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CARRIERS
CARRIERS
Truckers will hit 2 regions of snowstorms this week

According to Freightwaves:

As Texas and other Southern states continue to thaw from last week’s major winter storms, backlogged freight should gradually find its way in and out of those areas.

Meanwhile, drivers will have to chain up as winter storms hit the Northeast and Northwest this week.

Northeast

Snowfall will spread across the Northeast Monday, including portions of the I-95 corridor. This won’t be a major storm, with large metropolitan areas like Philadelphia, New York City and Boston receiving only an inch or two. A mix of rain, snow and freezing rain will make roads, especially some bridges and overpasses, extra slick in Baltimore and Washington. 

Most areas west of I-95 will see up to 5 or 6 inches of snowfall, with locally higher amounts downwind of lakes Erie and Ontario. This includes places mainly in western New York, impacting I-81 and I-90. Lake-effect snow showers will linger there on Tuesday and possibly Wednesday too.

Northwest

The Cascades and northern Rockies will get pounded by additional periods of heavy snowfall through Friday. Wednesday may be the only day this week with little to no snowfall.

Snowfall totals in the higher elevations could reach 36-plus inches, which isn’t debilitating. But drivers will have to slow down as they travel over mountain passes.

Winds will be strong enough to produce blowing snow and possible whiteout conditions Monday in western Montana. The National Weather Service has issued a blizzard warning for the northern Rocky Mountain Front, including the Logan Pass area. Winds there could gust as high as 75 mph.

Even in areas of Montana where snowfall doesn’t occur, winds will pose a high risk of rollovers. Gust will hit 60 to 80 mph across most of the state Monday.

Some lower elevations in the Cascades and northern Rockies may get drenched with up to 4 inches of rainfall. Mudslides and localized flooding could lead to roadblocks.

By: LFS Marketing

February 23, 2021

News
News LFS
Borderlands: Winter freeze could devastate Texas citrus industry

According to Freightwaves:

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Winter freeze devastates Texas produce industry; $100 million industrial park to be built near U.S.-Mexico border; USITC determines blueberry imports don’t harm U.S. growers; and CBP seizes marijuana worth $1.1 million.

Winter freeze could devastate Texas produce industry

The arctic blast that barreled through Texas last week dealt the Rio Grande Valley produce industry a blow, harming crops and potentially damaging future groves in the region.

The weather event was one of the worst the Rio Grande Valley has ever seen, said Tommy Wilkins, director of sales at Donna, Texas-based Grow Farms Texas.

“I have been in the business for 45 years and I do not recall this widespread cold and the temperature level they got down to, and for a significant amount of time it stayed down,” Wilkins told FreightWaves. 

Grow Farms Texas is a grower, distributor and shipper of everything from bell peppers, eggplant and squash to red cabbage, sweet onions and avocados.

“This will be a major hit to growers across the board. It will be a couple of days before we see the total extent of damage,” Wilkins said.

The Rio Grande Valley is the epicenter of the Lone Star State’s produce industry. The area stretches across the southeastern tip of Texas along the U.S.-Mexico border. The region includes cities such as Donna, Edinburg, McAllen, Mission and Pharr. 

More than 35 types of fruits and vegetables are grown in the Rio Grande Valley, including grapefruit, oranges, avocados, cabbage, aloe vera, onions, cotton, sugarcane and watermelons. 

The produce industry in the valley includes cold storage warehouses, wholesalers, distributors, customs brokers and transportation companies.

The winter freeze will affect the entire industry, from growers to shippers to packing and transport drivers, said Dante Galeazzi, president of the Texas International Produce Association.

Along with the freezing temperatures, the Rio Grande Valley like most of Texas had to contend with blackouts that affected millions across the state.

“The loss of power has been a tremendous issue. It makes accessing product in the warehouses nearly impossible,” Galeazzi said. “Most forklifts are electric now, so without a way to charge that equipment there was no way to move pallets of product in warehouses without power.”

Galeazzi said power began returning to the valley around Wednesday for many businesses, and warehouses were coming back online.

“Unfortunately, we’re seeing there are no trucks to move product out of these warehouses. Equipment is being delayed throughout the state by snow, icy roads, sleet and freezing rain,” Galeazzi said. “Even if you could get a truck, how would they get out of the area with all the fuel shortages?”

FreightWaves’ Reefer Outbound Tender Reject Index for Texas (ROTRI.TX) shows reefer rejection rates rising from near 27% on Feb. 11 to almost 32% on Thursday. Reefer rejections for Houston (ROTRI.HOU) rose from 36% to 61% over the same period, while Dallas (ROTRI.DAL) reefer rejections hovered around 28% for most of the week.

The increase in reefer rejections in Houston and across most of Texas is an indication carriers have less availability, which is pushing rates back up.

“I heard [Thursday] morning that there was several hundred loads posted available, and something like five trucks available with transportation rates for spot market transactions several thousand dollars higher than the week prior in the same lanes,” Galeazzi said.

Wilkins said the freeze will force his company to change shipping strategies this season.

“We will not load the truckload volume like we would have for sure in previous years,” Wilkins said. “Citrus, onions, dry vegetables, watermelons, what an unfortunate blow to farmers who give it their all.”   

April Flowers, director of marketing for Lone Star Citrus Growers (LSCG), said it is too soon to tell how much damage the freeze caused to their groves.

“It will take several weeks to get a clear picture of the extent of the damage, but we already had an early bloom on some trees that was lost in the freeze, so we’ll likely have a smaller crop next year — the jury is still out on that estimate,” Flowers said. “The next several weeks will provide a clearer picture as the trees defoliate and then have an opportunity to flush.”

LSCG is based in Mission, Texas. The company is a grower, packer, marketer, juicer and shipper of Texas red grapefruit and oranges.

Flowers said part of the company’s crop hadn’t been harvested when the freeze hit on Feb. 14.

“LSCG was fortunate in that we only had about 15% of our remaining crop still hanging on the trees,” Flowers said. “That fruit won’t make it to the fresh market, and it is now being harvested for juice. I have heard other grower estimates as high as 50-60% still on the tree.” 

Bret Erickson, senior vice president of business affairs at J&D Produce, said their vegetable crop was severely damaged.

Edinburg, Texas-based J&D Produce is a grower and shipper of fresh greens, honey sweet onions and melons.

“We are still assessing all of our crops with the hope we may be able to salvage some of our items, but only time will tell,” Erickson said. “As far as onions, we are cautiously optimistic that we may have avoided a complete loss, but again, we still need more time.”

Erickson said although there is still a lot of uncertainty on what the final damage will be, “there is no question that this was a very damaging weather event for all vegetable and citrus producers in our region.”

$100M industrial park to be built near US-Mexico border

Construction recently began on a $100 million, 50-acre industrial park called the Landmark at Otay near the U.S.-Mexico border in Southern California.

The Landmark at Otay will be 845,830 square feet of Class-A development spread across four buildings ranging in size from 153,630 to 240,975 square feet.

The project aims to take advantage of the growing commercial traffic near the Otay Mesa port of entry, as well as infrastructure improvements near San Diego, according to Tom Simmons, vice president of Majestic Realty Co.

“Low vacancy rates and need for additional industrial inventory make this the ideal time to bring Landmark at Otay to market and open up opportunities for additional companies to expand — in this important geographic market,” Simmons said in a statement.

California-based Majestic Realty is developing the Landmark at Otay in a partnership with Sunroad Enterprises and Colliers International Group.

USITC determines blueberry imports don’t harm US growers

After a six-month investigation, the U.S. International Trade Commission ruled that imported blueberries “do not seriously injure” the domestic blueberry industry.

The 5-0 ruling by USITC commissioners ends an inquiry that could have resulted in recommendations of tariffs on imported fresh and chilled blueberries in order to protect U.S.-based growers.

Mexico is one of the leading suppliers of blueberries to the U.S., accounting for $219 million worth of imports in 2019, according to the U.S. Department of Agriculture. Peru was the top supplier of blueberries to the U.S. in 2019, accounting for $485 million. 

The determination was hailed as a victory by the Fresh Produce Association of the Americas (FPAA), a Nogales, Arizona-based group representing produce importers.

“While FPAA is pleased with the determination, FPAA remains extremely concerned by the number of trade investigations opened recently by U.S. Trade Representative on imported produce, especially key commodities from Mexico, our No. 1 trade partner,” the group said in a statement.

CBP seizes marijuana worth $1.1M in Laredo 

U.S. Customs and Border Protection (CBP) agents in Laredo, Texas, recently discovered 5,280 pounds of alleged marijuana in a tractor-trailer.

The seizure occurred Feb. 13 at the World Trade Bridge cargo facility. Officers found 336 packages of alleged marijuana in the trailer of a tractor hauling auto parts from Mexico. The narcotics have an estimated street value of $1.1 million.

The case was turned over to the Department of Homeland Security Investigations.

By: LFS Marketing

February 23, 2021

News
News LFS
Vaccine distribution to rebound by midweek after winter storm delays

According to Freightwaves:

The severe winter storms that have devastated Texas and surrounding states have delayed the distribution of 6 million COVID-19 vaccine doses. But Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said it’s only a “temporary setback” that will be fixed by the middle of this week.

“Obviously it is a setback because you’d like to see the steady flow of vaccines getting out there to get into people’s arms, but we can play pretty good catch-up,” Fauci said Sunday on NBC’s “Meet the Press.”

“The number was 6 million doses [that] got delayed. We’ve gotten 2 million out, and we project that by the middle of the week we will have caught up,” Fauci said.

Parts of Texas and other Southern states were slammed with multiple daily record snowfalls last week, ranging from 4 to nearly 12 inches in places like Dallas, Little Rock, Arkansas, and Memphis, Tennessee. Freezing rain formed thick ice, leading to widespread, prolonged road closures. Many cities had record low temperatures, some subzero, and subfreezing conditions lasted for several days. The region began thawing over the weekend.

The brutal weather left millions of people without power — about 4 million in Texas alone at one point last Tuesday. Even though power has been restored to most of Texas and other affected states, broken pipes mean many still lack clean water. President Joe Biden declared a major disaster in 77 counties across Texas, making them eligible for federal recovery funds, and some emergency management officials want to include the entire state in the disaster declaration.

The rough weather prompted what the Centers for Disease Control and Prevention called “widespread delays in COVID-19 vaccine shipments and deliveries.” Power failures also forced some health care officials to quickly administer vaccine doses before they spoiled.

More than 57 million doses of the vaccines have been administered — with 41 million first doses administered and 16 million people fully vaccinated with the two-dose regimen — according to an NBC News analysis.

Overall freight volumes, as well as vaccine shipments, should snap back this week. But it may take some time for carriers to work through the freight disrupted by the storms. According to FreightWaves market expert Seth Holm, this will keep upward pressure on tender rejection rates — the rate at which shipper requests for truckload capacity are rejected by carriers — as well as spot rates through the end of February and right into the beginning of the spring freight season. 

As of Sunday, the average daily number of COVID-19 cases continued to plummet from a post-holiday peak. The U.S. has reported more than 100,000 new daily cases on only one of the last 14 days, a month after it regularly hit more than 200,000 new cases each day. Daily deaths are decreasing too, but at a slower rate, still regularly eclipsing 2,000.

By: LFS Marketing

February 23, 2021

CROSS-BORDER
CROSS-BORDER
Port Laredo No. 1 in exports for 2020

According to Freightwaves:

In 2020, Laredo, Texas, once again led the U.S. in exports, according to the latest Census Bureau data analyzed by WorldCity.

Port Laredo finished on top of the rankings for exports for the second straight year, totaling $80 billion in outbound shipments during 2020. 

Laredo’s top 10 exports were motor vehicle parts ($8.9 billion), engines ($3.4 billion), gasoline ($3.1 billion), engine parts ($1.2 billion), plastics ($1.1 billion), cell phones ($1.1 billion), taps and valves for pipes ($1 billion), chemical reaction initiators ($978 million) and computer chips ($944 million).

Port Laredo accounted for 5.6% of all exports from the U.S. during 2020, followed by John F. Kennedy International Airport (5.5%), Port of Houston (5.2%), Detroit’s Ambassador Bridge (4.7%) and the Port of New Orleans (4.6%).

The port, operated by the city of Laredo, includes the World Trade Bridge, the Colombia Solidarity Bridge and Laredo International Airport. 

Laredo also posted $126 billion in imports during 2020, led by vehicle parts ($15.7 billion), new cars ($11.1 billion), tractor trucks ($5.6 billion) and computers ($5.5 billion).

Port Laredo finished fourth overall during 2020 among the nation’s 450 international gateways for trade, behind the Port of Los Angeles, Chicago O’Hare International Airport and John F. Kennedy International Airport.

Mexico was Port Laredo’s top international trading partner during 2020, accounting for $201 billion in total trade.

China came in second, posting $1.2 billion in total trade with Port Laredo in 2020, followed by France ($540 million), Japan ($373 million), Nicaragua ($215 million), Malaysia ($210 million), Germany ($206 million) and Thailand ($205 million).

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

February 16, 2021

CARRIERS
SHIPPERS
Transportation troubles continue across frozen South

According to Freightwaves:

The historic winter that hit the South Sunday and Monday is gone. But several states remain bitterly cold and roads remain covered in ice and snow.

Besides road closures, several airports and intermodal terminals are closed. Meanwhile, millions of people have no electricity, and a follow-up storm is forecast to hit many of the same areas later Tuesday.

Rough roads

Portions of interstates, as well as U.S. and state highways, have been shut down. Truckers will hit delays from Texas and Oklahoma to the Ohio and Tennessee valleys, including places such as Dallas and Houston; Oklahoma City and Tulsa, Oklahoma; Little Rock, Arkansas; Jackson, Mississippi; Memphis and Nashville, Tennessee; Louisville, Kentucky; as well as Cincinnati and Columbus, Ohio.

Power problems

As of 11 a.m. ET Tuesday, about 4.4 million customers in Texas had no electricity, mostly in Houston, and many for 24 hours or more. Another several hundred thousand customers had no electricity across the remainder of the South.

