North American supply chains are experiencing massive disruption as bad weather continues to impact operations and port delays are exacerbated by a shortage of haulage capacity that is so bad, shippers are snooping to find potential hauliers.
Container lines have been reporting for several weeks, that the situation with trucking in the US was deteriorating to unsustainable levels.
The leading trade news source, Lloyd’s, warned last month that shippers and lines could expect steep hikes in US trucking freight rates as driver shortages, strong consumer demand, and new regulations create ‘a perfect storm’ of rising supply chain challenges that would get more challenging from April.
The most severe trucking capacity shortages and delays last month were experienced at many US ports including the New York and New Jersey, Charleston, Jacksonville, Norfolk, Savannah, Chicago, Columbus, Detroit, Memphis and Houston.
Container line CMA CGM has confirmed that they are facing significant issues in locating draymen to execute work orders, resulting in delayed pick-ups and deliveries, as well as significant cost increases.
Sustained economic growth is leading to sustained capacity problems, that means freight is sticking to docks much longer than many remember.
The primary issues behind the current disruption are new regulations requiring commercial trucks to be equipped with electronic logging devices; severe winter weather in specific markets that had been slowing down deliveries, thereby reducing the available inventory of drivers, and truck capacity; and fewer drivers in the market overall.
Shippers that delay drivers at their docks, or tender last-minute loads, are paying not only higher rates but increasing detention penalties. Instead, they need to work with their haulier more closely ahead of time to plan and tender loads that fit driver’s availability. That means taking a more pragmatic approach to freight management and even building “buffer time” into their supply chains.
And now the lines, starting with CMA CGM, are implementing an Emergency Intermodal Surcharge (EIS) of US$300 per container, in selected markets, where the line is nominated to provide carrier haulage services, effective from 16 March.
The lines are reserving the right to implement this intermodal charge in additional locations as the situation warrants. This is a fluid situation, so if you have any concerns about a particular shipment in progress, or one being planned, please contact us for the latest situation report.
Local commentators confirm that continued recovery from natural disasters and poor weather have been significant factors in the current disruption, but the biggest contributor, in their view, is the new Electronic Logging Devices (EDL) which strictly controls driver hours and freight movement availability and is resulting in paralleled shortages of available trucks and drivers.
The situation has become so dire in some areas, that it is being reported, one shipper desperate to find capacity went so far as to take down the names and US Department of Transportation numbers of trucking companies visiting a nearby Wal-Mart distribution centre.
“We’re looking for anyone coming into our area that we know that we might be able to contact,” said the shipper, who asked to remain anonymous. “That is an old trick, but it sometimes delivers trucks.”