Market Conditions:
US exporters continue to face market challenges due to logistics and supply chain issues though in some areas there is reason for optimism. The primary challenges remain the same, equipment availability, blank sailings, and decreased schedule reliability though depending on geography the amount of impact these issues have can vary widely. The ongoing labor situation on the west coast only adds to the overall stress and uncertainty.
Schedule Reliability and Blank Sailings
Though there have been significant improvements over prior years, ocean carrier schedule reliability continues to be a concern with on time rate levels only just now approaching 50%. With the continued decline in imports, the market saw an increase in blank sailings for April and this trend is expected to continue through at least the remainder of Q2. For exporters this means no reliable schedule for ships going out and no equipment coming in.
Equipment Issues
As a result of the increased blank sailing and decreased schedule reliability, equipment availability remains an issue. While ports located on the West and East Coast and the Gulf seem to have sufficient equipment levels, many IPI locations including Kansas City, Chicago, Louisville, and Nashville are facing challenges. US exporters should consider alternative routings to ensure a reliable flow of goods.
Market Rates
One area of brightness for exporters is that rates have for the most part remained stable and, in some trades, we are actually seeing decreases.
Labor Situation
On a further positive note, though a formal contract remains unsigned there appears to be positive traction towards getting a deal done in the near term. The ILWU and PMA appear to have finally reached an agreement on manning requirements for non-automated terminals at the ports of Los Angeles and Long Beach, which could ultimately lead to a finalized contract later this summer. Please continue to follow our NEWS section where we will continue to post updates on this issue as we receive them.
Despite current market challenges, Laufer continues to have success helping exporters get their goods to market in the most cost effective and efficient way. Please contact your local Laufer operations or sales representative with any questions regarding this update. For further insight please contact Marc Van Gorp, National Export Business Development Manager.