Airports

The Houston Hobby (ICAO code: HOU) and George Bush Intercontinental (ICAO code: IAH) airports remain closed until 4 p.m. CT Tuesday, according to the Federal Aviation Administration. The Abilene Regional Airport (ICAO: ABI) in Texas, which closed late Monday afternoon, is scheduled to reopen at 10 a.m. CT Tuesday, and the Baton Rouge Metropolitan Airport (ICAO: BTR) in Louisiana remains closed until 12 p.m. CT Tuesday. The Jackson International Airport (ICAO: JAN) in Mississippi is slated to reopen at 11 p.m. CT Tuesday, and the Abraham Lincoln Capital Airport (ICAO: SPI) in Springfield, Illinois, is closed until 9 a.m. CT Wednesday.

Ground delays continue at Dallas-Fort Worth International Airport (ICAO code: DFW).

Rails

Union Pacific Railroad (NYSE: UNP) updated a customer alert Monday evening, saying it would close most of its intermodal terminals Tuesday morning.

“We anticipate the closures to last approximately 72 hours,” Union Pacific said.

CSX Transportation (NYSE: CSX) also told its customers to expect delays.

Forecast

Another winter storm coming from the Rockies is likely to produce some heavy snowfall, as well as more freezing rain and icy conditions, for many of the same areas hit by the last storm. This storm will begin later Tuesday in the southern Plains, ending late Thursday in the Tennessee and Ohio valleys. This comes after many cities have been hit by daily record snowfalls and record low temperatures. Travel will remain treacherous on the roads, rails and runways.

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

February 16, 2021

SHIPPERS
SHIPPERS
Biden readies critical supply chain review

According to Freightwaves:

President Joe Biden is preparing to make good on a campaign promise to review critical supply chains and reduce American dependence on imports for pandemic-related equipment and materials.

In July 2020, while he was officially still the Democratic Party’s presumptive presidential nominee, Biden laid out a plan to help the U.S. prevent shortages of critical products needed in times of crisis. The plan was in response to what he and others saw as failed efforts of the Trump administration during the COVID-19 pandemic.

If elected, “Biden will launch a [100-day] review of U.S. supply chain vulnerabilities and implement a national strategy to close them,” the plan stated. “He will sign a comprehensive executive order … directing relevant agencies to identify the specific critical products where the U.S. faces national security supply chain vulnerabilities and to address these weaknesses immediately.”

That executive order is expected to be released “in the coming weeks,” according to reports citing unnamed administration sources. Relevant agencies named in a draft of the order include the White House National Security Council and the departments of Justice, Homeland Security and Commerce, Reuters reported.

Biden signed a related executive order in January aimed at strengthening COVID-19 supply chains. It directs federal agencies to fill supply chain shortfalls that include shortages of needle syringes available to administer the vaccine. It was one of a flurry of presidential actions issued by Biden the day after he was sworn in as president.

Last year’s supply chain review strategy asserted that the current pandemic exposed how the U.S. was vulnerable to global disruptions. “As president, Joe Biden will put Americans to work rebuilding domestic manufacturing of critical products to ensure that the U.S. and our allies have the capacity and resilience to make what we need for our national security, rather than be dependent on countries like China,” it stated.

The plan also stated that while medical supplies and equipment are the most pressing and urgent needs, “U.S. supply chain risks are not limited to these items. The U.S. needs to close supply chain vulnerabilities across a range of critical products on which the U.S. is dangerously dependent on foreign suppliers. America needs a stronger, more resilient domestic supply chain in a number of areas, including energy and grid resilience technologies, semiconductors, key electronics and related technologies, telecommunications infrastructure and key raw materials.”

The plan stated that President Biden will:

  1. Use the full power of the federal government to rebuild U.S. domestic manufacturing capacity of our supply chains for critical products.
  2. Implement a comprehensive approach to ensure the U.S. has the critical supplies it needs for future crises and its national security.
  3. Work with allies to protect their supply chains and to open new markets to U.S. exports.

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: Freightwaves

February 9, 2021

SHIPPERS
SHIPPERS
Super Bowl avocado exports from Mexico up by 8%

According to Freightwaves:

In the months leading up to Super Bowl LV, demand for avocados was stronger than ever, said Aaron Acosta, corporate relationship manager at Stonehill Produce in Pharr, Texas.

Currently, Mexico is the only country in the market shipping avocados, as Peru, Chile and California have finished their seasons.

“We’re probably looking at about an 8% increase from last year. In overall volume it’s like we didn’t miss a beat, even with the coronavirus,” Acosta told FreightWaves. “We definitely have the support of retailers who usually set aside promotions for the Super Bowl, which is helping us move some incredible volume this year.”

Stonehill Produce imports Hass avocados from the state of Michoacán in central Mexico, where more than 80% of Mexico’s avocados originate. 

Last year, Mexico exported 74,000 tons of avocados prior to the Super Bowl, according to the Mexican Avocado Producers and Packers (APEAM). 

This year, around 1,360 weekly avocado shipments have been made during the weeks before the game, equivalent to a truck leaving Michoacán every seven minutes for the U.S., according to APEAM.

“Although 2020 represented a year of challenges for all economic sectors worldwide, Mexican avocado exports maintained a good growth rate, increasing by 12% during the second half of 2020, compared to 2019, when 551,226 tons of avocados were shipped,” APEAM said in a statement. 

After the avocados are picked and packaged in Michoacán, they are brought over through the Mexican border to the U.S., usually either through the ports of entry in Laredo or Pharr, Texas.

There was a run-up in outbound tender rejections in the Laredo (OTRI.LRD) and the McAllen and Pharr markets as the Super Bowl approached. 

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

February 9, 2021

CARRIERS
CARRIERS
Abundant subzero temperatures with dangerous wind chills

According to Freightwaves:

A prolonged outbreak of arctic cold will soon spread across more than a dozen states. Truckers may have issues with fuel gelling and brakes cracking from the Plains to parts of the Northeast.

A strong arctic air mass plunged into the north-central U.S. and Midwest regions over the weekend and will linger virtually all of this week. The impact zone stretches from Montana and eastern Wyoming to the Dakotas, Great Lakes and Central Plains.

Extreme cold (some possibly near record levels), strong winds and snowfall in the favored lake-effect snow areas of the Great Lakes could impact supply chains and business operations for an extended period of time. The most intense lake-effect snowfall will hit western Michigan, the Upper Peninsula of Michigan, northern Ohio and western New York.

In addition, numerous light to moderate snow systems will move across portions of the central Plains and Midwest during the upcoming week. The snow in these areas will add to the transportation issues in the frigid conditions.

This area typically gets cold in the middle of winter, but this air mass is much colder than normal for early February. Late-night lows will drop below zero across several states this week, possibly as cold as the 20s and 30s below zero from eastern Montana to North Dakota and northern Minnesota.

Temperatures will remain below zero day and night in these locations, while wind chills will be a brutal 30 to 50 below zero. Because flatbed drivers have to spend a lot of time outside their trucks, it will be crucial for them to dress in layers, covering as much skin as possible. In these kinds of temperatures and wind chills, it takes 10 minutes or less for frostbite to set in. Wind chills as low as 25 below zero will hit as far south as Nebraska.

Everyone involved in freight and supply chains should expect disruptions to transportation networks — road, rail and air. Issues ranging from vehicle performance (trucks, cars and locomotives) to rail issues (frozen switches) are likely. Business operations could be impacted since workers may not be able to travel due to the dangerous conditions. Livestock will also be at risk.

This deep freeze will continue to impact truckers in major metropolitan areas such as Chicago; Detroit; Cleveland; Milwaukee; Minneapolis; Kansas City, Missouri; Indianapolis; and Columbus, Ohio. Smaller cities include Great Falls and Billings, Montana; Pierre, South Dakota; Fargo, North Dakota; Des Moines, Iowa; Omaha, Nebraska; Erie, Pennsylvania; and Buffalo, New York. Highs in many of these spots will only reach the single digits and teens all week.

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

February 9, 2021

News
News LFS
Outbound tender volumes reverse, break multiweek losing streak

According to Freightwaves:

The Outbound Tender Volume Index (OTVI) rose 2.7% this week to 14,051. It makes sense to adjust for the level of rejected tenders accounted for in OTVI to get a clearer look at year-over-year (y/y) comparisons. On a rejection-adjusted basis, volumes are up 21% y/y, a slight deceleration from last week’s 23% growth rate. 

The West Coast port markets that drove much of the freight volumes in the back half of 2020 heated up again this week. Los Angeles and Ontario, California, are two of the largest markets in the country and each saw volumes rise more than 7.5% over the past week. The rapid transition to e-commerce and stimulus-driven consumer demand has kept the Port of LA/Long Beach complex running at full capacity for months now. The same goes for Georgia Ports. Georgia Ports Authority (GPA) Executive Director Griff Lynch hasn’t seen a lull nor does he expect to. Shippers have front-run Lunar New Year, but sailings are not being canceled in normal fashion. 

Port markets on both coasts saw volumes pick up significantly this week. Savannah, Georgia, Elizabeth, New Jersey, and the West Coast ports all picked up (and New Orleans, too). 

The most recent Bank of America credit card spending data included positive and interesting data on stimulus recipients’ marginal propensity to consume (MPC). The MPC is an economic concept that captures the amount of spending that comes from a source of income — in this case, stimulus checks. What the researchers found was the MPC of the second round of stimulus was much higher than the first — meaning recipients are spending the second round at a faster rate than the first in April. Even then, only 15% of stimulus received so far has been spent, still leaving open the possibility of pent-up demand in coming weeks.

This is great news for freight volumes. While the vaccine rollout has picked up speed and America vaccinated 1.6 million people in a single day this week, the vast majority of the population remains unvaccinated and still unable to enjoy a normal range of activities (including spending on services). With services still unavailable, it is safe to say the bulk of the stimulus is being spent on both durable and nondurable goods, further fueling the freight markets. 

Last week, industrial production data for December was released and surprised to the upside. With consumers continuing to spend (up 5.2% y/y this week), a nascent industrial recovery, a red-hot housing market and retailers with weeks (and possibly months) of inventory replenishment ahead, the near-term future for freight demand appears solid. 

On a positive note, nine of the 15 major freight markets that we monitor as a broad, representative benchmark were positive on a week-over-week basis. This ratio strengthened back to the stronger levels it has become accustomed to in recent months as the freight market rallies. The markets with the largest gains this week in OTVI.USA were Newark, New Jersey, (15.45%), Memphis, Tennessee (10.32%), and Savannah (8.45%). The markets with the largest drops this week in OTVI.USA were Fresno, California (-12.38%), Houston (-4.35%) and Chicago (-3.13%)

Tender rejections slipping but still elevated

The Outbound Tender Reject Index (OTRI) has seemingly found a floor, moving less than 2 percentage points over the past three weeks. OTRI descended from the all-time high on Christmas Day near 28% to 21.52% currently, and the rate of decline has decelerated meaningfully over the past two weeks. 

The decline was not due to an influx of capacity rushing in, nor a steep decline in demand. Instead, it may have been a matter of price. The falling rejection rates have likely been driven by improving routing guides with new, much higher contract prices. We may see further declines in OTRI over the coming weeks due to this factor, but if demand remains high (which we believe is more than likely), OTRI will remain high relative to historical averages until bottlenecks at driver training schools can be resolved. 

The freight market is still incredibly tight, and capacity is not easy to source versus historical standards. The tight market is being rewarded with higher contract rates, which may continue to put downward pressure on both tender rejections and spot rates in the coming weeks. 

This doesn’t mean we should expect tender rejection rates to fall back near historical averages. Freight volumes remain up over 20% y/y and have not shown any signs of slowing anytime soon. The off-the-charts, record new equipment orders will surely impact capacity at some point. However, it will likely take several months for this equipment to be delivered, and even then, if the bottlenecks at driver training schools are not resolved, the impact could be muted.

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

February 2, 2021

CARRIERS
CARRIERS
Federal mask mandate covers freight workers, drivers at air and seaports

According to Freightwaves:

Freight forwarders, cargo security companies, truck drivers and warehouse operators are also covered by a new face mask mandate on commercial travel when they are on airport or seaport property, according to agencies implementing the rule.

The Transportation Security Administration on Monday issued a security directive to airport operators saying it will enforce the weekend order from the Centers for Disease Control and Prevention that persons entering or on a transportation hub wear a mask. President Joe Biden instructed agencies to require mask wearing for domestic and international travel to reduce the spread of the coronavirus, but the rules also apply to airports, seaports and border crossings.

Solo truck drivers operating over-the-road are exempt from the CDC mask requirement.

Operators of transportation hubs are required to ensure that people entering or on their premises wear a mask. Those who fail to comply may be removed and denied reentry, the TSA directive said.

Individuals who refuse to wear a mask may be subject to federal penalties.

The document tells airports to ask individuals to put a mask on and escort them from the property if they refuse.

The Airforwarders Association on Sunday advised members to expect more workplace regulations related to the COVID-19 outbreak from the Occupational Safety and Health Administration in response to the president’s Jan. 21 executive order on protecting worker health and safety.

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LFS keeps you updated with the latest news, if you need additional information about our freight shipping solutions, contact us or follow us on Linkedin.

For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

February 2, 2021

SHIPPERS
SHIPPERS
News Alert: State of emergency in New York as nor’easter strengthens

According to Freightwaves:

A strong nor’easter — the strongest of the season so far for many cities — has been dumping heavy snowfall in the Northeast. The storm began Sunday and has become more intense Monday, with snowfall rates of up to 2 inches per hour.

Gov. Andrew Cuomo declared a state of emergency late Monday morning for New York City and nine other counties throughout the Hudson Valley and Long Island. The counties included in the emergency declaration are Sullivan, Ulster, Dutchess, Orange, Putnam, Rockland, Westchester, Nassau and Suffolk.

The governor also issued an advisory for travelers and commuters. Above-ground subway service, as well as service on portions of the Long Island Railroad and Metro-North, may be significantly delayed or stopped this afternoon. Additionally, a number of major roads, including the Long Island Expressway and Interstate 84, could face travel bans if snowfall rates reach the forecast 2-3 inches per hour. New Yorkers are being urged to avoid all unnecessary travel.

