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Long Beach, CA — The pandemic-distorted global trade pattern of COVID-19 has lifted the intermodal transport industry out of turmoil, creating a major imbalance in shipping containers, intermodal chassis, and dragage drivers.
This is an evaluation of the expert panel at the Intermodal Expo of the North American Intermodal Association held on September 13.
“The intermodal industry is in unprecedented tension,” said Larry Gross, founder and president of Gross Transportation Consulting. “Many problems have spread throughout the industry.”
Virtually every segment, from transportation to rail and trucking, struggles to find enough drivers and staff to secure capacity in the right places and keep things running smoothly, he said. Said.
“Some of the challenges we face are the biased nature of development as a result of COVID,” said Lars Jensen, CEO of Vespucci Maritime.
In a conference call from Copenhagen, Denmark, Jensen said other countries were not comparable to the surge in imports into the United States. Globally, trade volumes are only slightly above pre-pandemic levels. As a result, shipping companies are moving vessels to Pacific routes, creating a global imbalance.
“We can unload a huge amount of containers to the terminal, but it happens that importers don’t receive them as fast as they used to,” Jensen said. “This creates a biased disruption in transportation.”
In addition, Jensen said there are at least 50 container vessels awaiting unloading outside the Los Angeles and Long Beach complexes. This is equivalent to about 400,000 TEU (a unit equivalent to 20 feet) floating outside the harbor.
Lars Jensen (Vespucci Maritime)
“It obviously leads to a lack of capacity, which we have never seen in the history of container ships,” said Jensen.
According to panelists, the problem and imbalance only lasts after the container is unloaded.
Dissatisfied with poor equipment and long delays in the harbor, drage drivers are either taking on other driving jobs or leaving the industry.
There is also a huge shortage of chassis used by truckers to transport containers.
Tim Denoyer, vice president and senior analyst at ACT Research, said many of the shortfalls were due to an estimated 200% or more import tariffs placed on chassis from China, the United States’ major producer. .. According to the Cato Institute, the new tariffs have significantly reduced purchases as each imported chassis costs more than $ 25,000 and triples in price. Also, US manufacturers do not have the capacity to fill gaps quickly.
Find out what’s happening in the freight market from ACT Research Co., LLC’s Tim Denoyer and Cass Information Systems #TransportationIndexReport..#freight #transportation #logistics #Supply chain #shipper #action #ACTResearchhttps://t.co/snnrq3Nxgh pic.twitter.com/s5KrOH7bCv
— ACT Research (@actresearch) September 13, 2021
Meanwhile, the aging chassis fleet in the United States has collapsed during periods of surge in demand, exacerbating the problem.
“I don’t think this is something we can solve right away,” Denoyer said. It may take most of the year to sort out, and during that time the intermodal industry “will have to do more with less.”
Most of the problems the industry is currently suffering from are not sufficient to move goods through the global supply chain, Jensen said. But he doesn’t believe that one of the lessons the industry learns from pandemics is to maintain levels of system overcapacity.
He said the company will grow slowly now, but will shrink in the next few years to operate with maximum efficiency. Competition forces companies to do so.
“Over time, I’m willing to pay for a significant excess capacity just to keep it idle for decades in case this happens again. Nothing changes, “said Jensen.
But Gross disagrees.
“We are now living in an era where the Black Swan events we have experienced seem to occur very often,” he said. “There are always unpredictable events that occur much more often than before …. We need to find a way to make the system a little more resilient.”
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Technological advances can help achieve that, said Evan Armstrong, president of Armstrong & Associates.
For example, Optimus Prime uses digital tools and sensors to track loads to make better use of trailers.
“They have a drop-and-hook program and basically always plan for those trailers, securing capacity for 3,000 out of just 1,000 trailers,” Armstrong said. increase.
“After all, with so many trucks and so many infrastructure environments, technology definitely helps maximize what you can do with fixed capacity,” he added.
According to Denoyer, autonomous trucking is another area where technology can eliminate another bottleneck.
He believes that tens of thousands of autonomous trucks could run on major highways within a few years.
“You can attach new fuel tags to these things and send autonomous trucks across the country very quickly,” he said.
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https://www.ttnews.com/articles/iana-2021-massive-imbalances-plague-intermodal-industry IANA 2021: Massive imbalance plagues intermodal industry