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FRANCIS SCOTT KEY BRIDGE IMPACT

Watching the video of the bridge collapse was surreal. To have that structure there one minute, then five seconds later be completely gone, was jaw-dropping. Certainly, our thoughts and prayers are with those whose lives were impacted by the collapse.  

Since the incident, clean-up has begun and a temporary waterway has been established, but it will take a while for the port to fully recover, let alone the bridge itself to be rebuilt. While the 30,000 plus vehicles that regularly cross that bridge is a sizable number, it’s about one-sixth of the volume that uses nearby major thoroughfares like I-695 or I-95 in the Baltimore area. Still, that traffic will need to go somewhere.  

From the trucking side, there will likely be two main areas of impact. First, local freight that is destined for ocean travel will now need to find another port of departure, likely destinations the ports of NJ/NY; Philadelphia; and Norfolk, VA. This means more freight will be heading out of the Baltimore area.  

Figure 1.1 below shows that since the end of March, right around the time of the bridge collapse, outbound volume, and freight tender rejection rates, have trended upward. Second, freight that travels around the Baltimore area will likely incur more out of “normal” route miles if the bridge was part of its route. 

More carrier miles = more time to deliver = less time for other freight = increased freight costs.

SOME BALANCE SEEN

Overall, freight volumes have trended slightly above 2023 (Figure 2.1).  

This has not dramatically impacted freight rates nationally or freight tender rejection rates. Excess capacity continues its slow runoff, and March saw an uptick in for hire carriers.  

On a more granular scale, flatbed freight seems to be more optimistic. As seasonal flatbed type freight, combined with an uptick in industrial production and manufacturing activity is occurring, it has pushed flatbed rejection rates to more normal levels over the past few months as seen in Figure 3.1.  

Flatbed rejection rates reached their highest point in over a year recently, and a 15 percent rejection rate is indicative of a more balanced freight market, if only for a certain equipment type segment.

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Trinity Logistics, a leading third-party logistics provider (3PL), is proud to share its recognition by Transport Topics as a Top Freight Brokerage for the 22^nd consecutive year. Securing the 23rd spot in the rankings, Trinity continues to demonstrate its industry-leading expertise and unwavering commitment to excellent service. 

Transport Topics is a leading publication within the transportation sector and conducts annual rankings of freight brokerage firms based on gross revenue and services offered. Securing a spot on this list for 22 consecutive years is a testament to Trinity’s exceptional performance and endurance through several years of change faced by the logistics industry. 

“We are incredibly honored to be recognized once again by Transport Topics,” said Doug Potvin, Chief Financial Officer at Trinity Logistics. “This achievement reflects the dedication and hard work of our entire Team, who consistently go the extra mile to ensure our customers’ and carriers’ success. Maintaining a top position for 22 years demonstrates the strength and stability of our company, and we are confident in our ability to continue exceeding expectations well into the future.”

Trinity Logistics continues to set the benchmark for excellence in the logistics industry, leveraging its extensive experience and innovative solutions to deliver exceptional value to clients worldwide. 

About Trinity Logistics

Trinity Logistics is a Burris Logistics Company, offering People-Centric Freight Solutions®. Our mission is to deliver creative logistics solutions through a mix of human ingenuity and innovative technology, enriching the lives of those we serve. 

For the past 45 years, we’ve been arranging freight for businesses of all sizes in truckload, less-than-truckload (LTL), warehousing, intermodal, drayage, expedited, international, and technology solutions.

We are currently recognized as a Top 100 3PL by Inbound Logistics, and as a Top Company for Women to Work for in Transportation by Women in Trucking.

Trinity Logistics, a leading third-party logistics provider (3PL), is thrilled to announce that President Sarah Ruffcorn has been named the recipient of the prestigious Distinguished Woman in Logistics Award (DWLA) by the Women in Trucking Association (WIT). The announcement took place during the Transportation Intermediaries Association (TIA) Conference held in Phoenix, Arizona, April 10 -13, 2024. 