“This storm is no joke and the main concern right now is that the expected snowfall rate of 2 [to 3] inches per hour this afternoon creates an extremely dangerous situation on our roadways,” Cuomo said. “When snow is falling that quickly, it makes it very difficult for plows to keep up with it. I want New Yorkers to hear me loud and clear: Stay home and off the roads and if you must travel, get where you’re going before noon, and expect to remain home for some time. We’ve been through this before and we will get through it again.”

This is a slow-moving storm which may not exit New York state and northern New England until Wednesday. By the time it’s all said and done, parts of the New York City metropolitan area could see snowfall totals of 12 to 20 inches. The same goes for other places from the mid-Atlantic to New England, including cities along the Interstate 95 corridor such as Baltimore, Philadelphia, Boston and Washington, D.C. Wind gusts across the region will range from 40 to 60 mph. Blowing snow will create whiteout conditions, and coastal flooding is possible.

As of 3 p.m. ET Monday, the New York State Department of Transportation has banned tandem and empty trailers from the following highways:

  1. I-84 from the New York-Pennsylvania border to the New York-Connecticut border.
  2. NY Route 17 east of Binghamton to the New York-New Jersey border.
  3. Interstate 684 entire length.

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By: LFS Marketing

February 2, 2021

SHIPPERS
SHIPPERS
Consumer Sentiment Posts Moderate Pullback in January

According to TTnews:

U.S. consumer sentiment cooled more than forecast in January, adding to signs consumers may be growing less optimistic as vaccinations roll out amid soaring new infections.

The University of Michigan’s preliminary sentiment index fell to 79.2 from 80.7 last month, data released Jan. 15 showed. The figure fell below the forecast in Bloomberg’s survey of economists that had called for a slight pullback to 79.5.

The gauge of current conditions fell 2.3 points to 87.7, while a measure of expectations dropped 0.8 point to 73.8, according to the survey conducted Jan. 2-13.

The slightly more downbeat sentiment reading signals that consumers may be starting the year with less faith in the economic recovery as soaring virus cases lead to new restrictions just as inoculations become more available. Nearly 1 million Americans filed for unemployment benefits last week after the biggest jump in claims since March, a report showed Jan. 14.

The report also showed inflation expectations picking up. Consumers expect a year-ahead inflation rate of 3%, the highest since August, up from 2.5% readings both last month and a year earlier. The five-year estimate rose to 2.7% from 2.5%.

A separate report earlier Jan. 15 showed that retail sales decreased 0.7% in December from the prior month, the latest indication that the new year may face a shaky start. Meanwhile, more support may be on the way: President-elect Joe Biden said Jan. 14 he will ask Congress for $1.9 trillion to fund immediate relief for the economy.

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By: LFS Marketing

January 19, 2021

CROSS-BORDER
CROSS-BORDER
Borderlands: Laredo gets third cold storage inspection facility

According to Freightwaves:

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Laredo gets its third cold storage inspection facility; a Texas trucking company is acquired by Phoenix Logistics; SE-Freight gets 30 Kenworth trucks; and Revere Plastics acquires a Mexican factory.

Laredo gets third cold storage inspection facility

Officials in Laredo, Texas, are planning to build a third temperature-controlled federal import inspection facility to accommodate cross-border produce from Mexico.

The 22,000-square-foot, 18-bay facility will be located near the Colombia Solidarity International Bridge, 20 miles north of Laredo. The project is part of a public-private partnership with Laredo-based Garros Services.

Under the partnership, Garros Services will build the $10 million facility on property it owns near the bridge, according to the Laredo Morning Times. No timetable for construction has been announced.

“The $10 million building will be substantially larger than the two current inspection installations,” said Teclo Garcia, the economic development director for the city of Laredo. 

Garros Services currently operates Laredo’s cold storage inspection facilities at the World Trade Bridge and the Colombia Solidarity Bridge.

Garros Services is a business owned by Eduardo Garza, the founder of Uni-Trade, a customs broker and logistics firm with offices in both Laredo and Nuevo Laredo, Mexico.

Garza recently has discussed adding a free-trade zone on the Mexican side of the World Trade and Colombia Solidarity bridges along the Texas-Mexico border. 

Port Laredo imported about $3.7 billion in produce from Mexico through the first 10 months of 2020, according to WorldCity. Avocados led the way, with almost $900 million in imports, followed by berries at $765 million and tomatoes at $558 million.

In December, Livonia, Michigan-based Mastronardi Produce opened a 185,000-square-foot logistics facility near its current distribution center in Laredo near the World Trade Bridge.

Leamington, Canada-based Nature Fresh Farms also opened in December a 61,000-square-foot distribution center in Laredo aimed at being a major hub for its fresh produce imports from Mexico. 

Texas trucking company acquired by Phoenix Logistics

Longview, Texas-based Sam Dunn Express (SDX), a nine-truck carrier, was recently acquired by Phoenix Logistics, an affiliate of Milwaukee-based Phoenix Investors.

Along with the acquisition of SDX, Phoenix Logistics also acquired Sam Dunn Enterprises Inc., a warehousing, logistics, distribution and fulfillment firm in Longview. SDX and Sam Dunn Enterprises will become part of Phoenix National Transportation, a newly formed regional trucking business.

“Phoenix National Transportation is an exciting new venture for the Phoenix companies; its addition is the next step in providing even more comprehensive services for our valued clients and partners,” said David M. Marks, president and CEO of Phoenix Investors. 

Phoenix National Transportation will provide over-the-road transportation services in northeast Texas and nearby states, catering to the food, beverage and alcohol industries. Sam Dunn’s facilities in Longview will be absorbed by Phoenix Logistics and become its 10th location.

SE-Freight de México takes delivery of 30 Kenworth trucks

SE-Freight de México recently acquired 30 Kenworth T680 trucks equipped with 52-inch mid-roof sleepers and Cummins X15 Euro V engines.

SE-Freight de México was founded in 2008 in San Luis Potosí, Mexico. The company offers cross-border transport, distribution and storage services with locations in San Luis Potosí and Nuevo Laredo, Mexico, as well as Laredo, Texas, and Canada, according to its website.

The Kenworth trucks were manufactured at the Kenworth Mexicana factory in Mexicali, Mexico.

Revere Plastics Systems acquires Mexican factory

Revere Plastics Systems recently acquired Alliance-McAlpin NY and its Mexican factory in Ramos Arizpe, Mexico.

The acquisition, which closed Dec. 30, establishes Revere’s first manufacturing facility in Mexico, according to a release. Ramos Arizpe is located 178 miles south of Laredo.

“This acquisition gives Revere an important foothold in the vibrant manufacturing region of northeastern Mexico,” Revere CEO Glen Fish said in a statement. 

The factory in Ramos Arizpe employs 180 people and operates in a 53,000-square-foot facility. Revere’s customers include automotive companies, HVAC, appliances, recreational products, metering devices and business office machines.

Revere Plastics Systems is headquartered in Novi, Michigan. The company employs about 1,000 people and operates eight manufacturing facilities in the U.S., Canada and Mexico.

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By: LFS Marketing

January 19, 2021

DRAYAGE
DRAYAGE
Port of Long Beach pads record book

According to Freightwaves:

The Port of Long Beach’s busiest year ever is in the books, with more than 8.1 million container units moved in 2020.

Two other records were achieved: December, with 815,885 twenty-foot equivalent units (TEUs) moved, was the busiest month ever and Q4 was the busiest quarter in the port’s 110-year history with 2,406,010 TEUs handled.

The port said that despite “economic uncertainty due to the COVID-19 pandemic and the ongoing trade war with China,” it handled a total of 8,113,315 TEUs in 2020, 6.3% more than in 2019 and beating the record-setting 2018 by 22,292 TEUs.

Imports increased 6.6% year-over-year to 3,998,340 TEUs, while exports were up only 0.2% to 1,475,888 TEUs. The biggest jump came with the number of containers unloaded and then sent back empty to Asia — a 9.9% year-over-year increase to 2,639,088 TEUs. In other words, the Port of Long Beach moved over 1.16 million more empty containers than loaded exports in 2020.

Port of Long Beach Executive Director Mario Cordero issued a statement Friday in which he thanked the “frontline workers on the docks who kept cargo moving during this unprecedented moment in history, ensuring the safe, secure and timely delivery of vital medical equipmwent and consumer goods. We have all endured incredible hardships with COVID-19, but I am looking forward to 2021 as a time of economic recovery and a renewed focus on our industry partners, infrastructure projects and community stakeholders.”

A huge influx of imports in the fall pushed the port to its record-setting 8.1 million TEUs. The spread of the coronavirus made for a miserable spring, with the Port of Long Beach’s volumes down 17.3% year-over-year in April

After the first six months of 2020, volume was down 6.9% year-over-year. The ports of Long Beach and Los Angeles had a combined 104 canceled sailings in the first half of the year, a huge spike from the 41 blanked calls during the same period in 2019. 

“It was a different story for the second half of 2020, when preliminary estimates show that the port had 104 unscheduled container ship calls that made up for voyages canceled earlier in the year, more than quadrupling the unscheduled sailings reported during the same period in 2019,” the port said. 

The 815,855 TEUs moved in December was a 22.6% hike from the same month in 2019. The total topped the record set in just October by 9,282 TEUs. In December alone, empties jumped 26.3% year-over-year to 263,852 TEUs. 

The port processed 2,406,010 TEUs between Oct. 1 and Dec. 31, a 23% increase from the fourth quarter of 2019. That beat the record-setting third quarter by 131,740 TEUs. 

2020 also made for the Port of Long Beach’s best November on record. The 783,523 TEUs moved was a 30.6% jump from November 2019. Again, the number of empties handled stuck out. The number of empty containers shipped back to Asia for refilling in November leapt to 283,563 TEUs, a 55% year-over-year increase.

Cargo activity did not drop off with the end of the calendar year. West Coast ports remain unusually busy in January. As of midday Wednesday, 32 container ships were at anchor in San Pedro Bay waiting to berth either at the Port of Long Beach or LA.

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For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

January 19, 2021

DRAYAGE
DRAYAGE
Port of Long Beach pads record book

According to Freightwaves:

The Port of Long Beach’s busiest year ever is in the books, with more than 8.1 million container units moved in 2020.

Two other records were achieved: December, with 815,885 twenty-foot equivalent units (TEUs) moved, was the busiest month ever and Q4 was the busiest quarter in the port’s 110-year history with 2,406,010 TEUs handled.

The port said that despite “economic uncertainty due to the COVID-19 pandemic and the ongoing trade war with China,” it handled a total of 8,113,315 TEUs in 2020, 6.3% more than in 2019 and beating the record-setting 2018 by 22,292 TEUs.

Imports increased 6.6% year-over-year to 3,998,340 TEUs, while exports were up only 0.2% to 1,475,888 TEUs. The biggest jump came with the number of containers unloaded and then sent back empty to Asia — a 9.9% year-over-year increase to 2,639,088 TEUs. In other words, the Port of Long Beach moved over 1.16 million more empty containers than loaded exports in 2020.

Port of Long Beach Executive Director Mario Cordero issued a statement Friday in which he thanked the “frontline workers on the docks who kept cargo moving during this unprecedented moment in history, ensuring the safe, secure and timely delivery of vital medical equipmwent and consumer goods. We have all endured incredible hardships with COVID-19, but I am looking forward to 2021 as a time of economic recovery and a renewed focus on our industry partners, infrastructure projects and community stakeholders.”

A huge influx of imports in the fall pushed the port to its record-setting 8.1 million TEUs. The spread of the coronavirus made for a miserable spring, with the Port of Long Beach’s volumes down 17.3% year-over-year in April

After the first six months of 2020, volume was down 6.9% year-over-year. The ports of Long Beach and Los Angeles had a combined 104 canceled sailings in the first half of the year, a huge spike from the 41 blanked calls during the same period in 2019. 

“It was a different story for the second half of 2020, when preliminary estimates show that the port had 104 unscheduled container ship calls that made up for voyages canceled earlier in the year, more than quadrupling the unscheduled sailings reported during the same period in 2019,” the port said. 

The 815,855 TEUs moved in December was a 22.6% hike from the same month in 2019. The total topped the record set in just October by 9,282 TEUs. In December alone, empties jumped 26.3% year-over-year to 263,852 TEUs. 

The port processed 2,406,010 TEUs between Oct. 1 and Dec. 31, a 23% increase from the fourth quarter of 2019. That beat the record-setting third quarter by 131,740 TEUs. 

2020 also made for the Port of Long Beach’s best November on record. The 783,523 TEUs moved was a 30.6% jump from November 2019. Again, the number of empties handled stuck out. The number of empty containers shipped back to Asia for refilling in November leapt to 283,563 TEUs, a 55% year-over-year increase.

Cargo activity did not drop off with the end of the calendar year. West Coast ports remain unusually busy in January. As of midday Wednesday, 32 container ships were at anchor in San Pedro Bay waiting to berth either at the Port of Long Beach or LA.

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For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

January 19, 2021

CARRIERS
CARRIERS
Treacherous weather out West this week

According to Freightwaves:

Truckers will hit heavy snowfall and periods of whiteout conditions Monday and Tuesday in the Rockies of southern Colorado and northern New Mexico, impacting freight flows on Interstate 25 and U.S. Highway 550 (the Million Dollar Highway). Snowfall will also spread into southeastern Utah and northeastern Arizona. Some areas could see up to 12 inches of accumulation.

Dry but dangerously windy conditions will make it risky for drivers to deadhead or carry light loads through the Sacramento Valley and the Sierra Nevada. Watch out on I-80 and U.S. 395. Gusts in the highest elevations along the Sierra crest could reach 100-plus mph.

More details available in the attached video:

https://www.freightwaves.com/news/treacherous-weather-out-west-this-week

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For cargo insurance experts, please contact Skholl, our partner to avoid any freight damage.

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By: LFS Marketing

January 19, 2021

CARRIERS
CARRIERS
Truckers facing more nasty Northwest weather this week

According to Freightwaves:

After periods of heavy snowfall in the Northwest over the past week to 10 days, another series of storms will slam the region this week. Truckers should be ready to chain up and expect possible roadblocks.

Most of the snow will fall from Monday afternoon through Tuesday afternoon in the Cascades and northern Rockies. The National Weather Service (NWS) has issued various winter weather alerts for parts of northern Washington state, where 12 to 24 inches of snowfall could pile up in the high elevations. Some lower elevations may see 5 to 10 inches.

