Due to the early onset of the Trans-Pacific trade’s peak season and the injection of capacity, concerns continue to swell around container lines, raising spot rates as the season heats up. As Canada’s two biggest railroads continue to battle Teamstar Canada, the Canadian government has declined to step in, potentially guaranteeing the certainty of a strike that could derail logistics and the country’s supply chain.
We will review this in more detail and discuss other industry happenings in this edition of the COGISTICS Transportation newsletter.
Trans-Pacific Spot Rates For the Peak Season is a Serious Concern
The frontloading of import cargo resulted in an earlier-than-expected peak season that started in May rather than August. However, with the injections of new capacity to the U.S. West Coast, spot rates have been pushed down in the last five weeks. This has created uncertainty about the Trans-Pacific shipping market for the rest of the peak season, especially if container lines cannot raise spot rates from Asia to the U.S.
Carriers are seeking general rate increases (GRIs) of $200 to $400 per FEU starting September 1, but some are offering lower “bullet” rates to compete. The market offers a wide range of rates to shippers and NVOs. Overall, U.S. imports from Asia have grown, but experts expect growth to slow. Then, there is the lingering threat to the East Coast volumes. Although it remains strong because of the upcoming holiday season, retailers continue to make arrangements to bypass or ultimately avoid shipping there as the potential ILA strike persists.
GPA Continues Progress on New Terminal
The Georgia Ports Authority (GPA) continues progressing on its new $127 million inland rail terminal, the Blue Ridge Connector (BRC), which will improve rail cargo capacity between northeast Georgia and the Port of Savannah. In a recent update, Wesley Barrell, GPA’s general manager of inland operations, mentioned, “Construction is moving along well. The rail yard grade will be met with another six weeks of earthwork, allowing additional engineering to advance. We are working closely with Norfolk Southern on tying our infrastructure into their existing track.”
This project is part of the GPA’s strategic rail expansion, including the successful Appalachian Regional Port (ARP) and the recently added Carolina Connector service. These inland terminals provide faster and more eco-friendly cargo movement, supporting local businesses and attracting major regional shippers.
Carriers Move to Ease Cargo Backlog in Bangladesh
Following a recent political upheaval that brought businesses across Bangladesh to a standstill, cargo chaos erupted, leading to supply chain disruptions and congestion at the Chittagong Port. To ease cargo backlogs, container lines are working hard to clear the cargo backlogs, with some carriers adding extra ships to handle the stranded exports.
Despite challenges, the outlook for Bangladesh trade remains positive as global importers diversify their sourcing. New shipping services are being launched to cater to this growing demand. While Bangladesh recovers, India’s apparel industry sees an opportunity to attract more orders from Western buyers.
Shippers Investing in Private Fleets, Despite Readily Available Trucking Capacity
While trucking capacity is readily available in the market and at favorable for-hire trucking rates, many shippers are still strategically maintaining or expanding their private fleets. This trend is driven by a desire for increased control over supply chains, ensuring reliable capacity, and improved customer service. However, that’s not all. Private fleets offer shippers several benefits, including cost predictability, operational stability, and reduced disruptions, empowering them with a strategic advantage in the industry.
Moreover, different industries utilize private fleets in fascinating and unique ways. The beverage industry, for example, faces specific regulations that necessitate in-house fleets for local deliveries. But without these restrictions, companies like Southern Glazer prioritize their private fleets to maintain strong customer relationships and showcase private fleets’ diverse and intriguing applications.
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