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Record dray rates at NY-NJ resulting from container backlog
Source
American Shipper
Post Date
04/05/2021

DEMAND from shippers looking to clear the backlog of containers at the Port of New York and New Jersey is soaking up drayage capacity and driving up spot rates for hauling containers to regional distribution centres.

With the months-long surge in imports expected to continue through the second quarter and cargo flow slowed by weather delays in February, drayage utives expect spot rates will stay elevated at least until April and maybe into June.

Load board provider DAT shows that rates for hauls of about 200 miles from Elizabeth, New Jersey, were at or near 12-month highs in the first week of March.

DAT quoted the rate to the Boston region at US$1,135 in February, up from $787 a year earlier. The rate has risen even more, reaching $1,178 as of March 8.

Paul Miller, vice president of Northeast field operations at drayage provider RoadOne IntermodaLogistics, said he has been fielding more calls from prospective customers looking for any available trucks, at any price, to pull containers out of the NY-NJ port and mitigate rising terminal storage fees.
"The container backlog has been relentless since June," Mr Miller said. "I get emails saying name your price." He said a shipper recently offered to pay $4,000 to bring a container from NY-NJ to Massachusetts; that trip may typically cost between $1,300 and $1,440.

Despite being one of the largest drayage providers in the Northeast, Mr Miller said all of his companys available trucks have been allocated to long-term customers.

"Our capacity has been going to long-term customers," Mr Miller said. "It doesnt matter whats the price because I cant take the capacity away from our regular customers."

With the surge in spot rates, Mr Miller said RoadOne has had to increase driver pay 15 per cent on average to keep drivers in their seats.
"They have so many other options available to them, such as final mile and Amazon-type delivery," Mr Miller said. "Even the over-the-road market is stronger."

MR Miller said the fores he has received from shippers is that demand will stay strong at least through June as seasonal inventories build up, stimulus checks prompt more shopping, and stores up as Covid-19 lockdowns .

"This will be a year-long peak season," Mr Miller said.

Drayage rates in the Northeast are one symptom of the acute port congestion occurring across much of the US. The Port Authority of New York and New Jersey said January 2021 volumes were up 16.9 per cent from a year ago to 721,284 TEU, reports IHS Media.
In addition to higher volumes, two snow closures at the NY-NJ ports during February added to the backlog.

With more boxes at the port, shippers are facing longer waits to outgate containers. Hapag-Lloyd said in a customer alert at the ning of March that it would take up to 15 days to reserve a truck to haul containers from the NY-NJ ports. The lead time for truck power at NY-NJ has been unchanged since mid-January, according to Hapag-Lloyd.


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