11/21/2023

Navigation Still Required: Ports and Drayage Outlook 2024

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A guest blog post by Richard Jung, Vice President, Port Services

Aerial of port drayage yard

After weathering recent storms, the North American port ecosystem can expect improving stability alongside new complexities in 2024. The ebbs and flows of demand should return as excess inventory wanes in distribution centers, yet lasting economic uncertainty may temper volumes. Labor dynamics will remain crucial to monitor, but West Coast disruptions may ease relative to US East and Gulf ports. While operations will ramp up, challenges from fuel costs and driver shortages will test providers. Disciplined planning and partnerships will be essential to overcoming headwinds as supply chains rebalance.

On the demand side, we can anticipate volumes climbing back toward pre-pandemic levels after inventory drawdowns subside. Peak season intensity should resume as well. With ILWU labor peace on the West Coast, the concern shifts to East and Gulf Coast negotiations. Growth will likely be more robust on the West Coast as shippers rebalance routes and the South Atlantic market will continue to be attractive to those seeking some supply chain diversity. Even so, elevated inventory levels will persist for some industries. This underscores the value of port-proximate transloading to align with precise shelf needs, as shippers continue to search for the right balance between just-in-time and just-in-case inventory strategies. 

Operationally, drayage will face margin pressure from escalating fuel costs and the ongoing driver shortage. The industry must enhance driver recruitment and retention to meet demographic challenges. Adoption of safety technologies and equipment can also improve efficiency. While electric trucks are progressing, often due to the pressure of clean air initiatives, more charging infrastructure is needed to scale these operations to make any meaningful impact across the industry. Automation remains a longer-term prospect in drayage’s complex setting. 

To prepare for 2024, shippers should diversify ports, carriers, warehouses, and suppliers. Routes and locations that mitigate risk are essential, as are partners offering flexibility and transparency.

Logistics providers like NFI are honing offerings and assets to align with customer needs. Investments in people, facilities, equipment, and technology will enable responsive, resilient and cutting-edge supply chain services. Above all, the constant pursuit of continuous improvement and preparedness will allow 3PLs to deliver when challenges arise.

With careful planning, flexibility and trusted partnerships, 2024 can mark a turning point toward supply chain stability. As operations ramp up, those who are ready to respond to both familiar and unexpected hurdles will thrive. By bracing for change and forging ahead, the ports and drayage community can navigate toward more reliable performance.

Richard Jung, Vice President, Port Services

With over 30 years of international transportation experience in the ocean carrier and logistics provider arena, Jung provides sales leadership to promote and grow NFI Cal Cartage’s drayage portfolio. To stay up-to-date on drayage and other industry news provided by Jung, subscribe to NFI Cal Cartage’s port drayage newsletter, Pier to Pier.