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State Of Freight

June 25th, 2014 by Mike Meyerhoff

I hate to be the bearer of bad news but as they say, when it rains it pours (and coincidentally enough, we are about to experience an actual El Nino).  Last month we talked about how the polar vortex, policy barriers, economy, and driver shortages were effecting freight…now enter the Longshoremen.

In short, the labor contract under which the west coast longshoremen work is set to expire on June 30th, and renegotiations don’t look too good.  In the past, longshoremen left out to dry have typically gone on strike leavings docks full of freight going nowhere.  Seeing as though the west coast handles about two thirds of all US retail containers, that’s some real jack just sittin on the dock of the bay.

When the longshoreman strike and cargo sits, retailers and wholesalers rush to get their cargo in and out before the strike (not to mention those who need to get their cargo to another port during the strike).  This translates to intermodal carriers offering great rates to the port so they can charge hefty sums to take freight out of the port.  This also eats up even more of the already depleted independent drivers which in turn means even greater upward pressure on freight prices.  And of course after the strike, workers will have to start digging through the back-log of containers which means intermodal carriers will still be naming their price until at least things settle.

So when will it end?  Well the last major work stoppage lasted ten days and only ended when president Bush invoked the emergency provisions of Taft-Hartley.  Ten days may be a drop in the bucket, but the mess it created before and the backlog it created after took several weeks to untangle.

Everyone is in the same boat here so there’s no need to panic.  Just keep sharp and on top of things so aren’t left with your profit being eaten up by underestimated freight.  Out of struggle comes resolve.