Snowfall rates could reach 1 to 2 inches per hour, leading to reduced visibility at times. Trouble spots include, but are not limited to, Sherman, Loup Loup, Stevens (U.S. Highway 2) and Snoqualmie passes (Interstate 90).

Snowfall may also disrupt drivers Tuesday from eastern Oregon to western Idaho, including portions of I-84 and U.S. Highway 95.

Meanwhile, heavy rainfall Monday through Wednesday could flood areas in western portions of Washington, Oregon and far northern California. This includes I-5 and U.S. Highway 101.

Look for rainfall totals of 4 to 8 inches in the mountains and high terrain areas, with 1 to 3 inches in the valleys and lowlands. The NWS has issued a flood watch for these areas, including Seattle and Portland.

Other disruptive weather

Snow or a snow-rain mix will continue across parts of the South through Monday morning, fading during the afternoon. This storm dumped snowfall in Texas over the weekend, with a daily record 4.4 inches in Waco. The storm is now impacting the Tennessee and lower Mississippi valleys. Delays are likely on I-20 and I-55 from Shreveport, Louisiana, to Jackson, Mississippi, and northwestern Alabama.

High winds Tuesday through Thursday will increase the risk of rollovers across most of Montana, from the Rocky Mountain front eastward. Gusts could reach 50 to 80 mph in places like Cut Bank, Helena, Great Falls, Billings, Glasgow, Miles City, Glendive and Livingston.

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By: LFS Marketing

January 12, 2021

DRAYAGE
DRAYAGE
Maersk Says Record Shipping Rates Unlikely to Have Peaked Yet

According to Transport Topics:

A.P. Moller-Maersk A/S, the world’s largest container carrier, is working at full capacity and can’t yet see a peak in freight rates that have already been propelled to record highs by pandemic consumer spending.

“All the ships that can sail are out at sea and all the containers that can hold cargo are in use,” Vincent Clerc, the head of the ocean transport division at Copenhagen-based Maersk, said in a briefing Jan. 6.

While rates probably will peak at some point during the first half of the year, Maersk only has about four to six weeks of visibility, Clerc said. “It hinges on when the economies reopen and when consumer patterns return to their previous state.”

Maersk and other container lines are enjoying a surge in freight rates sparked by a combination of low vessel capacity and a sharp increase in demand for goods amid lockdowns. At the same time, a shortage of containers and congestion at some ports have underpinned the prices that carriers can charge for moving cargo.

“We don’t know yet if the third lockdown wave will extend the peak because people stay at home and shop more on Amazon and Zalando or if it will shorten it because the economy will be hurt,” Clerc said.

Spot rates for transporting 40-foot containers soared 50% on average in 2020, or 30% more than the eight-year average, according to World Container Index data and Bloomberg Intelligence. Last year may go down as one of the best for the container line industry and freight rates could remain at high levels through the first quarter of 2021, according to Lee Klaskow, a senior analyst at BI.

Clerc said Maersk is unlikely to cancel more than just “very few” sailings next month during the Chinese New Year, a two-week period where shipments out of Asia normally slump.

Maersk is moving “huge volumes” of consumer electronics, furniture, home improvement equipment and “basically everything related to people’s homes,” Clerc said.

“We hadn’t foreseen just how COVID would be able to change consumer patterns,” he said, adding that acceleration in demand has been the fastest in at least 10 years. “People use a much, much higher portion of their wages on goods.”

The Maersk Group ranks No. 4 on the Transport Topics Top 50 list of the largest global freight carriers.

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By: LFS Marketing

January 12, 2021

DRAYAGE
DRAYAGE
FHWA Awards Grant Supporting AV Truck Project at Port of Virginia

According to Transport Topics:

The Federal Highway Administration recently awarded $49.6 million to support projects that incorporate transportation-related technologies, including an effort to develop autonomous truck accommodations at the Port of Virginia.

FHWA announced the grant awards Dec. 31. The funding was awarded through the Advanced Transportation and Congestion Management Technologies Deployment program, which funds the early deployments of technologies that are meant to improve transportation systems.

The Virginia Port Authority’s grant, which totals $2.1 million, will assist in efforts to make the terminal “autonomous truck ready,” according to FHWA’s announcement. Specifically, the goal is to develop a proof of concept using an autonomous truck to access the terminals and deliver and receive containers.

Located in the Hampton Roads area, the Port of Virginia generates major traffic. Its leading exports include mineral fuels, wood, plastics and iron.

“The extensive technology already integrated into our terminals uniquely qualifies Virginia to take a leadership role that will shape the vision of how marine terminals will handle the exchange of containers between semi-automated terminal equipment and intelligent over-the-road vehicles,” port Executive Director John Reinhart said. “This industry is evolving, and our goal is to be at the forefront of change and innovation to help us deliver efficiency, customer service and sustainability.”

RELATED: See the list of projects

The funding for the Virginia Port Authority represents one of 10 grants announced Dec. 31. The funds distributed through this round of grants support projects that use intelligent transportation systems technology to improve mobility and support vehicle connectivity.

RELATED: West and East Coast Ports Report Strong November Volume

“This $49.6 million in grant funding will support innovative solutions to improve connectivity and help prepare America’s transportation systems for the future,” Transportation Secretary Elaine Chao said.

Some $9.29 million was awarded to the San Diego Association of Governments. Antoinette Meier, director of mobility and innovation at SANDAG, said the project will involve deploying intelligent transportation solutions such as smart intersections, on-demand ride-share services, connected vehicle technologies and improved traveler information resources at border crossing points. Meier indicated the border area suffers from “crippling congestion,” costing the U.S. and Mexican economies billions of dollars annually.

In addition to ports of entry, the project’s scope will include Chula Vista, National City, downtown San Diego and the corridors and transit services that link the border to these communities. The project represents a partnership between SANDAG, the California Department of Transportation, the cities of San Diego and Chula Vista, transit and port representatives, and private sector partners.

“We selected these areas because they are popular destinations for people and goods that are traveling from the border region,” Meier told Transport Topics. “This allows us to address the complete trip, creating that seamless travel experience from end to end.”

The largest individual grant, for $9.95 million, was awarded to the University of Michigan to develop a network of smart intersections in Ann Arbor. The project will rely on connected and automated vehicle technology that allows vehicles and infrastructure to interact.

The Advanced Transportation and Congestion Management Technologies Deployment program was created under the Fixing America’s Surface Transportation, or FAST, Act of 2015. The projects supported by the program are meant to improve travel for commuters, reduce congestion and serve as national models for other states and metropolitan areas.

For this round of funding, FHWA evaluated 46 applications requesting about $205 million.

“The program selections this year look to the future to help ensure that our nation’s highway network is able to accommodate the many advanced technologies on the horizon,” Federal Highway Administrator Nicole Nason said.

State departments of transportation, local government groups, transit agencies and metropolitan planning organizations are eligible to apply for funds. Since its inception, the program has supplied $256 million to more than 45 projects.

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By: LFS Marketing

January 12, 2021

DRAYAGE
DRAYAGE
Manufacturers Rethink Supply Chains, Eye Reshoring After Events of 2020

According to Transport Topics:

A trade war with China and the disruptive effects of the COVID-19 pandemic have U.S. companies starting to question a decades-old strategy of shifting manufacturing operations to low-cost labor markets in China and other Asian nations.

Some are starting to invest in expanding or building new factories in the U.S. and its nearby trade partners, Mexico and Canada. Such moves are known as reshoring — for the U.S. — and nearshoring in Mexico and Canada. If the trend accelerates, it would create a domestic manufacturing boom and alter trucking routes, shifting some import-centric traffic from Southern California’s massive port complex to manufacturing hubs across the U.S., according to analysts.

A June survey by Thomas, a New York-based industrial sourcing platform, found that 69% of businesses said they are “likely” to “extremely likely” to reshore operations to bolster their supply chains — up from 54% in a previous survey in February, just before the pandemic took hold.

“The pandemic and trade disputes have together spurred U.S. sellers of manufactured goods to look at and act on reshoring and nearshoring and multishoring because the most prevalent model of single-sourcing from China was severely challenged,” Michael Zimmerman, lead partner for analytics at Kearney, an international consulting firm, told Transport Topics.

But the changes won’t be universal.

“Some industries or capabilities may be gone for good or may only come back partially because foreign sources have too much of a comparative advantage, but others are now seen in a better light for more localized sourcing,” Zimmerman said.

The expectation is that more companies will follow the example of Schneider Electric. The Boston-based company said in November that it will spend $40 million investing in automation and what it calls “smart manufacturing” tools at plants in Iowa, Kentucky, Nebraska and Texas to “safeguard” its supply chain. It will add 130 jobs in 2021.

“We now have the technology and resources available to expand and efficiently produce more locally,” said Annette Clayton, CEO of Schneider Electric North America. “By modernizing and localizing our operations, we can better serve our customers and minimize the risk of interruption when we face the challenges of global economic changes.”

Schneider’s investment represents a trend seen among clients of C.H. Robinson Worldwide, the Eden Prairie, Minn.-based freight broker and logistics provider.

C.H. Robinson has found that most companies moving operations to North America or expanding manufacturing in the region already have a presence here.

“As you would expect, transitioning entire projects, production lines or volume increases is a much smoother and quicker process if you already have ongoing production,” Carlos Tamayo Barron, managing director of global forwarding for C.H. Robinson, told Transport Topics. “However, there are still several players who have looked into reshoring or nearshoring even if they don’t currently have a presence in North America.”

C.H. Robinson ranks No. 7 on the Transport Topics Top 50 list of the largest logistics companies in North America.

Other logistics providers and motor carriers also are watching the trend, looking for business opportunities.

“We’re in early conversations with our customers and expect the trend to re-evaluate sourcing options will continue in the current environment,” said Ashfaque Chowdhury, president of supply chain for the Americas and Asia Pacific at XPO Logistics.

XPO ranks No. 1 on the TT Top 50 logistics list and No. 3 on the Transport Topics Top 100 list of the largest for-hire carriers.

“This is an opportunity for us both in our North American and European contract logistics business,” he said.

Relocating manufacturing in North America is likely to alter trucking lanes in the U.S. and increase freight demand, said Satish Jindel, founder of SJ Consulting Group.

One of the first signs of meaningful reshoring would be a change in container volumes at Southern California’s port complex, where there is a significant trade imbalance. The Port of Long Beach, for example, accepted about three times the number of loaded containers that it exported in 2020. That gap would narrow if increased manufacturing in the U.S., Mexico and Canada trade zone replaces imports.

Reshoring also would increase the number of freight moves within the U.S., Jindel said.

“You will have trucks moving raw material to the manufacturing plants, and partly finished goods moving from one factory to another for assembly,” he said. “Motor carriers have to be prepared to add extra capacity as they start to see changes in shipment volumes and characteristics.”

Freight lanes would decline in length as materials and goods moving back and forth travel 200 to 800 miles rather than long routes east from Southern California, Jindel said.

Although the pandemic and trade war may serve as catalysts, structural shifts in labor and other costs associated with Chinese trade will encourage U.S. manufacturing growth, said Scott Davis, CEO of Melius Research, a New York equity research and consulting firm.

The gap in manufacturing labor rates between China and the U.S. has narrowed as wages in the Asian export hub have risen and factory pay has declined in the U.S., Davis said.

If a U.S. company can make a product with half the workforce of a Chinese company, a business case develops for domestic manufacturing, he said. Factory automation is strengthening that case.

“But wage rates tell just a part of the story. You have to include shipping costs for exports, tariffs and time delays for transport,” Davis said.

And there are other factors. Shorter supply chains are better able to meet consumer expectations of fast and one-day deliveries. Quality control is better in the U.S., so companies experience fewer warranty claims and expenses. When a product is made closer to its end market, it also mitigates the environmental impact, an increasing consumer concern.

“The more the things are shipped, the bigger the carbon footprint,” Davis said.

All told, “you might not get 400 jobs back at a factory, but if you get 100 or 200, that’s still good,” he said.

But some analysts are skeptical that the U.S. is about to see a significant manufacturing rebound.

“Manufacturing microwave ovens isn’t coming back to the U.S. We are not good at doing low-margin commodities,” said Willy Shih, a Harvard professor and manufacturing expert.

Shih pointed to record volume in the transpacific shipping lanes, much of it fueling the e-commerce boom that has accompanied the COVID-19 pandemic.

November container volume at the Port of Long Beach hit a record 783,523 20-foot equivalent units of container cargo, a 30.6% increase over the same period a year earlier. The adjacent Port of Los Angeles posted the busiest month in its 114-year history in October, according to DAT Freight and Analytics.

“We have built so much infrastructure around these trade lanes to make them efficient,” Shih said.

Although both the U.S.-China trade war and the pandemic could be seen as so-called “black swan” events that would launch reshoring and nearshoring booms, similar disruptions such as the 2008 financial crisis, the 2011 tsunami in Japan and massive floods in Thailand that same year didn’t bolster U.S. manufacturing, Shih noted.

Davis, however, believes reshoring and nearshoring moves will now catch hold.

“None of this is going to happen overnight,” he said. “The companies that I work with tell me it will take 10 years to get to where they want to be — building duplicative supply chains so that they can put less stuff on boats.”

--

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By: LFS Marketing

January 12, 2021

CARRIERS
CARRIERS
Snowstorms continue this week for Northwest truckers

According to Freightwaves:

The parade of snowstorms that began in the Northwest several days ago marches on. Truckers will have to chain up heading through high elevations of the Cascades, Sierra Nevada and northern Rockies this week as periods of heavy snowfall and gusty winds continue.

Look for moderate to locally major disruptions in supply chains, freight flows and business operations as three strong cold fronts slam the region. Delays in surface and air transportation are likely.

Included in the potential impact zone are portions of I-80, I-84 and I-90 in Washington, Oregon, California, Idaho and Montana. Trouble spots include but are not limited to Snoqualmie, Lookout, Stevens, Donner, Carson and McKenzie passes.

According to the National Weather Service, some places received more than 24 inches of snowfall over the weekend. Some areas could see 12 to 24 inches of new snowfall Monday through Tuesday, followed by at least another 12 inches by the end of the week. Heavy accumulations will also hit portions of southern Alberta and British Columbia, Canada. Occasional wind gusts of 40-plus mph will produce blowing snow and whiteout conditions in some spots.

