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Logistics Intelligence Brief
Friday, January 14, 2022

Trucking

Forecast says shipping costs will stay “sky high” through first quarter (LTL Data)

DC Velocity January 13, 2022

Sky high shipping costs are expected to continue into the new year with transportation spend rising to record levels in the first quarter of 2022 due to the combination of rate increases applied by parcel and less than truckload (LTL) carriers along with ongoing strong pricing power for truckload fleets, a new study finds.
The forecast comes from the January 2022 Cowen/AFS Freight Index, a quarterly performance snapshot produced by third party logistics provider (3PL) AFS Logistics and financial services firm Cowen Research.
The trend is driven in part by record-high general rate increases (GRIs) announced over the past year by parcel and LTL fleets, the report found. “The two LTL GRIs in 2021—one in February and another in November—was a double whammy for shippers,” Jason Seidl, Cowen’s senior analyst for Airfreight & Surface Transportation, said in a release. “This gave carriers significant pricing power and they’re leveraging it.”

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Industry

Trucking, Farming, Heating Will Get More Costly as Diesel Surges

Bloomberg Chunzi Xu January 13, 2022

Trucking, farming and heating homes is set to get more expensive as diesel prices surge to highs not seen since 2014.
Diesel prices have risen as U.S. refiners began a heavy maintenance season this month, when fuel stockpiles are already at eight-year lows. A fire at one of the country’s largest refineries took out even more fuel-making capacity at the end of last year.

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U.S. rail carload and intermodal volumes start 2022 with annual declines

Logistics Management January 13, 2022

Intermodal containers and trailers—at 230,741—fell 20.4% annually, topping the weeks ending December 25 and January 1, at 205,836 and 189,535, respectively.

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Outlook 2022: Houston port pushes infrastructure plans to keep ahead of growth

The Journal Of Commerce Michael Angell January 13, 2022

Subscription-Based

The Port of Houston is readying for a possible bullwhip effect if imports begin ramping up again at the end of the first quarter of 2022, speeding up infrastructure projects to keep a buffer for demand that could last well into next year.
John Moseley, commercial director for the Port of Houston Authority, told JOC.com in December that Houston would likely end the year handling between 3.4 million and 3.5 million TEU, which would be at least 15 percent growth over 2020.
With consumers still spending heavily on goods in 2021, containerized imports through the US Gulf Coast jumped 21.4 percent year over year in the first 10 months of the year, according to PIERS, a sister product of JOC.com within IHS Markit.

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Trailer orders fall in 2021 as manufacturers battle omicron, parts shortages

Freight Waves Alan Adler January 13, 2022

Trailer manufacturers battling worker outages because of omicron infections and ongoing parts shortages finished 2021 on a down note with little optimism for a meaningful recovery in the near-term.
Preliminary net orders in December were soft at 26,600 units, continuing a months-long trend of manufacturers accepting only orders they are confident of being able to produce. Bookings were down 17% from November and off 40% year over year, according to ACT Research.
For the full year, manufacturers booked about 248,000 orders, down 17% from 2020. FTR Transportation Intelligence put 2021 orders at 249,000.

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Shippers/3PLs

Survey: 99% of retailers will offer same-day delivery by 2025

DC Velocity January 13, 2022

The results are presented in the company’s 2022 Bringg Barometer: State of Retail Delivery & Fulfillment report. According to the survey, 99% of respondents say they will be doing same-day delivery within the next three years, compared to 35% who say they are able to do so today. The survey also found that many current last-mile fulfillment models do not support same-day or on-demand delivery, however, with 36% of respondents saying they lack the technology for same-day delivery, citing real-time order visibility as the main problem, and 24% calling out the sheer distance they need to travel from warehouse to fulfillment as a primary obstacle to delivering on time.

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Government/Safety/Sustainability

Buttigieg prioritizing truck driver pay

Freight Waves John Gallagher January 13, 2022

To back up his statements, DOT announced on Thursday it is rolling out a slate of initiatives aimed at strengthening the trucking industry’s labor force, including two studies analyzing truck driver pay and unpaid detention time. Some of the programs were required as part of the Infrastructure Investment and Jobs Act that President Joe Biden signed into law in November, and were highlighted in the Trucking Action Plan that Biden unveiled in December.
“Making sure truck drivers are paid and treated fairly is the right thing to do, and it will help with both recruiting new drivers and keeping experienced drivers on the job,” Buttigieg reiterated on Thursday.

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FMCSA Sets Up Apprenticeship for Young Drivers

Transport Topics Eric Miller January 13, 2022

The pilot is open to 18- to 20-year-old drivers who already hold intrastate commercial driver licenses. It sets a strict training regimen for participating drivers and motor carriers to follow.
FMCSA said it will monitor motor carrier and driver performance throughout the program to ensure safety.
The pilot is substantially the same as one proposed in a September 2020 Federal Register notice, FMCSA said.
The pilot includes two probationary periods — one for 120 hours and the other for 280 hours — and mandates specific vehicle safety technologies be installed on trucks used by participants.
Link: Federal Register Safe Driver Apprenticeship Pilot Program

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U.S. Plans to Spend $27 Billion to Repair Bridges

The Wall Street Journal Julie Bykowicz January 14, 2022

The White House on Friday plans to announce more than $27 billion in spending over the next five years to repair dilapidated bridges across the country, including full funding for structures that aren’t part of the federal highway system.
The work will be funded under the roughly $1 trillion infrastructure bill that passed Congress with bipartisan support and was signed by President Biden in November.
State and local governments generally have to kick in up to 20% of the costs of bridge work to win federal funding. Administration officials said Thursday they are removing that requirement for bridges not connected to the federal highway system.

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With Biden Mandate Blocked, Many Companies Won’t Impose Covid-19 Vaccine Rules

The Wall Street Journal Chip Cutter January 13, 2022

Subscription-Based

U.S. trucking executives and industry groups that had previously warned the vaccine mandate could deepen upheaval in domestic supply chains welcomed the ruling.
“It’s a relief,” said Eric Fuller, chief executive of U.S. Xpress Enterprises Inc., a large trucking carrier based in Chattanooga, Tenn. “As much as I wish everyone would get vaccinated, this mandate was going to create a lot of headaches for a lot of companies.”
The ruling came a day after OSHA issued new guidance on the mandate’s application to truck drivers, saying that it didn’t apply to drivers who are the sole occupants of their vehicles or to individuals who spend only brief periods indoors with others.

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Delays await US-Canada truckers as vaccine mandates loom

The Journal of Commerce William B. Cassidy January 13, 2022

Subscription-Based

Shippers should expect delays, unexpected disruptions, and higher costs when Canada and the US impose COVID-19 vaccine mandates on cross-border truckers. Canada will impose a vaccine requirement on US truckers Saturday; the US is expected to follow with a mandate for foreign truckers entering the US later in January.
“It’s going to make it harder to move goods across the border,” Gary Fast, vice president of transportation at Canadian Tire, a Toronto-based retailer with more than 1,700 stores across Canada, told JOC.com Thursday. “Shippers in general are going to have to pay more.”
“It’s no different than when the US electronic logging device (ELD) mandate took effect (in December 2017) and rates skyrocketed,” Fast said. “Restrictions result in a constraint on capacity and that ultimately leads to higher costs. Some shippers will be able to afford it, and others will be in trouble. We’re going to have to be innovative.”

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