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Logistics Intelligence Brief
Friday, January 21, 2022

Trucking

Freight Costs Expected to Remain High in 2022

Transport Topics Connor D. Wolf January 20, 2022

Elevated freight rates are likely to remain through much of this year because of market turmoil, according to experts.
“We don’t see the spot rate market really coming down very much at all for the year,” Vise said. “We see it being down about 2.5%. But we see contract rates being up in 2022 about 6%.”
“Spot rates drop in January pretty much on cue,” Dean Croke, principal analyst at DAT Solutions, told TT. “But last week they increased, which was the first time they’ve done that since 2018. So that’s sort of extraordinary.”
DAT results showed spot market load post volumes are 80% higher compared to the same time last year. But freight volumes overall are relatively flat. Croke expects spot rates to continue at around the same level for at least the next six months.
“We’re seeing about double the volumes of freight moving in the spot market right now than we would pre-pandemic,” Croke said. “So normally it’s a 90-10 split, 90% contract and 10% spot. Right now it’s about 75-25.”

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Industry

Freight bottlenecks, cyber perils are top risks in 2022

DC Velocity January 20, 2022

Just-in-Time Shifts to Just-in Case. As the pandemic exposed flaws in “just in time” inventory systems, businesses have been exploring a shift to the “just in case” model, increasing buffer and safety stocks of critical components or best-selling products.

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U.S.-bound containerized imports set new record in 2021, reports Panjiva

Logistics Management Jeff Berman January 21, 2022

The state of elevated United States-bound imports and shipments remained intact in December, making 2021 a record-setting year, according to data recently issued by global trade intelligence firm Panjiva.
Total December U.S.-bound containerized freight imports—at 2,666,164 TEU (Twenty-Foot Equivalent Units)—were off 1.9% compared to November and were down 0.5% annually. Despite these declines, Panjiva observed that total 2021 containerized freight imports set a new annual record, rising 15% over 2020, to 32,970,647 TEU, with Panjiva noting that this tally showed how 2021 imports made up for 2020’s down year, due, in large part, to the Covid-19 pandemic.
Looking at U.S.-bound shipments, Panjiva reported that December shipments—at 1,333,700—saw a 6.6% increase over November and a 10.9% annual increase. For calendar year 2021, shipments posted a 16.6% annual gain, to 14,709,654.

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LM reader survey underscores the impact of inflation on supply chain and logistics

Logistics Management Jeff Berman January 20, 2022

Another takeaway from the LM survey showed how 82% of respondents are dealing with more supply chain challenges now than compared to a year ago. And, far from a surprise, 97% of respondents said their supply chain and logistics costs are up annually, with: 12.5% saying they are up 1%-to-10%; 29.7% saying they are up 11%-to-20%; 21.9% saying they are up 21%-to-30%; 10.9% saying they are up 31%-to-40%; 6.3% saying they are up 41%-50%; and 18.7% saying they are up more than 50%.

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Workforce

Trucking Workforce Essential to Supply Chain Resolution, Buttigieg Says

Transport Topics Eugene Mulero January 20, 2022

In particular, Buttigieg cited the opportunity to bring more women into the industry. “Knowing you’ve got 50% of the population but not yet 50% of the workforce, which suggests there are a lot of people out there who could be great truckers who have not been invited or, for whatever reason, haven’t taken an interest in those jobs. So, yeah, we believe these recruiting efforts will make a real difference,” he said.
Addressing the driver shortage will require this and more, he noted, as the industry is losing workers at a steep rate.
“If we only work on that side of the equation then it’s going to be a little bit like filling a leaky bucket,” he said. “Because we see far too many people leaving their jobs as drivers every single year.”
He said DOT estimates 300,000 workers throughout the trucking industry depart the sector each year. “So, yes we need to recruit and we need to retain,” he said.

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Union Pacific Says Covid-19 Left Railroad Understaffed

The Wall Street Journal Paul Ziobro January 20, 2022

Subscription-Based

Union Pacific Corp. said it was caught off guard by the number of workers absent because of quarantines and getting their vaccines, which led to fewer on-time trips and other deteriorating operating performance in the fourth quarter.
Chief Executive Lance Fritz said that the railroad company had been planning for the Covid-19 pandemic to have a smaller impact as the months progressed and felt that it had enough workers and resources to overcome any lingering effects.

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Government/Safety/Sustainability

Foreign Truckers Must Be Vaccinated to Enter US Starting Jan. 22

Transport Topics Dan Ronan January 20, 2022

“It applies to all Canadian and Mexican drivers,” he said. “I’m not too concerned about the Mexican drivers — the Mexican drayage drivers — they’re vaccinated at a pretty high rate. For the Canadian drivers, they now have to be fully vaccinated to get back into their country to go home. So they’re not going to come here if they’re not vaccinated.”
In a letter to ATA members, Costello outlined some of the details.
“Foreign national drivers will be required to demonstrate proof of being fully vaccinated as outlined by the U.S. Centers for Disease Control and Prevention,” he said. “Fully vaccinated means having two doses of an acceptable vaccine two weeks prior to entry into the U.S. or one dose of an acceptable vaccine that only requires a single dose, such as the Johnson & Johnson vaccine, two weeks prior to entry,” Costello said. “There is no testing requirement to enter the U.S.; however, those who have symptoms may be referred to the CDC for a medical evaluation.”

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