The DWLA is an annual award that recognizes outstanding women in various logistics fields and underscores their significant contributions to an industry traditionally dominated by men. The winner is chosen by a selection committee comprised of representatives from WIT, Truckstop, and the TIA. Sarah’s win highlights her exceptional leadership and dedication to driving positive change within the logistics sector. 

“I am truly honored to receive this award,” said Ruffcorn. “This recognition is a testament to the incredible Team I am honored to work with, the influential leaders, mentors, and family that have challenged and encouraged me. This is a great reminder of the power of collaboration and empowerment to drive positive change. I hope this award inspires others to pursue their goals and aspirations!”

With over two decades of experience at Trinity Logistics, Ruffcorn’s journey exemplifies her unwavering commitment and expertise. Starting as a dispatcher in Carrier Sales, she progressed through various leadership roles before being appointed President in 2019. Her visionary leadership has been instrumental in shaping Trinity’s success while fostering a culture of innovation and excellence. 

“At my very first meeting with Sarah, I knew she was a special talent,” said Catherine T. Pulos, Executive Vice President and Chief Operations Officer at Wawa, Inc. “Sarah is an expert in the field of logistics and a true servant leader. She is humble, dedicated, and truly cares about the development of her people. She believes in making a difference and her actions certainly prove that.” 

This latest accolade only adds to Ruffcorn’s growing list of achievements. In September 2023, she was a recipient of the 2023 Women in Supply Chain award by Food Logistics and Supply & Demand Chain Executive. Further, her dedication extends beyond Trinity Logistics as she is actively involved in industry advocacy and empowerment initiatives. Ruffcorn serves on the TIA Board of Directors and co-chairs its Women in Logistics Committee, advocating for diversity and inclusion with the logistics landscape. 

“Sarah Ruffcorn is in a leadership class that very few women will occupy and is completely deserving of this prestigious award,” said James T. Kenny, Ph.D., Professor Emeritus of Marketing. “Many organizations have sought Sarah out to serve in leadership positions or speak at their conferences because they see what I’ve seen in Sarah for over twenty years: a woman of impeccable character.” 

Ruffcorn’s recognition by WIT further amplifies the impact women are having on the logistics industry. All of Trinity congratulates Ruffcorn on this esteemed honor and celebrates her continued success.

About Trinity Logistics

Trinity Logistics is a Burris Logistics Company, offering People-Centric Freight Solutions®. Our mission is to deliver creative logistics solutions through a mix of human ingenuity and innovative technology, enriching the lives of those we serve. 

For the past 40 years, we’ve been arranging freight for businesses of all sizes in truckload, less-than-truckload (LTL), warehousing, intermodal, drayage, expedited, international, and technology solutions.

We are currently recognized on Transport Topics’ Top 100 Freight Brokerage List, as a Top 100 3PL by Inbound Logistics, and as a Top Company for Women to Work for in Transportation by Women in Trucking.

We’re excited to share that we’ll be attending 2024 Sweets & Snacks Expo! We can’t wait to network with others in the food and beverage industry. We have been working with shippers of all sizes handling products that need to arrive at peak quality for their consumers for decades. Helping them find simplified logistics solutions to what can sometimes be a complicated process is what we do best.  

If you’re interested in connecting with one of our experts in-person and learning how we can help you with your logistics, stop by booth #3529 and say hi!  

We’ll be hosting giveaways throughout the show that you can enter to win! 

Most of us over the age of 25 can remember when the World Wide Web made its debut. We remember the “beep-boop” sound of dial-up and the big chunky computers that were as wide as a television set in the 1990’s. It’s been almost 30 years since the dawn of the Internet. It’s mystifying to look at the impact it still has on our everyday lives. Because of the Internet, e-commerce was born, and the need for flatbed shipping has increased. 

