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Trucking Services Challenges in North America – July 22, 2014 -

The transportation and logistics industry is presently in the midst of challenging times due to truck power – drayage service shortages. Trucking services shortages in terms of equipment, drivers, capacity and increased safety mandates are an industry-wide issue. 

  • Driver shortages:  Over the past two years a high percentage of drivers have exited the intermodal drayage industry for other more profitable services. The latter is due to stricter government regulations associated with reduced drive times behind the wheel and the increased costs and certification necessary to handle hazardous materials over the road. Drivers are now limited to 11 hours behind the wheel.  Prior to this new Department of Transportation (U.S. DOT) regulation, drivers would average two (within) 100 miles round trips per day.  Today, they can generally only make one per day, due to on-going delays at the ports and rail terminals. 

 

  • Chassis shortages both standard and tri-axle: Ocean freight carriers are quickly exiting the chassis provider aspect of their traditional services. Drayage service providers have been forced to invest heavily in this added chassis equipment the safety profile of which must now match the strict standards already applicable to over-the-road trailers. This added condition is exasperating equipment availability.
  • Congestion at most of the ports & terminals: The volumes into the rail and port terminals across North America have significantly increased and are anticipated to remain high for the foreseeable future.  This reduction in fluidity makes it more difficult for the industry to secure sufficient truckers as well as chassis.  As congestion increases in all aspect of the movement of Intermodal traffic, this limits the amount of turns a driver can make, lowering weekly income.

              This inability to turn units productively has now impacted costs nationwide.

  • Safety regulations:  Government regulation of the trucking industry has intensified in the last several years.  One direct link to trucker availability issues is the increased cost truckers and their companies have to pay to handle hazardous loads.  Drivers, as well as their affiliated companies, are required to pay higher insurance premiums and most now be specifically certified to handle these moves.  The premiums for both have increase by more than 30% over the past few years.

 

We are fully committed to provide our customers with safe quality service. Given the current challenges all trucking service users face, we find it prudent to inform you that you may expect potential drayage delays and increased costs associated with those delays.  We are continuously evaluating our service options as we collaborate with several reputable trucking services providers coast to coast, to protect our customers’ best interest. It may be necessary for us to introduce rate adjustments in order to maintain dependable and established service commitments.

We appreciate your patience and assure you that we will continue to diligently coordinate and transport your export and import containers as quickly and trouble-free as possible.

 

 

 

7/6/14

U.S. Port congestion leads to more delays for trucking operations in Southern California and select other harbors.

The combined Ports of Los Angeles, Long Beach, Wilmington & San Pedro are adjacent to each other and form one of the world’s busiest ports complex.
The last four months, increasingly long delays are experienced delivering and picking-up containers, unlike any other period in recent history. Drivers frequently spend 4 to 6 hours in the various terminals to perform a function that used to take an hour or so. The future looks even bleaker. Today, a simple pick-up of an empty container means a 3-4 hour process.
Many customers seek “pre-pulls” and night recovery to avoid the unique-to-Los Angeles/Long Beach “Pier Pass”, making night gates particularly busy and challenging to navigate.
Trucking services are losing precious hours and dollars as they make every effort try to perform under these conditions..

As a result, trucking services are instituting  waiting time fees averaging $75.00 per hour (or fraction thereof) and assessed following the initial “free” 2 hours waiting time.

Understandably, this initiative is being introduced given the hourly cost of drivers, fuel, and the loss of productivity.

 

http://www.joc.com/sites/default/files/field_feature_image/Pier-T-file-photo.jpg

 

Article from the Journal of Commerce dated June 20th, 2014

‘Terrible congestion’ at Los Angeles/Long Beach Ports
Grace M. Lavigne June 30, 4:19 AM  - JOC - (Journal of Commerce)
33
With potential U.S. West Coast labor disruption just days away, truck traffic at the ports of Los Angeles and Long Beach is reportedly slow and congested, making it difficult for some shippers to get containers out of the nation's largest port complex.
It is taking at least 2-1/2 hours for the company’s drivers to get containers out of the two ports because of a chassis shortage, a source at a drayage company told the JOC. The equipment shortage, an issue even under normal circumstances, has intensified in the past month as beneficial cargo owners accelerated shipments ahead of the expiration of the West Coast dockworkers’ labor contract.
The contract between the International Longshore and Warehouse Union dockworkers and employers, the Pacific Maritime Association, expires at midnight June 30th. Negotiations between the two entities have never been free of some sort of disruption, and in 2002 the talks ended in a 10-day port lockout and significant work slowdowns.
Peter Friedmann, executive director of the Agriculture Transportation Coalition, reported to CONECT that the vice president of OOCL and the new executive director of the Port of Los Angeles advised that the “terrible congestion” at Los Angeles and Long Beach is chassis and equipment-related, and not related to any effort by longshoremen to influence the negotiations.
“It is only at certain terminals, not at all terminals at those two ports,” Friedmann said. “Unfortunately, those terminals ordered or received the wrong chassis and other equipment, and it will take a number of weeks, perhaps a number of months, before the appropriate equipment arrives. Until then, those terminals will be unable to work in normal fashion, and there will be severe delays.”
The timing couldn’t be worse. In the latest indication that shippers accelerated shipments ahead of the expiration of the Longshore union contract, containerized imports through Los Angeles and Long Beach, which handle 40 percent of all U.S. trade in May. In Los Angeles, containerized imports, including empties, increased 9.9 percent year-over-year, to 348,512 20-foot equivalent units, and imports at Long Beach were up 3.2 percent to 312,946 TEUs, according to preliminary figures from PIERS, the data division of JOC Group. The growth in May came on the heels of April’s 9.1 percent rise at Los Angeles and 3.4 percent increase at Long Beach.

