Market Update June 2024

Industry Market Trends

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

  • CVSA Roadcheck Impact: The CVSA International Roadcheck, which occurred in mid-May, resulted in temporary capacity tightness and an uptick in spot rates, particularly affecting already constrained regions. Carriers faced increased inspections, leading to a short-term reduction in available trucks on the road.
  • May Produce Season Surge: The month of May saw a significant increase in full truckload demand driven by the produce season, particularly in regions like California, Florida, and Texas. Key produce hubs such as McAllen, TX, and Nogales, AZ, experienced heightened activity, leading to tighter capacity and higher spot rates in these areas.
  • June Produce Season Continuation: The produce season will continue to drive demand through June, with an emphasis on regions like the Pacific Southwest, Texas, and the Southeastern United States. Expect ongoing tight capacity and elevated rates in these produce-heavy regions as harvesting peaks. As the summer progresses, agricultural shipments will remain strong, maintaining pressure on truckload capacity. Rates are likely to stay elevated in produce-centric areas, with potential easing in non-produce regions as capacity rebalances.

Ocean, Air, Port, and Intermodal Impacts

  • Increased Port Congestion: Major ports are facing congestion due to higher import volumes, with disruptions from geopolitical tensions and severe weather impacting schedules. Ocean freight rates are expected to stay high, influenced by continued port congestion and increased demand for summer goods.
  • Intermodal Volume Growth: Intermodal freight volumes have seen substantial growth, particularly in the international segment, which increased by 18% year-over-year through March. This trend is expected to continue into June as more shippers opt for intermodal solutions to mitigate truckload capacity constraints and leverage cost efficiencies.
  • Air Freight Demand: The demand for air freight remains robust, driven by high-value and time-sensitive shipments, especially in the electronics and pharmaceutical sectors. However, capacity constraints and rising fuel costs are expected to keep air freight rates elevated through June and the upcoming peak season.
  • Port Infrastructure Improvements: Significant investments in port infrastructure, particularly in the Gulf Coast and East Coast, are poised to enhance capacity and efficiency. The Port of New Orleans, for example, has been awarded $226 million for the construction of the Louisiana International Terminal, expected to boost breakbulk and container handling capacities by 2028.

Seasonal Trends

  • Memorial Day and Summer Retail Activities: The Memorial Day spike in freight volumes for food and beverages, combined with summer retail activities, has led to tighter capacity and higher spot rates. Key regions include Los Angeles, Chicago, and Texas
  • Produce Season Impact: The ongoing produce season, particularly in California, Florida, and Texas, is driving high demand for reefer trucks to transport fruits and vegetables like berries, lettuce, citrus, and tomatoes. This trend is expected to continue into June, maintaining elevated reefer rates.
  • Construction and Flatbed Demand: Increased construction activities are boosting demand for flatbed trucks, especially in regions like Houston and Pittsburgh. This trend will likely persist as summer construction peaks, affecting flatbed rates.
  • Grain, Dairy, and Beverage Movements: The Midwest is seeing increased activity for grains and dairy products, demand for beverage shipments rises with summer events. Key regions include Iowa, Wisconsin, California, and New York

Transportation Events

Upcoming Holidays

  • Operation Safe Driver, July 7th – 13th, 2024
  • FMSCA Safety week, August 25th – 31st, 2024
  • CVSA Brake Safety Day, Planned but unannounced.
  • TIA Conference
  • Juneteenth, Wednesday, June 19th
  • Independence Day, Thursday, July 4th
  • Labor Day, Monday, September 2nd

BM2 NEWS

  • T&LC is hosting a 90 min virtual workshop – Vetting Transportation Service Providers. June 26, 2024 @ 1400 EST. Join BM2’s own Carla Ray Rumford, and others as they help you safeguard your freight. Link to Register: Vetting Transportation Service Providers Avoiding Theft, Fraud & Scams (constantcontact.com)
  • BM2 hosted internal company wide trainings over theft, fraud, and reducing risk. We continue to develop our employees staying ahead of the scammers, protecting our partners!

