Adjusting for Increased Truck Rates and Reduced Productivity
In a stark contrast to the shipping slowdown seen in the spring, ports in California are seeing significant surges of imports, operating at peak utilization. Subsequently, trucking rates have increased, reflecting the demand of companies looking to move products out of the ports and across the country. At Sheltered International, our team is adapting to these increased rates, offering updated and flexible quoting options. Read on to learn more about current events impacting shipping, or contact us directly with questions regarding your shipment.
Ports Experiencing Peak Capacity
Demand for PPE, household wares, home exercise equipment, and other e-commerce goods shipped from Asia has stressed the capacity of ports in California, with LA and Long Beach operating at 105% capacity on peak days. As markets begin to reopen, Asian imports have increased 101% from March and year-over-year imports are up by 22%. With retailers eager to bring merchandise to the United States in advance of Lunar New Year and its respective shutdowns, ocean cargo capacity is being pushed even further.
Trucking Rates Increase
With port capacity pushed to the limits, terminal operators are unable to implement dual transactions and dray-offs, which typically are used to increase efficiency. As a result, truck turn times are on a steady decline, increasing from 58 minutes on average in June to 77 minutes in September. With reduced productivity, truck capacity is decreased, leading to a sharp spike in rates. Both truckload and less-than-truckload (LTL) rates are increased, with per mile averages up 54% from May and reaching $2.46.
Similarly, reduced productivity has increased container dwell times, consequently impacting port capacity to complete the cycle. As states reopen their markets at different times and with different regulations, demand varies significantly across the country; in conjunction with slowed delivery, this creates what Dean Croke, principal analyst at DAT iQ, calls a “network imbalance.”
How SiShips Can Help
During this heavy peak season, our team can provide your business with updated quotes. While we typically quote China-to-door delivery, we can now provide adjusted LA port-to-door quotes that reflect new rates. Alternatively, you may opt to select your own truck delivery method, using SiShips to obtain a port-to-port quote instead.
If you have questions, don’t hesitate to contact a member of our team. We’re here to provide you with the information you need to make the best freight forwarding choices.
