Radiant's Freight Market Update

This week: Cargo volumes surge 19% at Port of Los Angeles, trucking tonnage declines for 13th consecutive month, & Mexico's agricultural exports surge to $9.06 billion in early 2024.

Ocean

MSC redirects Israel-linked ships from Persian Gulf. MSC, the sole operator of Israel-affiliated vessels in the Persian Gulf, is rerouting these ships to alternate paths following the recent seizure of the MSC Aries by Iranian forces. Among them, the MSC Jewel and MSC Orion of the Himalaya Express service are being redirected. The MSC Jewel is en route to Jawaharlal Nehru port, skipping Abu Dhabi and Jebel Ali, to join the transpacific Sentosa Shikra lane. Meanwhile, the MSC Orion will offload cargo at Salalah port in Oman before omitting its Abu Dhabi call, with its next deployment pending confirmation. Read more from the Loadstar.

Ports

Third temporary channel expands Baltimore Port access. A third temporary channel has opened for vessels to enter and exit the Port of Baltimore, expanding shipping accessibility amid efforts to salvage collapsed sections of the Francis Scott Key Bridge. This new channel, positioned northeast of the fallen bridge, permits "commercially essential vessels" with specific dimensions, facilitating approximately 15% of pre-collapse commercial activity.

Cargo volumes surge 19% at Port of Los Angeles. Cargo volumes at the Port of Los Angeles surged by 19% year over year in March, marking the eighth consecutive month of growth. Port Executive Director Gene Seroka anticipates sustained robust cargo flow into the second quarter, attributing it to a strong job market, consumer spending, and the port's capacity expansion. While loaded imports increased by 19%, loaded exports saw a notable 47% YoY rise, marking the port's best performance since January 2020, according to Supply Chain Dive.

Trucking

Trucking tonnage declines for 13th consecutive month. American Trucking Associations (ATA) reported a slight 1% year-over-year decline in truck tonnage for March, marking the 13th consecutive month of such declines. The ATA For-Hire Truck Tonnage Index fell to 113.4, the second smallest reading during this period, and a 2% drop from February's figure. ATA Chief Economist Bob Costello noted that the truck freight recession persisted through the first quarter of 2024, with a 0.8% contraction from the previous quarter and a 2.4% decline from a year earlier, according to Transport Topics.

Norfolk Southern improves truck wait times at Chicago terminal. Norfolk Southern Railway (NS) has made strides in alleviating congestion at its Landers terminal in Chicago, where truckers previously faced long wait times to retrieve ocean containers. Between February and March, the percentage of drivers spending more than two hours inside the terminal decreased from 10% to 5.6%. Landers serves as NS' primary location for international cargo, particularly from or to the Port of New York and New Jersey.

Rail

Construction begins on high-speed rail linking Las Vegas and LA. Builders officially broke ground on a $12 billion high-speed train project connecting Las Vegas and Los Angeles. This project, touted as the first of its kind in the United States, aims to reduce travel time between the two cities to under two hours by the end of the decade. Supported by a $3 billion federal investment from the 2021 bipartisan Infrastructure law, the project is seen as a significant step towards a greener, more efficient transportation future. With trains expected to travel at speeds of 186 miles per hour, it promises to revolutionize travel along this route, significantly reducing both commute times and environmental impact. Read more here.

Air

Air Canada Cargo expands to Chicago O’Hare. Air Canada Cargo will introduce service to Chicago O’Hare International Airport (ORD) beginning on June 2, operating three weekly flights with a Boeing 767 freighter. This addition connects Air Canada Cargo's global hub at Toronto Pearson International Airport (YYZ) with its self-handled warehouse operation at ORD, enhancing its freighter network.

US Postal Service to shift air cargo operations to UPS over summer. The U.S. Postal Service plans to transition its daily air cargo volumes to UPS before the FedEx contract expires in September, ensuring continuity of service for customers leading into the busy holiday shipping season. Leveraging UPS's integrated air-and-ground network and bypassing its main sort hub in Louisville, Kentucky, UPS will handle domestic airmail more profitably than its predecessor. This shift follows UPS's recent acquisition of the Postal Service's primary air cargo business from FedEx, with plans to complete the transition before the contract ends in September. Read more from FreightWaves here.

International

AD Ports signs deal to upgrade Luanda Port Terminal. Abu Dhabi's AD Ports Group secured a 20-year concession agreement for Angola's Luanda port terminal, with a possible 10-year extension. AD Ports will invest $251 million initially, potentially rising to $379 million, to modernize and develop the terminal. Joint ventures with local firms will operate the facility, boosting container handling to 350,000 TEU and roro volumes to over 40,000 vehicles by 2026.

London Heathrow faces potential cargo disruption amid refueling strike. A 72-hour strike by AFS's aircraft refueling handlers at London Heathrow Airport, starting on May 4, could potentially disrupt services, including significant numbers of cargo-carrying passenger flights. The strike, involving 50 Unite members, stems from cuts to new staff terms since January 2024. AFS services 35 airlines at Heathrow.

Mexico's agricultural exports surge to $9.06 billion in early 2024. Mexico's Ministry of Agriculture and Rural Development (SADER) and the Bank of Mexico report a 9% year-over-year increase in agricultural exports for the first two months of 2024, totaling $9.06 billion. The U.S. remains Mexico's primary importer, accounting for nearly 90% of its market share, importing $8.1 billion worth of goods. Forecasts by the U.S. Department of Agriculture anticipate Mexican exports to the U.S. to reach $47.2 billion in fiscal year 2024, reflecting a 5% increase from the previous fiscal year, according to FreightWaves.

Other

FedEx to close four Florida facilities. FedEx plans to shut down four facilities in Florida by July 29, impacting 220 employees, including delivery couriers. The closures, part of the company's efforts to streamline operations amidst volume declines, follow similar actions taken last year in other states. FedEx's transformation strategy includes reducing its workforce, with nearly 22,000 jobs cut over the past year.

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The Radiant Network's supply chain and logistics updates provide valuable insights on freight trends, customs regulations, global news, economics, tech, and more. The Radiant Network includes the brands Radiant World Trade Services, Radiant Global Logistics, Radiant Canada, Radiant Road & Rail, Adcom, Airgroup, SBA, and Distribution By Air.

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Radiant World Trade Services is a part of Radiant Logistics, Inc. (NYSE American: RLGT), a publicly traded third-party logistics company that provides technology-enabled global transportation and value-added logistics solutions to a diverse account base. They offer comprehensive services including freight forwarding, truck and rail brokerage, warehouse and distribution, customs brokerage, order fulfillment, inventory management, and technology services. Radiant has an extensive network of offices throughout North America and other key markets worldwide.