Meanwhile, in the lower elevations and valleys, rain may be heavy at times. Localized flooding will be possible from Vancouver, Canada, to Seattle and Portland, Oregon.

As of Monday morning, it looks as if the rest of the country will be spared from major snowstorms this week. Forecast updates will be posted on the FreightWaves website and social accounts.

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By: LFS Marketing

January 5, 2021

DRAYAGE
DRAYAGE
Among Piers: Port of Oakland ends 2020 on high note

According to Freightwaves:

Three giant cranes valued at $30 million arrived at the Port of Oakland in California on Wednesday.

These are the tallest cranes ever at the Port of Oakland and rank among the tallest in the United States. Stevedoring Services of America ordered the cranes from Shanghai-based ZPMC for its Oakland International Container Terminal. 

“These cranes will keep the Port of Oakland competitive so that we can continue to attract the largest vessels calling North America,” Executive Director Danny Wan said in a statement. “Ultimately, bigger cranes at our waterfront translate into maritime and related jobs for the region.”

According to SSA, the cranes will have a lift height of 174 feet above the dock and will be able to reach 225 feet across a ship’s deck. When the crane booms are in a raised position, they will “soar more than 400 feet above the wharf,” the statement said. 

The new cranes will replace three older ones at the Port of Oakland.

Port of Long Beach

The Port of Long Beach’s community grants program, a more than $46 million initiative addressing pollution connected to the movement of goods, has received awards from the U.S. Environmental Protection Agency and Los Angeles County.

Both honors — the EPA Clean Air Excellence Award in the Gregg Cooke Visionary Award category and the LA County Green Leadership Award — recognize innovation in improving sustainability and air quality.

“When we created the community grants program, we wanted to demonstrate our commitment to helping those who are the most vulnerable to pollution,” said Long Beach Harbor Commission President Frank Colonna. “It’s great to receive this recognition because it means those efforts are helping people in meaningful ways.” 

The community grants program is designed to help those most affected by port operations: children, pregnant women, the elderly, the chronically ill and individuals with respiratory and/or cardiopulmonary disorders and illnesses. Grants fund community-based projects capable of directly reducing air and water pollution, traffic, and noise, according to the port. 

Combined with a previous mitigation grants program started in 2009, the Port of Long Beach has set aside more than $65 million, making it what officials called the largest voluntary port mitigation initiative in the country. To date, $27.5 million has been distributed, the port said. 

Port of Los Angeles

Cruise ships — all without passengers — are expected in and around the Port of Los Angeles in the coming weeks. 

“The visits for fuel, supplies and services are part of the cruise lines’ operations to reestablish the ships in U.S. waters as a prerequisite to meet federal regulations in order to resume cruising in the future,” a statement from the port said. 

Cruise operations have been suspended since March because of the coronavirus pandemic, and no date has been set for U.S. passenger sailings to resume. The port said the Centers for Disease Control and Prevention recently issued a Framework for Conditional Sailing Order that outlines a phased resumption of cruise ship operations. 

The Port of LA expects more than two dozen cruise ship calls through early February from Princess Cruises, Holland America and Norwegian Cruise Line. 

The port had 93 cruise cancellations in 2020. Each time a cruise ship calls LA, it contributes about $1 million to local businesses and the economy, the port said. “Losing these cruise ships amounts to losing nearly $100 million in economic activity on the LA waterfront.”

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By: LFS Marketing

January 5, 2021

SHIPPERS
SHIPPERS
New FAA rules put drone delivery closer to reality

According to Freightwaves:

Long-awaited regulations released Monday by the Federal Aviation Administration represent a big step toward wide-scale commercial use of drones in the U.S., including for package and cargo delivery, and full integration into the national airspace. 

The rules require unmanned aircraft systems (UAS) to broadcast identification or location information and allow operators of small drones to fly over people and vehicles, and at night under certain conditions. The next major step toward integration is developing rules for beyond-visual-line-of-sight operations, which currently require a waiver.

Remote ID is the equivalent of a digital license plate for drones. It includes the drone’s serial number or a unique flight ID number; the latitude, longitude and altitude of the unmanned aircraft and the control station; emergency status; and a time reference. 

The ability to monitor drones is aimed at public safety because it gives law enforcement, national security and public safety officials a way to find out if they are being flown in an unsafe manner or over sensitive infrastructure such as airports and military installations. Airspace awareness reduces the risk of drone interference with other aircraft and people and property on the ground.

Automated vehicle experts and policy-makers have warned that developers will take production overseas if U.S. regulations for commercialization don’t keep up with technology advancements, a development that would deprive the U.S. from reaping huge economic benefits as a leader in a rapidly growing market.

Drones represent the fastest growing segment of transportation, with more than 1.7 million drone registrations and 203,000 FAA-certified remote pilots, according to the agency.

Amazon (NASDQ: AMZN) earlier this year obtained a license to carry packages beyond visual line of sight of the operator as Prime Air develops an autonomous drone delivery service. Alphabet subsidiary Wing and UPS have already received FAA licenses and have pilot programs underway. While Wing delivers packages for FedEx (NYSE: FDX) and Walgreens (NASDQ: WBA), UPS (NYSE: UPS) is delivering prescription medicines for CVS in North Carolina. Walmart (NYSE: WMT) partnered with drone operator Flytrex for home delivery of certain items from stores in North Carolina , as well as DroneUp for delivery of COVID-19 tests in three cities. The programs use drones that can carry loads weighing 5 pounds or less.

On Wednesday, Class I railroad BNSF Railway petitioned the FAA for a waiver to remotely operate up to five unmanned aircraft over long distances for rail inspection and patrolling its private property.

Drone developers and operators welcomed the new FAA regulations. 

“The rules released today are critical steps towards future UAS rulemakings to enable more complex operations, including beyond visual line of sight for drone delivery, public safety operations and infrastructure inspection. Remote ID is also instrumental to the development of a UAS traffic management system that works alongside the existing air traffic control system for manned aircraft,” the Association for Unmanned Vehicle Systems International said in a statement.

The new regulations provide more flexibility to operate certain small unmanned aircraft, weighing less than 55 pounds, without obtaining a waiver to fly over people or at night. Drones operating at night must be equipped with anti-collision lights that can be seen for three miles.

The Remote Identification rule eliminates requirements that drones be connected to the internet to transmit location data. Instead, drones will be required to directly broadcast identification and location information with radio frequency technology such as Wi-Fi or Bluetooth. Drones can also be outfitted with a separate broadcast module.

The final rule differs from the draft proposal in requiring drone operators to have their remote pilot certificates with them and ready to be displayed if contacted by authorities.

Both rules will go into effect 60 days after publication in the Federal Register, which is expected in early January. Drone manufacturers will have 18 months to begin producing drones with Remote ID, with operators having an additional year to start using drones with tracking systems.

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By: LFS Marketing

January 5, 2021

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Year in Review: COVID-19, Infrastructure, Regulations Dominate 2020

According to TTnews:

During this unprecedented year, the nation turned its focus to those on the front lines of the fight, including medical personnel, first responders, grocery store workers and truck drivers. The contributions of truck drivers in particular — especially their role in delivering essential supplies to hospitals, supermarkets and elsewhere — gained praise. In communities nationwide, residents posted signs thanking drivers who kept the economy moving amid the stark financial downturn.

In April, President Donald Trump recognized commercial drivers during a ceremony at the White House. “American truckers are the foot soldiers who are really carrying us to victory,” Trump said. “They’ve done an incredible job.”

Joining him were the Secretary of Transportation, Elaine Chao, and the president of American Trucking Associations, Chris Spear.

“We obviously have an industry filled with some of the hardest-working, patriotic people in the U.S.,” Spear told Transport Topics after the ceremony. “Those drivers are moms, dads. They’re husbands, wives. They’re involved in their communities. They’re very charitable. They are the essence of the American spirit and to see it recognized like this in a time of crisis — I have to say — I think that is really an extraordinarily important thing for the leader of our country to do.”

At the centers of government, legislators and regulators worked to assist the nation’s response to the pandemic. They advanced emergency aid measures and passed regulatory relief to assist the freight industry’s ability to respond.

In Congress, policymakers approved multibillion dollar packages before agreeing to a colossal multitrillion dollar aid measure. This $2 trillion legislation advanced in the spring and contained more than $30 billion in transportation relief. That included $25 billion for passenger airlines and $4 billion for cargo airlines.

Despite the congressional response, representatives from the transportation modes urged Congress for emergency aid. Transit operators, Amtrak, state highway agencies and port officials continued to request billions of dollars for relief programs.

More recently, ATA called on congressional leaders to safeguard motor carriers against increased liability risk tied to the virus. As Congress negotiated a new round of aid in December, ATA’s Spear said: “The trucking industry is proud to play an outsized role in COVID-19 response and recovery efforts, and we ask that you consider the essential nature of the trucking industry as you consider the inclusion of reasonable liability protections in any future legislation.”

One lawmaker who has been an ally for trucking is returning to Congress after the fall elections. Maine Republican Sen. Susan Collins, an incumbent transportation funding leader, earned a fifth term to Capitol Hill after a tough challenge.

In the House of Representatives, Republicans gained seats but Democrats retained leadership, thus ensuring a return of chairmanships for transportation panels. Control of the Senate is linked to the outcome of two Georgia Senate runoffs in January. A win of at least one of the Georgia Senate seats would give Republicans the majority.

On the presidential stage, President-elect Joe Biden’s “Build Back Better” infrastructure proposal brings with it the promise of improving access to commercial corridors. While that was a goal shared by President Donald Trump, Biden arrives at a time when negotiations between the congressional and executive branches over infrastructure funding policy, combined with the on-again, off-again reauthorization efforts of the country’s highway law, have dragged on. Both points anchored national transportation interest, with nearly the complete transportation community urging policymakers to facilitate greater investments across mobility grids. Negotiations are expected to carry over into 2021.

During the year, regulators issued a host of waivers, exemptions and declarations aimed at facilitating the work of truckers.

Regulatory certainty on updated hours-of-service regulations did arrive, however, when in May Transportation Secretary Elaine Chao and former Federal Motor Carrier Safety Administration acting administrator Jim Mullen announced the long-awaited final rule on a slate of proposed changes that granted more flexibility to truck drivers. Many in trucking praised the four revisions that were approved, which included measures associated with the 30-minute rest break and sleeper berth time. Several safety advocates objected to the rule, however, and have pursued legal action.

The final rule arrived after more than a year of agency deliberations, which were made following consideration of thousands of public comments. The new rule is based on a proposed rulemaking announced in August 2019.

“That’s pretty fast for government rulemaking standards,” Dan Horvath, ATA’s vice president of safety policy, told TT. “It didn’t stall. It wasn’t put on a desk somewhere and sat and wait. To see that emerge in the middle of a pandemic speaks a lot to the effort to get that done.”

In August, FMCSA announced that Mullen would be leaving his post after less than one year. Wiley Deck, then a senior policy adviser within DOT’s Office of the Secretary, assumed the role of FMCSA’s deputy administrator. In September, automated technology developer TuSimple announced Mullen had taken a position as its chief legal and risk officer.

During the year, the FMCSA’s crash preventability program was amended to permit crashes where drivers were not at fault to be omitted from their safety profile. The agency also began a military pilot program for younger drivers, and launched its long-awaited Drug and Alcohol Clearinghouse database. The system logged more than 46,000 drug violations in the first year of operation.

Agency officials also announced plans to conduct a Large Truck Crash Causal Factors Study, the first update in 17 years. Additionally, a long-awaited proposed hair drug testing rule was announced by the Department of Health and Human Services.

In addition, as FMCSA’s Compliance, Safety, Accountability program turned 10 years old, a study of a potential new rating program, known as the Item Response Theory, was still underway — despite promises by FMCSA to make a decision on whether to incorporate the very complex system that could be used to rate motor carrier safety.

At the state level, many transportation-related concerns stemmed from consequences of COVID-19. While truckers’ steady consumption of diesel fuel helped stabilize revenue for state departments of transportation, across the states fuel tax revenue dropped sharply. As states instituted stay-at-home orders in hopes of diminishing the impact of the pandemic, a sharp drop in traffic from commuters and vacationers cratered revenue. Maine and New Jersey have passed legislation to boost transportation revenue, but the financial outlook across the board looks bleak. The American Association of State Highway and Transportation Officials estimates a loss of $16 billion for state departments of transportation in fiscal 2020.

On the West Coast, the California Air Resources Board approved a rule that will require manufacturers, beginning in 2024, to sell a certain percentage of electric heavy trucks, and it gave the go-ahead to drastically reducing oxides of nitrogen emissions in the state. Also, California’s Assembly Bill 5, which threatens the use of independent contractors by motor carriers, was set to go into effect at the beginning of the year but is hung up in the 9th U.S. Circuit Court of Appeals in connection with a challenge to the law by the California Trucking Association.

A federal appellate court in 2020 overturned the diesel fuel fraud convictions of former Pilot Flying J President Mark Hazelwood and two ex-Pilot sales executives on the grounds that a lower federal court permitted use of evidence that should not have been admitted. Also, last year, the U.S. Securities and Exchange Commission’s yearslong civil court fight with Daniel Ustian ended with the former Navistar International CEO agreeing to a $500,000 civil penalty and a permanent ban from serving as an officer or director of a public company.

Among broad industry challenges, a report showed that the parking shortage for truckers remains a serious problem and insurance rates for motor carriers continued to increase.

The rising tide of jury awards against truckers drew ATA’s attention, and attempts to mitigate these “nuclear verdicts” got underway in several state legislatures, including victories in Louisiana, Missouri and Iowa. In a related development, in New Orleans by year’s end 33 individuals had been indicted in a scheme to stage more than 100 accidents with trucks, intending to fraudulently seek damages in the courts for accidents in which truckers were not at fault.

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By: LFS Marketing

December 28, 2020

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Freight forecasters expect intermodal growth in 2021

According to Trains news:

Intermodal traffic will grow in 2021 but carload traffic will continue to struggle to recover from the pandemic in the new year, according to a freight forecasting firm’s outlook.

