Shipping Overseas with bad weather
Source by JOC
Severe weather slowing down the manufacturers with snow and freezing rain diminishing visibility on U.S. highways have an impact on the U.S. economy. Institute of Supply Management’s latest economic index of January PMI index of factory activity, released Feb. 3, declined 5.2 percentage points from December to 51.3, its eighth straight month of growth but its lowest reading since October 2012.
The ISM New Orders Index dropped 13.2 percentage points in January to 51.2 — that index’s biggest plunge since 1980 — while the Production Index fell 5.6 points to 54.8, both indications the economy is growing at a slower pace in early 2014.
Shipments delayed by bad weather
The Suppliers Deliveries Index, which rose to 54.3, an 0.6 point increase from December and a 1 point increase from November. That jump confirms that this year’s frigid weather is hitting supply chains in their weak points. The higher the SDI rises, the slower deliveries get. Since early December, storms have repeatedly hit the Midwest, Northeast, Mid-Atlantic and Southeast.
Flight disruptions alone estimated at U.S. $2.5 billion in lost productivity and productivity in January, ABC News reported, with airlines losing between $75 million and $150 million, according to cloud-based data and software company MasFlight.
Hilsenbeck said the weather, particularly in the Midwest, has left some warehouses and plants short-handed (schools close, and somebody's got to watch the kids) and has slowed the unloading of containers and trailers and the overall velocity of the system.
“It’s affecting us all,” Jeff Heller, vice president of intermodal and automotive marketing at Norfolk Southern, said in reference to the frigid weather of early January at the SMC3 JumpStart 2014 conference in Atlanta Jan. 21. “We have more failures on the locomotive side, and when we get the trains running, traffic backs up at our terminals.” That was a full week before a three-inch snowstorm caused massive gridlock in Atlanta Jan. 28, an epic mess
that wasn’t fully cleared for days. Even without snow, Atlanta is the fourth worst city in the U.S. for truck delays, costing businesses $775 million a year, according to the 2011 Urban Mobility Report from the Texas Transportation Institute. While Atlanta was stuck in what could be called
“snowlock,” the Southern winter storm closed ports from Virginia to Texas.
Expediters could benefit
Making money while the snow falls, i is the expedited transportation companies that provide emergency services that keep production lines moving when supply chains get snarled.
In the meantime, shippers throughout the country have little choice but to plan for unexpected delays and, where possible, try to add a mid-winter cushion to their supply chains.
Container volumes moving through West Coast ports in 2013 increased 2 percent compared to 2012. Loaded import containers also increased 2 percent, as did loaded export containers, according to numbers posted on the website of the Pacific Maritime Association.
Los Angeles-Long Beach led the way last year for West Coast ports. Total container volume at the Southern California port complex increased 2.7 percent. Oakland was up 2 percent. Total container volume in Seattle-Tacoma declined 2.2 percent, and Portland was flat compared to 2012.
Carriers are deploying their largest vessels in the North American trades in services to Los
Angeles-Long Beach, and this could help to explain why the Southern California ports are growing at the expense of the Pacific Northwest ports.
Containerized imports, for example, were up 3.5 percent in Los Angeles-Long Beach and 1.2
percent in Oakland. The normal rotation of Pacific Southwest services has vessels calling Los Angeles-Long Beach inbound, and then calling in Oakland before returning to Asia.
When focusing only on the month of December, it appears that the trends that were underway
throughout 2013 intensified at the end of the year. Total container volume at Los Angeles-Long Beach in December increased 7.2 percent over the same month in 2012, with imports up 3.2 percent and exports increasing 15.6 percent.
U.S. imports are expected to drop noticeably later this month due to the Chinese New Year
celebration in Asia as many factories close for two weeks or longer. However, exports could continue to grow as the export trade works toward its traditional peak month in March.
Air freight Consolidation Services can be accessed to expedite shippers' orders that are experiencing slowdown by the severe weather. Special consideration will be offered. Contact ETC International Freight System for alternative shipping methods at low consolidated freight rates (1-800-383-3157, www.etcinternational.com)
