Freight market update, 6 June 2022

Importers Prepare for West Coast Port Disruptions

Port labor negotiations are currently underway and have been for some time. In case you're not familiar with the situation, here's a quick rundown:

• The US West Coast ports are negotiating with their unionized workforce in an effort to reduce costs, expand operations, and improve productivity while keeping their current employees happy and maintaining their ability to negotiate wages on an individual basis.
• The current contract is up on July 1st. This means that if workers decide to strike, it will soon be illegal for them to do so.
• If the negotiations fail, major consequences could be ahead for the port's ability to process cargo shipments quickly and efficiently.

What will be its impact?

If a strike does happen, it could last for weeks or even months.

This would mean a massive disruption in the supply chain, which would affect the delivery of many goods and services across the country. Packages from China are the most likely to be delayed because they come through the ports of San Francisco, Los Angeles, and Long Beach. However, any package shipped from Asia or Europe could also be affected by disruptions at these ports.

This all is happening while US ports have cleaned up most of the massive backlog of container ships off the Southern California coast, just in time for the monster tidal wave of containers being sent from the Chinese ports awakening from covid.

Trucking Capacity Improves, Diesel Prices Still Climbing

The cost of diesel continues to rise and it’s impacting everyone from truckers to consumers. In recent weeks we have seen some normalization of trucks to loads, no longer in the capacity blood bath of Q1 2022. As for diesel, there has been every excuse in the books as to why the prices are so high. Some trucking industry execs say that is only the beginning of the fuel increase, and not to be surprised to $8.00 US ($3.00 per liter) prices by the end of the year. Trucking companies are feeling the pinch as they try to hold rates for customers while keeping their trucks profitable. Consumers reeling from record-setting inflation will be settling in for the long haul as summer usually sees even more fuel price gouging as holiday drivers take to the roads. Until consumers take a stand, start carpooling and not using vehicles to reduce fuel consumption and increase reserves, expect our Oil Overlords to keep the prices high.