09/15/2020
Greetings!
Recently in the domestic freight industry, we have seen rate volatility like never before. Just so you know that we aren't just making up prices because we can, here's a possible explanation.
According to the Global Port Tracker report, August 2020 showed 2+ million loaded containers (TEUs) hit U.S. shores last month. This marks the most in any month since the report was first published in 2002.
This has caused congestion at the ports of LA and Long Beach and shows a sharp turnaround from the spring, when U.S. ports reported double-digit declines in imports. The congestion doesn't stop there- tight rail and trucking capacity has added to the stress. The lowered demand during the economic slowdown put rail containers in storage and operators out of business.
The increase in the port activity alone would create rate volatility, but tack on top of that the shortage of rail capacity that has caused a huge decrease in bookings to and from the west coast and the pandemic-induced shortage of drivers and equipment and you've got the situation that we're in now.
That was a mouthful. But, it's important information to have when you have to explain why rates have gone up.
