Coming Down the Pike: No lack of business for the drayage shipping industry

LONG BEACH, July 18 – THE US drayage shipping industry, which delivers and collects containerized cargo to and from the nation’s ports, remains in a strong position with throughput continuing to rise around the country, according to new figures and advance estimates.

“Cargo volume is expected to remain high as we head into the peak shipping season,” said Jonathan Gold, Vice President for Supply Chain and Customs Policy at the National Retail Federation, the world’s largest retail trade association.

“The forecast import volume for 2022 is 29.84m teu, which would be a 2.6% increase over 2021,” the NRF said in the July edition of its monthly Global Port Tracker, which measures and predicts containerized imports.

It said the import volume in the first half of 2022 is forecast to increase by 5.0% versus the equivalent period of 2021, while the import volume in the second half of 2022 is forecast to increase by 0.2% versus the equivalent period of 2021.

The projected growth of 2.6% in imports is driven by “increased East Coast imports from Asia and Europe with larger ships,” according to Ben Hackett, whose firm Hackett Associates produces the Global Port Tracker.

Virginia sees 14.7% rise

That view is underlined by figures from the Port of Virginia which has seen a record 3.7m teu passing through the facility in the recently completed fiscal year 2022, an increase of 14.7% over fiscal year 2021. Drayage firms saw benefits, too, with truck containers up 16.5% for the year. 

The Port said its record cargo volume was driven “primarily” by an increase in loaded imports, followed by growth of empty export boxes. Significantly, the volumes came aboard 1,471 vessels, which is 67 fewer than in fiscal year 2021. In a word, more cargo came on bigger ships.

Port Director Stephen Edwards sees that growth trend continuing as the Port advances on a $1.4bn capital investment package even as it opens up “new markets” for cargo owners and shippers through “reworked” vessel services that are offering direct Asia-to-Virginia connections.

 Charleston up 12%

Virginia is not without its competitors, even on the East Coast as shown by the Port of Charleston, South Carolina, which reported a 12% increase in cargo this fiscal year over the year before. It said “sustained consumer demand” drove this growth, with imports up 22% year-over-year.

With an eye on drayage shipping, the South Carolina Ports Authority has extended Charleston’s Sunday gate hours through at least September and leased more than 1,000 chassis out of its SMART Pool chassis fleet – all part of an effort to keep imports and exports flowing through the supply chain.

“We are using every avenue possible to add more fluidity to the supply chain for our customers,” said Barbara Melvin, recently installed as SC Ports President and Chief Executive Officer.

“Our decision to invest in infrastructure ahead of demand is proving crucial in today’s environment,” Melvin said, alluding to more than $2bn of investment into port infrastructure to handle record cargo volumes.

And the process of development continues with larger ship-to-shore cranes, a new intermodal facility, and the all-important project to deepen Charleston Harbor to 52 feet, making it the deepest facility on the East Coast and able to attract even larger ships.

LA and Long Beach hold steady

While East Coast ports increase their ability to attract greater volumes of cargo from Asia and Europe, the West Coast ports of Los Angeles and Long Beach continue as the nation’s leaders when it comes to throughput records – with little end in sight.

The Port of Long Beach said it moved 5,007,778 teu during the first half of 2022, up 5.3% from the same period last year – and perfectly in line with the NRF’s forecast figure of 5%. 

The Port said it moved 835,412 teu in June, up 15.3% from the same month last year. Imports rose 16.4% to 415,677 teu, and while exports saw a 1.4% decrease, empty containers jumped 21.6%.

“We are anticipating a robust summer season as consumer demand continues to drive cargo to our docks,” said Port of Long Beach Executive Director Mario Cordero. “We expect to remain moderately busy in the coming months.”

Across San Pedro Bay, the Port of Los Angeles moved 876,611 teu in June, making it the best June in the Port’s 115-year history, and halfway through 2022, the facility has handled more than 5.4m teu, off last year’s record-setting pace by just 0.26% – but more is coming.

“We’re already beginning to handle back-to-school, fall fashion and year-end holiday goods. Despite inflation and higher-than-usual inventory, we expect cargo volume to remain robust the second half of the year,” said Port of Los Angeles Executive Director Gene Seroka. 

PHOTO: The South Carolina Ports Authority has invested in truck chassis to ease the shortage. Credit: English Purcell, SCPA.