Todd Tranausky, vice president of rail and intermodal at FTR Transportation Intelligence, projects that intermodal volume will grow by 5.4% next year. The growth will come from consumer demand and the need to replenish retail inventories, which remain at unusually low levels.

During the pandemic, people who remain employed have shifted their spending from services — such as restaurants, movies, and travel — to purchasing goods. That’s a positive for freight markets, and should translate into strong intermodal volumes at least through Chinese lunar new year in February, Tranausky said on an FTR webcast Thursday.

Normally there would be a lull in intermodal traffic after the fall peak. “We haven’t seen any indication of that at all,” Tranausky says.

Domestic containers should be the fastest-growing intermodal segment, Tranausky says, projecting a 6.2% increase in domestic box volume next year. 

Trailer volume is expected to hold steady next year, thanks to the rise of e-commerce and related parcel shipments. Trailer volume has been declining for years, but has revived amid the e-commerce boom, tight capacity in the trucking industry, and a shortage of truck drivers.

International intermodal volume should rise 5.4% next year as retailers continue to restock inventories, Tranausky says.

An economic wildcard, however, is the pandemic and distribution of COVID-19 vaccines. If the pandemic wanes in the second half of 2021, it could mean a shift of consumer spending back toward services. And that, the FTR analysts say, would be negative for consumer-related freight markets such as intermodal.

Intermodal is on a pace to finish 2020 with volumes down 2.5%, which Tranausky says is not bad considering the unprecedented impact of the pandemic during the widespread lockdowns in the spring.

Carload traffic, however, is “on a different wavelength,” Tranausky says. Carload freight is generally tied to industrial production, which was struggling before COVID-19 and has yet to bounce back to pre-pandemic levels. 

“It’s just muddled along and muddled through,” Tranausky says.

FTR expects economically sensitive carload traffic — defined as everything that’s not coal, agriculture, or tied to crude oil — to be flat overall in 2021. “Right now the outlook is not particularly robust,” Tranausky says.

Volumes should continue to recover in the first quarter. Second quarter year-over-year numbers will show huge growth due to being compared to the pandemic-related traffic trough of 2020. 

How carload fares in the second half of 2021 may hinge on how the pandemic and consumer spending unfold, as well as whether there’s a federal stimulus and what shape it takes, Tranausky says.

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By: LFS Marketing

December 28, 2020

CARRIERS
CARRIERS
Forward Air brings in the cops as system outage continues

According to Freightwaves:

An updated statement from Forward Air about the collapse of its technology systems adds three key words that all but confirm the company is a victim of a cyberattack.

The statement, released by the ground and air carrier company Friday, said it had “notified law enforcement” about the “security incident.” A statement released Wednesday did not mention law enforcement. The rest of the statement released Friday was otherwise identical to the statement from earlier in the week.

The apparent cyberattack on Forward Air has been so extensive that its website is down. A Forward Air customer told FreightWaves that his customer service representative that Forward Air employees were told to shut down their computers to help slow the attack.

While Forward Air has not used terms like “ransomware” or “cyberattack” in its statements, outside experts on those issues said the Forward Air incident had all the hallmarks of such an occurrence. David Jarmon, a vice president at cybersecurity firm Gray Analytics and former Department of Defense official, told FreightWaves this week that based on the small amount of information Forward Air had released, it was likely that it was “targeted in a cyberattack, likely involving malware infecting its systems, which brings ransomware into consideration.” 

The shutdown of much of Forward Air’s operations has had no discernible effect on the company’s stock price. Shares in Forward Air were up four consecutive days this past week, with a Friday gain of 0.86% to $78.20. That’s only 75 cents less than the company’s 52-week high. 

Beyond the reference to law enforcement, the Forward Air statement repeated several key points: It “detected” the incident on Tuesday; third-party experts were brought in; and the technology team at Forward Air is “working diligently to restore the affected systems and services and bring them back online as soon as possible.”

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By: LFS Marketing

December 21, 2020

SHIPPERS
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Truckers to hit snowy weather coast to coast this week.

According to Freightwaves:

Snowy weather will hit places virtually coast to coast Christmas week. The good news — drivers should be able to handle most of it. As of Monday morning, nothing indicates that these storms will have major impacts on supply chains.

Northwest

Periods of heavy snowfall and gusty winds will continue to hit the Cascades and northern Rockies Monday and Tuesday, then again by Christmas Day or Saturday. This will impact travel on Interstate 90 over Lookout and Snoqualmie passes, as well as Stevens Pass on U.S. Highway 2. Blowing snow will lead to reduced visibility and possible whiteout conditions at times. Some snowfall could reach the Colorado Rockies midweek.

Great Lakes-Northeast

A band of snowfall will move from the Great Lakes to the Northeast and southern Appalachians Monday night and Tuesday. Some areas could see freezing rain or sleet. This system will fade Tuesday afternoon or evening, with minimal effects along the Interstate 95 corridor.

A second storm will produce snowfall and gusty winds across the Great Lakes Wednesday into Christmas Eve, with snow possibly lingering Christmas Day. Parts of the interior Northeast could also see a white Christmas, with potentially heavy lake effect snow from northwestern Pennsylvania to upstate New York.

Other notable weather this week

Winds will be howling across a large portion of Washington state Monday and Tuesday, as well as south-central Oregon and northern Idaho. Gusts in these areas will reach 45 to 60 mph at times.

The risk of rollovers will also be high in southeastern Wyoming, where gusts could hit 60 to 70 mph Monday, affecting drivers on Interstates 25 and 80.

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By: LFS Marketing

December 21, 2020

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FMCSA expands HOS waiver to include COVID-19 vaccine transport

According to Freightwaves:

The Federal Motor Carrier Safety Administration (FMCSA) is expanding its emergency hours-of-service (HOS) waiver to include carriers transporting COVID-19 vaccines.

In a notice issued late Tuesday, the FMCSA also announced it is modifying the most recent extension of the HOS waiver — which had been scheduled to expire on Dec. 31 — to expire instead on Feb. 28, 2021, unless the COVID-19 national emergency is revoked sooner.

“This expansion and extension of the modified Emergency Declaration addresses national emergency conditions that create a need for immediate transportation of essential supplies, and provides necessary relief from the [regulations] for motor carriers and drivers,” today’s notice states.

The exemption continues to cover parts 390 to 399 of the federal motor carrier regulations for the 50 states and District of Columbia which, in addition to HOS, include inspection and maintenance of commercial vehicles, employee safety, and parking rules. Details can be viewed here.

The current exemption provides regulatory relief limited to the transportation of:

  1. Livestock and livestock feed.
  2. Medical supplies and equipment related to the testing, diagnosis and treatment of COVID-19.
  3. Vaccines, constituent products, and medical supplies and equipment including ancillary supplies/kits for the administration of vaccines, related to the prevention of COVID-19.
  4. Supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of COVID-19 such as masks, gloves, hand sanitizer, soap and disinfectants.
  5. Food, paper products and other groceries for emergency restocking of distribution centers or stores.

As with all previous HOS waivers in response to the pandemic, direct assistance does not include routine commercial deliveries, including mixed loads “with a nominal quantity of qualifying emergency relief added to obtain the benefits of this emergency declaration,” FMCSA stated.

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By: LFS Marketing

December 15, 2020

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Rehearsal exposes gaps in COVID vaccine delivery

According to Freightwaves:

Mock shipments of COVID-19 vaccine to test the federal government’s transportation and logistics planning have experienced spotty on-time performance, Pennsylvania Secretary of Health Rachael Levine warned a Senate subcommittee Wednesday.

Operation Warp Speed, a multiagency task force coordinating the national distribution to states, has already begun pre-positioning stockpiles of the first batch of vaccines made by Pfizer (NYSE: PFE) and German partner BioNTech and is expected to begin last-mile deliveries to designated administration sites within hours of the drug’s approval for emergency use. A Food and Drug Administration committee of independent experts is meeting Thursday to review the safety and efficacy of the Pfizer vaccine, which has shown 95% positive results in recent trials, with the agency likely to approve its recommendation within days.

Levine, who is also president of the Association of State and Territorial Health Officials, testified that during practice runs there frequently was a two-day lag between arrival of the vaccine and related supplies such as syringes, alcohol swabs and protective gear.

“In approximately a quarter of states, at least one significant issue arose during the mock shipment that requires attention prior to shipping the actual vaccine,” she said in prepared remarks to the Senate Commerce Subcommittee on Transportation and Safety. “Vaccine that arrives without the ancillary supplies required to administer it will delay the vaccination of key prioritized populations.”

OWS is procuring the ancillary supplies that McKesson Corp., the government’s central logistics coordinator, will assemble into kits to be paired with vaccine supplies at destination.

U.S. officials say they plan to deliver 40 million doses of the Pfizer vaccine and one from Moderna, which is up for FDA review next week, by the end of the year. The government prepurchased 100 million doses from each company, enough to immunize 50 million people because both products require two doses spread over three or four weeks. 

States and other vaccine jurisdictions have the final say on where they want vaccines to be shipped. OWS, led by the departments of Defense and Health and Human Services, and Pfizer have been conducting dress rehearsals for delivering and dispensing vaccines to iron out any kinks, but Levine said they have had “varying levels of success.”

During a briefing Wednesday, Army Gen. Gus Perna, Operation Warp Speed’s chief operations officer, said daily briefings among governors, health officials and industry partners are identifying remaining issues that need to be resolved.

“We’re solving problems ahead of execution,” he said. “Does this mean perfection? No. What is important is the open communication and collaboration. 

“I feel confident that we’ve done detailed planning. We’ve worked through rehearsals. We have checked the ‘what if?’ box and we continue to learn every day in preparation for eventual distribution.”

Executives at FedEx Express (NYSE: FDX) and UPS (NYSE: UPS), the primary express transportation providers for Pfizer and McKesson, said their companies are ready for the challenge after years of experience supporting pharmaceutical companies and extensive investments in cold-chain systems. Pfizer is managing its own vaccine distribution in coordination with OWS.

Last week, Perna and Moncef Slaoui, chief scientific adviser to OWS, visited one of UPS’s health care facilities in Louisville, Kentucky, to review supply lane plans, handling of ultra-low-temperature shipments and how UPS will manage its dry ice replenishment program.

“I believe they left feeling confident in our degree of readiness,” UPS Healthcare President Wes Wheeler said. 

Drugmakers have been customers of FedEx and UPS for a long time, so vaccine distribution isn’t new territory, said Richard Smith, FedEx Express’ president of the Americas region, during an OWS summit at the White House on Tuesday.

“We know them well, we know their business well, we work well together. And we plan for these things every year. We jump into action and use our networks in times of disaster relief and deliver for good . . . into effected communities when that happens. So we’re well-versed in planning for this,” he said. “So we’ve spent a lot of time on that. I think a lot of the onus on protecting the vaccine is on the packaging side.”

UPS Healthcare is providing logistics support for eight of the 10 leading vaccines currently in clinical trials.

Both companies have mapped out tens of thousands of lanes across the country and globally to make sure they have the necessary capacity.

The vaccine rollout comes when parcel companies are trying to manage explosive growth in package volumes as people who are sheltering at home because of the pandemic spend their money shopping online. UPS on Monday delivered 34 million packages. But Wheeler said UPS’s transportation network is making the vaccine a priority, with capacity reserved in its air network, package hubs and ground terminals.

Pfizer/BioNTech’s vaccine, which relies on a new messenger RNA technology, must be stored at minus 70 degrees Celsius/94 Fahrenheit to maintain stability. Supply chains are set up to handle medicines and perishable foods at frozen, refrigerated and ambient temperatures, but Pfizer’s extreme temperature requirements complicate transportation and storage.

Pennsylvania intends to direct the Pfizer vaccine to large health systems that have ultra-cold storage capacity and the ability to vaccinate many adults in a short period of time before the drug spoils, Levine said. The state intends to use the Moderna product, which is kept at minus 20 degrees C, in more rural areas where health care providers lack the same cold-storage infrastructure and have smaller numbers of staff and patients to vaccinate at once.

Pfizer’s vaccine ships in quantities of 975 doses and can’t be broken down into smaller allotments. The company developed its own thermal shipping box to store dry ice and keep the vials deep frozen during transit. 

FedEx, UPS cold chains

FedEx and UPS were busy this year building out pharmaceutical distribution infrastructure.

UPS recently invested in equipment to manufacture its own dry ice for refreshing containers moving through its main package hub in Louisville and to replenish dosing sites where needed. The facility can produce about 28,000 pounds of dry ice per day and UPS “will ship a box with 40 pounds of dry ice to all Pfizer dosing locations a day after the vaccine arrives,” Wheeler said. 

UPS is also nearly finished installing extra-large coolers and freezers in the same facility for future storage of anticipated vaccines, has invested in a cryogenic freezer for subarctic storage and offers a program to supply portable mini-freezers from Stirling Ultracold for local administration sites where dry ice may not be available. 

The Atlanta-based parcel delivery and logistics giant also opened new pharmaceutical-handling facilities in central and eastern Europe and the United Kingdom. 

FedEx has more than 90 cold chain facilities around the world, anchored by its Cold Chain Center in Memphis, Tennessee, with more than 20,000 square feet of temperature-controlled storage. The integrated logistics company is expanding its network of ultra-low temperature freezers, Smith testified. 

Sophisticated sensors and tracking technology enable UPS and FedEx to intervene and intercept any shipment if the temperature deviates from its acceptable range, the executives said. 

UPS has a new command center for real-time shipment monitoring and also designed software that can detect network disruptions before they occur and recommend countermeasures in real time, Wheeler added.

Levine urged Congress to provide more funding to help states with vaccination, saying the $340 million allocated for states, territories and big cities to date is inadequate for the most complex immunization campaign in history. The Association of State and Territorial Health Officials is asking for $8.4 billion in emergency supplemental funding to help pay for infrastructure, cold chain management, personnel, public education and other needs. 

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By: LFS Marketing

December 15, 2020

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SHIPPERS
O COVID Christmas tree

According to Freightwaves:

The pandemic is leaving its mark on the real Christmas tree market with an apparent uptick in sales, a compressed selling season and direct-to-consumer deliveries that are replacing some retail or Christmas tree lot purchases.

