Thursday, November 4, 2010

Upward Pressure Mounts on Transportation Resources

As previously reported here, signs continue to point to a squeeze on transportation platforms, with increased demand chasing capacity that was significantly reduced during the downturn.


Rotterdam, Europe’s busiest port, is facing “serious operational problems,” overwhelmed by surging container imports from China. Other major north European ports also risk congestion during the summer because of what Maersk Line, the world's biggest carrier, describes as an "unprecedented" surge in traffic in most trade lanes.

According to Alphaliner, the Paris-based shipping analyst, idled ocean capacity is down to two percent from a record of 11.7 percent in late 2009. With cargo hulls at virtually full capacity, container ship deliveries are set to hit a new high in July.

And in a sign that all players are looking for a bigger slice of the newly expanding pie, the Port of Montreal was shut down for a week in a lockout, after union longshoremen refused to work overtime. The Montreal Port Authority reported the first six months of 2010 brought “a vigorous recovery in most types of bulk cargo.”



In the air, cargo revenue jumped 33 percent for the three largest US airlines, reported the Journal of Commerce, with United’s belly freight up 57 percent to $190 million versus the same quarter last year. Scott Davis, head of UPS, said the “ocean squeeze” is pushing shippers to shift cargo to air freight.



On land, carrier USA Truck returned to profitability after five quarters of losses, amid what president and CEO Clifton Beckham called a “considerable shortage of capacity.” Like many truckers, they are going on an equipment-buying spree, driving heavy truck orders up 95 percent from a year earlier, according to commercial vehicle specialist ACT Research.



For shippers, all this points to a need to get your logistics ducks in a row, if you want those ducks delivered in a timely, cost-efficient manner.

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