West Coast Container Imports Boom
The Freight Logistics Optimization Works (FLOW) program has confirmed that there has been an influx of imports headed to the West Coast, which makes for some interesting news for truckers operating from the ports near the Pacific Ocean.
Cause
The reason for this increased rate of West Coast arrivals is two-fold. One is an increase of extremist activity happening in the Red Sea making it so that exporters from Saudi Arabia, India, and the like are taking their chances by going east rather than west. The other is that drought conditions in the Panama Canal are making it harder for countries such as Ecuador to send their exports via the Gulf of Mexico, causing them to instead travel up the Pacific Ocean instead.
“DOT and supply chain stakeholders are applying lessons learned from the pandemic-caused disruptions as it helps manage changes in freight traffic resulting from the reckless Houthi attacks against vessels in the Red Sea, as well as the reduction of traffic in the Panama Canal due to drought conditions,” The Department of Transportation stated on March 20th.
Effect
The effect is pretty much what you would expect: containers that would normally go to the East Coast instead make their way to the West Coast and travel the remainder of the journey by truck, either due to risk or feasibility. These turn of events create an increase in demand for trucks to ship these goods to the states on the eastern half of the country.
Conclusion
This increase in demand for using ports along California, Oregon, and Washington has not yet reached the intensity of the port backlog crisis seen in 2021. As such, it is a boon for the trucking industry as companies working overseas, either foreign or domestically, work to bring goods to American consumers. It will be interesting to see how long these events last: California saw similar drought conditions to what Panama is seeing now, but two consecutive Januaries of heavy rainfall reversed that. Panama will have to hope for a similar event so that the Panama Canal can properly reopen for business.
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