Lisa Yakomin, president of the Association of Bi-State Motor Carriers, says conditions have improved for truckers working the Port of New York/New Jersey. That’s the good news, but falling cargo volumes are a worry.
Conditions for truckers at ports in the United States are easing from the worst of the supply-chain snarls and freight volatility associated with the COVID-19 pandemic. That’s good news, but it’s not all good news.
NY/NJ Bi-State Motor Carriers Note Improvement
At the Port of New York and New Jersey, “Things have improved over the last few weeks,” said Lisa Yakomin, president of the Association of Bi-State Motor Carriers, a membership group representing 170 trucking and related companies at the port. “It’s not to say that conditions are ideal. It’s more a function of just how difficult conditions had become and now they’re better. It’s still really tough.”
Chassis inventories are improving, said Yakomin, “due mostly to the empty returns being stepped up because of the empty container fee that the [Port Authority of New York/New Jersey] Port Authority put in place. We saw empties being evacuated in much larger numbers as soon as they put that forward.”
The empty container fee came about to deal with the accumulation of empty containers at NY/NJ port facilities. Under the port’s container management scheme, carriers are charged if they fail to evacuate specified numbers of empty containers based on individual carrier histories.
Besides the empty container fee, a spike in holiday-season buying is also contributing to the easing of chassis inventories. The Port of NY/NJ is still dealing with freight that was brought in to satisfy the pandemic consumer spending surge, some of which is still sitting in containers outside of overstuffed distribution centers.
“Slowly but surely,” said Yakomin, “those containers that have been sitting for a while are starting to get emptied, and, as those empties are returned, we get the chassis back.”
John Rapczak, general manager of warehousing and freight brokerage at Worldwide Logistics Group, concurred, saying that “one of our large customers had a great Black Friday and we’re seeing a decrease in their inventory.”
“Chassis are available” at NY/NJ terminals, Rapczak added. In some yards, chassis are plentiful, leading to “crazy” turnaround times, according to one driver Rapczak spoke to.
Rapczak’s perch allows him to assess the drayage situation at ports around the country. From that perspective, Rapczak assessed that “the ports are not in the terrible condition they were last year and earlier this year.” Cargo shifted to Seattle and Oakland, and eventually to East Coast ports, in the face of the “complete congestion” in the ports of Southern California. “The last major hit we saw was in Savannah, which had a massive backlog,” he said.
At this point, drayage truckers are begging Rapczak for more business. “They’re saying, “I need more business to keep my drivers moving,’” he said. “It’s a very different scenario compared to what we’ve seen in the past two years.”
Volume Downturn
Rapczak’s explanation: “It’s about deficiencies in volumes,” part of which is related to the strategy of diversifying ports of entry. “The volumes are spread out throughout the country now,” he said.
But another part of the explanation, Rapczak said, is that “the economy is on the brink of a recession.” With importers having brought in inventory early this year, “we are now a freight recession,” he added. “Freight levels are going below where they were prior to the pandemic.”
Moving forward, drayage truckers are interested in clearing up “the detention and demurrage bills they are being inundated with,” said Yakomin. Drayage truckers are sometimes shut out by terminals when there are past due amounts owed. New Federal Maritime Commission rules seek to ease that situation by “keeping the issue between the contracted parties,” and “shifting the burden of proof to the billing party.”
Pending federal legislation on independent contractors is also on Yakomin’s radar screen. “Some of the regulations being pushed on the federal level will jeopardize the ability to utilize owner-operators,” she said, “and they make up the lion’s share of our workforce.” The Protecting the Right to Organize (PRO) Act would make it harder for employers to classify workers as independent contractors who are not fully protected by U.S. labor laws.
Driver retention and recruitment has been a perennial problem for drayage truckers, one that is now putting them in something of a bind. To keep up with pandemic volumes, truckers had to offer their drivers better compensation and were able to justify rate increases on that basis. “Fast forward a year, and shippers are looking for rate decreases,” related Rapczak. But trucking companies aren’t in a position to ask drivers for givebacks. “Margins are tighter at this point,” Rapczak added, “and carriers need to do whatever they can to lower their costs.”
Will 2023 be a Good Year?
Looking toward 2023, “Assuming that we’re able to preserve the status of owner-operators and we don’t lose 80% of our workforce,” said Yakomin, “I think we’re in for an exciting time next year.
“The Port Authority said they want to do everything they can to retain as much of the diverted California freight as possible,” she added. Although chassis shortages may continue into 2024, “I feel like we’re in a good place to do that with all of our port partners working together.” Above all, what port stakeholders want, Yakomin said, is to “start to move back towards a more predictable freight pattern. That would be really helpful.”
Rapczak has a somewhat different take, predicting that “in less than two years, importers will probably go back to their normal ways because they’re trying to cut costs” by bringing cargo back to Southern California ports. “They may think of the ports of Los Angeles and Long Beach to be the cheaper options,” he added, “but I think that smarter companies will keep port diversity in their back pockets.”