I'm Fine. I'm Just Not Happy.
Welcome to Edition 4 of the Please Haul My Freight newsletter. Here are some of the items in my reporter’s notebook this week:
UP METERING: UP is restricting gate reservations on a dozen US lanes. One IMC source shared his story about one of the impacted lanes:
“We have a load in Chicago G-2 to Tacsim [Seattle-Tacoma] loaded since 9/17 with no gate reservation in sight. It’s an [aggregate] load. So agent advised our customer no more after this one and we may have to transload and truck it.”
The same situation is happening from Memphis to Seattle, and from Lathrop to Chicago. Here’s what another IMC told me:
“Those lanes’ gate reservations are blocked to only shipments that already had established gate reservation pools. No new contract or transactional spot business will be able to secure a gate reservation.”
PNW PART II: UP is also grounding ocean boxes in Seattle-Tacoma because of a lack of marine chassis. DCLI said street dwells are nine days in Seattle-Tacoma, the highest of any US market. The problem has gotten worse since Aug. 1, according to TRAC and DCLI. TRAC also identified another issue: domestic loads traveling in ocean containers from places such as Memphis/Chicago to Seattle. Ocean carriers allow domestic cargo to travel in their boxes to California and the Pacific Northwest to collect additional revenue. Once the domestic receiver unloads the cargo, the empty ocean container is placed back into international service. TRAC said street dwells on these moves have TRIPLED year over year in the Pacific Northwest.
NORFOLK SOUTHERN: It’s very easy to find out when there is a marine chassis shortage impacting UP or BNSF. But notices like this one capture my attention:
“Pursuant to Norfolk Southern’s Intermodal Rules Circular, Section 4.6.1 (Failure to Provide Chassis), this notice serves as notification to shippers of a chassis shortage, disabling private containers from unloading off of railcars. Effective immediately this rule will go into place at New Orleans, LA. We are suspending the $100 per container, per day charge for the remainder of 2021.”
NS invoked this clause on May 27 in Birmingham, Detroit, and Louisville. In other news, NS will reopen its Buechel, Kentucky terminal beginning Oct. 4 to imports from the Port of Virginia due to “continued strong growth in the Louisville intermodal market.” Buechel will be a Tier 1 terminal for free time calculation
DETENTION AND DEMURRAGE: There is a new case before the Federal Maritime Commission on detention and demurrage — Mohawk Global Logistics v. MSC USA. Mohawk alleges MSC (“Respondent”) cannot assess demurrage on a carrier haulage move due to its own failure to provide a door delivery during free time. In a carrier haulage move, the ocean carrier is responsible for the drayage.
“Since delivery was delayed, by their admission, due to lack of available trucks, Claimant asked Respondent to arrange for extension of free time on terminal, but those requests were denied. As Respondent set up earlier delivery dates, demurrage was advanced by Claimant, only to find out their trucking fell through again…Respondent could not deliver cargo for 2 weeks.”
From MSC’s response to Mohawk:
“But for the fact that the email address provided by the shipper was incorrect, delivery notices would have been received, charges resolved, and cargo delivered prior to the end of free time.”
Mohawk responded on Sept. 23, and if you have time, read the email chain between Mohawk and MSC disclosed on pages 29 to 51:
“MSC USA had plenty of excuses for charging Detention and Demurrage. First it was the arrival notice issue, then the winter storm, shortage of trucks, Christmas holiday, and finally the story that the warehouse could not take the cargo until December 28, only to be recanted when the facts were presented to them. This was an epic customer service failure that went from bad to worse.”
This case may set the D&D standards on carrier haulage, otherwise known as “door moves.” Read the filings and let me know what you think!
POP-UP STORAGE: Remember how UP reopened Global III this summer? BNSF reopened Harvard Yard outside of Memphis, and NS reopened yards in Greencastle, Pennsylvania, and Buechel, Kentucky. NS also opened an auxiliary lot in Jacksonville. The Georgia Ports Authority (GPA) also wants to open “pop-up” storage lots as alternative pick up sites, according to Griff Lynch, GPA’s executive director.
“We are canvassing locations to examine how we can fully utilized assets that may be underutilized to address the congestion. I don’t know if these pop-up locations will make a massive difference, but we’re going to give it a shot. If there were an easy solution to all of this, we would have all found it already.”
Lynch expects to have more details to share in a couple weeks.
3PL STUDY: Penn State and NTT Data unveiled their annual 3PL study recently. Researchers find the gap between the percentage of shippers saying “IT capabilities are a necessary element of 3PL expertise” and the percentage who are “satisfied with their 3PL’s IT capabilities” is unchanged since 2010. More than 94% of shippers said IT capabilities are critical, but only 58% are satisfied with their 3PL’s IT capabilities.
“The above details raise the question of whether or not the IT Gap is ‘stuck in neutral.’ A logical conclusion of the data indicates this may be true.”
With all the technology startups covered by JOC’s Eric Johnson in his LogTech Letter, it’s surprising the gap has not narrowed. Why do you think gap is static? And what can be done to close the gap?
Do you have an opinion on anything I wrote? Or do you have a subject you’d like me to include in my next newsletter? Email me firstname.lastname@example.org to send me your thoughts and please consider a JOC subscription. Pretty please.
The Buechel, Kentucky terminal will operate Monday-Friday 0800-1600. If an ocean box is notified on a Friday evening, for example, then Saturday and Sunday don’t count against the free window. If the free time expired before COB Friday, however, then Saturday and Sunday are considered chargeable storage days even if the gates are closed.