There is some talk that the long-snarled supply chains are loosening up. From our perspective, that hopeful thinking is a lot more hoping than thinking.
This is still a tangled mess, and it’s going to need a pressure release.
Let’s start with the limited good news that’s fueling some of the premature optimism. It is true that the trucking market is softening. A bit. But that welcome development falls into a larger scene that is still replete with problems.
The drayage market is still incredibly tight. And if something has to go from a port yard to a rail yard, there’s a high risk of no available chassis to take it. That means that while the middle miles are cheaper than they were, the first mile is still very expensive.
Then there’s the last mile, where the warehouse market remains exceedingly tight. If you want to point to one knot in the supply chain that explains why the whole thing is still incredibly tangled up – which is why the pressure release is needed – that’s it.
A shipper sitting around with tons of containers needs to go somewhere with them. The best move for that shipper is to start blocking out warehouse space now – even if it’s for some point in the future – and hold that space. It’s a lot cheaper than demurrage, and it gets shippers working toward strategies for overflow protection that they’ll need over the long term.
The supply chain needs a pressure release. If shippers start going to work securing warehouse space for their containers, that might be just what the system needs. Because as it stands right now, consumers are paying the heaviest price (but obviously not the only price) for the still-very-tangled supply chain.
By the way, as always, pop.capacity is the best source for finding the warehouse space that’s perfect for you. So let us do the searching. Maybe that pressure valve is finally about to be opened.
