We in the transportation industry faced another extremely tough year full of challenges in 2015. It would be nice to have a few years when revenue is up, costs are down and we can breathe a little easier, but it doesn’t look as if we will get that kind of break anytime soon.
Two of the biggest challenges the industry faces now and into the foreseeable future are the delays in widening the Panama Canal and the delays in raising the Bayonne Bridge. Shippers and carriers alike need to plan for the future and bringing bigger ships to the East Coast is an important subject for the whole supply chain. Carriers that favor the Panama Canal can’t really make a solid plan in increasing ship size to the East Coast until the new Panama Canal is fully operational and shippers can’t plan distribution centers until they know the extra tonnage can make the journey. Even if the canal widening wasn’t delayed, the announcement that raising the Bayonne Bridge would not be completed on time would hinder increased tonnage on the East Coast because without a viable call at New York and New Jersey port, an expanded service on the East Coast isn’t feasible.
Carriers are still expected to carry intermodal freight and offer all-in rates for at least a one-year period. This is possible when you can figure your own in-house costs for a year and even doable when trying to calculate rail costs, as most carriers sign contracts with the rails for at least a year. The real wild card in this equation is when we are expected to offer intermodal rates with a trucking component for a year’s time. With the nationwide trucking shortage, not many truckers are willing to commit to a price for an entire year. Shippers may balk at this, but there needs to be a way for carriers to renegotiate a trucking component when there is a sharp spike in the cost. There is simply not enough room in the current rates to absorb sharply escalating trucking charges.