The Top 6 Stories in Freight
Here’s what’s happening this week:
- Freight expenditures surge off the charts
- Carrier minimum liability insurance floated back up to Congress
- Driver recruiting limits growth while costs grow
- March marked a 9-month Asian import record
- Consumer spending shifts but volume thrives on
- Normal means something else for container shippers
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. Freight expenditures surge off the charts
March Cass Freight Index data is in. As volumes surged after February weather holdups, freight payments hit a new record- 27.5% higher year over year. The overall index was equally driven by volumes and rates. And as the strong demand continues, ACT research predicts Q2 y/y comparisons will be in the 40-50% range compared to last year’s shut down. Get the full update here.
2. Carrier minimum liability insurance floated back up to Congress
The topic of insurance hikes for carriers has made its way back to the Congress floor. Just a few years ago a bill was in motion to raise minimum insurance liability up from $750K- but it never advanced past the House of Transportation Committee. Politicians argue it’s necessary due to rising medical costs- but for small carriers, farmers and manufacturers- a rise in insurance would be a death sentence. Get the full details on this developing story here.
3. Driver recruiting limits growth while costs grow
The freight boom is coming at a cost to everyone. Shippers have been feeling it for about a year now- and though business is booming, drivers are feeling the pain too. Driver recruiting problems are painting a similar story to that of 2017-18. Cost inflation from insurance… maintenance… equipment and wages. Carriers are experiencing all of it now and at peak level volume. And if we learned anything from the past, it’s that the pendulum swings… the question is, will it swing wildly between under and oversupply the way it did in the past? Get the details here.
4. March marked a 9-month Asian import record
Already-booming US imports from Asia reached another record as of March. Jumping 22% from February and 90.5% year over year, it was the second busiest month in trade… ever. March and February are historically the slowest months of the year- but in the new normal, nothing is normal. This of course created a massive backlog at West Coast ports… and to ease the pressure, shippers diverted freight to other ports- causing backups and operational issues at almost every major U.S. port. When it will slow down is still up in the air. Get the full story here.
5. Consumer spending shifts but volume thrives on
The shift in spending from products to experiences is starting to take place again as the country opens back up. But volume continues to prevail and is expected to continue doing so as produce season ramps up. Shippers diverting freight to ports outside LA/Long Beach is expected to create lasting volatility. But finally, there’s some good news for shippers. Rejection rates are expected to moderate as contract rates get marked toward spot. Not to mention, more drivers are expected to enter the market as social distance regulations ease and government unemployment benefits temper off… Get the details here.
6. Normal means something else for container shippers
“When will we get back to normal?” It’s a question container shippers have been asking for over a year now. The pandemic… weather conditions… the Suez incident. So much disruption and so many bottlenecks have been the result of numerous unforeseeable events. And JOC is warning shippers that the new normal moving forward will not ever go back to the overcapacity seen in the past. This means shippers- big and small- need to reassess their supply chain strategies to balance transaction costs, supply chain speed, flexibility and resilience. Get the details here.
Need help moving freight across North America? FLS can help. Our network of 54,000 carriers and 400,000 trucks is a great asset to any shipper… and our service levels are impeccable. Give us a try… Get a quote today!