DID YOU KNOW

  • At BM2 Freight, we leverage a vast network of over 40,000 carriers, but only the best make the cut as BM2 Primary Carriers. These top-tier service providers handle nearly 30% of our shipments, ensuring top-notch service and security for our customers’ freight.

 

INDUSTRY NEWS TO KNOW

Market Update 4/15/2024

Logistics industry market trends you need to know.

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

  • Panama Canal Optimism: With recent rains alleviating drought conditions, the Panama Canal Authority is expanding transit slots for Panamax vessels. As water levels in Gatun Lake rise, the outlook for canal operations and shipping efficiencies brightens, suggesting a smoother transit flow by 2025.
  • Election Anticipations: Upcoming presidential elections in Panama could pivot canal policies significantly, especially concerning the $2 billion Indio River project that aims to increase transits and provide potable water, highlighting the strategic interplay between infrastructure and environmental stewardship.

SEASONAL TRENDS:

  • Spot Rate Trends: April is anticipated to bring about a stabilization in spot rates, with potential for slight increases in specific segments due to the onset of the produce season and increased retail activity. Shippers should stay alert to these trends, leveraging opportunities for cost-effective shipping solutions amidst the evolving market landscape.
  • Spring Produce Surge: As the produce season begins, an uptick in demand for refrigerated transport aligns with historical trends. Regions such as Southern California and the US Southeast are preparing for a robust season, which may tighten reefer capacity and elevate spot rates in the short term.
  • Construction Boosts Flatbeds: Ongoing construction projects and a resurgent manufacturing sector are pushing flatbed demand. As infrastructure and development projects ramp up in the spring, the need for flatbed capacity could see significant regional increases.
  • Retail Revival: Retail sales often see a resurgence in the spring, potentially affecting van spot rates. Seasonal promotions and new product launches could contribute to a rise in demand for dry van capacity, warranting attention to potential rate hikes.

TRANSPORTATION EVENTS:

  • International Roadcheck Week (May 14th-16th)
    • Alcohol and drug substances and tractor protection systems will be the focus.
  • Broker Carrier Summit (April 22-24)

UPCOMING HOLIDAYS:

  • Tax Day was yesterday
  • Memorial Day (Monday, May 27)

WEATHER IMPACT

Plains and Mississippi Valley: Severe Weather and Flash Flooding Risk

  • Timing: Intensifying storm system affecting the Plains on Monday, and the Mississippi Valley on Tuesday.
  • Impact: Severe thunderstorms with a chance of very large hail, damaging winds, and isolated tornadoes. An Enhanced Risk (level 3/5) of severe thunderstorms is forecast from western Nebraska/South Dakota southward through the central Plains. A Slight Risk (level 2/5) extends into the southern Plains. Isolated flash flooding is possible, particularly where storms are more widespread.

Upper Ohio Valley through the Mid-Atlantic: Scattered Severe Thunderstorms

  • Timing: Monday.
  • Impact: A slight risk of severe weather centered around the Tidewater region of Virginia. Potential hazards include large hail and damaging winds.

Northern Cascades, Northern/Central Rockies, and Eastern Great Basin: Moderate to Heavy Snowfall

  • Timing: Next couple of days.
  • Impact: Winter weather advisories/warnings in effect. Expected snow accumulations of 6-12 inches or more at higher elevations.

Central/Eastern U.S.: Well Above Average Temperatures

  • Timing: Monday.
  • Impact: Temperatures in the 80s across the central/southern Plains, Mississippi Valley, and into the Mid-Atlantic/Southeast, with some areas possibly reaching the 90s. Critical Risk of Fire Weather on Monday due to hot temperatures and dry conditions.
    WPC’s Short Range Public Discussion (noaa.gov)

 

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Market Update 3/29/2024

Logistics industry market trends you need to know.

