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Imports surge on East & Gulf coasts as ILWU talks drag

Asia import volumes to the U.S. East and Gulf coast ports have surged amid delayed longshore labor negotiations on the West Coast. It is a sign that retailers have shifted discretionary cargo away from the West Coast in a bid to avoid potential disruptions linked to the negotiations.

Import volumes from Asia to the East Coast jumped 11.8% from January through September compared to the same period a year ago, while surging 29.2% on the Gulf Coast. West Coast volumes dropped 1.7% throughout the period.

September imports in LA-LB and Oakland increased 2.5% but declined 10.4% in the Northwest Seaport Alliance of Seattle and Tacoma. Asian imports in September increased 14.3% in NY-NJ, 11.1% in Savannah, 34.2% in Houston, and 45% in Charleston.

The magnitude of cargo diversion to East and Gulf coast ports is due to several developments on the West Coast this year. Shipper uncertainty about labor disruptions is a major factor. Additionally, questions about drayage capacity at CA ports due to the implementation of AB5 and environmental restrictions have also played a role.

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Strong trucking earnings shift pricing power

U.S. shippers looking for rate reductions and transportation savings in truckload contract negotiations are finding they must give a little to receive more.

Despite economic headwinds, large publicly owned trucking companies are defying expectations shaped by recession forecasts when it comes to revenue, freight volume, and earnings. Therefore, those companies have strong negotiating positions in a weakening economy.

That has implications for shippers that use those carriers to move high volumes of freight. Although shippers are certain to get some rate relief heading into 2023, those dependent on large, high-volume carriers will face more resistance to rate cuts.

The trucking market is “much more orderly” than a year ago, a sign of normalization rather than rapid decline in demand, according to Knight-Swift CEO David Jackson. But Jackson doesn’t foresee contract truckload pricing going into the freefall truckload spot rates did this spring.

A recession may be on the horizon, but freight demand is still strong across several sectors, particularly in manufacturing, construction, energy, and agriculture.  For-hire truck tonnage rose 5.5% YoY in September. Additionally, the Cass Freight Shipment Index was up 4.8% YoY in the same month.

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About O’Neill Logistics

O’Neill Logistics is a leading 3PL with operations in Rancho Cucamonga, CA; Savannah, GA; and Newark/Monroe, NJ. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.

O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.

Lastly, we aim to simplify your supply chain. We deliver exceptional service and can optimize your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.