Logistically Speaking - HOT SHEET - Week 37

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Logistically Speaking - HOT SHEET - Week 37

Fact for the Week

$4,782, the average price per 20-foot equivalent unit for container transport from Shanghai to Los Angeles last week, down 14% from the week before and off 57% since Jan. 20

 

Texas-Mexico Trade

According to the Texas Department of Transportation, trade between Mexico and Texas could reach $1.5 trillion by 2050. TxDOT forecasts that as many as 12 million tractor-trailers and 2.5 million rail containers will flow between the countries by 2050. In 2021, about 6 million trucks and over 420,000 loaded rail containers crossed the border.

  • Advanced technology will be the top cross-border supply chain between Texas and Mexico, valued at $651 billion.
  • This is followed by assembled motor vehicles ($187 billion), industrial machinery ($170 billion), fresh produce and grains ($93 billion), and manufactured goods ($61 billion).
  • The greatest challenge for the trade community is ensuring both countries have enough bridges, railways, and roads to facilitate the increased commerce, says Caroline Mays, TxDOT’s director of freight, trade, and connectivity.
  • Currently, Texas and Mexico are connected by 28 international bridges and border crossings, as well as six rail-only bridges. TxDOT estimates that U.S.-Mexico border crossing delays in 2019 resulted in $68 million in economic productivity losses, reducing GDP in both countries by $2.3 billion.
  • Solution: Dunavant Cross Border Division has locations in 10 strategic cities along the border and 7 locations Intra-Mexico. Whether you need Cross border service or consulting, please reach out to Johnny Araiza — (956)-285-4648

 

Norfolk Southern Opens Lots In Memphis

A surge of imports into Savannah has forced Norfolk Southern Railway (NS) to open two auxiliary container lots in the Memphis area after its primary terminal in the market hit capacity, causing significant headaches for exporters looking to send containers back to the port.

  • The two lots, one located a few minutes from the main Rossville terminal and another about 25 miles away near Memphis International Airport, can hold 2,000 stacked ocean containers combined.
  • The railroad told the Journal of Commerce that it essentially triples NS’s Memphis-area storage capacity, with Rossville capable of holding a maximum of 1,000 containers.
  • NS plans to push the long-dwelling import containers into the two additional storage locations to clear space at the main Rossville terminal.
  • According to data provided by the Georgia Ports Authority, imports moving from Savannah to Memphis on Norfolk Southern have surged 72% since Jul 1 compared with a year ago.

 

Trans-Atlantic Trade

Since January, 120,500 TEUs have been added to the Europe-America trade lane, a 12% increase. Spot rates on trans-Atlantic westbound routes have risen steadily since Jan 1.

  • The current rate from North Europe to North America is up 24 percent since the beginning of the year at $6,823 per TEU.
  • This is in stark contrast to Asia-North Europe, currently down 37% since Jan 1, and Asia-US West Coast down 39%.
  • While higher rates are a factor in the increase in capacity, port congestion is another contributor.
  • The congestion can be explained by a shift in volume from the West Coast.
  • With the East Coast ports backed up, the average round trip from Europe lasts 52 days. The increase in capacity is helping relieve some pressure as the current TEU capacity sits on the water.
  • Solution: With rates rising and tightening capacity for this lane, allow Dunavant to look at your supply chain and provide a bespoke solution.

 

ILWU Strikes

A union representing security guards at the Ports of Los Angeles and Long Beach authorized a strike last week, sources close to the matter told the Journal of Commerce, the latest of several recent labor actions that threaten to disrupt West Coast container flow just as it was returning to normal after two years of pandemic-driven disruption.

  • Members of the security guard union, International Longshore and Warehouse Union Local 26, work at most marine terminals at the LA-Long Beach complex and have been negotiating a new contract for three years.
  • While the security guard contract is separate from the coast-wide longshore contract currently being negotiated, officials are working feverishly to avoid a strike, given the possibility that dockworkers would honor any security officer picket lines, thus shutting down affected terminals.
  • No date has been set for a strike. In addition, talks with the Pacific Maritime Association are held up over compensation; one source told the Journal of Commerce.
  • The security guard strike authorization comes as optimism has faded over the past month that longshore labor and management will quickly reach their own settlement.
  • Solution: With uncertainty on the West Coast and ports backed up on the East Coast, Dunavant using our integrated technology and a host of data points, finds the path of least resistance.

 

Posted by Andrea Wiley at 07:35