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

  • Francis Scott Key Bridge Collapse: The catastrophic cargo ship crash causing the collapse of Baltimore’s key bridge has led to immediate suspension of vessel traffic in and out of the Port of Baltimore. This disruption, halting export container acceptance, is expected to have widespread ramifications on supply chains and may lead to logistical challenges and shipping delays. Clients should anticipate the need for alternative routing and potential storage solutions in the interim.
  • Port of South Louisiana Growth: Exhibiting resilience and growth, the Port of South Louisiana continues to increase its cargo volumes, setting a narrative of recovery and adaptability. Their expansion and record-setting revenue year signal a strengthening of their global shipping partnerships, which could serve as a strategic alternative for rerouting cargo impacted by the Port of Baltimore’s situation. This growth may offer new opportunities for shipping and logistics planning in response to current East Coast disruptions.
  • Seagirt Marine Terminal Closure: With the temporary closure of the Seagirt Marine Terminal due to the bridge collapse, one of the Port of Baltimore’s major entry points for cargo processing has been significantly impacted. The terminal’s closure on specific dates will affect freight schedules, and carriers are directed to use alternate gates, possibly resulting in congestion and extended wait times. We recommend clients to plan for these closures and prepare for extended lead times on cargo movement in the area.
  • Red Sea-Suez Canal Shipping Disruptions: The ongoing geopolitical tensions and threats of attacks in the Red Sea have prompted significant disruptions in maritime shipping routes, particularly affecting the Suez Canal corridor—a critical chokepoint for global trade. Shippers are being forced to reroute their freight around the Cape of Good Hope or opt for alternative pathways, leading to increased transit times and shipping costs. These developments are critical for clients reliant on timely deliveries, as they may necessitate reevaluation of supply chain strategies to mitigate risks and ensure continuity in operations.

SEASONAL TRENDS:

  • Rebuilding Efforts at Baltimore: As we step into April, the focus on rebuilding the collapsed bridge will persist. This event underscores the need for us to anticipate unforeseen disruptions and reinforce our crisis management protocols.
  • Spot Rate Trends: April is anticipated to bring about a stabilization in spot rates, with potential for slight increases in specific segments due to the onset of the produce season and increased retail activity. Shippers should stay alert to these trends, leveraging opportunities for cost-effective shipping solutions amidst the evolving market landscape
  • Capacity and Seasonal Produce: With the spring produce season ramping up, capacity may tighten in key regions involved in the harvest and transportation of seasonal crops. California, Florida, and Georgia will be hotspots for produce shipping, requiring strategic resource allocation and early engagement with transportation providers to navigate potential capacity constraints effectively

TRANSPORTATION EVENTS:

  • International Roadcheck Week (May 14th-16th)
    • More information to come regarding safety checks
  • CVSA Brake Safety Day is planned, but unannounced
  • TIA Conference (April 10th-16th)

UPCOMING HOLIDAYS:

  • Easter (March 31)
  • End of Ramadan (April 8)

WEATHER IMPACT

Southeast Coast: Heavy Rain and Thunderstorms:

Timing: Through Thursday afternoon.

Impact: The Southeast Coast is set to experience heavy rain and thunderstorms, with a slight risk of excessive rainfall leading to flash flooding in eastern North Carolina, southeast Georgia, and northern Florida. Marginal risk of severe thunderstorms is also forecasted for the Southeast Coast.

Mid-Atlantic and Northeast Coasts: Rain Showers and Potential Snow Showers:

Timing: Through Thursday.

Impact: Rain showers are expected along the Mid-Atlantic and Northeast Coasts, slight risk of excessive rainfall in southeastern Virginia into northeastern North Carolina. Snow showers may develop over interior New England, with potential for enhanced rain totals in southern New England by Friday morning.

Northwest: Rainy/Snowy Weather

Timing: Started Wednesday.

Impact: A period of rainy and snowy weather is expected across the Northwest, with precipitation spreading and affecting areas from the Pacific Northwest to northern California and the interior Northwest. Significant snow accumulations are possible in the Cascades, Sierra Nevada, and Northern Rockies.

Central U.S.: Warming Trend

Timing: Beginning Today through the weekend.

Impact: A warming trend is forecasted for the Central and Southern Plains into the Midwest, with temperatures expected to be above average.

WPC’s Short Range Public Discussion (noaa.gov)

 

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Market Update 3/13/2024

Logistics industry market trends you need to know.

