Trailer Bridge International’s Zach Monger Weighs in on Shipping Issues
Trailer Bridge International’s Director of NVOCC and Compliance Zach Monger recently sat down with Freight Business Journal Editor Chris Lewis to discuss current shipping issues and their impacts on US East Coast ports. In the article, Zach highlights a few of the challenges he sees with current customers and how they are impacting the ongoing push for nearshoring.
Read the full article below. For more on what’s going on at US East Coast ports, visit the full Freight Business Journal Issue 6 2024 here.
Article featured in Freight Business Journal Issue 6 2024:
Shipping issues prompt near shoring
The Red Sea issues haven’t had a major impact to US ports, but the Baltimore bridge collapse in March 2024 caused significant congestion on the East Coast, reports Zach Monger, director for NVOCC and compliance and non-asset transport operator Trailer Bridge.
While Baltimore now has a limited access channel, some cargo is being rerouted to East Coast ports like Norfolk and New York/New Jersey, putting strain on their capacity.
Moreover, says Monger: “With potential labour contract negotiations on the horizon at East Coast ports, and pre-peak season demand higher this year than in the past, West Coast ports are getting busier, as they are a viable alternative. This imbalance could lead to further congestion later. Shippers are also considering alternative ports like Savannah, Charleston, Jacksonville, and Houston to avoid congestion at major hubs.
“Overall, the global situation is causing delays and forcing shippers to be more flexible with their routing and scheduling.”
Bottlenecks are mostly prevalent in Asian ports in China, Vietnam or India but there are still quite a few in the US: “The situation is improving in some areas and getting more complex in others. The major congestion issues seen on the West Coast in 2023 have eased somewhat. However, the East Coast is facing its own set of problems.
“The collapse of the bridge in Baltimore caused disruption, and there’s concern about a potential labour strike later this year (September 2024) which could cause significant delays. Overall, bottlenecks still exist in the US, but they’ve shifted somewhat. The East Coast is a current concern, and the potential labour strike adds uncertainty.”
The good news is that some West Coast ports are functioning more smoothly. This means wait times and the number of anchored ships have decreased compared to 2023. However, Monger warns: “It’s important to note that this doesn’t mean congestion is completely gone. Delays can still occur, and there are concerns that the situation could worsen again.”
Meanwhile, high container rates are prompting shippers to consider near-shoring including from Mexico instead of Asia. There are several factors causing this, he explains: “Most importantly, cost reduction. The surge in container freight rates, especially from Asia to North America, makes nearby production in Mexico more attractive financially. It reduces overall shipping costs significantly.”
Furthermore, near-shoring reduces lead times, the time it takes to get goods from production to customers as distances are shorter compared to Asia.
Other benefits include supply chain resilience as near-shoring can make supply chains more resilient to disruptions like those seen recently such as port congestion in Asia, the war in Ukraine or the issues in the Red Sea. It reduces reliance on a single source – Asia – with its potential bottlenecks.
There are some other advantages to shifting manufacturing to places like Mexico, Central America or Dominican Republic. These countries offer a skilled workforce and have established infrastructure in addition to the benefits previously mentioned.
