SPRING 2022

160
THE DISTRIBUTOR’S LINK
CHRIS DONNELL 2022 TRANSPORTATION AND SUPPLY CHAIN OUTLOOK from page 100
Imagine If The ILWU Decided To Strike
The current ILWU (International Longshoreman and
Warehouse Union) master contract is set to expire on July
1st 2022, and based on the position of the PMA (Pacific
Maritime Association), this could be a stalemate of epic
scale given the current transportation industry. Should
there be a work slow down or stoppage this could deal
a knock-out blow to the transportation industry. Back in
2014/15 the negotiations resulted in a strike that lasted
6 weeks, however, it took upwards of 4 months to dig
everything out. If a strike or work slowdown were to take
place today, the chaos would echo throughout the globe,
decimate our national supply chain (whatever is left of it)
and plunge us into one of the worst economic recessions
of the past 100 years. Keep your eyes on this one.
Rail/Intermodal
[a] The rail or intermodal industry continues to
struggle, however, with several ocean carriers continuing
to refuse inland cargo we are seeing few issues with
the rail. Further, while the ports of Los Angeles, Long
Beach and even Seattle are incredibly congested, the
rail carriers are operating at peak capacity and making a
dent in the long-standing cargo at the ports.
[b] Conversely, for inland rail terminals, especially
places like Chicago, Kansas City, Memphis, Dallas and
Atlanta, importers and exporters haven’t seen much
improvement. Congestion and equipment shortages,
driver detention and other issues are still hindering the
terminals from functioning at peak output. Factor in the
weather in places in the Midwest and it only further
complicates the situation.
Warehousing/CFS Stations And Airline
Terminals Will Continue To Struggle As They
Are Positioned At Or Near The Tail End Of
The Supply Chain
[a] Available warehouse space in Los Angeles,
Atlanta, Seattle and Chicago is reportedly less than 1%
and it has been that way for the past eight months. Most
warehouse leasing companies have a backlog of orders
for space and what does come available is filled within
days of being on the market.
[b] CFS Stations (Consolidated Freight Stations) are
not out of the woods as we are receiving reports across
the country of CFS stations being backed up for two to
three weeks before being able to pull containers from the
port or rail ramp and unload them. This adds to the total
costs, all of which are being pushed on the importer.
[c] Airline terminals continue to be rocked by a
surge in demand which is forecasted to not let up until
2023. Air imports have increased an average of 5% over
2020 levels even though the vast majority of carriers
are working with less than 50% of their overall capacity
due to travel restrictions, flight cancelations, and the
grounding of a large portion of the airlines global fleet.
Trucking In The USA!!!
This seems to be the hot topic of the day, especially
when you factor in what is happening on the Windsor,
Canada border.
[a] More than 5,000 truckers have created a
blockade for cargo entering and exiting between Canada
and the United States in response to the stringent mask
mandates enacted for entering Canada.
[b] Rumor has it that this is set to trickle into the
United States. I have received multiple emails stating
that the trucking industry is going to conduct a convoy
traveling across the United States starting on March 1st
- which if this where to take place could cripple supply
chains nationwide. Grocery store, gas station and water
shortages may be the result.
Summary
Overall, I think I’ve painted a pretty good (if not
possibly grim) picture of what importers, exporters,
and manufacturers can expect in 2022. If I could pass
along some advice, it would be this: Put a value on your
relationship with your logistics provider. Ensure you’re
in constant communication with them, forecast out a
minimum of 1 month to ensure space and capacity
is available when needed, and turn over every stone
when it comes to strategizing. It’s not easy out there,
especially when you’re on the ground floor watching
the transportation industry continue this path down the
rabbit hole.
CHRIS DONNELL