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

  • Port of Los Angeles and Port of Long Beach experienced significant year-over-year increases in cargo volumes in January 2024, driven by Lunar New Year demand spikes and concerns over Red Sea geopolitical tensions. This underscores the critical role of West Coast ports in adapting to global trade dynamics.
  • Georgia Ports Authority (Port of Savannah) reported two consecutive months of growth at the start of 2024, with a notable 14% year-over-year increase in February 2024. This growth, supported by increased rail moves, highlights the port’s expanding role in facilitating key exports and imports.
  • Port of Virginia saw a notable turnaround with a 10% year-over-year increase in February 2024, after a dip in January, reflecting efforts to accommodate larger ships and its strategic importance on the East Coast.
  • Port Houston set a record for January 2024, with a 4% year-over-year increase, emphasizing its growing importance in the Gulf Coast region, driven by strong imports from China ahead of the Lunar New Year.
  • Port operations face challenges such as environmental mandates and the need for infrastructure improvements.
    • Technological integration and strategic planning are critical in enhancing efficiency and mitigating congestion.
      • These efforts align with broader market trends, suggesting that strategic adaptations to economic signals and technological advancements will drive significant changes in port activity and maritime freight operations.

SEASONAL TRENDS:

  • Spot Rate Trends:
    • Rates showing signs of stabilization and expected gradual increases into Q2 2024.
      • This trend is reminiscent of the recovery phases observed in past cycles, particularly mirroring the dynamics of 2018 and 2019. Economic uncertainties and shifts in consumer demand continue to play a significant role in shaping the rate landscape across all segments.
  • Seasonal produce shipments in early spring may contribute to a gradual increase in rates.
    • Though the season has begun relatively slow. States “In Season” CA (leafy greens, in March broccoli, cauliflower, strawberries peak in April), FL (Citrus peak in March, Strawberries started and peak in April), TX Citrus, AZ (leafy greens), and GA (Onions in April)
  • Capacity:
    • The market is experiencing a transformation rather than a contraction in capacity.
    • Technological innovations and strategic workforce management are pivotal in addressing current capacity challenges. Large carriers absorbing excess drivers and the integration of AI and robotics for operational efficiency indicate a shift towards a more technologically advanced and efficient freight market.
      • This evolution suggests that capacity issues may not lead to an immediate correction in rates but rather to a gradual adaptation of the market to new dynamics

TRANSPORTATION EVENTS:

  • International Roadcheck Week (May 14th-16th)
    • More information to come regarding safety checks

UPCOMING HOLIDAYS:

  • Easter (March 31)
  • End of Ramadan (April 8)

WEATHER IMPACT

Central Colorado and Four Corners Region: Heavy Snow

  • Timing: Wednesday night into Friday.
  • Impact: A long-duration snow event is forecasted, with the heaviest snow expected across the Front Range of Colorado, including areas like Boulder and Denver. Snowfall may exceed a few feet in some areas, with 1-2 inches per hour rates possible, leading to hazardous travel conditions.

Midwest to Southern Plains: Strong to Severe Thunderstorms

  • Timing: From this evening into Thursday.
  • Impact: The risk of strong to severe thunderstorms brings the potential for damaging winds, hail, and possible tornadoes. This severe weather threat extends to the Mid-South from Thursday evening into early Friday.

Southern Plains to Mid-South: Excessive Rainfall and Severe Weather Threat

  • Timing: Thursday evening into early Friday.
  • Impact: Enhanced rainfall and severe weather, including the potential for flash flooding and severe thunderstorms, could impact areas from Arkansas and neighboring areas, shifting towards Tennessee by Friday morning.

Eastern U.S.: Very Warm and Pleasant Weather

 

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Market Update 2/29/2024

Logistics industry market trends you need to know.

