According to PIERS data, so far this year, the volume of freight entering the ports of Los Angeles and Long Beach has been significantly reduced, and shippers using 53-foot containers to move goods are also declining. In the first quarter, imports through the Southern California gateway fell 30% year-on-year. more.
John Roberts, chief executive officer of J. B. Hunt, said the impact of the decline in Southern California's imports, which are critical to domestic intermodal transportation, spreads inland. Schneider National Group CEO Mark Rourke stressed that the number of West Coast ports is "highly correlated" with their intermodal operations.
Hub Group reported that in the first quarter its west-to-east transcontinental freight volume fell 6 percent year-on-year, while U.S. West local freight volume fell 12 percent.
Rourke in the mid-April meeting also said that international multimodal transport has declined, through the California warehouse import goods also fell, we need to import to improve, need to finalize the West Coast labor agreement, so that customers on the West Coast imported products have confidence.
Hub Group CEO Phil Yeager said that when the West Coast port labor challenge passes, it is expected that imports will return to more normal levels, which will be a good driver of growth.
's latest Intermodal Savings Index (ISI) data shows that intermodal shippers saved nearly 26% under annual contracts in the first quarter, down from more than 30% in the first quarter of 2022. The ISI contract index averaged 125.8 in the first quarter, down 7.6 percent year-on-year and slightly below the five-year average of 127.8. The spot ISI averaged 115.2 points in the first quarter, down 6.6 percent year-over-year, but in line with the five-year average of 115 points.
A labor agreement at West Coast terminals could be reached soon after local labor and management reached an agreement Tuesday on staffing requirements at the non-automated marine terminals in Los Angeles and Long Beach. But the damage from 12 months of negotiations and union strikes is undeniable, with shippers moving more and more discretionary cargo to ports along the East Coast and Gulf Coast to avoid labor disruptions on the West Coast. The situation in these ports will gradually affect vehicle transportation and domestic multimodal transportation.
PIERS data shows that the West Coast's share of Asian imports in March was 58.4 percent, down from 59.9 percent in March 2022 and has been below 60 percent since last June, while contract negotiations began on May 10.
Domestic intermodal resistance, but not immune to port slowdowns
According to the North American Intermodal Transport Association (IANA), although the coastal share of shipping containers is shifting to the East Coast and Gulf Coast ports, by 2020, about 20.1 percent of domestic intermodal shipments will come from the Southwest, which is Arizona, California or Nevada. This share has grown to 21.3 per cent annually over the past two years, and by the first three months of 2023, it is about 21.1 per cent.
Because transit times are shorter, multimodal transport on the East Coast is not dominant, so truck rates are more competitive with rail.
TEU volumes across all of California's ports fell 24 percent from the third quarter of 2022 to the first quarter of this year, and while international intermodal traffic fell 32 percent over that period, cargo diverted into 53-foot containers fell only 11 percent. The president and founder of Gross Transportation Consulting said that compared with international intermodal transportation, domestic intermodal transportation is less vulnerable to fluctuations in the number of ports in Los Angeles and Long Beach.
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