Redwood Report: Market Intel for June 29, 2023 – Redwood Logistics : Redwood Logistics
We’ve arrived on the finish of the second quarter, which brings at the least some stage of challenges to logistics suppliers every year. This 12 months we proceed to see close to traditionally excessive tender acceptances as brokerages look to carry on to useful contract freight, limiting alternatives for the spot market. A brand new quarter brings new contract awards to logistics suppliers with this 12 months seeing the bottom priced contract charges the market has seen in practically three years.
A lot to take a look at as we head into Q3 and the Fourth of July vacation.
Watch This Week’s Redwood Rundown
As we hit the tip of the second quarter, markets are nonetheless muted, however will the Fourth of July vacation deliver any change? EVP of Procurement Christopher Thornycroft provides his predictions for each pre- and post-holiday impacts on this week’s 5-minute market replace:
Fourth of July Market Impacts
The Independence Day vacation will deliver challenges to provider capability as drivers look to get dwelling for the vacation. This may end in a weeklong put up Fourth of July market repositioning of drivers, creating inevitable service failures to low-price shippers.
Final 12 months the continued softness of the marketplace for the Memorial Day and Fourth of July markets have been indicators for us for the remainder of the 12 months as to what the patterns of provide/demand steadiness would generate within the spot market, and plans have been made for a comparatively comfortable spot season. Up to now this 12 months we’ve got felt the repositioning ache within the post-Memorial Day market, and the put up Fourth of July repositioning will probably be a robust barometer for the influence on future occasions akin to Labor Day (Sept. 4) and the Thanksgiving/Christmas/New Yr’s holidays on the spot market.
Panama Canal Drought Presents Newest Worldwide Transport Curveball
The Panama Canal stays in a historic drought which has pressured the nation to sluggish visitors, limiting the load and quantity of container ships for the foreseeable future. Almost 40% of all containerized imports and exports from the U.S. make their means by way of the Panama Canal every year because it stays essentially the most cost-effective delivery lane for Asia to U.S. East Coast and eliminates transit time on the route by practically every week.
Though the final 18 months of import projections have been concerning the shift from the West Coast to the East Coast ports, a titanic shift again in direction of the West Coast may very well be underway from this drought. This will probably be sluggish shifting because the worldwide delivery patterns can take months to reorganize, however a surge of West Coast freight will problem a California surroundings for the primary time for the reason that AB5 ruling went into impact, exasperating capability within the area.
Prime 3 Charts for the Week
1. FreightWaves Outbound Tender Rejection Index (OTRI)
It’s not 5% but, however we’ve seen some upward motion on the OTRI (3.69%) during the last two weeks, which means that as capability is shed, we’ll proceed to see pure strain mount on the contract charges.
Information shared with permission from FreightWaves
2. DAT Nationwide Load-to-Truck Ratio
Just like the OTRI, the load-to-truck ratio signifies a slight uptick, notably within the reefer phase (3.71 to 1; blue). Whereas it’s been an unseasonably weak produce season within the Southeast (see subsequent chart for extra on that), it’s nonetheless introduced a squeeze to some markets forward of the Fourth of July vacation.
Information tailored into map format with permission from DAT Freight & Analytics.
3. USDA Yr-over-Yr Share Change in Home Produce Shipments
As illustrated above, produce season has pinched some markets, however by way of year-over-year volumes, home produce shipments are down 18.3% total, notably pronounced in opposition to a seasonably sturdy mid-June in 2022.
Information from U.S. Division of Agriculture Specialty Crops Nationwide Truck Fee Report
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