 

 

Severe Weather impacts U.S. rail services

1

News reprint from Union Pacific’s Announcement #: CN2014-23
Weather Recovery Update
Announcement Number: CN2014-23

July 2, 2014
The weather events over the last two weeks continue to create operating challenges on our network. Heavy rainfall has caused washouts and other flood-related damage at many locations in the Midwest.

.Rendition Small | 2014 Flood ImageRendition Small | 2014 Flood Image
Washouts on the Union Pacific network this week.

Union Pacific crews have mobilized and are working to repair our infrastructure as quickly and safely as possible. Updates on major service interruptions are listed below:

Mankato Subdivision

  • We have restored limited service to our Mankato subdivision southwest of St. Paul ahead of schedule. As you may recall, this subdivision experienced significant damage on June 19 after flooding caused washouts and mudslides along approximately 40 miles of the route. We have completed initial repairs and will begin to process backlogged shipments over the next several days. Additional maintenance will take place over the next three to four weeks as we work to fully restore the line.
  • Mississippi River water levels are starting to recede near St. Paul. Flood barricades are being removed and rail lines reopened as conditions permit. Embargoes are being lifted as operations resume. We are coordinating closely with the City of St. Paul to open remaining closed lines as the water levels recede and repairs are made.

Clinton Subdivision

  • We have also restored limited service along our Clinton subdivision near Cedar Rapids, Iowa. The Clinton subdivision is part of our central corridor east-west main line between Chicago and the West Coast. Soft roadbed conditions are restricting speed through the area, and we will continue to perform maintenance over the next several days. Once service is fully restored to this main line, it will take additional time to return to normal operations.

Tama, Iowa

  • Further west along the Clinton subdivision, near Tama, Iowa, the Iowa River is above flood stage and is expected to crest in the next 24 hours. We have work crews on standby to conduct repairs if necessary.

We will continue to reroute traffic as necessary, and customers may experience delays in the affected areas until service is fully restored. We appreciate your continued support as we work through these challenges, and we will update you as repairs progress and operations are returned to normal.
Please contact the National Customer Service Center or your Union Pacific representative with any questions.
Union Pacific – Building America –

 

 

CUSTOMER ALERT
U.S. RAIL & TRUCKING INDUSTRY DELAYS IMPACT SUPPLY CHAINS

June 26, 2014

To Our Valued Customers:

The domestic & North America trucking industry is facing tremendous capacity & service challenges which are severely impacting shipping flows and generating a negative effect on the supply and demand ratio for these services in the US. These conditions are also affecting cross-border services to and from Canada and Mexico.

Transit-time delays for units moving via rail into and out of the U.S. West Coast Ports specifically are compounded by container pier drayage hold-ups for cargo waiting to be picked up or dropped off at the Piers. Virtually all West Coast Ports including Los Angeles, Long Beach, Oakland and Seattle are effected. The increased demand for drayage services currently exceeds capacity.

Union Pacific Railroad, as an example, currently reports delays of up to 48 hours in arrivals and departures at their Los Angeles Ramp (ICTF).
 
The contributing factors include but not limited to:

  1. More transportation of crude oil by rail: rail congestion coming into and out of the Houston and general Gulf coast region, caused in part by increased shipments of crude oil to refineries
  2. High demand for trucking services and the limited availability of bulk trucks are exacerbated in part by new Federal regulations reducing the maximum workweek for truckers. The latter, combined with additional safety-driven steps such as a maximum 11 hours driving time per day, are compounding the already tight available capacity
  3. Potential for a July 1, 2014 Port operations strike action on the West Coast
  4. Seasonal rail construction, heavy maintenance and repair caused by the particularly harsh winter conditions that impacted most of the United States and Canada this past season
  5. Ongoing severe weather-related impact in the U.S. Midwest and Plain States

 

Delayed carrier haulage deliveries have resulted in added costs imposed by the container drayage service companies to cover, extra waiting time at the ocean freight terminals, overnight storage of containers, demurrage and “dry runs” charges, to name a few.

While the above conditions are beyond our direct control, be assured that Primary Freight Services is fully committed to help our customers minimize the added costs and the delays to the very best of our ability.