Shipping costs also are on the rise, as freight capacity remains tight and rates soar.

Nationwide, Christmas tree sales were projected at around 18 million to 20 million this year, but the numbers are now expected to clock in closer to 22 million, according to McKenzie Cook, owner of McKenzie Farms in Oregon and Happy Holiday Christmas Trees in North Carolina.

Oregon and North Carolina are the top Christmas tree-producing states in the country.

The Pacific Northwest as a whole was forecast to sell around 4.5 million trees, but Cook now expects a seasonal tally of 5.5 million. 

“It’s been a very good year,” he summarized. But the extra volume, he said, is offset by the higher costs. “Expenses are up, labor is in short supply, truckers are in short supply. 

“Everything is running 10% more than last year.”

That sentiment is echoed by Carl Johnson, president of Pac West Transport, a Portland, Oregon-based brokerage that specializes in perishables including seasonal offerings like Christmas trees.

So far this season, Pac West has moved 60 to 80 Christmas tree loads to retailers in states such as Texas and California, with an average of 700 trees in a truck, Johnson told FreightWaves.

That’s about the same number as last year, he observed, adding that he will be curious to see sales figures at the end of the month, to confirm tree purchases are indeed up compared to 2019.

What distinguishes the 2020 season are prices, with drivers hauling trees to California charging an average of $200 more per load, he said. The Texas premium this year is $500.

Because of COVID retailers have to jump through more hoops, he added. “I have Christmas tree shippers that used to ice their trucks on site. Now they have us stop along I-5 south in a couple of different locations just because of the closeness of the employees, the manpower required to do that safely.” 

Home delivery

It wouldn’t be a COVID Christmas without home delivery of Christmas trees. 

In 2020, Walmart (NYSE: WMT) will not only deliver a real Noble Fir to your door but will also help you hang up your outdoor lights. 

Amazon (AMZN) is in its second year of Christmas tree delivery, according to Doug Hundley, a spokesperson for the National Christmas Tree Association, a trade group representing Christmas tree farms.

Walmart and Amazon did not respond to FreightWaves’ requests for comment.

Both retail giants are following in the footsteps of smaller businesses.

The Christmas Tree Stand, a small retailer in Philadelphia, has been delivering Christmas trees directly to homes for around four years, said co-owner Katie Kempf. 

But it’s definitely “increased a lot” as consumers seek out contactless delivery, Kempf noted. Sales overall are up 50% compared to last year, she added.

Khaled Naim, CEO and co-founder of Onfleet, a company that provides retailers with last-mile delivery technology, said numerous Christmas tree delivery services are using the company’s platform this year — and that they’ve been ramping up since before Thanksgiving. 

“Since people are staying put,” Naim speculated in an email to FreightWaves, “perhaps they’ve decided to go all out with a real tree this year but, as with everything else this year, would prefer to get it delivered.” 

As Naim suggested, another feature of the COVID Christmas is that people are not only buying more real trees, they bought them earlier in the season, before Thanksgiving.

As a result, the selling season, rather than running through December, is going to end early, said Cook, who typically moves 1,200 Christmas tree loads in a 30-day period. 

“Most people will be sold out next week,” he said.

Real vs. artificial

Increased sales are a boon to real Christmas tree sellers, who face competition from the artificial Christmas tree industry. 

Evergreen sales have remained stable over the past 40 years, according to Hundley, despite an exponential increase in the U.S. population during that period.

The disconnect is due in part to the fact that artificial tree sales are expanding rapidly. “It’s not biting into our market, but it’s certainly increased,” he said. “We wish we had more [market share], but we have a nice balance.”

The trend toward tree delivery certainly helps.

“People can have real trees, right on their doorstep,” Hundley said.

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By: LFS Marketing

December 7, 2020

CROSS-BORDER
CROSS-BORDER
Borderlands: Trade official wants new free-trade zone on Texas-Mexico border

According to Freightwaves:

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Officials want to create a new free-trade zone along the Texas-Mexico border; DFW Airport invests in a data-sharing platform; Mexico sees a record trade surplus in October; and Mexican officials announce 29 new infrastructure projects at $11.5 billion.

Official wants new free-trade zone along US-Mexico border

A Mexican official recently pitched the idea of creating a new free-trade zone on the Mexican side of the World Trade and Colombia Solidarity bridges along the Texas-Mexico border. 

Eduardo Garza Robles, president of the Border Trade Alliance in Mexico, said the zone would promote even more foreign trade and investments to the area.

“This would allow for greater efficiency and logistical competitiveness in the zone since it would have two entry and two exit points across these international bridges, in addition to allowing for the development of very productive commercial activities,” Garza Robles said in news outlet El Manana.

A free-trade zone is the international version of the United States’ foreign-trade zone program. Free-trade and foreign-trade zones were created for the purpose of expediting and encouraging foreign commerce.

The zones are duty-free areas created where goods can be rapidly shipped, repackaged, relabeled, or manufactured further and re-exported without customs authorities stepping in. 

Garza Robles’ proposal is to create a 13-square-mile free-trade zone that would span the Mexican side of the World Trade and Colombia-Solidarity bridges on the Texas-Mexico border. The bridges connect the cities of Nuevo Laredo, Mexico, to Laredo, Texas.

Both sides of the border already have numerous customs brokers, logistics warehouses and trucking companies, Garza Robles said.

Garza Robles is also CEO of Uni-Trade Group, a customs broker and logistics firm with offices in both Laredo and Nuevo Laredo.

“I think it would be a very strong economic trigger for this region that includes Laredo, Nuevo Laredo and Colombia, Mexico, and the area of Anahuac, Mexico, especially now that there are differences with China,” Garza Robles said.

Officials in Laredo said they have not been in contact with Garza Robles regarding the new free-trade zone. Laredo already has Foreign-Trade Zone (FTZ) No. 94, which was established in 1983.

FTZ No. 94 includes the Laredo International Airport complex, the Texas Mexican Railway Industrial Park, the Killam Tract, the International Commerce Center, La Barranca Ranch, Unitec Industrial Center and the Embarcadero Business Park.

Elsy Borgstedte, assistant director of the Laredo International Airport, said 39 companies currently operate in FTZ No. 94, with another in the pipeline.

The largest commodity flowing through Laredo is automotive goods. Others are textiles, leather footwear, electrical machinery and equipment, beverage and food products and plastic rubber products, Borgstedte told FreightWaves.

“The value of exported goods through FTZ 94 in 2019 was $588.6 million,” Borgstedte said.

Before the COVID-19 pandemic started last March, Borgstedte said they were getting contacted “two to three times a week requesting information to become an FTZ operator.”

“During COVID-19, it has reduced to one to three times a month,” Borgstedte said. “Some FTZ operators are reducing the FTZ-activated square footage.”

DFW Airport invests in air cargo data-sharing platform

Dallas-Fort Worth International Airport (DFW) recently introduced a cloud-based data-sharing platform from Nallian for cargo customers. It is aimed at creating “seamless transactions across the supply chain,” said John Ackerman, executive vice president of global strategy and development at DFW Airport.

“This new platform makes processing cargo through DFW more efficient by providing accurate and timely information to our cargo community,” Ackerman said in a release.

Dallas Fort Worth International Airport has started using Nallian’s cloud based data sharing platform for cargo customers. (Photo: Nallian)

Nallian’s cloud-based technology will reduce the amount of time and paperwork required for cargo shipments coming through DFW, said Nallian CEO Jean Verheyen.

“A dedicated slot booking application allows truckers and freight forwarders to request and reserve dock door slot times, eliminating wait times while reducing roadway congestion and harmful emissions,” Verheyen said.

Belgium-based Nallian is a cloud-based chain community that allows companies to collaborate across international supply chains.

Future enhancements to Nallian’s service at DFW will include real-time pharmaceutical tracking and monitoring capabilities, allowing for multinational collaboration among global cargo hubs, Verheyen said. 

Mexico sees record trade surplus in October

Mexico registered a record trade surplus of $6.2 billion in October, thanks to a rebound in exports mainly to the United States, according to Mexico’s National Institute of Statistics and Geography (INEGI).

Exports in October totaled $42 billion, a year-on-year increase of 3%. Imports into Mexico declined 14% to $35.7 billion compared to the same period in 2019, according to INEGI.

“Exports of manufactured products in October 2020 reached $38.3 billion, which represented an increase of 3.5% at the annual rate,” the INEGI report said.

In the first 10 months of 2020, the trade balance presented a surplus of $25 billion, with the U.S. receiving 82% of Mexico’s total non-oil exports.

Mexico announces 29 new infrastructure projects at $11.5B

Mexico recently announced another round of 29 private and public infrastructure projects worth about $11.5 billion which are expected to break ground by the end of 2021.

The majority of the plans are for highways as well as energy and water projects. The announcement is similar to a roughly $14 billion package of 39 building works announced in October.

The projects are intended to help kickstart Mexico’s recovery from the coronavirus pandemic, as well as fill long-standing gaps in transportation and energy infrastructure, according to Mexican President Andrés Manuel López Obrador.

The largest single project announced is a $2.35 billion liquified natural gas terminal to be built in the Mexican state of Baja California by IENOVA, a subsidiary of the U.S. company Sempra Energy.

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By: LFS Marketing

December 7, 2020

DRAYAGE
DRAYAGE
Federal Maritime Commission expands investigation of ports’ demurrage, detention problems

According to Freightwaves:

The Federal Maritime Commission (FMC) is reacting to the growing chorus of complaints and protests about operations at the ports of Long Beach, Los Angeles and New York/New Jersey by launching an expansion of an existing fact-finding mission.

The FMC on Thursday approved a supplement order that allows an expansion of an earlier order from the spring, International Ocean Transportation Supply Chain Engagement. The order specifically allows FMC Commissioner Rebecca Dye to investigate ocean carriers that are operating in alliances.

The announcement by the FMC comes a few days after a coalition led by the Harbor Trucking Association (HTA), the trade group representing the drayage industry in Southern California, called on the FMC to investigate the Long Beach and LA ports, with particular emphasis put on alliances. 

The alliances allow two or more ocean carriers to get together and share some operations, but HTA is criticizing them for aggravating an imbalance between locations for container pickups and dropoffs. That cuts down on the number of dual transactions, in which a dropoff and pickup are done at the same location and at the same time. In turn, that creates delays that, when fueled by record import volumes, can result in big demurrage and detention charges against the drayage companies. 

“The expanded commission investigation will seek to determine if the policies and practices of those shipping companies related to detention and demurrage, container return and container availability for U.S. export cargoes violate 46 U.S.C. 41102(c),” the FMC said in a statement.

That law, among other sections, includes a clause entitled “Practices in Handling Property.” It says that various players in the port supply chain, like a common carrier, must “establish, observe and enforce just and reasonable regulations” in handling property, such as containers. 

Demurrage and detention charges have soared at the Southern California ports, in part because containers can’t always be returned when the drayage company wants them to and appointments have been difficult to get. In the press conference earlier this week, HTA CEO Weston LaBar referred to the problem as being similar to renting a car, having it scheduled for return on a Monday and then being told by the rental car agency that the driver couldn’t return it until Wednesday. Not only that, they’d get charged for it as well during that time.

The surge in imports into the port has also caused a squeeze on chassis supplies.

“The time has come to resolve the most serious impediments to port performance,” Dye said in a prepared statement. “The potentially unreasonable practices of carriers and marine terminals regarding container return, export containers and demurrage and detention charges in the ports of Los Angeles, Long Beach and New York/New Jersey present a serious risk to the ability of the United States to handle trade growth.”

Although Dye’s statement did not refer to the Interpretive Rule, that regulation passed earlier this year does deal with questions on how to regulate detention and demurrage in connection with the steady flow of containers in and out of ports. 

The HTA, which has been pushing the issue across its coalition, said it “applauds” the FMC decision. And it took aim at the shipping companies, specifically calling out “foreign-owned” firms.

“The carriers have no one to blame but themselves,” LaBar said, speaking for the HTA. “This has been a hot issue of debate for six years, and following a four-year investigation, the FMC issued their Interpretive Rule outlining what they believe are reasonable business practices. The ocean carriers decided to do nothing. In fact, they raised the detention fees on American truckers. This is only the beginning. It’s time to fix this broken system.”

FMC Commissioner Dan Maffei released a statement that said he “strongly” supports the expanded fact-finding effort.

“There are reports that some carriers are threatening high charges for failure to return empty containers on time, even in cases where congestion has made it difficult or impossible to do so,” he said in the statement. “I fear there are too many in the industry who may be ignoring the principles set out in the Interpretive Rule when it comes to levying detention and demurrage charges.”

The HTA, along with the California Trucking Association, had earlier put out a sort of “call to action,” raising the issue of high demurrage/detention fees, the lack of dual transactions and calling on the shipping community to do something about it. Maersk is the only company to have publicly stepped forward in response to that. During the press conference earlier this week, LaBar said no other companies had done so privately.

The port of LA’s executive director Gene Seroka earlier this week discussed steps his agency was taking to improve “fluidity.”

While the earlier requests by HTA and its coalition partners focused on the Southern California ports, Dye’s order on an expanded fact-finding effort brings in the Port of New York and New Jersey.

“The commission now has a clear and compelling responsibility to investigate the practices and regulations that are having an unprecedented negative impact on congestion and amplifying bottlenecks at these ports and other points in the nation’s supply chain,” the FMC said in the formal supplemental order it published. “This is a serious risk to the growth of the U.S. economy, job growth and to our nation’s competitive position in the world.”

While Maffei did issue a statement of support, he suggested that more steps might be necessary. It may be, he said, that what comes out of the fact-finding mission isn’t enough.

He mentions the issue with dual transactions and “increasing reports that the delays and congestion problems are being exacerbated by carrier demands that a container, once emptied, be returned to a different location from that where it was obtained.” Maffei said it was “imperative” the commission look into that issue.

Maffei also said the commission needs to look at reports of a tight supply of containers to export chemical and agricultural products. “We have a responsibility to ensure that carriers do not limit the containers for U.S. exports in a way that is inconsistent with the Shipping Act and other U.S. laws,” he said in his statement.

