Shippers need to prepare for the additional stress on chassis pools and an excessive amount of box detention.
(RENO, NEV.) – ITS Logistics, today released the February forecast for the ITS Logistics US Port/Rail Ramp Freight Index. This month the index forecasts that there will be significant complications with freight being stored on wheeled containers in the US, as well as limited ocean chassis equipment.
“A major concern is the volume and duration of freight being stored on wheeled containers in the US as BCO warehouses continue to work through significant inventory levels,” said Paul Brashier, Vice President, Drayage and Intermodal for ITS Logistics. “If containers are sitting on chassis, those chassis cannot be used on newly arriving containers, putting additional stress on chassis pools throughout the US—especially inland rail ramp pools. As well, In Q2 and Q3 the excessive amount of box detention for containers dwelling at these DC’s will be billed to BCO’s and Shippers, costing shippers tens of millions of dollars per quarter.”
These charges are less than ideal given the weaker consumer demand and pressure to lower the cost of goods sold in an attempt to process the historically high inventory levels. It is expected to ripple through earnings for Shippers creating further challenges in the new year. Rail service disruptions have also impacted export schedule reliability, resulting in a shortage of containers moving from ports to inland rail yards.
“We’re seeing a lack of ocean chassis equipment at inland rail ramps to process interior point intermodal (IPI) freight coming into the US,” continued Brashier. “IPI container traffic is reaching pre-pandemic levels. In addition, the booking behavior of beneficial cargo owners (BCO) is returning to rail ramps that are as close to drive chassis’ (DC) and storage capacity as possible. This is being done to lessen transportation costs.”
The news comes just as the Federal Maritime Commission (FMC) prepares to enforce the Ocean Shipping Reform Act in the new year by conducting further investigations into carriers. Currently, the FMC is working through more than 200 complaints against carriers, as they are being denied cargo space and facing rising detention and demurrage fees. The agency saw almost $2 billion in detention and demurrage complaints in 2022, and carriers have already refunded $700,000.
“While the FMC is performing investigations to resolve the current disruption in fees, chassis and trucking providers need to actively monitor the IPI container traffic and their transportation costs,” continued Brasier. “Plans should be made to reposition chassis now, as there could be significant operational constraints as we get closer to the summer and fall retail peak season.”
ITS Logistics offers a full suite of network transportation solutions across North America as well as omnichannel distribution and fulfillment services to 95% of the U.S. population within a two-day timeframe. These services include drayage and intermodal in 22 coastal ports and 30 rail ramps, a full suite of asset and asset-lite transportation solutions, omnichannel distribution and fulfillment, and outbound small parcel.
The ITS Logistics US Port/Rail Ramp Freight Index forecasts port container and dray operations for the Pacific, Atlantic, and Gulf regions. Ocean and domestic container rail ramp operations are also highlighted in the index for both the West Inland and East Inland regions. Visit here for a full comprehensive copy of the index with expected forecasts for the US port and rail ramps.
About ITS Logistics
ITS Logistics is a premier Third-Party Logistics company that provides creative supply chain solutions with an asset-lite transportation division ranked #23 in North America, the #11 drayage and intermodal provider, a top-tier asset-based dedicated fleet ranked #39, and innovative omnichannel distribution and fulfillment services. With the highest level of service, unmatched industry experience and work ethic, and a laser focus on innovation and technology–our purpose is to improve the quality of life by delivering excellence in everything we do.
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