The tide is turning for the supply chain industry as container volumes show gradual signs of returning to pre-pandemic levels. With the new labor contract ratified by ILWU, container volumes on the rise, and port infrastructure investments underway, the future of supply chain looks promising ensuing smooth sailing ahead.
Follow along with our industry news roundup series to stay informed on the latest trends and advancements impacting the supply chain industry.
Here are five recent stories you don’t want to miss:
ILWU Ratifies New Labor Contract
The International Longshore and Warehouse Union (ILWU) voted to ratify a six-year contract with the Pacific Maritime Association (PMA). Members of the ILWU voted 75 percent in favor of the West Coast port worker agreement, ending 13 months of negotiations. The new contract calls for a 32 percent salary increase over six years that will be paid retroactively to July 1, 2022. Most importantly, the agreement will result in a return of cargo volumes to the West Coast that had been previously diverted to the East and Gulf coasts during the period of disruptions.
Port of Oakland Container Volume Rise
On August 23, the Port of Oakland announced a rise in container volume in July. Full TEU grew 16.8 percent in July 2023 compared to the TEU data reported in July 2022. More specifically, full imports rose by 12.5 percent and exports jumped by 23.1 percent compared to the same period last year. The Port of Oakland Director, Bryan Brandes, remains optimistic about the gradual container volume rebounding in the future.
Port of Savannah Adds Four Ship-to-Shore Cranes
The Port of Savannah received four crucial super Post-Panamax ship-to-shore cranes at the end of August. These new cranes will replace the older equipment and enhance container handling efficiency, allowing the port to service up to 10 ships simultaneously. This upgrade is part of the $1.9 billion infrastructure improvement plan, reaffirming Savannah’s status as a highly efficient and globally connected shipping facility.
July Import Volumes Continue to Mirror the Pre-COVID ‘Normal’
Experts point out that the decline in import volumes reported in most news outlets is falsely alarming. This drop is primarily a result of the unique import boom triggered by the COVID-19 pandemic, which has now settled to pre-pandemic levels. In July 2023, U.S. ports received 2,187,810 TEUs of imports, nearly unchanged from July 2019, down only 0.5 percent. Moreover, import volumes have shown resilience, with a 1.7 percent increase for the first seven months of the year compared to the same period in 2019.
Freight Industry is Bouncing Back
The freight market conditions in the U.S. are improving, with several key indicators showing a shift in supply and demand dynamics. First, the percentage of rejected truckloads by trucking firms is at its highest in six months, showing that trucking companies have plenty of options when choosing their loads. Second, the Outbound Tender Volume Index (OTVI) has steadily risen, with a 12 percent increase in volumes over the past six months. Third, truckload spot rates have fluctuated throughout the year, hovering between $1.50 and $2.10 per mile, while the breakeven cost per mile ranges from $1.56 to $1.90. With higher volumes expected to persist, a forthcoming increase in the freight rate is anticipated.
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