Radiant's Freight Market Update

This week: Air Force trials autonomous cargo planes, Teamsters Canada warns of rail strike threat, & Georgia breaks export record in 2023 with nearly $50B in trade.

Ocean

Ocean container lines struggle amid port congestion and ship shortages. Shipping lines are grappling with port congestion and ship shortages due to the ongoing crisis in the Red Sea, now in its third month. Jeremy Nixon, CEO of Ocean Network Express in Japan, highlighted scheduling challenges resulting from vessels arriving at ports on unscheduled days. Diversions to the Cape of Good Hope route have extended voyages by 10 to 14 days, complicating global logistics. Increased volumes at key hub ports in Asia and the Mediterranean further exacerbate the situation.

Ports

Georgia breaks export record in 2023 with nearly $50B in trade. Georgia's exports soared to a record $49.7 billion in 2023, marking the third consecutive year of growth. Major exports included civilian aircraft, motor vehicles, turbojets, poultry, and chemical wood pulp. Canada, Mexico, China, Germany, and Singapore were among the top export markets. Georgia ranked seventh in the U.S. for trade value, facilitating over $186 billion in transactions and ranking 12th for export value.

Alabama Port Authority and CSX partner for intermodal facility. The Alabama Port Authority announced plans to collaborate with CSX Transportation to construct an intermodal container facility in Decatur, enhancing rail connectivity with the Port of Mobile and northern Alabama. This partnership aims to expedite freight transfer, with the project set for completion by 2026. The ICTF at the Port of Mobile provides access to five Class I freight railroads and four shortline railroads, according to Freight Waves.

Oakland Terminal implements overnight shift to clear vessel backlog. Oakland International Container Terminal (OICT) is tackling a backlog of nine vessels by introducing an overnight shift, aiming to clear congestion within two weeks. This initiative, including a rare "hoot owl" shift from 3 a.m. to 8 a.m., reflects efforts to alleviate strain on the facility, which handles the majority of the port's container volume.

Trucking

Truck tonnage declines in January. The American Trucking Association (ATA) reported a decline in truck tonnage for January, dampening hopes for a freight industry turnaround. The ATA For-Hire Truck Tonnage Index fell 4.7% year-over-year to 111.0 and 3.5% month-over-month. ATA's Chief Economist, Bob Costello, attributed the decline to adverse winter weather and decreases in retail sales, housing starts, and manufacturing output. Despite this, the Logistics Managers’ Index showed a slight improvement, reaching 55.6 compared to the previous year's 54.7.

Rail

Teamsters Canada warns of rail strike threat. Teamsters Canada said a work stoppage could occur involving nearly 9,300 workers at Canada's major rail operators, CN and CPKC. Negotiations have stalled over safety-critical rest provisions and wage increases, prompting CN and CPKC to file notices of dispute. The clock starts ticking on a possible strike or lockout, potentially occurring in 81 days or early May. Read more from Freight Waves here.

FRA presents new long-distance rail routes. The Federal Railroad Administration unveiled 15 new or revived long-distance routes as part of ongoing Amtrak Daily Long-Distance Service Study discussions. These routes are proposed following stakeholder workshops and will be evaluated further in accordance with the Infrastructure Investment and Jobs Act of 2021. A final report of recommendations to Congress will be made after another round of meetings this spring. More details on the process are available on the study website.

Air

Air Force trials autonomous cargo planes. Pyka, an autonomous electric cargo plane builder, delivered the first unit of its autonomous Pyka Pelican Cargo aircraft fleet to the innovation arm of the Department of Air Force (DAF), AFWERX, for trials within the U.S. Air Force's Agility Prime program. The planes, with a 400-pound payload capacity and 200-mile range, aim to advance commercial and military interests in emerging technologies. Air Force researchers additionally ran successful military drills using California-based startup Xwing's autonomous cargo aircraft, demonstrating capabilities in transporting “mission-critical cargo.”

Airbus progresses A350F development. Airbus has accelerated the development of its A350 freighter, targeting final assembly and first flight milestones in 2025. Industrialization processes are underway, with parts production and testing in progress. Key components, including the lower fuselage skin and wing-box feet, are being manufactured, while comprehensive testing of systems and components, such as the environmental control system and cargo loading system controls, is ongoing.

International

Mexican rail freight project presents alternative to Panama Canal. Talks are continuing surrounding Mexico's Tehuantepec Interoceanic Corridor as the project gains traction amid nearshoring growth and Panama Canal challenges. The proposed intermodal rail between Coatzacoalcos and Salina Cruz ports, spanning approximately 300 km, offers the shortest link between Mexico's Pacific and Gulf coasts. With a capacity target of 1.4 million TEU by 2033, the project aims to bolster regional economic and logistics development. However, challenges include the need for significant capacity expansion at both ports, from 300,000 TEU to 1.3 million TEU, and potential implications for stakeholders like CPKC, which has interests in the Panama Canal Railway.

Technology

UPS and NSDC collaborate to enhance tech and logistics skills for Indian youth. The UPS India Technology Centre partnered with the National Skill Development Corporation (NSDC) to address skill development challenges among Indian youth. With only 49% meeting employability standards, initiatives like this Memorandum of Understanding (MoU) aim to bridge the education-employment gap. By fostering industry-ready technology skills, the collaboration seeks to empower Indian youth for local and global opportunities, aligning with India's ambition to become a $5 trillion economy.

Other

Lawmakers call for investigation into forced labor in seafood supply chains. Bipartisan lawmakers are urging the Biden administration to investigate forced labor allegations in Chinese seafood supply chains ahead of the World Trade Organization’s Ministerial Conference. The letter, signed by 12 members, advocates for evaluating and addressing forced labor concerns, especially those involving Uyghur forced labor. The move underscores Congress's commitment to combat human trafficking and hold accountable entities engaged in such practices.

Pennsylvania bill proposes community referendums on warehouse development. Pennsylvania State Representative Joe Emrick introduced legislation to allow local residents to vote on decisions regarding warehouse development. House Bill 1960 would require voter referendum for warehouses or distribution centers exceeding 100,000 square feet and situated on three or more acres of land. This initiative aims to amplify community voices and ensure greater transparency in high-impact development projects.

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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.