Freight Market Update For Houston, TX

Transcript

Market Update – Houston Texas 

As part of our continuing market update series, where we look at local shipping markets across the country to see how they have been affected by the current environment in the freight industry, today we will be examining the local market in Houston, Texas. National challenges such as increased freight tonnage, capacity issues, labor and equipment shortages, new safety regulations, and higher rates have affected local markets in different ways. Many traditionally larger markets are experiencing long delays and congestion, resulting in some nearby smaller markets being saddled with freight overflow from shippers looking to circumvent the backups in the larger hubs and avoid supply chain disruptions. To get an idea of how the freight market in Houston has been impacted, we spoke with Transcon manager Brandi Mills, who provided insight into some of the obstacles facing Texas’s most prominent shipping hub.

 

Overflow

Covid has turned shipping upside down in the last two years. The freight industry has experienced a significant increase in e-commerce and other freight while being hampered by reduced capacity, fewer available drivers and trucks, and new safety regulations that have slowed shipping processes to a crawl. This congestion has led to an overflow of freight being rerouted to the Port of Houston by the struggling air and sea market, resulting in previously unseen cargo volumes being funneled through the Houston area as shippers look to avoid crowded coastal ports and busier air freight terminals in the country. Shipments routed through the Port of Houston are being consolidated and transloaded onto full truckloads for their final leg of transit. The massive freight overflow has led to the number of outbound full truckloads doubling nearly every month for the last year, with no sign of letting up anytime soon.

 

Port of Houston

The Port of Houston has become a popular reroute for importers looking to avoid the backups currently being experienced at the east coast and west coast ports. And while the port cannot accommodate as many larger vessels as some of the coastal ports, resulting in some delays, it maintains a fairly robust turnaround time for offloading imported containers, which has led to shippers and carriers routing ships to Houston instead in the hope that they can get their cargo off of boats and transloaded onto trucks faster than can be accomplished in Los Angeles or New York.

 

Trucking Capacity 

With the increase in traffic at the Port of Houston and the number of shippers looking for full truckloads going outbound from the Houston area, trucking capacity has been stretched thin, forcing companies to expand their carrier pools beyond those they traditionally work with in order to accommodate the growing freight tonnage requiring trucks and drivers. Luckily, the Houston market has not had as many issues with driver and equipment shortages as some other markets. Though it has been a logistical challenge to find capacity and rates have skyrocketed, so far, providers have been able to coordinate the increase in full truckloads, even some same-day trucks, without significant problems or major delays.

Local cartage capacity has also been stretched thin, and though the network of regional carriers has been mostly sufficient for handling the increased freight overflow, additional communication and coordination have been paramount to making sure capacity is available and cargo can be moved on time.

 

Labor 

From drivers to warehouse workers, freight markets throughout the country have struggled to meet the labor needs necessary to handle the growth in freight. In Houston, many warehouse managers have remained committed to maintaining a core workforce with the experience and dedication to keep logistics running as smoothly as possible. However, the temp labor pool, which providers rely on to be flexible and accommodate seasonal upturns in freight, has shrunk significantly, making it difficult to flex up and down with surges in the market.

 

Advice for Shippers in Houston

The best way for shippers to adapt to the myriad challenges facing the shipping market in Houston right now is to practice planning, communication, and patience. The further ahead shipments can be scheduled, and the longer the lead times provided by shippers, the more chance at securing capacity and better transit times for a load. Open lines of communication between shippers and carriers are critical to ensure both sides can adjust when unforeseen obstacles arise, as they often do in today’s chaotic shipping landscape, and to manage the expectations of customers and distributors. With the increase in international reroutes and additional freight tonnage coming into Houston, carriers are not able to provide some of the turnaround times for same-day pickups or expedited transit times that they had been able to in the past. Information must be communicated effectively so that shippers and carriers are on the same page regarding expectations, especially because these market trends show no sign of slowing down.

