Freight Forward: Preventing flare-ups

Welcome to Freight Forward, where each Monday, I’ll recap what happened in supply chains the previous week through JOC.com articles and additional sources and also what to expect for the week ahead.

I’m Cathy Roberson, a supply chain writer and researcher. For this weekly series, I serve as a research analyst for the Journal of Commerce (JOC), for whom I identify trends, provide thoughts and input into stories and assist with parcel last-mile queries.

Ports of Vancouver and Prince Rupert are breathing a sigh of relief as the 13-day longshore strike ended last week. However, it may take weeks, possibly into September, for operations to return to normal, writes Bill Mongelluzzo.

But as one flame is put out, a couple of others may be getting brighter on the US East Coast.

• Terri Errico Griffis writes that ILA Local 1422 in Charleston is protesting against the state’s and South Carolina Port Authority’s (SCPA) use of non-union state employees at the Hugh K. Leatherman Terminal. At issue is whether giving union members all work at new East Coast terminals or expansions, per a 2013 master contract clause, is creating new jobs or preserving work the ILA is entitled to. Both Charleston and Savannah, as well as Wilmington, NC, use so-called hybrid models for their longshore workforce, with union workers performing certain jobs, including maintenance and repair and clerical duties, while state employees operate cranes and perform other on-dock work.
• A New Jersey heavy-equipment operators’ union is suing the International Longshoremen’s Association (ILA), alleging the dockworkers reneged on a deal that would have allowed nonlongshore workers to do project work at a Port of New York and New Jersey marine terminal, writes Michael Angell.

Meanwhile….

Inland

US shippers and logistics providers are increasingly concerned about the potential impact of a Teamsters union strike at UPS and a shutdown at Yellow, writes Bill Cassidy. “If both happen, that’s all hell breaking loose,” Adamo said in an interview after the Teamsters and UPS contract talks broke down. “That’s what I’m preparing my teams for. We have real network concerns, and we need to make sure we can handle the influx of volume.” “It’s beginning to look a lot like July 1997,” and the run-up to the last Teamsters strike against UPS, said Satish Jindel, president of research firm SJ Consulting Group and parcel consultant ShipMatrix.

Trucking companies hauling ocean containers in Chicago have been encountering a scarcity of chassis from DCLI and TRAC Intermodal amid a rush to repair and refurbish the equipment that saw heavy usage amid high demand in 2021 and 2022, writes Ari Ashe. “We just can't find enough mechanics right now to fix every chassis we want to fix,” Val Noel, COO of TRAC Intermodal, said. “This is not a fleet issue. This is all about having enough mechanics to get those chassis back in available condition so that the drayage providers can use them. I truly believe by the middle of next week, worst case the week after, the situation in Chicago will be resolved.”

Truck drivers calling Jacksonville’s Blount Island marine terminal have been battling multihour delays in recent weeks as they contend with higher container volumes and a construction project that has helped snarl traffic at the facility, writes Ari Ashe and Teri Errico Griffis.  Southern Companies recently issued a notice about “major delays and congestion” at Blount Island, saying cargo owners should “be prepared to extend containers’ last free day.” The problems flared in recent weeks after Ocean Network Express (ONE) shifted a vessel service out of Jacksonville’s other primary container terminal, Dames Point, in May. The shift has caused a volume imbalance between the two terminals.

Inventory

There is growing conviction among US companies that inventory destocking is working, thinning stockpiles of goods built up in 2022 but just not fast enough, writes Bill Cassidy. Research firm Armada Corporate Intelligence estimates that 61.5% of US businesses are still overstocked, with only 23.7% holding “effectively balanced” inventories and 11.3% understocked.

Positive shipper sentiment about inventories decreased 25 percentage points, from 57% in the second-quarter index to 33% in BlueGrace Logistics’s third-quarter Logistics Confidence Index. “Neutral” sentiment rose from 30% to 53%, “indicating a growing uncertainty,” BlueGrace said.

Global

• India is seeing more exports than imports, writes Bency Mathew. Traditionally, containerized imports at Indian ports have exceeded outbound volumes by approximately 10%, anecdotally. According to industry observers, the new trade pattern reflects a sharp drop in empty equipment imports amid weakening demand conditions rather than sustained export trade.   Carrier sources noted that storage yards at busier ports are currently clogged with empty boxes, arguably a residual effect of significant inventory consolidation at the height of pandemic-induced elevated export flows.
• Teri Errico Griffis writes that DHL Supply Chain plans to invest $551 million in Latin America by 2028 to boost its presence in the region by developing fulfillment centers and infrastructure for customers looking to diversify their sourcing into that growing market, according to Global CEO Oscar de Bok. 

Economic Outlook

• Tuesday, July 18 – US June Retail Sales
• Tuesday, July 18 – US June Industrial Production
• Wednesday, July 19 – US June Housing Starts

That’s it for this week. Please be sure to hit the subscribe button to receive the latest updates.

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What did I miss? Have a question? Let me know in the comments. I’ll be checking back throughout the week to answer questions, address comments and share additional insights.

In the meantime, here’s wishing everyone a good freight week ahead!

-Cathy