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

  • U.S. East Coast Ports Volume Downturn:
    • As of early 2024, U.S. East Coast ports have been experiencing a downturn in volume. This change is attributed to various global logistics challenges and shifts in shipping routes, which include rerouting vessels to the U.S. West Coast to avoid congestion and potential delays.
  • Response to Houthi Rebels’ Activities:
    • The ongoing activities of the Houthi rebels in the Red Sea region have led to increased vigilance and security protocols by international shipping companies.
    • The situation underscores the need for coordinated international efforts to ensure the safety and security of maritime traffic, which could have implications for shipping times and costs, particularly for routes connecting the Red Sea to major US ports.
  • Impacts:
    • The ongoing situations in the Suez Canal and Panama Canal have impacted available capacity and ocean container prices due to rerouting and diversions.
    • Despite these challenges, ocean rates are showing signs of steadying in some lanes.
    • The adjustments have led to increased transit times and delays in product arrivals, emphasizing the importance of contingency planning and the potential for considering modal conversions to air freight for critical shipments.

SEASONAL TRENDS:

  • Spot Rate Trends:
    • The beginning of 2024 saw a continuation of fluctuating spot rates across the trucking industry, with the dry van, refrigerated (reefer), and flatbed segments each responding to unique market pressures and seasonal demands.
    • Despite variations, a general trend of adjustment in spot rates was observed, reflective of broader economic and industry-specific factors.
  • In February, produce season typically starts in southern regions of the U.S. such as Florida and Texas, with these states becoming focal points for seasonal demand due to the influx of produce from Mexico and Latin America.
    • The surge in produce shipping from these areas affects the freight market, notably impacting outbound spot rates due to the increased demand for transportation​.
  • Capacity:
    • A notable trend in early 2024 was the continued adjustment of capacity.
    • Following peaks in 2022 and mid-2023, the market saw a contraction in capacity (continues to do so), which was especially pronounced in January 2024.
      • This trend suggests a market recalibration that could impact freight rates.

TRANSPORTATION EVENTS:

UPCOMING HOLIDAYS:

  • Ramadan begins (March 10)
  • Daylight Savings Time (March 10)
  • Easter (March 31)

WEATHER IMPACT

Great Lakes, Central Appalachians, and Northeast:

  • Snow: Light to moderate snow is forecasted across the Great Lakes, Central Appalachians, and Northeast, contributing to the winter landscape but with less severity compared to the West Coast mountains.
  • Warm Temperatures: The Northeast and Mid-Atlantic will experience temperatures 10 to 25 degrees above average, with warm southerly winds preceding a front moving off the East and Gulf Coasts by Thursday.

West Coast and Mountains:

  • Heavy Snow: The Cascades, Northern Intermountain Region, Northern California, and Sierra Nevada Mountains are bracing for heavy snowfall.
    • A second winter storm this Wednesday and Thursday is expected to hit these areas hard, particularly affecting higher elevations above 5000 feet.
    • Blizzard conditions are forecasted for the Sierra Nevada Mountains, with potential for over 5 feet of snow, leading to significant disruptions and whiteout conditions making travel impossible.
  • Coastal Rain: Coastal areas in the Pacific Northwest and Northern California will see rain starting Wednesday, continuing into Friday. This rain will extend into Central and Southern California as the week progresses.

Thunderstorms and Showers:

  • Gulf Coast to Northeast: Showers and thunderstorms are expected from the Central Gulf Coast to the Northeast on Wednesday, associated with a deep low moving into Eastern Canada.
  • Lake-Effect Snow: Following the front, lake-effect snow will develop downwind from the Great Lakes into Thursday, providing additional snowfall to the regions.
  • Southwest and Southern Rockies: Scattered showers, thunderstorms, and higher-elevation snow are anticipated from Wednesday into Thursday, moving into the Southern Plains and affecting areas into the Lower Mississippi, Tennessee, and Southern Ohio Valleys and parts of the Southeast by Thursday night.

WPC’s Short Range Public Discussion (noaa.gov)

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Market Update 2/15/2024

Logistics industry market trends you need to know.

