Radiant's Freight Market Update

This week: Cargo theft surged by over 57% in 2023, Panama Canal transits hit new low in December, and the Louisiana International Terminal Project receives $226 Million from USDOT.

Ocean

Panama Canal transits hit new low in December. The Panama Canal continues to feel the consequences of its ongoing drought during the dry season, lasting until May. Recent data from the Panama Canal Authority (ACP) reveals a sustained decline in transits, with December experiencing a 4.7% drop compared to November. However, December transits fell at a much lower rate of decline than in November, when transits plunged 21.9% versus October, according to Freight Waves. Reservations were further restricted, but unexpected November rain allowed the ACP to increase reservation slots. December's transits were 27.5% below those in December 2015, before the Neopanamax locks went into service, which took almost a decade to build at a cost exceeding $5 billion.

Ports

Louisiana International Terminal Project receives $226 Million from USDOT. The Louisiana International Terminal (LIT) project in St. Bernard Parish secured a $226 million grant from the U.S. Department of Transportation's Infrastructure For Rebuilding America (INFRA) program earlier this week. This follows a previous $74 million from the federal Mega Grant program, bringing the project closer to its $1.8 billion goal. The LIT, a collaboration between the Port of New Orleans, Ports America, and Terminal Investment Ltd., aims to establish itself as the premier international container gateway in the Gulf of Mexico. The additional funding will speed up progress towards the project's completion around 2028, enabling it to handle 2 million twenty-foot equivalent units annually and accommodate ultra-large container vessels navigating the Panama Canal, according to Freight Waves.

Port of Los Angeles maintains top position with 2% YoY growth. Cargo volumes at the Port of Los Angeles rose 2% YoY to 742,519 total TEUs in December, marking five consecutive months of growth. Despite ending the year as the leading container port in the U.S., the port processed less cargo in 2023 compared to 2022, with a 13% decline at 8.6 million container units. Port Executive Director Gene Seroka emphasized a 3% increase in the West Coast market share compared to East and Gulf Coast ports, highlighting the port's priority of revitalizing cargo and related jobs.

Port Everglades records 3% YoY increase in cargo volumes. Port Everglades experienced a 3% YoY increase in cargo volumes, reaching 83,878 total TEUs in November. This marks the first YoY increase for fiscal year 2024, with loaded exports and empties both rising by 6%, while loaded imports dropped by 5%. Despite the YoY growth, port volumes fell 2.1% month over month, according to Supply Chain Dive.

Trucking

Volvo Trucks announces design overhaul of VNL Tractor. Volvo Trucks North America introduced a significant revamp of its Class 8 VNL tractor, marking the first major overhaul since 2017. Described by VTNA President Peter Voorhoeve as "a quantum leap forward," the redesigned VNL is considered the company's most significant launch since 1996. Approximately 90% of the truck is new, with the order book opening in April and production scheduled to commence in the third quarter.

Canada awards $3.9 million contract for Alaska highway safety improvements. The Canadian government has allocated a $3.9 million construction contract to enhance safety at the Pink Mountain intersection on the Alaska Highway in British Columbia. The project aims to improve the reliability and modernization of crucial road infrastructure, emphasizing the commitment to ensuring safety for the region's economic well-being. Planned safety upgrades include new acceleration and deceleration lanes, left-turn bays, widened roadway elevation, signage adjustments, drainage improvements, and closure of secondary access points. The construction is scheduled to begin in May and finish by September, with a focus on involving indigenous suppliers and workers in line with traditional First Nations lands.

Rail

Surface Transportation Board calculates railroad productivity change. The Surface Transportation Board (STB) presented its calculation for the 2018-2022 railroad productivity change, proposing a 1.1% per year decrease. Comments are due by Feb. 5, with the STB explaining the methodology and inviting input on data accuracy and computations. Read more from Railway Age here.

Union Pacific reports 1% increase in Q4 profit. Union Pacific's fourth-quarter profit rose by 1%, reaching $1.65 billion, compared to $1.64 billion the previous year. The increase is attributed to higher deliveries of fertilizer, imported goods, and vehicles. The Omaha-based railroad announced plans to invest $3.4 billion in network and equipment improvements for the upcoming year.

Air

FAA launches direct inspection of Boeing's aircraft production. In response to a door panel incident on an Alaska Airlines flight, the FAA has initiated a direct inspection of Boeing's production lines. FAA Administrator Mike Whitaker stated that a team of inspectors has been deployed, shifting from an audit to a direct inspection approach. The FAA is collaborating with Boeing and airlines to develop inspection instructions, aiming to facilitate the return of the 737 Max 9 to service. Whitaker, in his third month as FAA Administrator, refrained from predicting a return date, emphasizing the priority of resolving issues before reinstating the planes. Boeing said it intends to temporarily halt operations on multiple production lines to conduct safety sessions for factory workers with a goal of assessing current practices and providing recommendations for enhancement.

International

Trucknet Enterprise introduces Middle East land bridge as freight solution. Israeli digital freight marketplace, Trucknet Enterprise, has collaborated with PureTrans, DP World, Cox Logistics, and WWCS to establish a land bridge across the Middle East. This route connects the Dubai port of Jebel Ali to the port of Mina Salman in Bahrain, passing through Saudi Arabia, Jordan, Haifa in Israel, and Port Said in Egypt. Marketed as an 'express' service, the land bridge is positioned as a faster alternative to sea routes affected by the Red Sea crisis, reducing shipping times by approximately 10 days. The cost is estimated to be 15-20% more expensive, however. Read more from the Loadstar here.

Cargolux launches aerial firefighting unit. Cargolux plans to operate a fleet of 12 Air Tractor AT-802F Fire Boss aircraft over a three-year period with the establishment of Aquarius Aerial Firefighting. The first three aircraft have already been delivered and are set to be deployed in May. With a $72 million investment, Cargolux aims to address the shortage of aerial firefighting capacity in Europe and other regions.

Other

Cargo theft surged by over 57% in 2023. Cargo thefts were up a staggering 57% in 2023 compared to 2022, with losses totaling nearly $130 million, according to CargoNet. The actual figure is likely higher due to non-mandatory reporting. California, Texas, and Florida are identified as the top three hot spots, but incidents are spreading to inland logistics hubs like Louisville, Kentucky. In response, companies are adopting preventative measures and advanced technologies, such as digitally locking systems, telematics, and real-time tracking, to mitigate the growing risk. Read more from CNBC here.

Governors urge President Biden to reconsider electric vehicle mandates. Governors from 16 states have written to President Joe Biden, requesting a reevaluation of the current mandate requiring two of every three vehicles to be battery-electrics by 2032. The letter advocates for market-driven adoption of electric vehicles and asks to “allow American consumers to maintain choice in the types of vehicles they choose to drive.” It was signed by governors from Arkansas, Idaho, Iowa, Louisiana, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Oklahoma, Texas, South Dakota, Utah, Virginia and Wyoming.

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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.