The Beginning of ECommerce

Over time, ecommerce has taken the baton from traditional brick-and-mortar stores, leaving many big-box store retailers high and dry. Since Amazon Prime’s arrival in 2005, online shopping has exploded in the marketplace. The ease and convenience of it have forced many retailers to develop a strong online presence or risk closing their doors for good.

COVID-19 Creates Rapid Growth

Due to health concerns and social distancing practices, COVID-19 rapidly escalated the use of ecommerce. Total online spending in May 2020 was up 77 percent year-over-year (YOY), according to a report on online spending released in June by Adobe. In that report, Vivek Pandya, Adobe’s Digital Insights Manager, states that it would have typically taken 4-6 years to see the level of growth in online shopping that was seen then. Contactless online ordering helped individuals attempt to limit their exposure to the virus by shopping from home, so it’s easy to see why those reported numbers were so high. 

Since the pandemic, the changes in the ways consumers shop have remained. While in-person shopping has increased compared to then, it still lacks in the amount of foot traffic that was received previously. Consumers continue to like the ease of online shopping, and with fewer in-person shoppers, companies are investing less in their brick-and-mortar locations, which has only made people less likely to want to shop in person. In fact, it’s estimated that 40,000 to 50,000 retail stores will close in the next five years, according to the UBS investment bank.

Ecommerce continues to experience growth, with 22 percent of retail sales being online in 2023, the largest U.S. ecommerce sales percentage to date, according to the U.S. Department of Commerce. As e-commerce growth carries on, it’s created a growing need for companies to expand their inventory and improve their ability to distribute their products. What used to be a problem of “too much” storage space for companies before the pandemic has quickly turned into a necessity in today’s time. 

The Need for Storage Space

As online distributors continue to see growth, their need for storage space has grown as well. Prior to Covid-19, one or two warehouses could keep a medium-sized company running efficiently. Now, more space is needed to keep up with the increasing demand of companies. Having more than one distribution center can be a huge benefit to a company’s ability to stay successful these days.

This all trickles down to the construction industry. As demand grows for new or renovated warehousing, the need for building materials to meet that demand has also increased.

How ECommerce Growth Affects Flatbed Shipping

Flatbed shipping has always been a leading mode of transportation for industrial freight. Lumber, stone, racking, and other building materials travel best on an open trailer due to their odd dimensions and additional weight requirements.

Looking for an extensive guide to keep on hand for your over-dimensional shipping?

Usually, flatbed shipping sees an increase in volume in the summer months. Construction companies take advantage of the warmer weather, which is most suitable for outdoor construction work. During this peak shipping flatbed season, it’s not unusual to see tightened capacity and higher freight rates, but any added demand for warehousing can add to that, making securing a flatbed carrier more difficult.

Strong Relationships Help

Having a relationship with a third-party logistics company (3PL can be a benefit to those who coordinate freight to be delivered to a job site. Typically, job site freight is very hands-on and has a perpetual knack for being time-sensitive. Installation crews are on-site to receive and install the material scheduled to be delivered. Even the slightest delay can cause significant ramifications to the completion of the construction project. Having a strong relationship with a 3PL can help companies mitigate risk, reduce costs, and provide peace of mind to those who are coordinating the freight.

Be Ready for Anything

It appears online shopping is here for the long-haul and whether it’s causing you to expand your warehousing or not a 3PL like Trinity Logistics can help you be prepared for any changes that may come your way. With Trinity, you’ll gain a Team of experts that can help you optimize your supply chain and arrange shipping for various of transportation modes, including flatbed, while offering end-to-end visibility of your shipments. No matter what changes the future brings, you can stay one step ahead when you choose to have Trinity Logistics by your side.

Stay up to date on the latest information on conditions impacting the freight market, curated by Trinity Logistics through our Freightwaves Sonar subscription.

WILL 2024 BE A FREIGHT REBOUND YEAR?

I certainly do not expect that we will return to freight volumes like we saw in 2021, and part of 2022. Now, I will never say never, but those were most likely once in a lifetime events. However, there are many signs that point to a potential for 2024 to see a rebound in freight volumes and carrier rates.  

