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Radiant's Freight Market Update

Dec 14, 2023

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Carriers eye forward market return amidst increasing demand, Southern California ports report strong November volumes, and U.S. and Canada jointly aim to reduce locomotive emissions to net zero.


Carriers eye forward market return amidst increasing demand. Increasing forward demand is luring ocean carriers back to chartering, with major vessels largely booked until next spring, reinforcing daily hire rates. Despite predicted 3-4% demand growth for the next year, carriers report a "significant improvement" in six-week booking visibility. Carriers are responding with rate restoration, notably on the Asia-North Europe trade, where FAK rates of $3,000 per 40ft are announced for January 1, surpassing earlier market spot rates of $1,000. MSC's recent support increases the likelihood of the higher prices being successful, according to gCaptain.

Panama Canal transits continue to plummet, disruptions will persist into 2024. Restrictions at the Panama Canal have resulted in a 20% decrease in vessel transits over the past month, as daily transits were reduced due to a severe drought. The Panama Canal Authority had announced a gradual reduction to 18 transits per day by February 1, cutting it in half from the normal level. This decline is causing delays for shippers, prompting longer routes and increased freight costs to avoid congestion and high transit fees. Delays for ships carrying crops have reached up to three weeks, with limited transit slots prioritized by container vessels and others with regular schedules. Analysts suggest these restrictions may persist until the wet season in 2024 replenishes reservoirs, potentially returning to normal shipping by April or May.


Georgia Department of Transportation to replace Talmadge Bridge at Port of Savannah. The Georgia Ports Authority had initially announced plans to raise the Talmadge Bridge without closure back in October, but a shift in strategy now involves a complete replacement, per the Georgia Department of Transportation (GDOT). The original plan aimed to elevate the bridge without disrupting traffic by excavating the shipping channel, but limitations in channel depth make further excavation impractical. Mayor Van Johnson acknowledged that growing commerce in the area led to the decision to replace the bridge. The bridge will have to be larger in order to accommodate newly built cargo ships, which are larger due to their fuel efficiency. The Port of Savannah currently ranks as the third busiest seaport in the United States.

Southern California ports report strong November volumes. The ports of Los Angeles and Long Beach reported their November volumes this week, defying expectations. The West Coast ports emphasized strong U.S. consumer spending as a key factor driving volumes. Notably, the ports have rebounded to pre-pandemic levels, demonstrating growth compared to the levels observed in 2019. Read more from Maritime Executive here.


ATA announces support of National Defense Authorization Act. The American Trucking Associations (ATA) announced that it supports the National Defense Authorization Act (NDAA), which aims to improve access to military bases and strengthen cross-border trade, according to The Trucker. The legislation now awaits approval from both the House and Senate before reaching the president's desk for signing into law. “These wins for trucking are particularly noteworthy during a Congress that hasn’t found agreement often,” said Bill Sullivan, ATA’s chief advocacy and public affairs officer. “It proves that we still can push good policies forward and succeed.”


CN to acquire Iowa Northern Railway. Canadian railway CN intends to purchase Iowa Northern Railway (IANR), a short-line railroad covering 275 miles of track in Iowa. Based in Waterloo, IANR, a privately-owned entity connecting with CN's network, caters to agricultural and industrial markets in the Upper Midwest. The acquisition details, including costs, were not disclosed. However, regulatory approval from the Surface Transportation Board is pending, with potential approval anticipated in 2024. IANR mainly serves agricultural and industrial markets in the Upper Midwest.

U.S. and Canada jointly aim to reduce locomotive emissions to net zero. During the COP28 United Nations climate change conference in Dubai, leaders from the U.S. and Canada announced plans to collaborate on reducing greenhouse gas emissions in the railway sector. The initiative, known as the Rail Decarbonization Task Force, aims to explore and expedite the adoption of zero-emissions locomotive technologies. U.S. Energy Secretary Jennifer M. Granholm, U.S. Transportation Secretary Pete Buttigieg, and Canadian Minister of Transport Pablo Rodriguez outlined three key goals for the task force in a joint statement released this week. Those goals include “establish[ing] a joint research agenda to test the safe integration of emerging technologies, including hydrogen-powered and battery-electric locomotives; coordinate strategies to accelerate the rail sector’s safe transition from diesel-powered locomotives to zero-emission technologies to ensure a net-zero rail sector by no later than 2050; and collaborat[ing] on the development of a U.S.-Canada rail sector net-zero climate model by 2025.”


First Amazon Air Airbus A330 P2F cargo plane begins service in U.S. The first Amazon Air Airbus A330P2F cargo plane, converted by Elbe Flugzeugwerke (EFW), has commenced operations in the USA. The airline has a standing order for 10 A330P2F jets, with the first delivered to contracted operator Hawaiian Airlines. The aircraft is already in service on various routes across the country, providing additional capacity following the heightened demand during Amazon's busiest period, the Christmas shopping season.


China looks to bolster supply chains as production shift continues. China is taking steps to reinforce its supply chains in response to mounting concerns about western disengagement, despite notable increases in volumes on certain new rail routes. During this week's Central Economic Work Conference in Beijing, China's leadership declared intentions to enhance supply chain resilience, aiming to mitigate the risk of further losses of international shippers amidst heightened competition from India and Mexico. While specific actions were not disclosed, this announcement coincided with China's November export figures, which revealed minimal year-on-year growth following six consecutive months of contraction.


Tesla recalls nearly all cars sold in U.S. over monitoring defect. Tesla is recalling over 2 million vehicles sold in the U.S. to address a software issue and rectify a faulty system designed to ensure driver attention while using Autopilot. Documents released on December 13 by U.S. safety regulators indicate that the update will enhance warnings and alerts for drivers, with potential limitations on where basic versions of Autopilot can function. The recall follows a two-year investigation by the National Highway Traffic Safety Administration into a series of accidents occurring during the use of the Autopilot partially automated driving system, including some that resulted in fatalities.

USDOT cargo visibility data-sharing initiative provides insights on supply chain. The White House-led initiative to share crucial supply chain information, including container volume destinations, equipment availability, and labor demands, is providing U.S. supply chain stakeholders with enhanced insights to strategically allocate resources. Launched in March 2022, the Freight Logistics Optimization Works (FLOW) program recently introduced an application programming interface (API). This API allows participants to seamlessly integrate supply-demand data across various metrics directly into their transportation management decision systems. Read more from The Journal of Commerce here.


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.


Radiant World Trade Services is a part of Radiant Logistics, Inc. [linked] (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.