Redwood Report: Market Intel for June 15, 2023 – Redwood Logistics : Redwood Logistics
With main developments on the U.S. east and west coasts this week, there’s loads to cowl on this week’s replace, however we begin with the breaking information that the ILWU (Worldwide Longshore and Warehouse Union) has reached a tentative settlement to a 6-year contract (protection in JOC and FreightWaves) that may cowl all 29 ports on the U.S. Western Coast.
How a lot freight that had been diverted to East Coast/Gulf Coast ports will come again to the West Coast ports stays unknown, as a few of the freight might not return. After all, the deal nonetheless must be formally ratified by each events, however whether it is, it is going to actually be welcome information to West Coast carriers, because it implies that import volumes on the West Coast will not be suppressed by port labor uncertainties. The looming cloud lifts simply in time to keep away from larger peak season chaos.
Different elements that might have an effect on the West Coast such because the long-term influence of AB5 have nonetheless but to play out, because the West Coast has not gone by a sustained growth market because the rule was carried out. We’ll preserve our eyes on how the market unfolds out west, however there are many different developments to unpack on this week’s market replace.
Watch This Week’s Redwood Rundown
The massive information coming into the week was Sunday’s I-95 bridge collapse in Philadelphia, which was the first matter on this week’s 2.5-minute Rundown with EVP of Procurement Christopher Thornycroft. Get the high-level overview earlier than we dig into extra element:
I-95 Bridge Collapse Snarls Northeast Networks
Interstate 95 is the primary north-south freeway on the East Coast and is without doubt one of the main freight corridors within the Northeast. A driver misplaced management of a gas-filled tanker, which caught hearth beneath the I-95 bridge in Philadelphia, inflicting the northbound lanes to break down.
The Pennsylvania Division of Transportation is reporting common I-95 updates on its web site, together with that demolition of the broken portion of the bridge has already been accomplished forward of schedule, and state Administration, engineers and contractors have developed a plan to reopen the roadway safely and shortly.
For now, the short-term impacts will probably be creating extra miles for drivers and forcing carriers, load planners and owner-operators to re-evaluate probably the most environment friendly route for shippers historically served by that portion of I-95. As with all acute disruption, impacts will probably be localized at first, with a ripple impact carrying into subsequent week that will probably be fascinating to observe by way of any tightening capability in what’s been a muted market like many within the north.
High 3 Charts for the Week
1. Bureau of Labor Statistics Shopper Value Index (CPI)
We did see some indicators of reduction with the discharge of the most recent CPI, displaying year-over-year inflating moderating from 4.9% in April to 4.0% in Might. The contemporary knowledge provides the most recent proof that the Fed’s push to regulate speedy worth will increase is starting to work and hopes that continued monetary tightening will start to ease. Contributing to the decline are vitality costs, lead by oil, which is at present buying and selling close to two-year lows.
Interactive chart from BLS web site
2. FreightWaves SONAR Outbound Tender Quantity Index
Freight volumes dropped from 11,463 final week to 10,763 this week, consultant of softening all through almost each market since Memorial Day. Now two weeks out from the Fourth of July vacation, with it touchdown on a Tuesday this yr, it is going to pose difficulties to routing guides as transit instances and driver repositioning will take the complete week to be corrected.
Information shared with permission from FreightWaves
3. DAT Scorching Markets
The one area that has remained tough is Texas, led by Houston (8.9 to 1 load-to truck ratio) and Dallas (6.8 to 1), and to a lesser extent Laredo (7.9 to 1), McAllen (13.1 to 1) and El Paso (6.2 to 1). The Southeast continues to be within the midst of produce season, albeit a traditionally weak one. Arizona continues to be experiencing some excessive volumes (Phoenix 6.7 to 1), although Southern California volumes have moderated over the previous few weeks (Los Angeles 4.6 to 1).
Information tailored into map format with permission from DAT Freight & Analytics.
Massive Image Market Outlook
Even with the at present muted market stress, the 12-month crystal ball continues to indicate capability exiting the market as a result of fee stress. Whereas demand issues stay extraordinarily related till stock ranges have been considerably diminished, and capability stays sturdy yr over yr, continued worth reductions in transportation and a nonetheless sturdy labor market will start to indicate the energy of competitors for driver jobs, inevitably organising an undersupplied freight market which may be a well-known change.
Searching for Even Deeper Market Insights?
How are all the main freight markets doing? How will the ILWU tentative settlement influence import/export patterns? When will I-95 re-open? We’ll preserve tabs on all of it, so keep tuned and we’ll preserve you within the loop.
Observe the Redwood LinkedIn web page to catch our Redwood Rundown movies on Tuesdays, plus coming quickly you’ll give you the option to enroll in unique deeper weekly market insights by way of e-mail on Wednesdays. And preserve checking again to our insights weblog for these weekly deep dives because the week winds down.
