The Weekly Freight Report for October 7th, 2021
The Top 6 Stories in Freight
Here’s what’s happening this week:
- September sees a slight dip in the LMI but growth continues strong year over year
- Inventory shortages put holidays shopping in danger
- Best practices for retaining your best drivers
- Shippers move to air shipping due to port bottlenecks
- High demand at Canadian ports increases fees by 5x
- Tight capacity triggers price hikes before holidays
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. September sees a slight dip in the LMI but growth continues strong year over year
With the release of the latest Logistics Manager Index Report, the future could see some decreased logistics growth. The LMI decreased to 72.2 in September from its 73.8 reading in August… Who can we thank for the dip in numbers? You guessed it…l the culprit lies in elevated prices in warehousing and transportation coupled with tight capacity. Even with the dip, the index is well above the 50pt mark… meaning the LMI is well above where it usually is and growth is still the trajectory. Managers predict more of the same even until this time next year. Read all about the LMI update here.
2. Inventory shortages put holidays shopping in danger
Worsening bottlenecks. Factory closures. Labor shortages. Low supply of cargo containers. Increased transportation costs. Increased consumer demand. High consumer expectations on delivery times. Empty shelves. Few choices of goods to buy. Holiday anxiety is getting real for shippers… Warehouses are depleted. And retailers are paying upwards of $20K per shipping container and premiums on logistics services to do whatever it takes to get inventory and meet sales targets. See what lengths retails are going to in preparation for the holidays.
3. Best practices for retaining your best drivers
Today, drivers are leaving for greener pastures… or smoother roads… as turnover remains at historic highs. Better wages and benefits. Positive leaders. Convenient shifts. Camaraderie. Empowerment. All of these are ways to keep your best employees and motivate your drivers to work hard for your company. See the details on keeping the best drivers here.
4. Shippers move to air shipping due to port bottlenecks
Who would have thought that shipping “air” would be the US’s biggest export? Ports are moving empty containers out with each sailing to make room for the containers waiting offshore. Most empty containers return to the ports via truck even though 30% of truck appointments are remaining vacant each day. As utilization per ship drives freight costs, empty containers fill up valuable real estate at US ports. Get the data here.
5. High demand at Canadian ports increases fees by 5x
Transloading has spiked demand for 53-foot domestic containers in Vancouver. Shippers with deep pockets are willing to pay a pretty penny… or $1500-per-container… to get a guaranteed container and spot on the train to transport cargo. Canadian Pacific’s guaranteed equipment fee was only $300-per-container 3 months ago. Due to increased demand for containers and the strain demand is putting on domestic shipping, the number of guarantees is being limited and booked out weeks in advance. Learn about the other changes being instituted to combat demand here.
6. Tight capacity triggers price hikes before holidays
A clogged supply chain and increasing customer demand could complicate the holidays for retailers. When approximately 4,000 packages per second are circulating through a system, there is bound to be some sluggish movement. Climbing prices in inventory, warehousing, and transportation are wreaking havoc on the logistics industry and are having an impact on the upcoming holidays. Increased customer demand coupled with slow delivery is triggering an increase in the cost for retailers as they look to store delayed inventories. Click here to see just how stressful this holiday season will be.
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!