Radiant's Freight Market Update

This week: East Coast ports ready for cargo diversions, Teamsters Canada authorizes strike vote for CN and CPKC crews, & UPS secures USPS air cargo contract.

Ocean

Trans-Pacific container rates plummet. This week saw another significant drop in eastbound trans-Pacific ocean container spot rates. With container ship capacity rebounding on the trade lane, rates fell by 17.8% to $2,976 per FEU from the previous $3,620. Since March 1, rates have plunged over 36% due to network adjustments and loosening capacity post-Red Sea crisis.

Ports

East Coast ports ready for cargo diversions. Alternative East Coast ports stand ready to accommodate cargo diverted from Baltimore, following the collapse of the Francis Scott Key bridge and the suspension of vessel traffic. Ports of New York, New Jersey, and Virginia have said they are collaborating with shippers and Maryland counterparts to manage increased cargo flow effectively. Crews in Baltimore have been diligently working to open temporary channels to allow limited numbers of ships to bypass the wreckage.

Port of Seattle unveils modernized terminal. The Port of Seattle’s Terminal 5 inaugurated its fully modernized south berth with the arrival of the MSC Lily, an 8,800 TEU containership. This marked the opening of Phase 2 of the Terminal 5 Modernization Program, featuring state-of-the-art infrastructure to enhance operational efficiency and support sustainable growth. Read more from World Cargo News.

Trucking

Federal government addresses truck emissions challenge. The Biden administration acknowledged the cost challenge of transitioning trucking to zero-emission vehicles, but pledged federal support. “The overarching challenge is aligning the market-driven desire from fleets to adopt zero-emission freight vehicles with the resources required to make it successful, and right now, they cost more,” said executive director of the U.S. Joint Office of Energy and Transportation Gabe Klein. Subsidies aim to bridge the gap, while accessible charging infrastructure is crucial for widespread adoption. The EPA's Phase 3 rule for heavy-duty vehicles, spanning model years 2027 to 2032, aims to mitigate 1 billion tons of greenhouse gas emissions and yield $13 billion in annualized public health benefits. Read more from Freight Waves here.

Ontario opens new truck inspection station. Canada’s Ontario province inaugurated a new commercial vehicle inspection station along Highway 11/17, a vital Trans-Canada Highway route into the Port of Thunder Bay. Equipped with advanced technology, the $30 million facility aims to improve road safety and expedite transit infrastructure. “The new Shuniah commercial vehicle inspection station will help reduce the risk of accidents, protect everyone on the road and ensure the safe movement of goods across northern Ontario,” said Prabmeet Sarkaria, Minister of Transportation.

Rail

Federal rule mandates two-person crews on freight railroads. Major freight railroads are now required to maintain two-person crews on most routes following the finalization of a new federal rule by the Transportation Department’s Federal Railroad Administration. The rule, developed over two years, responds to safety and job concerns raised by rail unions, which emphasize the critical role of conductors in train operations and emergency response. Read more from the Associated Press here.

Teamsters Canada authorizes strike vote for CN and CPKC crews. The Teamsters Canada Rail Conference has authorized a strike vote for Canadian National and Canadian Pacific Kansas City engineers and conductors amid stalled contract negotiations. If approved, a walkout or lockout could occur as early as May 22.

Air

UPS secures USPS air cargo contract. UPS has secured a significant air cargo contract from the United States Postal Service, positioning itself as the primary air cargo provider for USPS. The contract expands upon an existing partnership and underscores UPS’s role in moving the majority of air cargo for USPS within the U.S. USPS’s current air cargo contract with FedEx Corp. is set to expire in late September.

Air cargo demand surged in February. February saw the third consecutive month of double-digit year-on-year growth in air cargo demand, with total cargo tonne-kilometers (CTKs) up by 11.9% compared to February 2023, according to data from the International Air Transport Association (IATA). Available cargo tonne-kilometers (ACTKs) increased by 13.4%, driven by the return of belly capacity. Despite a slight dip in the average load factor to 45.1%, the strong demand growth outpaced cross-border trade expansion.

International

Taiwan experiences strongest earthquake in 25 years. Taiwan experienced its’ most powerful earthquake in 25 years Wednesday morning, claiming nine lives and leaving dozens trapped in quarries. The tremor, which injured over 1,000 people, originated off the coast of rural Hualien County, 150 kilometers (93 miles) from capital Taipei, which also felt the impact. A tsunami warning was initially issued, but has since been rescinded.

Russia’s container market surges. Russia’s container market saw an 18% year-on-year increase, totaling 1.05 million TEU in the first two months of the year. Growth across import, export, railway transit, and domestic traffic sectors, notably driven by container traffic through Russian Baltic Sea ports, reflects a robust market despite the departure of several global shipping giants from Russia in 2022.

Technology

Drone delivery providers continuing to advance. Drone delivery companies are advancing their capabilities and expanding their networks, signaling increased adoption of drones in last-mile logistics. Partnerships, regulatory progress, and enhanced service offerings from industry players like Zipline, DroneUp, and Wing illustrate the growing role of drones in supply chain operations. Read about some of the new developments in drone delivery from Supply Chain Dive here.

Other

U.S. halts oil reserve purchases amid price surge. Due to increasing prices, the Biden administration has decided not to buy oil for the Strategic Petroleum Reserve. The Energy Department aims to prioritize taxpayers' interests and will monitor market conditions instead. The U.S. benchmark has reached over $85 a barrel, with recent purchases averaged around $81 per barrel, despite a target of $79 or lower. The Energy Department has been slowly replenishing the reserve, currently holding about 363 million barrels, down from nearly 600 million in 2022.

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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.