Please, keep your hands inside the car

Add comment September 20th, 2006 David Bush - Iasta

According to a recent article in Global Logistics & Supply Chain Strategies entitled Riding the Rails Out of the Intermodal Muddle, between now and October monthly container volume will build to nearly two million boxes moving through major U.S. ports. Truck drivers and trailers and chassis will be at a premium, and the rail intermodal system will be pushed beyond 100 percent capacity. This is a staggering statistic. Especially considering:

• The number of import containers has grown eightfold in the last 25 years to 400 million twenty-foot equivalents (TEUs) per year.
• For the last 25 years, the capacity growth rate of the nation’s entire transportation infrastructure has remained static.

However, what’s even more surprising is that there is little immediate danger of port congestion or choking of the domestic system that has plagued the industry in recent years especially considering John Ficker, president of the National Industrial Transportation League has stated we have reached a point where demand has exceeded the railroad industry’s capacity to haul all of this traffic, hurricane season is upon us, and the ever increasing number of security initiatives. Furthermore, there are serious manpower shortages in the Trucking Industry and the article clearly states that railroads must build capacity and improve service levels to handle this increased traffic.

In other words, you should not take your logistics for granted and assume that even local US based shipments will be on-time and problem free as even the slightest breeze could theoretically knock out part of the house-of-cards infrastructure that North America is essentially running on due to the current situation of capacity maximization and manpower shortages. You should not only plan for minor disruptions, but do what you can to avoid potential problems in the first place. The article provides three recommendations, courtesy of Steve Branscum, group vice president of consumer products marketing for Burlington Northern Santa Fe.

• Make better use of West Coast ports. Ocean carriers gravitate to L.A. / Long Beach, but spreading shipments across the ports reduces the chance of congestion.
• Be more cognizant of which inland destinations are best served by which port and route freight accordingly. Railroads can then create greater density on certain lanes and improve efficiency.
• Use receivers that work 24/7 to avoid frustrating carrier service performance and clogging terminal operations.

Entry Filed under: General, Global Supply Issues/Risk