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

  • Ongoing Challenges in the Red Sea:
    • The Red Sea region continues to face significant disruptions due to military strikes against Houthi positions, affecting global supply chains. European importers are dealing with inventory shortages due to delays, while Asian export hubs face tight space and equipment availability.
      • However, there are signs that conditions may be improving slightly as congestion levels remain minimal and carriers adjust to accommodate longer routes​​.
  • Surge in Ocean Freight Rates:
    • Ocean rates from Asia to North America have surged significantly, with West Coast rates increasing by 38% and East Coast rates by 21%.
      • Despite these increases, there’s speculation that freight rates might be nearing their ceiling, especially with the Lunar New Year approaching and potential shifts in demand.
  • Air Cargo as an Alternative:
    • There has been a moderate shift towards air cargo due to delays in ocean shipping. China-North America air cargo rates climbed by 11% last week, indicating a response to the ongoing disruptions.
      • This suggests that some shippers are exploring alternatives to navigate the current challenges in ocean freight​.

SEASONAL TRENDS:

  • Spot Rate Trends:
    • Spot rates across the trucking industry, including dry van, refrigerated, and flatbed segments, have continued to decline for the third consecutive week as of the week ending February 9, 2024. This trend is part of a broader pattern of lower rates and reduced load activity compared to the previous year and the five-year average. Notably, dry van rates saw the most significant drop, reaching the lowest weekly spot rate since before Thanksgiving.
  • In February, produce season typically starts in southern regions of the U.S. such as Florida and Texas, with these states becoming focal points for seasonal demand due to the influx of produce from Mexico and Latin America.
    • The surge in produce shipping from these areas affects the freight market, notably impacting outbound spot rates due to the increased demand for transportation​.
  • Capacity:
    • Continues to squeeze out of the market from its October 2022 and July 2023 highs, and accelerated in January of 2024.

TRANSPORTATION EVENTS:

UPCOMING HOLIDAYS:

  • Ramadan begins (March 10)
  • Daylight Savings Time (March 10)

WEATHER IMPACT

South, Mid-Atlantic, and New England Tranquil Weather:

  • Following a strong nor’easter, these regions are expected to experience much more tranquil weather, allowing for a period of drying out. Below-normal temperatures along the Eastern Seaboard today will give way to milder air by Thursday, gradually returning to above-normal temperatures.

Northern Plains, Upper Midwest, and Great Lakes:

  • Heavy Snowfall: A quick-hitting wave of low pressure is expected to deliver heavy, accumulating snowfall across the Northern Plains, Upper Midwest, and the Great Lakes today and Thursday. This system will move quickly, bringing several inches of snow and potentially impacting travel and daily activities in these regions.

West Coast and Intermountain West: Rain and Snow:

  • The next Pacific storm system is set to bring locally heavy rain to the West Coast and significant high-elevation snowfall to the Intermountain West over the next couple of days. This will likely affect outdoor activities and could lead to hazardous travel conditions in mountainous areas.

Temperature Trends:

  • Cooling Down: A cold front following the low-pressure system will bring modified Arctic air south from Canada, leading to below-normal temperatures across the northern Plains and Midwest by the end of the week.

WPC’s Short Range Public Discussion (noaa.gov)

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Market Update 1/30/2024

Logistics industry market trends you need to know.

General Market Trends

 Deisel National Averages: This Week: $3.838 Last Week: $3.863 Weekly Change: $0.025 Year over Year Change: $0.766 Reference: Gasoline and Diesel Fuel Update - U.S. Energy Information Administration (EIA) National RPM Month to Month Changes: Dry Van Markets (Dec to Jan): $0.03 per mile Reefer Markets (Dec to Jan): $0.09 per mile Flatbed Markets (Dec to Jan): $0.05 per mile

Potential Market Disruptors

Port Impacts:

  • Red Sea Shipping Crisis: The Red Sea is experiencing a dramatic impact on global shipping and trade due to attacks against commercial vessels. These disruptions, caused by Houthi rebels, have led to a severe reduction in shipping traffic through the crucial Suez Canal, which accounts for a significant portion of global trade. The crisis is not only raising costs but also contributing to increased greenhouse gas emissions due to longer shipping routes. Container ship transits have declined drastically, and liquefied natural gas (LNG) carriers have ceased transiting the area altogether since mid-January 2024.
  • Ocean Freight Market Dynamics: The dynamics of global logistics continue to evolve, impacting trade patterns and inflationary pressures. While ocean freight prices have seen a downward trend, recent developments like the Houthi attacks and Red Sea diversions have led to a spike in ocean rates across ex-Asia lanes. This has resulted in carriers responding with increased rates and surcharges, and the industry anticipates capacity shortages and congestion in the coming weeks.
  • Optimism in US Ports: Despite global challenges, there is optimism among US port leaders for 2024. With unprecedented federal investment in ports, there’s a focus on expanding port capacities, reducing carbon emissions, and enhancing digital capabilities. Major projects are underway to modernize ports like Los Angeles and Long Beach, and there’s a strong focus on developing green hydrogen hubs​.

