Radiant's Freight Market Update

This week: Red Sea shipping risks continue to escalate, U.S. West Coast ports brace for import surge amid challenges, & Maersk and Hapag-Lloyd to enter into operational cooperation.

Ocean

Red Sea shipping risks continue to escalate. Despite U.S. and U.K. airstrikes in Yemen, the Red Sea remains perilous for shipping. Connecticut-based Eagle Bulk's Gibraltar Eagle and the Greek-owned Zografia fell victim to anti-ship ballistic missiles. Shell, MOL, NYK, and K-Line have all suspended Red Sea transits. Container-ship diversions around the Cape of Good Hope are likely to last for months, impacting spot rates and influencing 2023 trans-Pacific contract negotiations.

If you have any specific concerns or questions, please contact us.

Ports

U.S. West Coast ports brace for import surge amid challenges. Anticipating a surge in imports, U.S. West Coast ports face challenges from geopolitical and supply chain issues. Increased throughput, surpassing East and Gulf Coast ports, signals optimism among ocean carriers. While infrastructure projects enhance port capabilities, concerns linger over trucking capacity due to volume drops in Los Angeles and Long Beach. California's shift to electric trucks and chassis ownership challenges further complicate the situation. Read more from the Loadstar here.

Trucking

Multiple Canadian trucking companies suspended following collisions. Following collisions with a tunnel and highway sign, Canadian authorities suspended two Vancouver-area trucking companies, TSD Holdings Inc. and International Machine Transport Inc. These suspensions come after the shutdown of Chohan Freight Forwarders after an overpass collision in December. According to FreightWaves, the Ministry of Transportation recorded 17 overpass collisions involving tractor-trailers in 2023. New rules and fines announced by the agency aim to enhance safety, including in-cab warning devices for dump-style vehicles and over-height-vehicle fines.

Rail

Maersk adopts rail alternative amid Panama Canal constraints. A.P. Moller-Maersk announced plans to navigate around the drought-affected Panama Canal by employing a freight railroad. Due to low water levels limiting large ship passages, Maersk's Oceania-Americas (OC1) service will shift from canal transits to utilizing the Panama Canal Railway—a 47-mile rail line running parallel to the canal, linking the Atlantic and Pacific oceans. According to FreightWaves, vessels that used the Panama Canal will now use a “land bridge” creating two separate rail loops, one for cargo headed to the Atlantic and another for the Pacific. While northbound vessels foresee no delays, southbound vessels may experience some disruptions.

Air

FAA completes initial inspections on grounded Boeing 737 MAX 9 jets. The Federal Aviation Administration (FAA) has finished inspections on the first batch of 40 Boeing 737 MAX 9 jets, a crucial step toward potentially ungrounding the model. Following a mid-air cabin panel blowout on Jan. 5, the FAA had mandated re-inspections for 40 of the 171 grounded planes. The agency will now review the results to determine the safety of allowing MAX 9s to resume flying. Boeing has enlisted retired Navy admiral Kirkland Donald and external experts to assess the aircraft quality management system, including manufacturing practices and supplier quality handling, providing recommendations to President and CEO Dave Calhoun and the Boeing board of directors’ Aerospace Safety Committee.

International

Maersk and Hapag-Lloyd to enter into operational cooperation. A.P. Moller-Maersk and Hapag-Lloyd have announced plans to enter into an agreement called 'Gemini Cooperation' beginning in February 2025, pooling a fleet of approximately 290 vessels with a combined capacity of 3.4 million TEUs. The network will encompass seven trade lanes, incorporating Asia–U.S. West Coast, Asia–U.S. East Coast, and Transatlantic routes, featuring 58 new services and around 6,000 port-to-port combinations.

Other

Some U.S. cities to test zero-emissions delivery strategies. Eight U.S. cities and one county are set to test out innovative strategies aimed at reducing delivery-related greenhouse gas emissions. Launched on Jan. 9 by Climate Mayors, C40, and the Los Angeles Cleantech Incubator, with funding from Wells Fargo, the zero-emissions delivery challenge involves: Los Angeles, Pittsburgh, New York City, Washington, D.C., Santa Monica, Oakland, Portland, and Louisville. Miami-Dade County, Florida, will also participate. This initiative aims to address growing concerns about the environmental impact of online order-delivery trucks on air quality and climate, particularly in low-income, disadvantaged communities along the first and last mile of the supply chain. Read more from Supply Chain Dive here.

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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.