The global logistics industry is on pace to reach a staggering $6.55 trillion by 2027, with the vast majority of its market size coming from multimodal shipping operations. However, recent years have held unprecedented challenges for companies offering multimodal shipping services. Facing an ongoing chassis shortage, persistent labor issues, and looming port slowdowns from new legislation, logistics professionals face a challenging multimodal shipping environment. We've dug into three challenges facing multimodal shippers and how improved ocean freight visibility can help.
Labor Woes Complicate Rail Transit
As recent labor issues have made headlines, multimodal shipping providers have been taking notice. Transportation industry strikes on either side of the Atlantic threaten to complicate multimodal shipping operations.
U.S. freight rail workers are currently threatening the most headline-grabbing of these strikes. The strike, narrowly avoided in September when labor unions and freight rail companies reached a tentative agreement, is back on the table after several labor organizations refused to ratify the tentative agreement. Although the Brotherhood of Maintenance of Way Employees Division (BMWED) pushed the end of their mandated cooling off-period to December 1, the threat of a rail strike persists.
If a freight rail strike should occur, it could cost the U.S. economy an estimated $2 billion per day.
While a freight rail strike is not a sure thing, shippers are considering contingency plans to satisfy their customers' growing demand for multimodal shipping. By gradually reallocating rail shipments to truckload and, in some instances, LTL transportation, some multimodal shipping providers hope to avoid the worst repercussions of a freight rail strike.
In an interview with CNBC, Brian Bourke, CEO of SEKO Logistics, was quoted as saying, "If you are in logistics and you are not already scenario planning for a potential work stoppage, you may be behind the curve right now ."
As multimodal shipping professionals prepare to face a freight rail strike, some are retrofitting outdated tech stacks with improved freight visibility software. Freight visibility software can be integrated seamlessly into existing tech stacks, providing the efficiency of an application programming interface (API) without overhauling operations. Automated exception alerts, paired with integrated freight visibility communication capabilities, help shippers react to labor issues the moment they start affecting operations.
Chassis Shortage Exacerbates Capacity Crunch
A chassis is a trailer or undercarriage unit specifically for transporting shipping containers. Without a chassis, it becomes impossible to transport containers from one mode of transportation to the next, making them vital to multimodal shipping processes. A lack of chassis means containers can end up sitting on ships, unloaded, at ports for days, or waiting weeks in rail yards.
Yet despite the importance of chassis, multimodal shipping professionals throughout the United States are still looking for the chassis they need to continue multimodal shipping operations.
Trouble on Each US Coast
In August 2022, 94% of drivers hauling cargo at the Port of New York and New Jersey said they sent workers home because of a lack of chassis, according to a survey conducted by the Association of Bi-State Motor Carriers.
But it's more than just the East Coast that's seeing multimodal shipping operations affected by the chassis shortage. On the West Coast, TRAC Intermodal, a leading chassis provider, was briefly forced to close its chassis pit at the high-volume Port of Oakland, leaving many multimodal shippers without a feasible means of transporting containerized goods.
A representative of Trac Intermodal, which has 180,000 chassis across the U.S. after investing more than $1 billion over the past decade, told Supply Chain Dive, "they're getting consumed on the street three times longer than what they historically have been."
Adding More Chassis is Not Enough
Increasingly, multimodal shipping organizations and industry groups have been pushing for large-scale solutions to the chassis crisis. Recent deals, such as the October deal between TRAC Intermodal and LB Steel and Integrated Industries, promise to bring more chassis to American shippers.
However, solving the crisis isn't simply a matter of adding more chassis; it will also take an improved allocation of the chassis already in the system.
Consolidated Chassis Management plans to grow the "South Atlantic Chassis Pool to about 85,000 chassis from its current 60,000 over the next seven years and lower the pool's utilization rate to between 73% and 75% to improve availability," the company’s CEO, Mike Wilson, told Supply Chain Dive.
How Improved Ocean Freight Visibility Will Help
Yet, for many multimodal shippers, these solutions offer too little, too late. The chassis shortage has complicated multimodal shipping processes for years, and innovative multimodal shipping companies have turned to improved ocean freight visibility as a solution. Ocean freight visibility allows shippers to maintain real-time visibility over their multimodal shipping operations, ensuring they can predict and avoid costly slowdowns and exceptions from an ongoing chassis shortage.
Looming Construction Could Cause Chaos
The Inflation Reduction Act (IRA) allocates $3 billion toward ports, stipulating that the funds not be used to invest in fully automated technologies. The goal of the grants is to purchase and invest in sustainable technologies and strategies at ports, hopefully reducing transportation sector emissions, which currently account for 27% of U.S. greenhouse gas emissions.
However, it's not all good news for shippers. While the IRA is ultimately designed to improve multimodal shipping, the industry will undergo some growing pains along the way. The billions allocated to port construction through the IRA will undoubtedly close berths at ports across the nation, forcing shippers to reallocate freight as construction begins to improve a port's sustainability.
Those construction slowdowns at ports could prove problematic for shippers already dealing with the historic capacity crisis, looming threats of massive strikes, and ongoing equipment shortages. However, slow-moving trends can be complex for shippers to spot without accurate freight visibility. Cloud-based analytics, accessed through an ocean freight visibility provider, can give multimodal shipping professionals the birds-eye view they need to understand the ins and outs of their supply chains. With an API-enabled ocean freight visibility provider, multimodal shipping professionals can see and react to global logistics trends.
Facing a Complicated Multimodal Shipping Landscape, Today’s Shippers Need OpenTrack
With OpenTrack, shippers can access the latest in ocean freight visibility. OpenTrack’s cloud-based ocean freight visibility technology, easily integrated into an existing tech stack, ensures that multimodal shipping companies can face labor issues, chassis shortages, and new legislation without affecting operations. With OpenTrack, multimodal shipping professionals can implement a broad range of multimodal freight visibility innovations:
- Automated Exception Alerts
- Cloud-Based Analytics.
- Real-Time Multimodal Container Track and Trace
These freight visibility assets, easily accessed through a platform-agnostic API, mean that shippers have instant access to the latest innovations in freight visibility across all modalities. With a broad range of challenges facing multimodal shipping, today’s multimodal shippers can’t afford to operate in the dark. Book a demo with OpenTrack today, and shed light on your logistics.