Seasonal Trends:

  • Winter Weather Impact: With the onset of winter, expect disruptions in freight movement due to severe weather conditions, including snow and blizzard-like events.
  • Produce Market Influence: The influx of produce entering the market in and from the Southwest and Florida has sparked an increase in rates, with the additional volume from the produce market, expect a tightening of capacity.
  • 2024 spot rates have held onto their holiday momentum, only falling modestly by $.05/mile after the recent peak, suggesting an upturn in freight flow, while the ongoing Red Sea crisis and global events like the Chinese New Year continue to influence shipping routes and costs, potentially impacting future rates and market dynamics.
  • Capacity: Continues to squeeze out of the market from its October 2022 and July 2023 highs.

Transportation Events:

Upcoming Holidays:

  • Chinese New Year (Feb. 10)
  • Valentine’s Day (Feb. 14)
  • Ramadan begins (March 10)

Weather Impact

Outlined map of North America showing weather trends in certain regions

  • Northeast, Mid-Atlantic, Southeast, Gulf, Midwest, Great Plains, Texas, and Southwest:
    • A warmer and sunny weather pattern is expected across these regions. High temperatures could reach the upper 50s to lower 60s, with a generally dry period until late in the week. Rain is not expected until late Friday at the earliest.
  • California:
    • Warmer and sunny weather initially.
    • Atmospheric river storms expected, potentially causing high-end flooding, beach erosion, mudslides, and heavy mountain snow.
    • Northern California at risk for flooding starting Wednesday.
    • Southern California to experience very rainy conditions on Thursday.
  • Pacific Northwest:
    • Steady rains initially, with the atmospheric river storm soaking the region.
    • Rainfall totals reaching 2-3 inches in the mountains and up to about 1.50 inches in the lowlands.
    • The storm track expected to lift north, with another, stronger atmospheric river storm focusing on Vancouver Island and southwestern British Columbia, but also impacting northwestern Washington.
  • WPC’s Short Range Public Discussion (noaa.gov)

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Market Update 1/11/2024

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

  • Red Sea Crisis Impact: The ongoing crisis in the Red Sea, including Houthi rebel attacks, is prompting shifts in shipping routes, leading to longer transit times and increased costs. This has resulted in a surge in ocean-shipping rates and additional fees, as carriers divert from the Red Sea to avoid conflict zones.
  • Airfreight as a Mitigation Strategy: Shippers are considering the use of airfreight to counter delays caused by the Red Sea crisis. However, airfreight rates haven’t yet shown significant changes, but an increase is anticipated in the near future.
  • Future Rate Trends: Despite the current rate hikes due to the Red Sea situation, there is an expectation that rates might decline post-Chinese New Year, as the industry adapts to the routing changes and deals with the excess capacity challenges

SEASONAL TRENDS:

  • Winter Weather Impact: With the onset of winter, expect disruptions in freight movement due to severe weather conditions, including snow and blizzard-like events.
  • Produce Market Influence: The influx of produce entering the market in the Southwest has sparked an increase in rates, with the additional volume from the produce market, expect a tightening of capacity.
    • The end of 2023 saw muted freight demand with tender rejections and spot rates below 2022 levels, yet early 2024 has brought a modest rise in spot rates.
  • The market is witnessing a quick recovery in tender volumes post-holiday season, suggesting an upturn in freight flow, while the ongoing Red Sea crisis and global events like the Chinese New Year continue to influence shipping routes and costs, potentially impacting future rates and market dynamics.

