RENO, Nev., Nov. 13, 2023 (GLOBE NEWSWIRE) -- ITS Logistics today released the November forecast for the ITS Logistics US Port/Rail Ramp Freight Index. This month, for the first time in the index's history, all modes across all regions are at normal operations. As the good news arrives just in time for the holidays, shippers and carriers should continue closely following the choke points at the Suez and Panama Canals as water conditions worsen and the current conflict between Israel and Gaza continues.
“While there are no adverse effects yet, water levels in the Panama Canal are limiting the amount of cargo that can be transported on ocean vessels,” said Paul Brashier, Vice President of Drayage and Intermodal for ITS Logistics. “Geopolitical unrest in the Middle East also has the potential to affect vessel flow through the Suez Canal. The Panama Canal is responsible for moving over 40% of all U.S. container traffic, which equates to approximately $270 billion in cargo.”
On November 10, the Panama Canal Authority is expected to implement additional vessel reductions with the sole goal of conserving water as levels are still being impacted by a severe El Niño weather system. As a result of the drought, the Panama Canal authorities need to reduce the number of daily transits from 29 to 25 ships in the coming weeks. A decrease in vessels will continue to occur until transit is reduced to 18 ships per day in February. Popular to East Coast trade due to being a faster route, the reduction to 18 ships will represent between 40% - 50% of full capacity.
“This supply chain disruption is taking place while a significant freight recession is occurring, which has impacted companies such as Convoy and Yellow,” continued Brashier. “With many trucking companies now executing at rates under their operations cost, there will likely be an escalation of providers that exit the market. Trucking capacity is at risk due to high fuel costs, low rates from shippers, high capital access costs, and government mandates. Safety and service level declines will be the first indicators that a trucking provider is struggling. Industry professionals should prioritize vetting their selected partners' fiscal health as we head into the new year.”
As we approach the end of 2023, ITS advises industry leaders to take the opportunity to transition from reactive measures to proactive supply chain planning by collaborating with supply chain partners to reconfigure networks and implement lessons learned from the past five years. The supply chain is expected to stabilize, allowing for a strategic shift, while freight rates for trucking, rail, and ocean are at levels not seen since before the pandemic.
ITS Logistics offers a full suite of network transportation solutions across North America and omnichannel distribution and fulfillment services to 95% of the U.S. population within two days. 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 #21 in North America, the #11 drayage and intermodal provider, a top-tier asset-based dedicated fleet, 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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