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Logistics Intelligence Brief
Friday, July 9, 2021

Trucking

Freight capacity pinch will continue into 3rd and 4th quarters, 3PL forecasts

Council Of Supply Chain Management July 8, 2021

Likewise, less-than-truckload (LTL) traffic will see a continued capacity crunch and possible rate increases. “Conditions are unlike anything the market has experienced. Many major carriers are not accepting new business. Fuel surcharge averages are trending upward to 22%,” Transportation Insight’s vice president of pricing services, Chris Mendenhall, said in the report.

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Industry

229% Surge in China-US Shipping Costs Drives Inflation Pressure

Bloomberg/Transport Topics Brendan Murray July 8, 2021

The cost to ship a boxload of goods to the U.S. from China edged close to $10,000 as the world’s biggest economy keeps vacuuming up imports amid slower recoveries from the pandemic from Europe to Asia. The spot rate for a 40-foot container from Shanghai to Los Angeles increased to $9,631, up 5% from the previous week and 229% higher than a year ago, according to the Drewry World Container Index published July 8. A composite index, reflecting eight major trade routes, rose to $8,796, a 333% surge from a year ago. Drewry said it expects rates to increase further in the coming week.

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U.S. industrial rents continue to see strong gains, reports CBRE

Logistics Management Jeff Berman July 8, 2021

With ongoing elevated demand buoyed by strong consumer spending activity, especially related to e-commerce, there has been a subsequent impact on United States average industrial asking rents, according to research recently issued by Los Angeles-based industrial real estate developer CBRE. In its “U.S. MarketFlash: Industrial Taking Rents Now Growing Faster Than Asking Rents, Reflecting Voracious Demand,” CBRE reported that average industrial asking rents headed up by a record 8.3% in the fourth quarter of 2020 and by 7.1% in the first quarter of 2021, with asking rents averaging 6.8% over the past five years. CBRE also observed that taking rents are seeing significant growth, with first-year base rents on leases of 12 months or more seeing a 9.7% annual increased through the first five months of 2021. That growth is being paced by bulk warehouses seeing gains of 13.2% for leases of 500,000 square-feet or more and 11.6% for leases between 100,000 and 499,999 square-feet.

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Port Tracker report continues to highlight strong U.S.-bound import levels

Logistics Management Jeff Berman July 8, 2021

Should these projections hold, import totals for the first half of 2021 would be up 35.6% to 12.8 million TEU, with 2021 estimated to be up 16.7%, to 22 million TEU. “Operational constraints brought about by the COVID-19 pandemic combined with the surge in consumer demand have severely strained the logistics supply chain,” Hackett Associates Founder Ben Hackett wrote in the report. “The challenges have stretched ports’ ability to plan for shifts in vessel capacity and pressures on both port-side and land-side infrastructure. The splurge in newbuilding orders for ships with 23,000-plus TEU capacity will bring further challenges.”

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Workforce

Job Openings Are at Record Highs. Why Aren’t Unemployed Americans Filling Them? (Subscription Based)

The Wall Street Journal Jon Hilsenrath And Sarah Chaney Cambon July 9, 2021

More than nine million Americans said in May that they wanted jobs and couldn’t find them. Companies said they had more than nine million jobs open that weren’t filled, a record high. As the economy reopens, the process of matching laid-off workers to jobs is proving to be slow and complicated, a contrast to the swift and decisive layoffs that followed the initial stage of the pandemic in early 2020. The disconnect helps to explain why so many companies are complaining about having trouble filling open positions so early in a recovery. It also helps to explain why wages are rising briskly even when the unemployment rate, at 5.9% in June, is well above the pre-pandemic rate of 3.5%. The relatively high jobless rate suggests an excess of labor supply that in theory should hold wages down. Several factors are behind the development: Many workers moved during the pandemic and aren’t where jobs are available; many have changed their preferences, for instance pursuing remote work, having discovered the benefits of life with no commute; the economy itself shifted, leading to jobs in industries such as warehousing that aren’t in places where workers live or suit the skills they have; extended unemployment benefits and relief checks, meantime, are giving workers time to be choosy in their search for the next job.

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Government/Safety/Sustainability

DOT Federal Leaders Host Roundtable With Trucking Executives

Transport Topics Eleanor Lamb July 8, 2021

ATA Executive Vice President of Advocacy Bill Sullivan, who represented the federation at the roundtable, emphasized the industry’s priority of finding new recruits. ATA has identified women, young people and people from urban and rural areas as potential sources of truck-driving talent. “Our industry won’t move offshore and is a solid path to the middle class for men and women willing to join,” Sullivan said. “The median salary for a truckload driver working a national, irregular route was reported most recently at over $53,000, and wages have gone up substantially on average in the first half of 2021. The bottom line is, the trucking industry is hiring and paying great wages to drivers.”

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New Texas law deals blow to Reptile Theory trial strategy in crash litigation

CCJ Matt Cole July 8, 2021

The new law, known as HB19 from its path through the state legislature, requires a jury to find a trucking company or truck driver liable for a crash before exemplary damages can be sought in a civil case. It allows a defendant trucking company to request a two-phase trial in which the first phase would be used to determine liability for the crash itself and the amount of compensatory damages awarded. The second phase would be used to determine any negligence from the motor carrier, such as driver training or equipment problems, and the amount of exemplary damages awarded. Despite the criticism of the legislation, Texas Trucking Association President and CEO John Esparza said the new law will still protect the rights of Texans and all Americans traveling through Texas who may be involved in a crash with a commercial vehicle, “but at the same time reduce opportunities for some of these trial lawyers to manipulate evidence at trial in which they’ve been seeking millions and millions in damages in cases where the commercial vehicle owner was not at fault and where the plaintiff in many cases was not even injured.” Esparza noted that in recent months, one TXTA member “spent over eight hours of deposition over an accident that occurred, and not a single one of those questions were about the accident itself. It was all about the company.”

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