Radiant's Freight Market Update

This week: Carrier schedule reliability declined in January, Port of Savannah sees strong growth, & rail industry urges rigorous review of CN's Iowa Northern acquisition.

Ocean

Challenges persist for Panama Canal. The Panama Canal continues to face ongoing drought issues, impacting global shipping. Despite slight improvements, climate change and structural factors are hindering transit through the waterway. Low water levels in Lake Gatun, exacerbated by the El Niño phenomenon, threaten transit capacity. The forecast anticipates relief with the onset of La Niña by mid-2024, breaking the drought cycle.

Carrier schedule reliability declined in January. Carrier schedule reliability declined notably across major ocean trade lanes in January, particularly affected by Red Sea diversions, significantly impacting routes beyond Asia-Europe and Asia-US East Coast. Sea-Intelligence Maritime Analysis reported a global on-time performance of 51.6%, the lowest since September 2022. Lars Jensen, CEO and founder of Vespucci Maritime and an analyst at the Journal of Commerce, highlighted that this figure is well below pre-pandemic levels, which typically ranged between 70% and 80%.

Ports

Port of Savannah sees strong growth. Georgia Ports Authority reported significant growth at the Port of Savannah in February. Total throughput was 451,670 twenty-foot equivalent units (TEUs), representing a 14.4% year-over-year increase. Loaded imports totaling 219,000 TEUs were up 19% year over year, and loaded exports of 121,930 TEUs were 10% above February 2023, according to Freight Waves. Strong performance in loaded imports and exports indicates growing momentum, surpassing previous peak volumes and pointing to continued growth through March.

Port of Virginia invests in cargo operations improvements. The Port of Virginia is set to enhance cargo operations through a $1.4 billion infrastructure investment, featuring a widened shipping channel. The expanded channel now enables two-way passage for ultra-large container vessels, improving efficiency and accommodating more vessels. This investment, part of the Gateway Investment Program, includes dredging the channel and implementing six additional port-related freight projects, promising increased capacity and streamlined cargo movement, according to SupplyChainDive.

Trucking

Canada tackles trucking sector trade barriers. The Canadian Government has initiated a project to address internal trade and labor mobility barriers in the trucking sector. Led by Altis Consulting, the research aims to identify obstacles and develop policy solutions. The project seeks to streamline interprovincial regulations, align maintenance standards, and address sector-specific challenges by collaborating with industry stakeholders. Participation in focus groups during March and April 2024 is open to trucking businesses and workers nationwide. Read more from the Canadian Trucking Alliance here.

Rail

Rail industry urges rigorous review of CN's Iowa Northern acquisition. Canadian Pacific Kansas City (CPKC) and Iowa Interstate challenged the Surface Transportation Board's classification of Canadian National's (CN) acquisition of Iowa Northern Railway as a minor transaction last week. CPKC and Iowa Interstate assert that the deal demands a significant review due to its potential ramifications for regional competition and diminished rail competition in the state. These objections align with the National Feed and Grain Association's stance, urging the STB to reconsider the classification. The significance of this decision lies in its impact on the regulatory process, potentially leading to a more extensive and prolonged review period. CN has asserted that CPKC's comments don't merit reconsideration, as they were submitted late. CN believes acquiring Iowa Northern will bolster rail competition and benefit Iowa shippers, while CPKC argues it will stifle competition in the state.

Air

FAA gives Boeing 90 days to address safety issues. The Federal Aviation Administration (FAA) is mandating that Boeing address systemic safety and quality-control concerns within 90 days. Following an independent expert panel's report revealing flaws in Boeing's safety culture and management, FAA Administrator Michael Whitaker emphasized the need for substantial improvements. Spirit Aerosystems also confirmed last week that it is in talks of a possible acquisition by Boeing.

International

China investing in transport infrastructure. China unveiled plans for extensive investment in logistics infrastructure to drive economic growth. Dalian announced a $33 billion investment in its transport network, focusing on port expansion and new rail bridges with the aim to increase container volumes by 12% and open new ocean routes. Shanghai has begun projects to boost Yangtze River Delta flows, including the construction of a new container terminal. Read more from the Loadstar here.

Other

GM expands pickup truck recall over tailgate safety issue. General Motors has recalled a further 820,000 pickup trucks in North America due to potential tailgate safety concerns. The National Highway Traffic Safety Administration (NHTSA) announced the recall expansion, which follows an initial recall of 323,232 trucks last month. The recall affects Chevrolet Silverado and GMC Sierra models sold between 2020 and 2024.

SEC removes scope 3 emissions from final climate disclosure rule. The Securities and Exchange Commission (SEC) is voting this week on its finalized climate disclosure rule, with adjustments to scope requirements. Scope 3 emissions reporting is omitted while reporting obligations for scope 1 and scope 2 emissions are scaled back. These requirements will be phased in, applying initially to large accelerated filers and accelerated filers. The decision to exclude scope 3 stems from concerns over compliance costs and data consistency, reflecting feedback received during the comment period. Read more from SupplyChainDive 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.