TRANSPORTATION EVENTS:

UPCOMING HOLIDAYS:

  • Chinese New Year, February 10th
  • Valentines Day, February 14th
  • Start of Ramadan, March 10th

WEATHER IMPACT

  • Eastern U.S.: Expect a major winter storm, with heavy snow (6-12 inches) and blizzard conditions from eastern Nebraska to central Michigan. Minor flooding is possible in the northern Mid-Atlantic and Northeast.
  • Southern Plains to Michigan: Rapidly intensifying low-pressure system bringing severe weather, including possible tornadoes and wind gusts.
  • Northern Rockies and Plains: Dangerously cold temperatures persisting, with highs below zero in some areas.
  • Forecast for the Week:
  • Midwest and Ohio Valley: Cold arctic air following the storm, with below-average temperatures continuing.
  • Intermountain West and Rockies: Multiple snow events, especially heavy along the Oregon and California coasts.
  • Implications:
    • Prepare for potential disruptions in the Eastern U.S. and Midwest.
    • Monitor local advisories for safety and operational planning.
    • Expect possible delays and adjust logistics accordingly.
  • WPC’s Short Range Public Discussion (noaa.gov)

TEMPERATURE TRENDS

  • Storm warning across North America

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Market Update 12/29/2023

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

  • Port Recovery not expected until 2025.
  • Previously, the west coast was yielding more tonnage to the east, we are now seeing it return to the west.

SEASONAL TRENDS:

  • We’re seeing a notable reduction in market capacity, driven by factors like bankruptcies, holiday periods, and operators sidelining their trucks.
    • This, coupled with declining load volumes and increasing rejections, is setting the stage for a distinctive trend.
  • First week of Q1: Expect a surge in rates.
    • This is a direct consequence of the tightened capacity and the current market’s response mechanisms.
  • After first week of Q1: Anticipate a shift as truck capacity re-enters the market.
    • This change, along with a rebound in load volumes, will lead to a decrease in rates, eventually stabilizing after an initial fluctuation in January.

TRANSPORTATION EVENTS:

UPCOMING HOLIDAYS:

  • New Years (Monday, January 1)
  • Chinese New Year (Saturday, February 10)
  • Ramadan begins (Sunday, March 10th)

WEATHER IMPACT

North American map highlighted with different colors to reflect weather events

Northern and Central Plains

Current Situation: Winter weather warnings and advisories related to the recent blizzard have been discontinued.

Forecast: The upper-level circulation associated with the storm will gradually diminish. Mixed rain and light snow are expected to taper off by the afternoon.

Midwest

Forecast: Wrap-around moisture from the Great Lakes will bring mixed rain and wet snow today, with only minor snow accumulations due to temperatures being just above freezing.

Northern Mid-Atlantic to Southern New England

Weather Event: A strengthening coastal low is causing moderate to heavy rain.

Impacts: Potential for excessive runoff and flooding, minor coastal flooding expected in the New York City metro area due to high tides.

Movement: The heavy rain will move across southeastern New England by the afternoon, with the possibility of moderate rain rotating back towards the southeast New England coast later.

Northeast and Maine

Forecast: On-and-off rain showers will linger, potentially changing to light wet snow over Maine on Friday. Light wet snow will also continue along the Appalachians.

Florida

Forecast: A round of rain is expected to pass through southern Florida, influenced by a subtropical jet stream and a low-pressure wave.

West Coast

Weather Systems: A couple of large Pacific cyclones.

Forecast: These will produce unsettled weather, with rain and high-elevation snow over the Pacific Northwest and California. Dry conditions are expected for much of the rest of the western U.S., with mixed precipitation reaching the Great Basin by Saturday morning.

Temperature Trends

  • Northern Tier and Western U.S: Milder than normal temperatures
  • Southern Tier to Southeastern U.S: Cooler than normal conditions will shift across these regions.
  • Notable: Mild overnight temperatures from the northern Plains to the Northeast are expected to be more than 20 degrees above normal, likely setting records for warm minimum temperatures, especially this morning.

WPC’s Short Range Public Discussion (noaa.gov)

INDUSTRY NEWS TO KNOW

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