First, let’s talk about rates for over-the-road (OTR) carriers. Many new entrants came to the carrier market in ’21 and ’22, but currently, we’re seeing the contraction of for-hire carriers.  

As shown in Figure 1.1, the past 14 months have seen less carriers in the market. As supply continues to dwindle, this will put upward pressure on rates. Granted, it may take another 12 months for the carrier market to find an economic balance.  

Figure 1.2 measures the rate at which carriers reject tenders (shipments) and continues to slowly climb upward. Granted, a rejection rate of five-plus percent is not earth-shattering, but in comparison to where it was in 2023, sub three percent in several months, five percent and the continuing upward movement is noticeable.  

Lastly, Figure 1.3 shows that spot rates continue their slow rebound from the middle part of 2023. Contract rates throughout much of 2022 and half of 2023, were $0.60 to $0.70 cents per mile higher. Today, that gap stands at $0.36 per mile. This is a combination of spot rates inching higher, but also contract rates being less than prior years.

An Opportunistic Outlook

While contraction in the carrier market will influence the supply side of the economic equation, there also needs to be a demand component. The below chart (Figure 2.1) shows loaded rail car volume and over-the-road volume trending up and to the right, but the green line, representing inbound ocean containers, is really peaking.  

Eventually, these containers will morph into rail and OTR volume. This is most likely a result in the drawing down of inventories, and the need for replenishment. Combine this with continuing increases in the manufacturing sector and housing market that will show better signs than 2023, it sets the stage for strong demand especially in the second half of 2024.  

Will it be a bull or bear year in ’24? Well, if you would have asked that question six months ago, even maybe three months ago, my answer would have been slightly bearish or at best flat. However, seeing the recent signs on freight activity and the carriers needed to move this freight gives more reason to be optimistic as we go through the next ten months of the year.

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Trinity Logistics, a leading third-party logistics provider (3PL), is proud to announce that it has been honored with the prestigious “Fiercely Good Award” by BlueTriton Brands Inc., a prominent player in the beverage industry. The award was presented to Trinity Logistics during BlueTriton’s Annual Carrier Meeting, which saw the attendance of over 150 carrier and 3PL companies.

“The BlueTriton Brands, Inc. 2023 ‘Fiercely Good Award’ is to recognize our colleagues that embrace being fearless business owners, boldly innovative, deeply committed, and fiercely good,” said Tilde Zimmerman, Transportation Procurement Director at BlueTriton Brands, Inc. “In 2023, Trinity Logistics went above and beyond what was asked or expected of them. We like to appreciate and recognize the efforts of those who collectively make us better. Thank you for being FIERCELY GOOD, Trinity Logistics Team!”

Zimmerman specifically recognized Trinity Logistics for its exceptional commitment to service and its invaluable contribution to a community initiative spearheaded by BlueTriton Brands, Inc. Trinity Logistics played a pivotal role in facilitating the delivery of a much-needed donation of water by BlueTriton to support a local high school football showcase in Broward County, Florida, demonstrating its dedication to making a positive impact beyond the realm of logistics.

Delivering the donation posed unique challenges, including the absence of a loading dock at the school premises and the logistical intricacies of offloading the shipment directly onto the football field. Despite these obstacles, Trinity Logistics executed the task with precision and efficiency, ensuring the timely and seamless delivery of the water donation. 

Representing Trinity Logistics at the event were Fatima Adams, Director of Operations at Trinity’s Florida Regional Service Center (RSC), and Jared Lineweaver, Senior Sales Executive. Their presence underscored Trinity’s commitment to fostering strong partnerships and delivering exceptional service.

“We are deeply honored to receive the ‘Fiercely Good Award’ from BlueTriton,” said Adams. “This recognition stands as a testament to our unwavering commitment in providing exceptional service to our customer relationships. We are immensely proud of the solution our Team assembled and their dedication and resourcefulness in overcoming this challenging task.”

