U.S Export Market Letter
April 4, 2018
“The Best Ability is Availability”: ELD and Impact on Container Drays for Export
The most significant issue impacting export services today remains trucking and sourcing of truck power. Delays in availability for export container moves in certain locations, especially in midwest rail hubs, are significant (Chicago: 7-14 days, Kansas City: 3-7 Days, Memphis: 7-14 days, Columbus: 4-8 days, and Minneapolis: 7-14 days). For hazardous or specialty equipment delays are even longer.
Trucking Rates are Still Increasing: On average, we are still experiencing rate increases from trucking companies and expect another 15-20% increase on average over what we already saw at the end of 2017. In many cases, however, truckers are demanding an extra amount on top of the increased rate to accept a move – in many situations in excess of $300-$400. Carriers have also added language in their tariffs allowing for similar trucking surcharges (as high as $500/container) on top of the increased dray rate that has been negotiated.
Drivers Are Choosing Which Cargo They Accept: With limitations on drive time and mandatory rest periods monitored through the new ELD process, drivers have become increasingly selective of which loads they will accept. Even at significantly higher rate levels, some locations and distances are still not accepted by some drivers as they fear the risk of being out of service, especially away from home and family. We see this especially true in locations that are more than three hours from a terminal or port facility. With many of our work orders, individual drivers are vetting the location, the terminal, which carrier, chassis availability, and time and distance before they accept the move.
Quote Speed and Consistency is Suffering: In general, ocean export pricing is managed and requoted monthly. For basic ocean freight that will remain the same. However, when quoting trucking services it is becoming much more difficult because you may have to make 4-5 calls to truckers in your network just to find one that has availability within the extended time frame that is reasonable, and some are not providing rates that are valid for more than a few weeks.
Skipped Rotations Due to Lunar New Year and Seasonal Weakness ex-Asia: US exporters are also dealing with blank sailings as a result of the voided services leaving Asia during the Lunar New Year holiday. So space in general has also tightened. We are also seeing carriers schedule blank sailings leaving Asia in late April and early May, which means that for US exporters, these blank sailings will again impact the export market in late May and early June.
Laufer’s Export Program: We move significant quantities of export containers and expect to ship approximately 30,000 containers export in 2018. A significant portion of that volume is within our Forest Products Program. We perform the trucking for about half of this volume and expect to be asked to handle even more as this becomes even more difficult for exporters to manage themselves. For immediate assistance, please reach out to your local team and salesperson so that we may be able to assist you in navigating through this difficult situation
Thanks so much for all your continued support.
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