According to the Port Authority of New York and New Jersey (PANYNJ), in the year to March 2023, New York-New Jersey imports fell 27% from a year earlier to 898,437 TEUs, and in the first quarter, weekly truck visits averaged 13% less than a year earlier.
Shortbarge drivers who have flooded the ports of New York and New Jersey in the past two years are now facing the impact of a container slowdown that has forced rates to drop by nearly half from a year ago. The ample supply of drivers has made it easier for shippers to switch from rail to truck transportation. And more frequently reprice their short-barge contracts.
the Port of New York-New Jersey topped the list for container traffic in the United States in 2022, bringing more drivers to the port, truck visits to the port have declined as traffic has declined. In March, the number of container transport trucks registered at the port reached 27040, an increase of 44% from March 2021. As fewer containers need to be transported, only 42 per cent of trucks registered at ports in March were in use.
Erik Holck, a partner at truck brokerage WHY Logistics, said that because container volumes are "plummeting", drivers who could have worked five days a week are now working two to three days a week.
Holck said the economic downturn had significantly depressed spot prices for capacity. Shipping a container to a major distribution center in Allentown, Pennsylvania (Allentown) this year costs about $1400, compared to $2500 last year. A Newark car operator also said its sales were down 20% from a year ago.
Christy Mendick, president of SFC Intermodal, a truck brokerage, said haulage rates can sometimes be $5 to $6 a mile higher than in other trucking divisions over the past two years. But now short barges are sometimes more expensive than truck or flatbed rates of only $1 per mile.
drive loading "selectivity" has diminished
in the past two years, shippers have been required to deliver goods two weeks before their arrival to ensure that a truck driver is found, while truck drivers can also be more selective in choosing which marine terminal to ship goods from and the type of goods they are transporting. Now because of the decline in freight traffic, drivers are willing to accept any opportunity to work.
Holck said that since the beginning of the year, selectivity and delivery times have changed dramatically.
low truck rates have led to more shippers switching from intermodal rail. A shipper can transfer a container onto a dry van trailer and deliver it to Chicago in two days at a cost of about $2,000, up from more than $3,000 last year.
Intermodal service from New York-New Jersey to Chicago also takes two days, but truckers at the receiving end to pick up containers can face delays, Holck said.
As haulage costs fall, some companies that want business are reducing port trucking-related additional insurance, certification and other costs.
Mendick said that even with the drop in spot rates, shippers are not too eager to reduce contract rates with short-barge carriers to ensure consistent, reliable service. Still, some shippers are seeking to move from annual contracts to shorter-term deals with carriers because of uncertainty about freight demand and the potential for further cost savings. "Some people are asking for price cuts very slowly, but very few customers are looking at quarterly or six-month contracts."
others have taken the opposite approach. While quarterly pricing is more common in 2021 and 2022 as rates and demand soar, Holck said he sees shippers now locking in annual rates due to increased availability of drivers.
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