Canada pours cash into developing global trade links outside the US
The Canadian government has been aggressively pursuing trade agreements with partners around the world to ...
Eduard Goricev
Wild shifts in traffic volumes caused by Washington’s policy changes on tariffs are also posing a challenge for US drayage firms.
And for smaller players, the steep drops pose an existential threat – the bright future promised by the Trump administration may arrive too late for small drayage firms that rely on steady volumes to cover their costs.
Hence, the sharp drop in container traffic entering the US last month, after US importers had paused or cancelled orders for goods from China, set off alarm bells.
Imports at the port of Long Beach slumped 20.9% year on year in May, while neighbouring Los Angeles registered a drop of 8.5%. Up the west coast, imports going through terminals at Seattle and Tacoma fell 17.3% and 39.4% respectively. In terms of value, China’s exports to the US were 34.5% down on May 2024.
Matt Schrap, outgoing CEO of the Harbor Trucking Association, a coalition of drayage operators in California and Washington, predicted a dire future for drayage firms and jobs in warehousing and retail.
The light at the end of the tunnel is coming from an oncoming train, he said last month.
The impact was most pronounced on the west coast, but other US container gateways have felt repercussions, said Donna Lemm, chief commercial officer of IMC, which provides drayage services at all major US ports and key inland intermodal hubs. Ports on the US Gulf coast saw declines in volume as sailings were pulled, she added.
Thanks to its nationwide footprint and a diversified portfolio, IMC came through the downturn with relatively steady volumes until about three weeks ago, when it registered a decline in traffic. For small operators it has been hard to survive, Ms Lemm said. With the ongoing freight recession, which has weighed on the trucking sector for two years, the outlook for small firms is concerning, she added.
The coming weeks should provide some relief, as imports from China ordered after the détente in the US-China trade war early last month are beginning to arrive on the west coast. Indeed, on Tuesday IMC saw the first of this traffic reach California, Ms Lemm reported.
The National Retail Federation predicts elevated import volumes through August, due to the 90-day pause in US tariffs on China origin goods. But, another twist in the negotiations between the two governments could bring about another shift in volumes.
While the rollercoaster so far has not had a big impact on IMC’s business, “planning has been very challenging,” said Ms Lemm. Right now, the company is bracing for the surge in imports, which she expects to play out across the US.
Still, the Federal Maritime Commission’s assertion of truckers’ free choice of chassis on merchant haulage shipments in Memphis, Chicago, LA and Savannah has been ignored by some carriers, which harbours the risk of a repeat of the problems seen three years ago.
Ms Lemm noted that to date no fines had been levied on carriers that continue to violate the ruling, which does not bode well for situations where chassis availability is tight.
“Until we see penalties, we will see no change,” she said.
The uncertainty surrounding US maritime imports has slowed IMC’s expansion drive, but only temporarily, said Ms Lemm, adding: “This quarter we have stood still, but the intention is we will continue our expansion.”
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