Everybody’s got a lot on their plate right now, so here’s a way for you to stay up-to-date on the latest news without the extra hassle. Introducing…the eShipping Industry Update Report.
Each month, our team sits down to comb through the metrics, trends, and key takeaways on the state of the logistics industry to help your business plan for the coming months.
▪ Old Dominion Freight Line (ODFL) announced a 2024 general rate increase (GRI) of 4.9%, effective in early December. As shown to the left, ODFL's GRI is right in line with the last 2 years but will take effect about a month earlier than last year's increase. Over the last few months, four other LTL carriers have announced 2024 GRIs, including FedEx Freight (+6.4% average), ABF (+5.9%), TForce Freight (+4.9%) and SAIA (+7.5%). So, ODFL and ABF have announced similar GRIs vs. last year, FedEx Freight and TForce have announced smaller GRIs vs. 2023, and SAIA has announced a larger GRI y/y. We still expect 2024 GRI announcements from XPO and FWRD.
▪ While the magnitude of GRIs vary across the group, everyone other than FedEx Freight have pulled forward the timing of their rate increases by 1-2 months. Notably, SAIA has the largest GRI that's been pulled forward the most y/y. GRIs typically impact a small portion of each carrier’s customer base (~20%-25%). However, we expect that earlier y/y GRIs in 4Q will provide a modest boost to LTL yields in 4Q and could support better sequential margin trends vs. normal seasonality.
▪ According to DAT Trendlines, full truckload has seen a decrease in spot market rates for dry vans and flatbeds, with a slight uptick in spot reefer rates as we make our way halfway through Q4. One factor being brought up in conversation is the Load-to-Truck ratio dropping significantly across the past week, month, and year in Vans and Flatbeds. There appears to be fewer loads to fill the supply in several major markets.
▪ FreightWaves’ Sonar is reporting the Outbound Tender Volume Index is up over 6% this week, which also marks one of the first consistent spikes over last year’s OTVI (Year over year). This index is meant to measure freight demand by requests on capacity. The index is imperfect, as it can be negatively impacted by spikes in tender rejections. However, outbound tender rejections have stayed consistently low this year. This could be a sign of a higher demand market for spot freight to finish off the year.
▪ Fraud is still an issue that shippers and brokers are contending with as we move towards the end of the year, but several technology partners are shining the spotlight on bad actors. It is important to stay vigilant and stay proactive against these schemes as they grow in complexity. Double check your BOLs to ensure that the carrier's name matches the carrier
reporting to pick up the load and communicate with the broker (if used) to ensure your freight is on the correct carrier.
▪ Asia to the USWC arrived on schedule 47.8% of the time in September, up from 44.6% in August and were about 4.5 days late. (JOC)
▪ Asia to the USEC arrived on schedule 38.7% of the time in September, down from 39.4% in
August. (JOC)
▪ As a consequence of carrier's capacity management by aggressive blank sailings, all vessels departing from China in October are very full. Carriers are now going to apply GRI from 01 November. (HLS)
▪ Container lines are starting to send their new ultra-large vessels straight into storage upon delivery. (The Loadstar)
▪ The transpacific lane will have about 23% of deployed capacity blanked in October – the highest level since April. It’s leading to poorer reliability as last minute blanked sailings can cause delays in the form of rolled containers and late arrivals. (Freightos)
▪ Descartes put October’s ocean imports 11.5% above October 2019, 2.5% higher than in October 2018 and 15% higher than in October 2017. (Freighwaves)
▪ TAC Index said that the recent rate rises reflected a “genuine if modest peak season bounce with gains on rates from all major outbound locations around the world”.
▪ The latest figures from the Baltic Exchange Airfreight Index (BAI) based on TAC data show that average rates – spot and contract – on services from Hong Kong to North America increased by 18.4% compared with September (AirCargoNews)
▪ Air cargo space on the China to North America trade is in short supply as strong e-commerce demand outstrips the slow return of passenger flights and the essential belly cargo capacity they add to eastbound routes (JOC)
▪ With the holidays approaching, it is important to know the deadlines for shipping to ensure timely delivery. Here are the dates posted by each Carrier for delivery by Saturday, 12/23:
UPS:
▪ UPS Ground – Not posted, refer to ups.com/ctc for details
▪ UPS 3 Day Select – Tues, Dec 19
▪ UPS 2nd Day Air – Wed, Dec 20 / Thurs, Dec 21(w/ Sat delivery option)
▪ UPS Next Day Air – Thurs, Dec 21 / Fri Dec 22 (w/ Sat delivery option)
USPS:
▪ USPS Ground Advantage – Sat, Dec 16
▪ First-Class Mail – Sat, Dec 16
▪ Priority Mail – Mon, Dec 18
▪ Priority Mail Express – Wed, Dec 20
▪ Even with a robust construction pipeline that has many projects set to deliver in the coming year, JLL reports warehouse construction firms may find themselves unable to keep up with the rapidly increasing demand as the backlog of current projects will force new requests to be stalled, delaying construction schedules. Many tenants are being forced to expand or relocate to secondary and tertiary markets.
▪ For companies looking to build warehouse facilities in new markets, access and proximity to viable labor is a key factor to determining the viability of a new market.
▪ With ecommerce requiring three times the space of traditional through put distribution, low vacancy rates and high rent costs mean that both 3PL and private warehouses will need to embrace creative solutions in order to expand their footprint. (extensive)