Trinity Logistics is grateful to BlueTriton Brands, Inc. for the recognition and remains steadfast in its mission to provide innovative logistics solutions while positively impacting the communities it serves.

About Trinity Logistics

Trinity Logistics is a Burris Logistics Company, offering People-Centric Freight Solutions®. Our mission is to deliver creative logistics solutions through a mix of human ingenuity and innovative technology, enriching the lives of those we serve. 

For the past 40 years, we’ve been arranging freight for businesses of all sizes in truckload, less-than-truckload (LTL), warehousing, intermodal, drayage, expedited, international, and technology solutions.

We are currently recognized on Transport Topics’ Top 100 Freight Brokerage List, as a Top 100 3PL by Inbound Logistics, and as a Top Company for Women to Work for in Transportation by Women in Trucking.

After several record setting years, 2023 saw shifts to the freight market. How did the 2023 freight market affect shipper and carrier businesses? Did other businesses have the same struggles as yours? Are they expecting to face similar difficulties in 2024? How are their partner relationships? 

Trinity Logistics wanted to get answers to these questions for you, so we asked a random sample of our shipper and carrier relationships to gauge the effect 2023 had on their business and what their expectations for 2024 in our first Freight Market Survey. Here’s what we found out:

2023 SHipper & Carrier Data: Freight Market Survey Results

Past Challenges – Same, But Different

Considering the recent turndown of demand and the freight market, it’s not a big surprise that money was the biggest issue for shippers and carriers alike. Shippers answered that transportation costs were their biggest challenge in 2023, with supply chain delays/disruption and capacity not far behind. Low rates and increasing operating costs were the main challenges facing carriers. 

Business Impact – Could Have Been Better

Even with the change in consumer demand trending downwards throughout 2023, most shippers answered that their year was good overall. Carriers on the other hand seemed to face a rougher year in business with over half of them stating their year could have been better or was poor. 

A LOOK INTO 2024

Future Challenges – Money Problems

2024 isn’t looking much different in terms of challenges compared to 2023. Shippers look to have the same financial challenges as they did in 2023 with transportation costs, supply chain delays/disruption, and decreased demand being the top concerns selected. Carriers are still concerned about low rates, operating costs, and low freight volumes hurting their businesses. 

Hot Trends

Even though transportation costs are shippers’ strongest concerns in their previous answers, it seems the increased amount of supply chain disruptions and delays we’ve all experienced in these recent years have hit a nerve, with the majority answering that supply chain resilience is the trend their business is most interested in. Cybersecurity also looks to be a growing interest.

Carriers on the other hand, interestingly enough, look to the recent trend of Artificial Intelligence (AI). Also, as noted in the comment boxes of our “Other” option, increased rates and better fuel prices were trends they’d like to see in 2024. 

Load Volumes & Capacity – Slightly Positive Outlook

Overall, shippers are slightly more optimistic for 2024, thinking it won’t bring any change or the change it brings will be positive. Most think load volumes will stay the same or there will be a little more in freight volumes this year. As for truck capacity, they think it will be the same as 2023 or slightly tighter. 

Carriers also think 2024 will bring more freight volumes and that capacity will likely stay the same or get tighten slightly versus 2023.  

Spot or Contract?

Year-over-year, shippers aren’t looking to change much in terms of which market they turn to. Most look to continue to put most of their freight on the spot market.

For carriers, there looks to be some change anticipated. In 2023, most carriers ran spot market freight but in 2024, over half of them look to haul contracted freight. 

Do Shippers Have a TMS?

It’s 2024, so you’d think most shippers would have a transportation management system (TMS), and no surprise, they do. For those that don’t and answered, it seems they did not have a good experience with one in the past or don’t know enough about them. 

Brokers Are the Way to Go

When asked how they like to move their shipments, most shippers use a mix of carriers and third-party logistics providers (3PLs) or just 3PLs. A few do use their own trucks. For those that do outsource to 3PLs, they usually just stick to one provider.

