U.S. freight companies and unions are negotiating to avert a strike by railroad workers. This strike could create a series of negative effects on global supply chains struggling to recover from the pandemic and political instability between Russia and Ukraine.
Previously, containers were stuck at railroad yards in the US due to a lack of manpower and equipment. According to statistics from supply chain data provider project44, current wait time has increased to more than 2 days, an increase of at least 1 day compared to the beginning of the year.
In July, the US imported about $47 billion worth of goods from China, making the trans-Pacific route one of the most important routes for the world economy. Containers from Asia are usually unloaded from ships on the West Coast and then transported inland by rail.
Therefore, any disruption on this route could cause fares to rise again as transportation is delayed while the demand for road transport continues to increase.
Prior to that, freight rates had fallen steadily from last year's record levels due to weak consumer demand. Inflation is affecting personal spending and retailers are running out of warehouse space to hold inventory, limiting the need to ship more digital furniture and devices.
A strike by U.S. railroad workers could threaten shipments of consumer goods from China on some of the world's most lucrative trade routes. According to Drewry, the cost of shipping a 40-foot box from Shanghai to the US fell to $4,782 last week, the lowest since April 2021.
Red Rose (according to Bloomberg)