For further information please contact: news@primaryfreight.com
or please check our web-site @ www.primaryfreight.com

 

 

 

 

News Flash

Manila, the Philippines

Truck restrictions imposed by authorities in the Philippines - Local leaders in Manila have defended new rules that restrict access of heavy vehicles on the capital’s streets, saying the scheme will encourage smoother movements of cargo once shippers adapt to the requirements. However, opponents of the ban say it will slow trade activity, jeopardizing future economic growth.
The restrictions, introduced in late February of this year, block access to city streets from 5am to 10am and 3pm to 9pm for eight-wheeler trucks and other vehicles with a gross weight in excess of 4500 kg. There are some exceptions, including vehicles carrying perishable goods and petroleum products, and those serving government projects. The mid-day window, a temporary concession granted by the Manila administration to allow shipping companies time to adapt, is set to be closed within six to eight months.The shipping industry, meanwhile, claims the restrictions – which will affect truck access to the Port of Manila – will generate transportation bottlenecks, potentially leading to a shortage of finished goods and inputs for manufacturers, as well as delays in exports.

 

 

 

6/12/14

Port of Seattle, WA congestion:

For the past 15 days, significant delays are currently experienced at the Port of Seattle terminals.
It is unknown if the delays are related to the ongoing U.S. west coast labor negotiations. In addition, the closure of Terminal 5 is affecting cargo & container flows. At this time, import loads appear more affected than exports shipments.
Typically, drayage/container transport companies allow up to two (2) hours at the various terminals for the pick-up or drop-off of containers. Local trucking services providers are now assessing standby charges over two hours waiting time. If trucks are re-directed, this step may result in 'dry run' charges. Given that neither truckers nor freight forwarders and NVOCC’s control the efficiency of the terminals. Every effort is put forth to get in and out of the terminals quickly and smoothly, to assure turn-around times that enable us to meet delivery and pick up appointments. The inability of the terminals to service trucks timely before the end of day shut-down may result in extra charges for the exporters or importers. Every effort is being made to minimize the extra costs for our customers and network partners.
On average, the hourly waiting time over 2 hours equates to $75.00/hour with a minimum of $75.00 for over-time waiting periods.

 

CUSTOMER ALERT

PORT CONGESTION SURCHARGE
June 3, 2014

GRI July 1,2014 from All USA ports to AU / NZ including Pacific Islands $10.00 w/m

PORT CONGESTION SURCHARGES ARE ANTICIPATED IN THE EVENT OF DISRUPTION OF WEST COAST PORT OPERATIONS

To All Primary Freight Services Valued Customers:

The current labor contract between the ILWU and PMA is scheduled to end on June 30, 2014. The engaged parties expect to conclude the negotiations process in reaching a new agreement.
While the parties strive to reach a suitable resolution without a work stoppage or slow-down, if unsuccessful by June 30, it is anticipated that a possible lockout will result in a disruption of Port Operations on the US West Coast.
In the wake of such an outcome, all Carriers have proceeded to file Port Congestion surcharges that will become applicable should an inconclusive result of the negotiations impact the port operations.

In turn, Primary Freight Services will be extending the following Port Congestion surcharges:

ORIGIN

DESTINATION

TYPE

INCREASE AMOUNT LCL

INCREASE AMOUNT FCL

All USA Origins

All International Destinations

Surcharge

USD 25.00 W/M

USD 800 per 20’ *
USD 1,000 per 40’ **
USD 1,125 per 40’ ***

All International Destinations

All USA Destinations

Surcharge

USD 25.00 W/M
USD 25.00 min

USD 800 per 20’ *
USD 1,000 per 40’ **
USD 1,125 per 40’ ***

* FCL - USD 800 per 20’ container for all equipment types
** FCL - USD 1,000 per 40’ dry, reefer, flat, open-top and tank
*** FCL- USD 1,125 per 40’ high cube dry and reefer

Please note that this is a forward filing and, without work stoppage, slow-down or strike, these surcharges or related tariff filings are null and void.
For more information please contact us at (800) 635-0013 or at sales@primaryfreight.com

Primary Freight Services, Inc.
6545 Caballero Blvd.
Buena Park, California 90620 – USA -

 

Stay Connected and Stay Up To Date with Primary Freight Services
We are constantly working on ways to provide our customers with a thoroughly rewarding experience in their daily interactions with Primary Freight Services. Embracing our core value of providing timely and meaningful information consistently challenges us to find new and exciting avenues for distributing information.  With this in mind, we are pleased to announce new ways to stay up to date with Primary Freight Services and the markets we serve.

At the core of these efforts is our recently renovated website, which has a new look and feel and expanded functionality. 

Do You Tweet? We are excited to announce our new Twitter page which we use to announce industry relevant news and items of interest.  Give it a try and follow us at www.twitter.com/primaryfreight
 
Check out our blog ~ Cargo Shorts: Thoughts from outside the box, where you will find ruminations on our industry and relevant, up to date content. Meet us in the blogosphere at http://primaryfreight.wordpress.com!

Are you LinkedIn? Let’s face it, social networking isn’t just for kids.  It’s a powerful tool that allows you and your business to stay up to date with relevant market news, as well as the key players in the industry.  Get connected to Primary Freight Services at www.linkedin.com!

We are excited about keeping you informed and will continue to find new ways to do so.  Enjoy!

 

 

Primary Freight Services, Inc. consistently monitors local, regional, and national trends to ensure we are ahead of the curve identifying new markets and capturing new business!