Shippers most often look to a 3PL for help with their everyday shipments, for transportation management, visibility, and access to their capacity. The main reason shippers choose not to work a 3PL for their logistics? They don’t like the risk. 

Transportation Modes – Staying Consistent

Overall, shippers aren’t looking to change what transportation modes they use for their shipments. Truckload and less-than-truckload (LTL) are the primary modes they like to use, with a little diversification sprinkled in.

Exceptional Service Stands the Test of Time

When it comes to their logistics partners, shippers find the most value in receiving exceptional service, with costs coming in as a close second. 

Most Wanted: Long Mileage, Flatbed Shipments

When it comes to mileage, most carrier companies tend to run long-hauls or a mix of short and long shipments. Flatbed hauls are the type of shipments most carriers like to haul with dry van coming in as a close second. 

Load Boards are the Way

With 74 percent selecting this option, load boards are the norm for carriers to find available shipments. Sometimes they use their shipper relationships, and occasionally they make use of a 3PL. 

3PLs – Expanding a Carrier’s Reach

Carriers most often look to a 3PL for help with gaining access to available shipments that they wouldn’t have otherwise. Covering backhauls are another big reason carriers reach out to a 3PL. 

For those that choose to not work with a 3PL, it’s often because of money; rates not being high enough. Surprisingly in the comments, many are not familiar with what a 3PL or freight broker is as well.  

When it comes to measuring value in their 3PL partners, most carriers want good rates and great communication.

Fraud Concerns Growing

Fraud and scams have been growing in the industry, so we wanted to know what carriers think about it. Carriers are most worried about double and triple brokering affecting their businesses compared to concerns of identity theft or cargo theft. 

Successful goal-setting is a necessity for Freight Agents to run prosperous businesses. If you’re feeling stuck with your goal setting, the Fresh Start Effect could help you achieve what you want.

If you perform a web search on the “Fresh Start Effect”, you’ll find a lot of articles and studies on the impact that a Fresh Start Date has on goal setting.  

What is a Fresh Start Date? 

It’s a date that signifies a clear end and a new beginning. New Year’s Day is the epitome of a fresh start date because you’re ending one year and starting a new one. However, a Fresh Start Date doesn’t have to be as well known as New Year’s Day. It can be any day that signifies a new beginning such as your birthday, Mondays, the first day of a new month, etc. 

Why Is a Fresh Start Date Important in Goal-Setting?

Studies show that people are more likely to commit to their goals when centered around a Fresh Start Date. It gives a boost to let go of the past, whether it’s a behavior that you would like to let go of or a new behavior that you would like to start.  

Tips for Freight Agents to Achieve Their Goals

If you’re looking to really set yourself up for success when setting your goals, here are some tips you can put into place.

1. Set Your Fresh Start Date  

Choose your Fresh Start date to give yourself an extra chance at committing to your goal!

2. Make It S.M.A.R.T.  

Using this tried-and-true goal setting method can help you become specific in what you are trying to accomplish. Make sure your goals are specific, measurable, attainable, realistic, and timely, giving you a greater chance at seeing success. 

3. Know Your Why 

Make it personal. Why is this goal important to you? How will your life look different when it is accomplished? Goals that don’t have a personal why behind them can seem arbitrary and make it very easy to quit.

4. Write It Down and Share It!  

Writing down your goal in a place that you can see often, such as a daily planner, helps keep you focused on the goal. Having someone else aware of your goal also helps you stay accountable to yourself!

5. Plan Ahead 

This is the beauty of a Fresh Start Date. By knowing when you are going to start, you can put in the work ahead of time to close out your current chapter and begin the new one.  Whether it’s transitioning and delegating responsibilities or researching and learning so that you can hit the ground running on your fresh start date, having some pre-planning time will allow you to focus on the goal ahead.  

