The ITS Logistics US Port/Rail Ramp Freight Index from ITS Logistics reveals potential labor disruptions in the U.S. East and Gulf Coasts and heavy pre-tariff shipping pending the outcome of the U.S. election. On the positive front, demand and rates for transpacific freight from Asia are normalizing, signaling the end of peak season for shipping ocean containers.
“While labor disruptions are unlikely, shippers should keep a pulse on how this evolves throughout the month,” says Paul Brashier, VP of global supply chain for ITS Logistics. “There are also reported issues with lingering rail congestion and operational slowdowns, so taking this into consideration, we have chosen to keep September rail modes at an ‘elevated’ concern status. Shippers should keep dray-off, transload, and one-way trucking operations in place as peak shipping season comes to a close.”
Key takeaways:
- Just this weekend, the International Longshoremen’s Association (ILA) leader Harold Daggett confirmed that workers “don’t want any form of semi-automation or full automation” and that the United States Maritime Alliance (USMX) members should have agreed with unions before investing in new equipment. The USMX, on the contrary, has pledged to maintain the existing contract language around automation, which directly confirms that “there will be no fully automated terminals and no implementation of semi-automated equipment or technology/automation without agreement by both parties.”
- In addition to automation concerns, the ILA also scrutinized pensions, inadequate healthcare provisions, and the use of cameras in workstations as a measurement of control vs. matters of safety. Regardless of the outcome of this current wave of negotiations, this labor battle has impacted logistics providers, ports, and rails globally and is part of a trend of more ports considering automation as a step in elevating new logistics solutions.
“As we wait for the negotiations to come to a close, industry professionals should keep in mind that we will see a few weeks of elevated demand for inland dray, rail congestion, and other operational issues in September as containers make their way through the North American supply chain,” says Brashier. “With the labor issues in Canada subdued, operations in North America are mostly stabilized.”
