Market Update – Seattle Washington
In the past months, the national freight market has faced a slew of challenges stemming from increased demand, labor and equipment shortages, capacity issues, and new safety regulations. This combination of hurdles has overwhelmed the freight market, particularly in larger markets like Chicago and Los Angeles, where they are experiencing constant setbacks and delays. Today, we will be looking at Seattle to see how some of the problems hampering supply chains nationwide have affected its local freight market. To get a clear picture of what is happening in the pacific northwest’s largest freight market, we spoke with Transcon Manager Erin Barber.
Like many larger markets, Seattle has experienced its fair share of capacity issues in the past few months. One of the challenges that has led to capacity problems in the area is the result of rail traffic backups. In the past, imported freight arriving at the port in Seattle would often be loaded onto rail cars and transported to another larger transfer hub before being transferred to a truck for the final leg of its journey. With the current rail congestion and backlogs, importers are opting to transload cargo at the port directly onto trucks and send them straight to the final destination. This has led to a dramatic increase in full truckload rates being paid by shippers desperate to keep transit times as short as possible to avoid supply chain disruptions. In addition, more drivers are saying no to loads more frequently because they know there will be another load waiting to hire them minutes later. The Ltl market has not fared much better, as driver and labor shortages have left terminals overwhelmed with the increase in freight traffic and unable to keep up, leading to more high rates and long transit times.
With so much congestion and backup on the rails and in the market in general, warehousing and storage of freight waiting to be transported have also become more complex. Traditionally, freight providers have been able to accommodate LCL (less than container load) freight at a single or a small number of container freight stations within their network. As the freight gridlock has increased, so has the need for warehousing space, forcing providers to seek third-party container freight stations to handle the overflow of cargo waiting to be broken down, consolidated, and shipped out. In fact, shipments that require additional equipment or labor in order to load and unload them efficiently, such as unpalletized or floor-loaded cargo, have started to be rejected by providers that lack the time and resources for any loads that will further slow down their freight network.
The chaos of the freight market shows no sign of slowing down in Seattle. As congestion builds up in other west coast markets like Los Angeles, shippers look to shift their cargo toward less inundated areas. Because Seattle is a smaller market, many shippers have rerouted freight there, thinking they would beat the crowds in L.A. This has resulted in more backups in Seattle as they try and handle the overflow, which in turn causes shippers to move back toward Los Angeles, creating ping-ponging waves of overflow in both markets as shippers search urgently for fewer delays and shorter transit times.