The most significant concerns over the next 12 months include trucking capacity exiting the market and container supply chains at risk due to diversions around Red Sea avoidance effects, according to a new report from ITS Logistics.
In addition, as Q2 approaches, the index will closely follow the International Longshoremen Association (ILA) negotiations as current ocean contracts are being deliberated.
“As we navigate ocean carrier RFP season this month, it is important to strategically plan your supply chain for the next 12 months,” says Paul Brashier, VP of drayage and intermodal for ITS Logistics. “It is critical to stay as geographically close to your trucking capacity as possible. If you can book to the ramp/port or, to the door while utilizing customer nominated trucker (CNT) commercial arrangements, you can ensure that trucking capacity is properly vetted and that you have trusted partners with a nationwide footprint.”
Key takeaways:
- Since no significant traction has been made to date in the ILA negotiations, this has sparked a cause for concern across the industry. The ILA’s six-year contract with the United States Maritime Alliance expires Sept. 31. It represents port terminal operators and ocean carriers on the East Coast.
- Cargo containers that were once set to be shipped to the East Coast are now beginning to be sent back to the West Coast. The goal is to avoid service disruptions, which is the reverse of what occurred in 2022 and 2023.
“The union has confirmed May 17 as the cutoff date for the local contracts to be agreed to in order to implement the negotiation of a master contract for the largest union of port workers in North America,” adds Brashier. “Despite the fact that historically, the ILA has cautioned against striking in comparison to West Coast union counterparts, contingency plans should be put in place during this current ocean contract season.”
