Paul Brashier, vice president of drayage and intermodal at ITS Logistics, discusses the impact of Lunar New Year on the supply chain, port visibility in the last two years, and what lies ahead for the supply chain industry.
Lunar New Year is generally a major time of the year for imports and the transportation associated with it, but this year it was muted, Brashier says. For on thing, there’s too much inventory sitting idle in DCs and warehouses throughout North America — not just retail, but commodity-based as well. “Right now, we're seeing that we're not going to have much of a lift,” he says. “We’re keeping the same cadence of low volumes that we saw in December and probably are not going to see any lift until we get into Q3 or Q4 of this year.”
At the same time, so much capacity and infrastructure was put in place over the last 18 months that any lift that comes from Asia is likely to be absorbed fairly easy. “We're not going to see any major disruptions throughout the supply chain when it comes to ports or terminal activity,” Brashier says.
The inflationary pressures that so many companies feel right now is not as big a factor in Brashier’s world. “Drayage costs are down. You're seeing space for a 40-foot box from East Asia at $2,000 [to] $3,000. A year ago, that was $20,000 to $30,000. So anything that might cost some inflationary pressure is not coming from transportation.”
Brashier says efficiency has been maximized in drayage. “Terminals and port authorities are putting in vast amounts of infrastructure to make sure that we don't run into bottlenecks again.” Going forward, that will be a priority for the industry. “We're working ahead of issues and not reacting to them when they occur.”
Timely, incisive articles delivered directly to your inbox.