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Radiant's Freight Market Update

Dec 28, 2023

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Some shipping lines plan return to Red Sea while others say it's still too dangerous, U.S. introduces patrol operation for Red Sea shipping, Mexican exports expected to increase cross-border trade in 2024.


Some shipping lines plan return to Red Sea, others say it's still too dangerous. Maersk is planning to send numerous container vessels through the Suez Canal and the Red Sea in the coming days, signaling a return to this route for global shipping firms. Meanwhile, Hapag-Lloyd AG will continue avoiding the Red Sea despite a US-led taskforce, rerouting vessels via the Cape of Good Hope due to recent militant attacks.


Port of New Orleans receives grant for new container terminal. The Port of New Orleans secured a $73.77 million federal grant for the initial phase of the $1.8 billion Louisiana International Terminal project. Upon completion in 2028, the terminal will handle 2 million twenty-foot equivalent units annually, accommodating ultra-large container vessels.


Mexican exports expected to increase cross-border trade in 2024. With global supply chains moving manufacturing to Mexico, nearshoring is poised to drive the North American freight economy in 2024. This trend is contributing to Mexico surpassing China as the leading U.S. trading partner in 2023, with $656 billion in two-way trade from January through November. One of the largest nearshoring projects headed to Mexico will be Tesla’s $5 billion automotive factory in Monterrey, which is scheduled to be completed within the next two years, according to FreightWaves.

Benchmark diesel price rises after 8 weeks of decrease. The eight-week downward trend in the benchmark diesel price came to an end this week after the Department of Energy/Energy Information Administration reported a 2-cent-per-gallon increase, bringing the price to $3.914 per gallon. This rise marked the first increase since the substantial 10.1-cent jump to $4.545 per gallon on October 23. From that date until the price published on December 21, the average retail diesel price, as published by the DOE/EIA, had experienced a decline of 65.1 cents per gallon before the 2-cent increase on Tuesday.


U.S. reopened Mexico rail crossings after closures. Last week, the United States reopened two critical rail crossings connecting Texas and Mexico, five days after their closure due to heightened migrant traffic. U.S. Customs and Border Protection (CBP) announced the resumption of operations on Friday afternoon at the international railway crossing bridges in Eagle Pass and El Paso, Texas. The closures had caused concern among railroads, the agriculture industry, and some lawmakers due to the impact on exports. The White House stated that the crossings would operate 24 hours a day in the coming days, a move welcomed by railroads, U.S. grain industry trade groups, and Mexico's farm lobby. Growers estimated a daily loss of almost 1 million bushels of grain exports during the closure.


Most impactful cargo stories of 2023. The past year brought transformative changes to the air cargo industry. Adjusting to the new normal post-pandemic, the industry witnessed a shift from the high demand of previous years as belly capacity on passenger flights returned. Simple Flying outlined the top air cargo stories of 2023 here.

Crewless cargo aircraft being tested. A large cargo aircraft completed a pilotless flight in a November test approved by the Federal Aviation Administration (FAA in a groundbreaking move for the aviation industry. The automated flight, managed by Reliable Robotics, utilized the Cessna 208B Caravan aircraft. Supervised by a remote pilot stationed 50 miles away, the unmanned aircraft operated for 12 minutes. Read more from Interesting Engineering here.


Antwerp receives bomb threat on MSC boxship. The Port Authority of Antwerp received a bomb threat related to an incoming ship. The Federal Police are currently handling the ongoing investigation, with no additional information available at this time. An anonymous caller warned of explosives on the 5,018 TEU containership, MSC Bhavya V, en route to the port. The Liberian-flagged vessel, which departed Hamburg on December 24, had also visited Bremerhaven, Le Havre (France), Sines (Portugal), and Nemrut (Turkey).


U.S. introduces patrol operation for Red Sea shipping. The U.S. and its allies introduced Operation Prosperity Guardian to reassure shipping lines about the safety of returning to the Red Sea. Despite initial expectations of a swift resolution and minimized container rate impact, a press conference by Defense Department spokesman Maj. Gen. Patrick Ryder provided little assurance of imminent disruptions ending. Ryder's statements suggested that unless the Houthis are easily deterred by tough talk, full-scale military-escorted convoys for commercial ships are not guaranteed. Operation Prosperity Guardian aims to enhance patrols, building upon existing U.S. Navy efforts, with increased warships and international partnerships.


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.