6. Celebrate! 

Having a significant reward or way to signify the achievement of a goal can help maintain motivation. For example, one goal that many of Trinity’s Independent Freight Agents have each year is to achieve Platinum status. This is a designation set aside for Agents that hit production goals in a calendar year. The reward for our Platinum Agents is an all-expense paid vacation for two! It’s a great way to recognize success, celebrate, and network with other Platinum agents so that you can start getting motivated for the next year!

One thing many people forget is that goals don’t just have to be professional; they can be personal, too. Whether you want to strengthen your relationships or learn a new skill, use these tips to get yourself there.  

How Trinity Helps Freight Agents Get a Fresh Start for Their Business

At Trinity, we plan our goals around our monthly periods. This gives us the opportunity to evaluate regularly to ensure that we are staying on track and adjust quickly if needed. With our Independent Freight Agents, we work with them based on their personal business needs. Depending on the particular goal of a Freight Agent office, we may review these monthly, quarterly, or annually.  

For instance, many of our Agents set the goal to achieve Platinum Agent status. Because of this, we have a Platinum Agent tracking tool that we can send out at any time to help them track their progress toward this important goal. 

A Fresh Start Date is just one tactic to setting your Freight Agent business up for success and always a great time to re-evaluate your current brokerage partner.  In fact, Freight Agents who partner with Trinity Logistics often see an average of 20 percent growth within their first two years of joining. 

Check out the details of Trinity’s Freight Agent program to see if making a change at your next Fresh Start Date may be right for your business. 

Stay up to date on the latest information on conditions impacting the freight market, curated by Trinity Logistics through our Freightwaves Sonar subscription.

COULD WE LOSE CARRIER CAPACITY….WITHOUT LOSING ACTUAL CAPACITY?

Certainly, this question could cause one to scratch his head. If we don’t have a decline in the number of operating authorities, or available trucks, then how could we lose capacity? 

Well, technically, the answer is you would not be physically losing trucks. However, an impact could be felt from recent events with regards to container shipping that would make it feel like less trucks are available. With recent geo-political events, and events at home, shipping to the West Coast has become more feasible than it was a year, certainly two years, ago. As ocean carriers are mindful of events in the Red Sea, combined with an easing of labor tensions at the West Coast ports, freight that in prior years was diverted to the East Coast is now heading back to the left coast of our country.  

As you can see in Figure 1.1, container costs from Asia to Los Angeles are over $1700 cheaper than freight bound for an East Coast port, such as New York. Figure 2.1 shows outbound freight volume for the last year in the Los Angeles market, currently seven percent higher than this time last year.  

So how could this impact capacity? When freight hits the East Coast ports, it’s typically consumed close to the port or at the very least, the coast itself. This means more regional runs. When freight hits the West Coast, typically that freight is destined for locations such as Dallas, TX or Chicago, IL, so taking freight up and down the East Coast may be a one-day run. Freight out of the Los Angeles market, heading to further destinations would take a day and a half, two days.  

Same freight, same one-truck move, but now it occupies that truck for twice as long. Additionally, this could necessitate a shifting of fleet resources from one coast to the other, potentially creating an over-capacity on one side of the U.S. while the other coast is more desperate for trucks.

SPRING IN 6 WEEKS?

Will that rodent in Pennsylvania be right this year, and will freight volumes accelerate quicker as a result? First of all, ‘ol Punxsutawney Phil is batting less than 50 percent for his career and the last 10 years he’s only been accurate three times.  

A better canary in the cave would be how the rejection rate index ebbs and flows. As you can see in Figure 3.1, van rejection rates have been pretty stagnant for the past year. Flatbed has remained relatively high and reefer rejection rates have trended up the last five months. If Phil is a soothsayer this year, we expect flatbed rejection rates to continue rising. If produce season also starts earlier than most, reefer rejection rates will then follow. 

As reminder, with increases in rejection rates, shippers typically see transportation costs increase on the spot market.  

Stay tuned for next month’s update to see if an early spring is a turning of the tide for the freight market.

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