negotiation position. I also do not believe the Biden Administration will tolerate more than work slowdowns with inflation currently being of significant importance.”
The contract is set to cover more than 22,000 dockworkers at nearly 30 ports throughout the US West Coast. As the industry awaits final decisions to be made, the West Coast ports are still operating, however, ocean carriers and shippers have opted to reroute a portion of their cargo to ports on the Gulf and East Coast.
“These negotiations have been done in private by the ILWU and PMA and as result, the industry is trying to be proactive against the risk of a labor disruption, such as a strike,” said Brashier. “There may be a disruption in Q3 when volumes turn around for retail peak if an agreement is not made in the next 3 months. The ILWU will also stall for more leverage and terminal operators need to move fast, or we will have an issue come late summer/early fall. There is uncertainty and everyone is concerned that the events of 2015 may repeat itself.”
In 2015, following the end of an existing contract, the US Federal Mediation and Conciliation was asked to provide support to the ILWU and PMA in reaching an agreement. The tension between the parties resulted in delayed productivity and contributed to 2016’s holiday season port congestion. Although significant progress is not expected to be seen until the spring of this year, government intervention is not anticipated.
“In the meantime, as negotiations occur, we must continue to be proactive,” continued Brashier. “Dray rates are decreasing, and we project those rates should hit bottom this month or in April. This will benefit most BCO’s as they go to RFP for dray services. We’ve finally reached pre-pandemic levels and that should hold throughout the year, so while we wait for the ILWU and PMA to end their negotiation, it’ll be imperative to take advantage of all the positive events occurring for the supply chain while we can.”
ITS Logistics offers a full suite of network transportation solutions across North America as well as omnichannel distribution and fulfillment services to 95% of the U.S. population within a two-day timeframe. 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, 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. Visit here for a full comprehensive copy of the index with expected forecasts for the US port and rail ramps.