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By: LFS Marketing

December 1, 2020

CARRIERS
CARRIERS
Truck Drivers Could Be Among Earliest to Get COVID-19 Vaccine

According to TTNEWS:

Truck drivers and other workers in critical and essential jobs could be among the earliest people to receive COVID-19 vaccinations as several major pharmaceutical companies begin working with major transportation firms to deliver the vaccines.

Distribution, dubbed Operation Warp Speed, could start as early as mid-December, according to a committee within the Atlanta-based Centers for Disease Control and Prevention. As many as 40 million doses could be delivered by the end of the year.

On Nov. 25, the Advisory Committee on Immunization Practices said once the Food and Drug Administration approves a vaccine or multiple vaccines, the committee will decide whether to recommend it and, if so, who should receive it.

The committee is considering four groups, based on supply:

  1. Health care personnel.
  2. Workers in essential and critical industries.
  3. People at high risk for severe COVID-19 illness due to underlying medical conditions.
  4. People 65 years and older.

In March, the Department of Homeland Security and the Cyber and Infrastructure Security Agency proclaimed that truck drivers were considered critical infrastructure workers.

“Employees supporting or enabling transportation functions, including truck drivers, bus drivers, dispatchers, maintenance and repair technicians, warehouse workers, truck stop and rest area workers, and workers that maintain and inspect infrastructure (including those that require cross-jurisdiction travel),” the declaration said.

Also deemed essential were “employees of firms providing services that enable logistics operations, including cooling, storing, packaging and distributing products for wholesale or retail sale or use.”

University of Minnesota-Morris economist and professor Stephen Burks is a trucking industry expert and a former driver. He also is a recent COVID-19 survivor, having spent much of November ill with a high fever and congested lungs. His wife also was sick, but with much milder symptoms, and she recovered faster.

Burks told Transport Topics truck drivers need to be high on the list of people receiving the vaccine early.

“Medical personnel taking care of COVID patients would be the first in line, and that would make perfectly good sense,” he said. “And there are essential workers, such as truck drivers and grocery store workers who have to be interacting with people to make the basics of the economy go on, even when we have a lockdown. Truck drivers count in this group of essential workers.”

Biotech firm Moderna on Nov. 30 applied to the FDA for an emergency use authorization. Pharmaceutical company Pfizer filed its application with the agency Nov. 20.

The trucking freight and logistics industry will play a critical role in distribution, and other modes of transportation will be involved as well.

Fort Worth, Texas-based American Airlines announced Nov. 25 it recently had moved a trial of a major pharmaceutical company’s thermal packaging from Miami to South America in anticipation of flying the vaccines.

On a LinkedIn post, CEO Doug Parker pointed out, “More than half of the world’s air cargo flies in the bellies of commercial airliners. The vaccine cannot be distributed as quickly as possible without the combined capacity of cargo and commercial carriers.”

Several major transportation providers, including UPS Inc., FedEx Corp. and DHL, have told TT they are deep into their distribution plan. All of the logistics companies that will move the vaccine are building new cold storage facilities around the county to have enough capacity.

Of the vaccines showing the most promise, experts say Pfizer’s may be the most difficult to transport because of the ultracold temperatures required for the vaccine to be effective: near minus 94 degrees Fahrenheit, or 20 degrees colder than winter at the South Pole. It also has a shorter shelf life than Moderna’s vaccine.

For Moderna, its vaccine must be shipped at comparatively less frigid minus 4 degrees Fahrenheit but can be kept in a standard refrigerator for up to 30 days. Pfizer’s may only remain effective in a freezer for five days.

Burks is cautiously optimistic the logistics and trucking industry’s planning and preparation will carry the day.

“I am expecting some glitches, but I would expect overall, it will mostly work,” he said. “It’s going to be tricky, especially for the Pfizer vaccine. The problem is to get through the next six months or eight months. After that, we’ll be in a world that will be relatively plentiful with vaccines. We’ve got to get through the summer. Will we substantially get the job done? I am hopeful.”

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By: LFS Marketing

December 1, 2020

SHIPPERS
SHIPPERS
Canada - Unable to reposition empty trailers on the other side of the border

TORONTO, Ont. – Being unable to reposition empty trailers on the other side of the border is a long-running frustration carriers and other supply chain participants would like to see resolved under a new U.S. presidential administration.

“The issue of the empty trailer seems so simple and really needs to be addressed,” said Stephen Laskowski, head of the Ontario Trucking Association and Canadian Trucking Alliance. He was speaking at a virtual Truckload Carriers Association (TCA) Bridging Border Barriers event. “You have the supply chains on both sides of the border in support of it, and it’s good for the environment.”

But industry associations have spent 10 years lobbying to allow greater flexibility on the movement of empty trailers without success.

Mark Seymour, CEO of Kriska Transportation Group, said the current rules are costly for carriers and drivers, who must live unload rather than dropping a loaded trailer and grabbing an empty to be loaded elsewhere for the return trip.

“Drivers are spending more time bumping docks and waiting to get unloaded,” Seymour said. “It negatively affects utilization and it translates to drivers wanting and deserving more pay because they are spending more time to do the same amount of work. It’s more efficient for us and the customers to give us the flexibility to drop a trailer, grab an empty and go load it somewhere else.”

He said some drivers have even been turned away at the border when they said they are going to drop a loaded trailer, with Customs assuming they would then be violating cabotage rules by picking up an empty.

John Lyboldt, TCA president, said the industry can expect changes under President-Elect Joe Biden’s administration.

“I think you’re going to see some additional trade cooperation,” he said. “I think there are opportunities for us to make some gains in regards to this issue.”

Trucking-related issues that are likely to be revisited by Biden include infrastructure, the classification of independent contractors, labor union relations, tax reform, tort reform and tolling by states.

The Canada-U.S.-Mexico Agreement (CUSMA), which replaced NAFTA, has done little so far to bolster cross-border trade, but still holds promise.

“Anyone who thinks that because of this agreement trade is going to skyrocket overnight will be disappointed,” Lyboldt said, noting the pandemic may have stalled progress on things like reducing red tape, improving productivity and digitizing paperwork.

Laskowski said he’d like to see Customs agencies on both sides of the border invest more heavily into their hardware and software systems, to prevent blockages such as one that recently occurred causing hours-long delays.

“The border, on both sides, was basically down for a couple days as we had to deal with systems issues,” he said. “Those systems need investments, just like roads and bridges.”

Lyboldt agreed, noting that on a recent visit to the southern border town of Laredo, Texas, Customs agents said their biggest challenge is access to sufficient broadband.

As for CUSMA, Laskowski said it’s a complicated deal and lawyers and politicians on both sides of the border are still in the process of interpreting all its implications.

At the border, Seymour also expressed concerns about what appears to be an increase in driver harassment by Customs. One Kriska driver faced questions on why he had been in the U.S. for so long, even when he explained he’d completed his reset there.

“We all complain insurance is very expensive but I’ve come to realize why it’s become as expensive as it is, and frankly I support the direction it’s going.”Mark Seymour, CEO, Kriska

“It’s silly,” he said. “It’s harassing, nobody likes it and it’s not going to serve any of us very well.”

He wondered if an increase in trucker scrutiny was because the border is less busy with a lack of passenger car traffic.

But when it comes to skyrocketing insurance costs, one of the most pressing issues facing many fleets, Seymour was less sympathetic.

“Insurance has become very expensive and it’s a function of many contributing factors,” he said. “One of my beliefs is, it was too cheap for too long and a lot of people got in the market on the supply side, lost boatloads of money, and quickly pulled out. So now the market is very small, not that many [insurers] want to play in it, so they’re being very fiscally responsible.”

Kriska is in a captive, giving Seymour the opportunity to see first-hand how expensive claims have become.

“I have the privilege of seeing what it really looks like when they pull the covers back,” he said. “We all complain insurance is very expensive but I’ve come to realize why it’s become as expensive as it is, and frankly I support the direction it’s going.”

The costs of accidents, capital costs of equipment, the cost to repair the equipment, and environmental cleanups have all gone up in price, not to mention nuclear verdicts. Seymour said captives are a good way to protect against some of those challenges, as long as you align with the right partners who share a commitment to investing in safety and reducing claims.

“But there’s still the underbelly of our industry that continues to find wormholes to cheat, lie and steal,” he said, naming exploiting Facility Association insurance as one example, and plating vehicles in other provinces as another.

When it comes to reducing claims in the first place, Seymour said slowing down is one way to achieve it. Kriska governs its trucks at 100 km/h.

“We are looking at, how do we reduce the frequency and severity [of crashes],” he said. Other initiatives taken by the fleet include installation of forward-facing cameras (a requirement for all members of the insurance captive it is in), and spec’ing collision mitigation systems.

“Complaining about the cost of insurance is going to do nothing unless you’re doing something about it that will help your case,” Seymour added.

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By: LFS Marketing

November 23, 2020

CROSS-BORDER
CROSS-BORDER
US, Mexico, Canada border closures extend another month

According to Freightwaves:

The U.S. land borders with Mexico and Canada will remain closed for nonessential travel until at least Dec. 21, after the three countries agreed to extend the restrictions as COVID-19 surges.

Officials announced the border closure extension on Thursday. Trucks will continue to move freely across the borders, as the movement of essential goods remains exempt from the restrictions. 

The borders have been closed for nonessential travel since March to curb the spread of COVID-19. 

The extension was largely expected as cases of COVID-19 continue to grow in the U.S., Canada and Mexico. However, promising results from trials of two COVID-19 vaccine candidates have raised hopes that the restrictions could be lifted in 2021. 

The restrictions haven’t directly affected cross-border freight volumes, which have recovered from their pandemic lows.

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By: LFS Marketing

November 23, 2020

DRAYAGE
DRAYAGE
New rail port to connect Texas and Mexico

According to Freightwaves:

The city of San Angelo, Texas, recently approved a $600,000 deal with South Plains Lamesa Railroad (SPLRR) to create a multi-commodity railroad transloading facility between central Texas and Mexico.

SPLRR will purchase a 180-acre tract from San Angelo and invest about $1 million to develop the new rail port. San Angelo is located in west central Texas, about 200 miles from San Antonio and 390 miles from the Mexican border.

San Angelo “could become a new major distribution center of products coming out of Mexico, and that also gives us an opportunity to send products to Mexico as well,” Guy Andrews, director of the San Angelo Development Corp., said to the San Angelo Standard-Times.

The new facility will be called the San Angelo Rail Port. 

SPLRR, based in Slaton, Texas, operates more than 23 miles of track in the area. The company also operates a rail port facility in Pueblo, Colorado, with 28 miles of track.

SPLRR’s rail port in San Angelo will connect to the Texas Pacifico Transportation (TXPF) branch of the South Orient Rail Line, a 385-mile rail line owned by the state of Texas and operated by TXPF. The line extends from the San Angelo area all the way to the U.S.-Mexico border in Presidio, Texas. 

TXPF is a Class 3 railroad operating company based in San Angelo that is part of Grupo México.

Officials at TXPF said the San Angelo rail port will help boost freight movements through West Texas and also tie into the eventual reopening of the Presidio-Ojinaga International Rail Bridge.

In 2019, the Texas Department of Transportation approved a 10-year, $59.7 million plan to rehabilitate hundreds of miles of the South Orient Railroad line, including reconstructing the Presidio-Ojinaga International Rail Bridge on the Mexican border. A fire destroyed the previous bridge in 2009.

The bridge is about 95% complete and could be operational by the second quarter of 2021, said Stan Meador, a TXPF spokesman.

“This bridge project has been in the works for years. Now that it is getting close, more and more shippers are showing interest,” Meador told FreightWaves.

Meador said the type of cross-border commodities initially anticipated for the bridge include energy products, such as petroleum-based products coming out of the Permian Basin and going into Mexico, as well as agriculture commodities.

“Long term, any kind of commodity that you see crossing the border could be something we’re looking at, things like intermodal automotive,” Meador said.

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By: LFS Marketing

November 23, 2020

SHIPPERS
SHIPPERS
Heavy snowstorm to slam Western freight markets

"Truckers who can’t avoid will have to chain up as heavy snowfall develops. High winds will increase the travel risk.

A storm system is approaching the Mountain West the next few days, producing light snow and freezing rain in high elevations Monday. The storm will spread south Tuesday from the Cascades and northern Rockies into the Sierra Nevada. As of Monday morning, the National Weather Service (NWS) has various winter storm alerts posted only for the Sierra Nevada, where the worst weather may occur.

Snow levels there will start out around 6,000 to 7,000 feet, then lower slightly Wednesday. Through Wednesday afternoon, 12 to 24 inches of snowfall could pile up along the crest of the northern Sierra Nevada and over the higher elevations of the southern Cascade Range.

In addition to the heavy snowfall, strong gusty winds from the southwest will lead to blowing snow and occasional whiteout conditions. Significant disruptions to travel and freight movement are likely across the northern Sierra highway passes late Tuesday into Wednesday.

The highest volume market in the path of this snowstorm is Stockton, California. Indicated on the FreightWaves SONAR map of the Outbound Tender Volume Index (OTVI), it appears in blue. This indicates a high level of outbound loads being offered by shippers to carriers.

Out of 135 freight markets, Stockton ranks 15th regarding OTVI. So a lot of truckers may be heading there to pick up loads. However, the storm will delay drivers arriving Monday if they can’t leave before the storm intensifies by nighttime. Otherwise, they may have to wait at least a couple of days for the storm to fade." Freightwaves.

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By: LFS Marketing

November 17, 2020

The largest -ever vaccine distribution campaign: Pfizer
News LFS
The largest -ever vaccine distribution campaign: Pfizer

According to Freightwaves; Pfizer largest - ever vaccine distribution for Covid 19 will de managed on its own and they will ship COVID medicine directly from U.S. manufacturing facilities and warehouses to end users with the help of trusted transportation providers. Direct shipping enables Pfizer to have greater control and real-time insights into the status of the frozen vials.

The U.S. government has contracted with the New York-based pharmaceutical company to deliver 100 million initial doses once its vaccine is approved, with an option for an additional 500 million doses. Pfizer’s product must be maintained at minus 75 degrees Celsius (-109.3 degrees Fahrenheit) to maintain its effectiveness. Officials this week said they expect to provide safety data from final-stage clinical trials to the Food and Drug Administration by the third week of November and then apply for an emergency use authorization if everything checks out.