Radiant's Freight Market Update

This week: Impending Canadian Rail Strike Poses Threat to Supply Chains, American Airlines Boosts Cargo Capacity on Transatlantic and Transpacific Routes, U.S.-Mexico Trade Surpassed $200 Billion in First Quarter.

Ocean

U.S. freight outlook cloudy despite import surge. Despite a surge in imports and increasing pricing power for ocean carriers, the outlook for the US freight economy remains uncertain. While U.S. retailers raise import forecasts and container volumes grow, the freight demand lacks momentum to pull transportation providers out of a two-year slump. Read more from the Journal of Commerce here.

Expanded shipping routes boost Asia-Mexico trade. Services from Mediterranean Shipping Co. and CMA CGM along with a new sea route from Cosco Shipping Lines, are targeting growing trade between Asia and Mexico. Cosco's new Transpacific Latin Pacific 5 (TLP5) line offers direct connections between China, South Korea, Japan, and Mexico, with transit times ranging from 15 to 20 days. Read more from Freightwaves here.

Ports

Top 12 port volume trends. Port volumes serve as valuable indicators for understanding trade trends. With maritime gateways handling 40% of international freight value, tracking monthly port data provides insights into long-term trade trends. Explore this interactive tracker from SupplyChainDive for the total volumes of the top twelve ports.

Trucking

Diesel price decline indicates market shift. A decline in diesel prices reflects a market downturn, with the retail price dropping for the fourth consecutive week to its lowest level since January. The Department of Energy/Energy Information Administration average weekly retail price declined 5.3 cents a gallon Monday, falling to $3.894, according to FreightWaves. Despite previous upward trends in oil and diesel prices, recent weeks have seen a decline, with Middle East tensions having little impact on oil supplies.

FedEx and UPS increase fuel surcharges. UPS and FedEx increased fuel surcharge calculations, adding pressure on shippers while aiming to boost per-package revenues. UPS raised its domestic Ground, Air, and SurePost fuel surcharge tables by 50 basis points, while FedEx hiked its U.S. ground and Express fuel surcharge tables by 100 basis points effective May 6.

Rail

Union Pacific proposes Mexican train crews for border efficiency. Union Pacific Railroad (UP) has suggested allowing Mexican train crews to operate within a limited US area near Eagle Pass, Texas, to enhance transit speed and deter migrant access to trains along the border. UP CEO Jim Vena drew parallels with Canadian border practices, where Canadian crews hand over freight to US crews at designated points upon entry. Read more from the Journal of Commerce here.

Impending Canadian rail strike poses threat to supply chains. The potential strike of over 9,000 Canadian rail workers, including conductors and engineers, poses a severe threat to the country's supply chains. Teamsters Canada Rail Conference (TCRC) plans a lockout starting May 22, which could disrupt operations at major railways, Canadian National (CN), and Canadian Pacific Kansas City (CPKC). The dispute primarily revolves around proposed modifications to rest period provisions, raising concerns about workplace safety. Members of CN authorized a strike with a 98% affirmative vote and a 93% turnout, while CPKC members showed similar support with a 99% affirmative vote and a 92% turnout, according to SupplyChain 24/7.

Union Pacific enhances intermodal service with faster transit times. Union Pacific has introduced a new intermodal service promising a three-day transit time between Southern California and Metro Chicago. Leveraging 70-mph service capabilities, the railroad aims to compete for business while significantly reducing greenhouse gas emissions.

Air

Amazon expands fleet with 10 Boeing 767 Freighters. Amazon has partnered with Air Transport Services Group (ATSG) to add 10 Boeing 767-300 cargo jets to its fleet over five years. The deal underscores Amazon's growing presence in the US parcel market, with potential for an additional 10 aircraft. ATSG expects to operate 50 freighters for Amazon by year-end.

American Airlines boosts cargo capacity on Transatlantic and Transpacific routes. American Airlines announced expanded cargo capacity on routes from the U.S. to Europe and Asia for the summer season. New services include routes from Barcelona, Copenhagen, Nice, and Venice to various U.S. destinations, supported by year-round operations on select routes. Additionally, the carrier increased transpacific flights and now offers widebody capacity on domestic routes from its DFW hub.

Bluebird Nordic ceases operations amid air cargo market recovery delay. Iceland-based cargo airline Bluebird Nordic closes its operations after 23 years due to rapid expansion during the pandemic, followed by a global freight market cooldown. Despite recent air cargo market recovery, the timing was insufficient to sustain the airline, which surrendered its air operator certificate and is returning aircraft to lessors, according to FreightWaves.

International

U.S.-Mexico trade surpassed $200 billion in first quarter. Mexico remains the top trading partner of the United States, with two-way trade totaling $68.5 billion in March and surpassing $200.1 billion in the first quarter of 2024. However, year-over-year trade with the U.S. declined by 5% in March. Canada was the second-ranked U.S. trade partner in March at $65.1 billion, followed by China at No. 3 with $42.7 billion.

Technology

Amazon introduces electric truck fleet in California to cut shipping emissions. Amazon deployed 50 new heavy-duty electric trucks in Southern California to reduce pollution from its global shipping operations. As part of its commitment to carbon neutrality by 2040, Amazon aims to test large electric vehicles' capabilities in logistical operations, employing them for drayage tasks such as transporting shipping containers and moving packages between its facilities. Read more from Supply Chain 24/7 here.

Other

Final Key Bridge victim recovered, demolition scheduled. The body of the final victim of the Francis Scott Key Bridge collapse in Baltimore has been recovered, concluding the tragic incident. Salvage crews found José Mynor López's body more than a month after the bridge collapse, allowing authorities to plan the controlled demolition of the wreckage. The U.S. Coast Guard announced plans to reopen the Fort McHenry Limited Access Channel to a depth of 45 feet on Friday following the expected removal of the Dali, according to FreightWaves. The three other temporary channels will remain open.

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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.