Image of trucks lined up in a parking lot

Market Update – Houston Texas 

As part of our continuing market update series, where we look at local shipping markets across the country to see how they have been affected by the current environment in the freight industry, today we will be examining the local market in Houston, Texas. National challenges such as increased freight tonnage, capacity issues, labor and equipment shortages, new safety regulations, and higher rates have affected local markets in different ways. Many traditionally larger markets are experiencing long delays and congestion, resulting in some nearby smaller markets being saddled with freight overflow from shippers looking to circumvent the backups in the larger hubs and avoid supply chain disruptions. To get an idea of how the freight market in Houston has been impacted, we spoke with Transcon manager Brandi Mills, who provided insight into some of the obstacles facing Texas’s most prominent shipping hub.

 

Overflow

Covid has turned shipping upside down in the last two years. The freight industry has experienced a significant increase in e-commerce and other freight while being hampered by reduced capacity, fewer available drivers and trucks, and new safety regulations that have slowed shipping processes to a crawl. This congestion has led to an overflow of freight being rerouted to the Port of Houston by the struggling air and sea market, resulting in previously unseen cargo volumes being funneled through the Houston area as shippers look to avoid crowded coastal ports and busier air freight terminals in the country. Shipments routed through the Port of Houston are being consolidated and transloaded onto full truckloads for their final leg of transit. The massive freight overflow has led to the number of outbound full truckloads doubling nearly every month for the last year, with no sign of letting up anytime soon.

 

Port of Houston

The Port of Houston has become a popular reroute for importers looking to avoid the backups currently being experienced at the east coast and west coast ports. And while the port cannot accommodate as many larger vessels as some of the coastal ports, resulting in some delays, it maintains a fairly robust turnaround time for offloading imported containers, which has led to shippers and carriers routing ships to Houston instead in the hope that they can get their cargo off of boats and transloaded onto trucks faster than can be accomplished in Los Angeles or New York.

 

Trucking Capacity 

With the increase in traffic at the Port of Houston and the number of shippers looking for full truckloads going outbound from the Houston area, trucking capacity has been stretched thin, forcing companies to expand their carrier pools beyond those they traditionally work with in order to accommodate the growing freight tonnage requiring trucks and drivers. Luckily, the Houston market has not had as many issues with driver and equipment shortages as some other markets. Though it has been a logistical challenge to find capacity and rates have skyrocketed, so far, providers have been able to coordinate the increase in full truckloads, even some same-day trucks, without significant problems or major delays.

Local cartage capacity has also been stretched thin, and though the network of regional carriers has been mostly sufficient for handling the increased freight overflow, additional communication and coordination have been paramount to making sure capacity is available and cargo can be moved on time.

 

Labor 

From drivers to warehouse workers, freight markets throughout the country have struggled to meet the labor needs necessary to handle the growth in freight. In Houston, many warehouse managers have remained committed to maintaining a core workforce with the experience and dedication to keep logistics running as smoothly as possible. However, the temp labor pool, which providers rely on to be flexible and accommodate seasonal upturns in freight, has shrunk significantly, making it difficult to flex up and down with surges in the market.

 

Advice for Shippers in Houston

The best way for shippers to adapt to the myriad challenges facing the shipping market in Houston right now is to practice planning, communication, and patience. The further ahead shipments can be scheduled, and the longer the lead times provided by shippers, the more chance at securing capacity and better transit times for a load. Open lines of communication between shippers and carriers are critical to ensure both sides can adjust when unforeseen obstacles arise, as they often do in today’s chaotic shipping landscape, and to manage the expectations of customers and distributors. With the increase in international reroutes and additional freight tonnage coming into Houston, carriers are not able to provide some of the turnaround times for same-day pickups or expedited transit times that they had been able to in the past. Information must be communicated effectively so that shippers and carriers are on the same page regarding expectations, especially because these market trends show no sign of slowing down.

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