Peak Season Creates Potential for Congestion Warn U.S. Forwarders

U.S. forwarders are raising concerns over the lack of effort to improve supply chain resilience. A surge in traffic could cause overwhelm the system and result in the same congestion challenges seen between late 2020 and spring last year, forwarders are warning.

According to the Institute for Supply Management, supplier delivery performance improved in April for the seventh month in a row, reaching its best level since March 2009.

A global forwarder noted that issues with drayage, rail transport and technology persist. Drayage operators and forwarders reported that the supply of chassis remains in short supply so a volume surge would result in congestion. The forwarder highlighted that current smoother flows reflect reduced volumes in the system and not because of improved infrastructure or processes.

Staffing challenges were diagnosed as a key factor responsible for a poor operational performance record for Class 1 railways. However, an inability to increase staffing levels continues to hamper improvements in service and performance.

The same forwarder cautioned that airports could again face the risk of lengthy delays. Freight is shifting back to original gateways with the resurgence of passenger flight and the downward pressure on airfreight rates and yields. Consequently, this is stretching wait times for truckers at airports.

A second global forwarder however, was unconcerned about potential bottlenecks at the ports. They noted that a diversification shift meant cargo now moves through gateways rather than into the popular U.S. West Coast ports.

According to the near-term outlook, import projections indicate a late and relatively moderate peak season in 2023, although the situation remains fragile and could change at a moment’s notice.

Source: The Loadstar?