Freight Insights for Week of April 12

Freight Insights for Week of April 12


The following insights are taken from a weekly discussion between Sunset’s nine US/MX branches.

Trends and discussions range from seasonal manufacturing and agriculture trends that affect available capacity to general insight into outside factors affecting freight volumes.

Below is a summary of the April 13 call:

FREIGHT VOLUMES & CAPACITY

  • Diesel FSC average at $3.129 this week, down .015 week-over-week.  Prices expected to hold for a bit, then climb in connection with the season change and warmer weather usage. Prices for diesel are close to .60 cents more YOY.
  • Reefer capacity is temporarily loosening, but is not causing rate reductions.  NW is seeing a shift in outbound options ahead of the winter storms, with the eastern coast showing heavy saturation of capacity.   Carriers are ahead of the curve and shifting into produce-heavy outbound markets this week to capitalize on heightened rates and shorter lead times. 
  • Dry Van – volumes fell this week coming off a very heavy quarter end.  Capacity in pockets is beginning to ease, but carriers are not following suit with rates.  Outbounds on the western half of the U.S. are heavy, with a much more even spread across the eastern half.  Outbound CA/OH/GA/IL/TX are hardest hit at the moment for overall state movements.
  • Flatbed – Produce/Steel/Lumber all competing.  Prices are expected to start rising fast for freight over the next few weeks; preliminary figures show close to 150% cost rise by 5/1.    
  • Ports – Port of Montreal on partial strike starting today, could move to full blown by end of week if talks do not go well with Union.  Inbound containers are hitting record highs, both in volume and in costs. Federal Maritime Commission investigating alleged tariff-fee overcharges, which is leading to a closer look into shippers records, and potential for new regulation talks.
  • LTL – rising jet fuel prices are putting pressure on freight movements by air, tied with a shut down of a large group of 737 models by Boeing due to engineering flaw is not helping the already tasked industry and record setting air cargo growth this year.  Certain companies are trying to advance through the issue by putting in new terminals (Forward Air – 11 additions), and adding freight for international networks (DHL – Asia/Pacific).  Large players like UPS and FedEx have begun reinstating money-back guarantees on air freight to curb customer unrest.
  • Class 8 truck orders and sales are up, but manufacturers cannot keep up with demand.   Biden’s infrastructure policies are of concern to an already hard hit industry, and expectation for expansion is far outweighing available equipment (both new and used options).  For new equipment, anticipated wait times of 8 months to receive equipment is tasking the used truck market heavily.  Be on the lookout for growing carriers to have higher OOS %’s due to older equipment being put back on the road to keep up with growth and demand.  Carriers are expected to put trucks on the road in mass volumes after the International Road Check Week 5/4-5/6.
  • International Road Check Week 5/4-5/6. Carriers are preparing fleets ahead of the blitz.
  • Weather Updates:
    • Snow with pockets up to 12” scattered across NV/UT/CO/MT/ND 
    • Heavy Winds and fire advisories in NV/AZ/CA 
    • Storm surge expected in Midwest and tonight, moving through SE, with second set pushing through Friday.  Heavy rain and risk for flooding and tornados. 
  • Several laws and regulation changes are being discussed that could impact the industry. White House Infrastructure bill for state spending and push to expand driving jobs.  NTSB is looking at industry standardization for collision-avoidance technology drawing light to a recent upswing in accidents and trend analysis.  
    • Others pending – California CARB laws 5/1/ Biden’s Transportation Review/ ABC test/ DOT HOS Changes/ FMCSA policy changes and regulatory review (Emergency Declaration extension to May 31, Commercial Driver Panel, Drug and Alcohol Clearinghouse).
  • Warehouses in Canada are at full capacity and across U.S. in port regions with fast progression further inland.  Lack of supply is steadily causing costs to rise with additional increase expected over the next few months as the ports and manufactured stock begin clearing. 
  • Canada is in the middle of a soft ELD transition for any trucks crossing border; started 4/1 with a June deadline.  U.S. ELD regulations will not be enough for Canadian compliance, so carriers are rapidly trying to prepare for the transition.

Industry data is pulled and summarized weekly from key proprietors and industry experts using multiple publications and sources. Some examples of the publications used are Freightwaves, Transport Topics, American Shipper, American Cranes & Transport, FMCSA, DOT, SC&RA. The information is discussed with Sunset Managing Directors and validated prior to publication of summary data in this posting.


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