IN THE NEWS: FreightWaves NOW: Paul Brashier on LA/LB impact on Gulf and Atlantic ports

FreightWaves
Dec 19, 2023
Kaylee Nix and Anthony Smith

FROM THE INTERVIEW: “We have our next live guest ready to go. We have Paul Brashier joining us from ITS Logistics, talking a little bit about some changes that are going on the Gulf Coast and Atlantic Ports. Now that we are seeing reduced traffic thanks to restrictions at the Panama Canal. Paul, thank you for joining us this morning and of course Panama Canal issues is the top story for a lot of folks right now to continuing to see reduced traffic. How are the Gulf Coast and Atlantic Coast ports fairing so far?” asks Kaylee Nix, Senior FreightCaster

“Things have kind of stayed the course. The way contracts are working, you are locking into a contract either January, March, or April for the year. A lot of folks stay away from the West Coast because they went through labor negotiations, booked annual contracts in the East Coast. When you get into January and March of 2024, they are going to start seeing more shippers migrate back to the West Coast. That is because the transpacific route is quicker, it is going to be a lot more cost effective. You have some geopolitical issues with the red sea right now. You have the Panama Canal that is restricting some flow. There will be some natural migration back to the West Coast from transpacific freight and that will migrate off the Southeast and the Gulf Coast. There are lines of business that are going to stay there since infrastructure was put in place. There are new industries that are going in. I’m down here in Galveston Texas. I can see the ships lining up off the coast. They are steadily coming in. A lot of that freight, especially in the Gulf Coast in Huston Texas market is infrastructure related freight, project freight, energy, oil and gas etc. There are some natural industries that stay but you will see a migration as we get next year back into the West Coast. One thing we are going to be keeping an eye on if the West Coast can handle the new volumes and any increases—you know what is probably going to be the first time in a couple years.” Paul Brashier.

“And Paul we are looking at this transition happening. Can you talk to whether this is maybe some advantageous timing. We are looking at the time of the year where a really huge retail pull right now because we are already in the retail swing. There is usually a little lull going into the beginning of a new year. Is this advantageous timing and is this something we can expect going into the middle of 2024?” asks Anthony Smith, Chief Economist.

“From the data we are seeing right now, there is strong potential for a Lunar New Year peak. Right before Lunar New Year, you will see shippers restock inventory. A lot of what we are seeing for inventory of a lot of the shippers and retailers is that they have eaten through the last 18 months of inventory that they have had. Now they are going to restock and that is usually done before the Lunar New Year shutdowns for transpacific freight. For the first time in a couple of years we are going to have a real Lunar New Year peak at the beginning of the year that should lift rates going into contract season. We will see just how much inventory is brought back in. Keep in mind that..." Said Paul Brashier, VP of Drayage and Intermodal at ITS Logistics.

Listen to the full interview here.