The Top 5 Stories in Freight
Here’s what’s happening this week:
- New bill proposes 167% insurance increase for carriers
- FMCSA agrees to increased communication as new training rule deadline approaches
- Shippers forced to choose between high air freight costs or losing shelf space
- New FTR Shipper Conditions Index reading indicates slight market improvements for shippers
- Ocean freight rate spread might offer opportunities for shippers
- New bottleneck has ‘U.S importers panicking going into early peak season
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. New bill proposes 167% insurance increase for carriers
A new bill is being reviewed by the House that would raise motor carrier insurance by $2M- a 167% increase. Trucking activists are calling the hike ‘harmful and unnecessary.’ And if passed, it would jeopardize countless small and family-owned businesses as well as blue-collar jobs. Check out the letter these trucking groups sent to legislators to defend their position here.
2. FMCSA agrees to increased communication as new training rule deadline approaches
The trucking industry is less than a year away from upgrading its new entry-level driver training (ELDT) requirements set by the FMCSA. The association initially delayed these updates by two years in 2020 to ensure the IT infrastructure is in place upon rollout. But driver trainers haven’t been too happy about the lack of communication on the association’s part about what is expected from the new rule and its timeline. After pleading for better communication, the FMCSA has agreed to do just that. Here’s its game plan.
3. Shippers forced to choose between high air freight costs or losing shelf space
Desperate times call for desperate measures. High demand… logistic bottlenecks across modes… and depleting inventories. Shippers are desperate to get products on shelves. To make matters worse, many manufacturers have deals with retailers that include shelf space… and if they can’t fulfill purchase orders, they lose shelf space. For this reason, many shippers have been biting the bullet and paying up to 3x more to ship air freight. And with rates softening month over month, it might be a more viable option for more shippers. Get the details here.
4. New FTR Shipper Conditions Index reading indicates slight market improvements for shippers
The latest data from FTR’s Shipper Conditions Index are in. April stats came in at -11.9, following March’s record-low reading of -17.8. This index measures how favorable market conditions are for shippers. A reading above zero indicates the market is in favor of shippers, and anything below that is considered ‘less than favorable for shippers.’ The firm noted lower fuel costs and weaker freight volumes as drivers for improvement. Shipper conditions are expected to improve… but stay in the negative into 2022. Check out the full report here.
5. Ocean freight rate spread might offer opportunities for shippers
Ocean freight rate increases have upgraded to a whole new level over the past few months… and it keeps getting worse. But one JOC analyst says that beyond the headline rate levels, there are even more important developments that could present opportunities for shippers. Check out his thoughts on how the extreme spread in freight rates is a clear competitive opportunity for some shippers here.
6. New bottleneck has ‘U.S importers panicking going into early peak season
The bottlenecks for shippers continue. And this latest one is causing “U.S. importers to panic.” This month, the key export hub of Yantian in the heart of China’s factory belt was shut down this month to control virus cases. And it shrunk what little existing capacity shippers have. What it means is, in addition to shipping rates remaining high… delivery times could get stretched out even more. And it could cause major problems for shippers hoping to replenish inventories going into an early peak season. Get the full details here.
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