Zurich Insurance and their head of Strategic Business Risk, Linda Conrad, are sharing some interesting insights into the longer-term financial implications of the prolonged West Coast port disruption for retailers across the country.
Not surprisingly, February volumes at the Port of Los Angeles (POLA) and Port of Long Beach (POLB) were down on an annual basis in February, as the months-long labor dispute between the Pacific Maritime Association and the International Longshore & Warehouse Union, which impacted freight flows and port operations in the form of terminal congestion and related supply chain challenges, came to an end with the parties reaching a tentative five-year contract agreement on February 20.
Shipping lines collectively lost around $150 million in the fourth quarter of 2014 due to U.S. West Coast congestion, according to Drewry Maritime Research. In the most recent issue of Container Insight, researchers note that carriers experienced various levels of disruption from the port labor dispute, and attempted to quantify the losses by examining available data.
The most recent edition of the Trucking Conditions Index (TCI) from freight transportation forecasting firm FTR continued to reflect how current market conditions are translating into solid overall momentum for motor carriers.
The TCI reflects tightening conditions for hauling capacity and is comprised of various metrics, including capacity, fuel, bankruptcies, cost of capital, and freight.
Good news heading into the weekend. The price of oil is on yet another ride down as swelling global supplies overwhelm rising but still relatively weak demand.
The price of oil has fallen close to its lowest price in six years, and many expect it to fall much further in the coming weeks because supplies are still heading up and the summer driving season is still months away.
The Freight Transportation Services Index (TSI), which is based on the amount of freight carried by the for-hire transportation industry, fell 0.2 percent in January from December, declining for the second consecutive month, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics’ (BTS). The January 2015 index level (122.9) was 29.9 percent above the April 2009 low during the most recent recession. U.S. Department of Transportation Office of Public Affairs 1200 New Jersey Avenue, SE Washington, DC 20590 http://www.dot.gov/briefingroom
Dan Bentzinger, MIQ Logistics Senior VP Transportation Services and Chief Information Officer, is presenting a breakout session entitled The “Business” of IT at the KC IT Symposium on Thursday, April 9, 2015.
Zepol reports that total U.S. container imports are down over 5 percent this year, compared to January and February of 2014. Nearly the entire decline in imports was attributed to West Coast ports. The ports of Los Angeles and Long Beach, which make up a combined 40 percent of U.S. container imports, declined by 19 and 20 percent so far in 2015. East Coast ports have reaped the benefit, especially the port of New York/Newark, which increased container imports by 8 percent this year.
North American shipment volume jumped up in February, while total freight expenditures reversed a three- month slump. The problems caused by labor negotiations on the West Coast have contributed to an economic slowdown for most of the first quarter. The two sides in the ILWU contract negotiations have come to terms, but not yet ratified them, which will open the floodgates to moving the backlogged freight. The Port of L.A. estimates that it will take three months to return to normal. Meanwhile congestion and capacity will be the industry’s buzzwords.
The Houston Ship Channel is still closed following a collision yesterday between two ships.
The ship channel is expected to remain closed until the U.S. Coast Guard has the situation under control. Officials at Morgan’s Point was lifted overnight.