Radiant's Freight Market Update

This week: Global fuel prices surge amidst trade disruptions, New York grants $111.1 million for rail and port upgrades, & SEC mandates climate disclosure rule for public companies.

Ocean

India-Europe ocean rates fall due to weakened demand. Container carriers operating in the India-Europe trade route are adjusting prices significantly to optimize vessel capacity for March sailings. Rates for shipments from West India to Europe and the Mediterranean have plummeted by double-digit percentages recently, reflecting evolving trade patterns around southern Africa, according to the Journal of Commerce.

Red Sea crisis could cause EU ETS emissions costs to triple. Ongoing missile attacks by Houthi rebels in the Red Sea have prompted a growing number of commercial vessels to divert their routes to Europe via the Cape of Good Hope, leading to an 80% increase in sailing distance. This shift has resulted in increased emissions liabilities under the EU Emissions Trading System (EU ETS) for shipping companies, as extended routes increase fuel consumption and exposure to emissions regulations. OceanScore “has estimated that the Cape of Good Hope route has caused bunker consumption to triple due to the extended distance.”

Ports

Security concerns over Chinese-made cranes in Canadian ports. Chinese-manufactured cargo cranes that are currently under scrutiny for security risks in the United States are widely deployed in Canadian ports. Concerns stem from the presence of cellular modems on these cranes, which are not integral to their operation and raise suspicions regarding potential malicious activities. The proximity of the manufacturing site to a shipyard linked to China's military further exacerbates security apprehensions, although the Canadian government has not publicly addressed these concerns. Read more from the Financial Post here.

Trucking

Global fuel prices surge amidst trade disruptions. Disruptions along major trade routes, refinery closures, and a resurgence in demand are driving up global fuel prices. Uncertainty in forecasts is heightened ahead of the U.S. presidential election, where inflation is a significant concern. Increases in gasoline and diesel prices outpace those of crude oil in key markets, with factors such as fuel production interruptions and higher shipping costs contributing to the upward trend.

U.S. Class 8 truck sales continue to decline. February marked the seventh consecutive month of year-over-year declines in U.S. Class 8 retail sales, dropping by 12.5% to 17,619 units compared to the same period last year. Year-to-date sales are down by 9.6%, reflecting a sustained downturn in the market.

Rail

New York grants $111.1 Million for rail and port upgrades. New York Governor Kathy Hochul announced the allocation of $111.1 million in grants for 38 port and freight-rail infrastructure projects across the state. The funding, the largest ever awarded under the Passenger and Freight Rail Assistance Program, aims to modernize key freight lines and port facilities. Projects include track and bridge rehabilitation, capacity expansion, and procurement of cleaner rail equipment, enhancing transportation infrastructure and supporting economic growth. Read more about the planned projects here.

Accelera announces first fuel cell-powered locomotive for freight rail. Accelera by Cummins revealed that it has commissioned its first fuel-cell-powered locomotive for freight rail. The emissions-free locomotive was developed as part of the Hy2Rail project in Austria, with funding from the Austrian Research Promotion Agency. Integrating Accelera fuel cell power modules with a battery system, the locomotive features a hybrid propulsion system, that “includes power electronics, on-board hydrogen storage technology, a vehicle control unit, and software,” Accelera said.

Air

FedEx Pilot Union faces internal rift amid contract talks. A dissenting group within the FedEx Express pilots' union has disrupted contract negotiations by petitioning federal authorities to end mediation prematurely. This unexpected move exposes deep divisions within the union, complicating negotiations following the rejection of a tentative labor agreement last summer. The cancellation of scheduled bargaining sessions underscores the challenges faced by the union's leadership in maintaining credibility and unity. Read more from FreightWaves.

International

Prague Airport enters collaborations to boost air cargo development. Prague Airport has signed a memorandum with 12 companies to enhance air cargo operations at Václav Havel Airport in the Czech Republic gateway. Through the Prague Airport Cargo Point platform, the initiative aims to improve competitiveness and stimulate cargo growth. The focus on attracting long-haul passenger carriers underscores the significant revenue potential of air cargo on passenger routes.

Bangladeshi bulk carrier boarded by suspected Somali pirates. The Bangladesh-flagged bulk carrier "Abdullah" with 23 crew members onboard was reportedly boarded by suspected Somali pirates in the Indian Ocean. The United Kingdom Maritime Trade Operations (UKMTO) received reports of armed individuals seizing control of the vessel. Despite the unauthorized armed presence, the crew members are reported unharmed as of the most recent update.

Other

USPS increases security measures for mail collection boxes. The U.S. Postal Service has implemented security enhancements for its blue collection boxes nationwide. Tens of thousands of high-security blue collection boxes, along with electronic locking mechanisms, have been installed in areas prone to postal crime. “These investments will help to modernize USPS’ infrastructure and ensure that the public can safely and securely send and receive mail,” USPS said in a statement.

SEC mandates climate disclosure rule for public companies. The Securities and Exchange Commission (SEC) has passed a climate disclosure rule requiring public companies to disclose climate-related risks in their SEC filings. While the rule excludes Scope 3 emissions, it adopts a phased approach for disclosing Scope 1 and Scope 2 emissions. Manufacturers and their suppliers must navigate compliance with the evolving regulatory landscape, considering state laws and international directives that encompass broader emission reporting requirements.

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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.