The deep-sea lines are starting to look for alternatives - from todays LL:
Supply chains hit by US intermodal bottlenecks
21 Mar 2018
News
Written by
by Will Waters
Carriers introduce emergency intermodal surcharges and cargo owners seek logistics alternatives due to delays at North American ports
Savanah is among the US ports where CMA CGM has imposed a $300 per teu surcharge
SUPPLY chains to and from the US are being disrupted by various intermodal challenges and bottlenecks, with lines introducing emergency intermodal surcharges and some shippers seeking emergency logistics alternatives due to cargo delays at US ports.
Driver shortages, strong consumer demand, and new regulations have created a perfect storm of rising supply chain challenges that could get worse from April and shippers and carriers can expect steep hikes in US trucking freight rates this year.
Trucking capacity shortages exacerbated delays last month at several US ports including the Port of New York and New Jersey, Charleston, Jacksonville, Norfolk, Savannah, Chicago, Columbus, Detroit, Memphis and Houston.
Logistics specialists report that a combination of factors have continued to put the region’s logistics and intermodal infrastructure under pressure.
Container line CMA CGM has reported that for several weeks the situation with trucking in the US had continued to deteriorate to an unsustainable level.
“In many markets, we are facing significant issues in locating draymen to execute our work orders, resulting in delayed pick-ups and deliveries, as well as significant cost increases,” CMA CGM said.
In a note to customers, the French carrier explained that the primary challenges it was dealing with were new regulations requiring commercial trucks to be equipped with electronic logging devices; severe winter weather in specific markets that had been slowing down deliveries and further reducing the inventory of drivers and truck capacity; and fewer drivers in the market.
“The reduced availability of drivers impacts our ability to take care of all of the work orders we have to manage on a daily basis,” the company said.
As a result, the line has implemented an Emergency Intermodal Surcharge (EIS) of US$300 per container where CMA CGM is nominated to provide carrier haulage services, on certain key markets, effective from March 16. This charge is being applied to intermodal shipments via Chicago, Houston, Savannah, Memphis and Columbus, although the line said it reserved the right to implement this charge in additional locations “as the situation warrants”.
Other lines have also reportedly begun introducing similar fees.
“This additional charge will allow us to manage escalating costs and help us to continue to provide a proper level of service,” CMA CGM said. It will not apply to those moves where a shipper’s nominated trucker has been engaged to provide services.”
Emergency logistics specialist Evolution Time Critical said this week that it had been working with automotive manufacturers and their suppliers to move vital components from Europe and China as a result of cargo being delayed at US ports. It highlighted a similar list of factors “combining to put the region’s infrastructure under increasing pressure”, including continued recovery from natural disasters and poor weather, the new EDL mandate, “and shortage of available trucks and drivers has led to a threat of critically short supply to some suppliers”.
Managing director Brad Brennan said: “Sea freight is a vital aspect of the automotive supply chain, but due to lean inventory or stock availability there is often minimal margin for error. Customers are currently telling us that they are experiencing delays of weeks caused by this perfect storm of events, resulting in the need to secure new parts from the origin suppliers and bring them in as fast as possible.”
