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Temperatures and Freight Costs Are on the Rise This Summer

 

According to data provided by Cass Information Systems (NASDAQ: CASS), freight costs saw a surge in June and are expected to continue to rise moving forward.

The expenditures component of the Cass Freight Index increased 56.4% year-over-year and was 11% higher than in May. In fact, compared to 2019, the expenditures index was up 27.9%

The difference in the year-over-year numbers has been greatly affected by a steep drop in demand due to world-wide COVID-related lockdowns during the same period in 2020. This trend of increasing rates will likely continue due to the widespread lack of drivers, warehouse space, and equipment like trucks and containers.

“Tougher comparisons in the coming months will naturally slow these year-over-year increases, but extraordinary growth rates will continue in the near term, driven by increases in both shipment volumes and freight rates,” Tim Denoyer of ACT Research explained.1

Many industry experts expect the capacity constraints to ease up in the near future as the driver employment rate increases in response to higher pay which should, in turn, change the trajectory of truckload rates.

“Even with material supply constraints, the freight cycle remains in high-growth mode, benefiting from a strong retail economy, tight inventories, and a persistent backlog of container ships anchored in the San Pedro Bay,” Denoyer said. He believes the industrial sector will begin to catch up to broader demand as “record capital goods demand and likely infrastructure programs” play out. 1

The current capacity backdrop could begin to loosen as transportation payrolls expand and extended unemployment benefits have already expired in some states. Additionally, waning stimulus payments and supply constraints (drivers, trailers, and chassis) are weighing on volumes.

Though 2020 was marked by low levels of supply and exceptionally high demand, these levels will not last indefinitely. As they say, the cure for high prices is high prices; the market will eventually correct itself.

 

 

Becoming a Truck Driver Looks Good Through Higher Pay Tinted Glasses…

 

Driver recruitment and retention remains the top priority throughout the trucking industry.

It’s estimated that more than 200,000 qualified CDL holders are not currently working due not only to the COVID-19 pandemic, but also increased compliance with the Drug & Alcohol Clearinghouse. Diminished driver school graduation rates, early retirements, and more than 75,000 Clearinghouse violations are also some factors for the reduced number of drivers.

Data shows that driver hiring conditions are getting better, according to Tulsa, Oklahoma-based software-as-a-service provider Tenstreet. A recent report from the company that helps carriers better recruit and onboard drivers noted a “positive driver hiring outlook on the horizon.”

There has been a “slow but steady climb back to January levels” the data shows, with the number of drivers filling out job lead forms and applications continuing to move higher. January is usually a busy month for activity as drivers tend to inquire about changing fleets or jobs at the beginning of each year.

“Overall, we’re starting to see the same general seasonal trend lines the trucking industry is used to, with applications taking a hopeful turn upward in May, which will ideally mirror 2019’s trend of an increase in applications over the summer and into the fall,” the report read.2

A press release cited support from customers and their understanding of “the growing needs of the market” as a catalyst for the pay raise.

 

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. 

REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

 

SOURCES:
1. https://www.freightwaves.com/news/freight-costs-see-june-surge-tougher-comps-coming</a>
2. https://www.freightwaves.com/news/driver-employment-market-may-be-improving-amid-historic-pay-increases

 

Like many industries, the United States truckload capacity market moves in cycles of supply and demand, supply being the number of trucks and drivers that haul freight and demand being the demand for those trucks to meet the needs of the current market.

 

For shippers and brokers, the cyclical rise and fall feels perhaps even more exaggerated in recent memory, given the current COVID-19. In fact, at the end of Q4 in 2019, capacity started becoming tighter than anything we’ve seen before. And now that the economy is rebounding and business is booming for many industries, freight demand is gaining momentum. With an increase in consumer spending and difficulties in finding enough drivers, the capacity squeeze continues.

Another factor in the tight capacity is the low supply of available warehouse space caused by consumers spending on physical goods and companies holding more inventory. A report from CBRE states that we will see an increase to 26% of retail sales by 2025 in the U.S. and globally we will need an increase of 1.5 billion square feet to keep up with a $1.5 trillion uptick in e-commerce sales.

Imported cargo shipments to the U.S. are expected to remain at a record or near-record levels for several more months as consumer spending continues to restart the pandemic-damaged economy. But economists and other experts say that all of that buying is clogging an already overtaxed supply chain.

“I see the back half of the year remaining strong,” Port of Los Angeles Executive Director Gene Seroka said. “The peak season starts for us on August 1st for our back-to-school specials, fall fashions, and then the holidays. But we have to hustle; we still have some cargo in the back lot to clean up before we pivot to peak season.” The Port of Los Angeles reported five months into the year, overall cargo volume is 4,551,445 TEUs, an increase of 48.2% compared to 2020.

“Supply chains are finding it difficult to keep up with demand as shipping capacity struggles,” Hackett Associates founder Ben Hackett said. “A number of vessels taken out of service when volumes were low remain in dry dock while others are delayed in congested ports, which face a lack of manpower both because of COVID-19 illnesses and the tight labor market.

 

A Busy Rest of 2021 Ahead

As we move into a busy fall season and then into the holidays at the end of the year we could face more challenges. Some industries are seeing their defined peak seasons disappear as the e-commerce boom has caused them to have year-round demand. But, we will still see some seasonal increases in an already tight environment.

If the last two years have taught us anything, it is to expect the unexpected! Proper planning and working with trusted logistics partners can help ease any burdens we may face in the rest of the year.

 

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. 

REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

 

 

It’s a “carrier’s market”.

Truckload as well as LTL carriers have been overwhelmed with freight to the point that it is causing service and transit time failures. Drivers and dockworkers are difficult to source. Rail and port congestion, deeply depleted inventories, and warehouse unloading issues are only a few of the obstacles all carriers are looking to overcome.

Shippers are disappointed, while each carrier, in their own way, is trying to ease the backlog. Many of the larger carriers have long-term plans for additional terminal facilities and campaigns to hire more drivers, but in the short-term many are embargoing certain congested lanes. All of this is confusing to shippers, causing them to consider changing their carrier selections. However appealing that may seem, now is not the time to shift carriers. Since they are all working through the same challenges, you will likely face the same issues at the next one.

Generally speaking, carriers have experienced better year over year margins, but costs have also been higher – driver development and wages are the largest expense. Another practice that has added significantly to carrier costs is that many carriers are using purchased transportation for their line haul or last mile delivery in order supplement their capacity.

Additionally, carriers are finding that the metrics used to price LTL over the last 20 plus years is not producing desired revenue. Another complication is that LTL has become a catch-all, aggregating larger e-commerce shipments with shipments of 8+ pallets that previously might have gone as a truckload. Difficulty in sourcing truckload capacity has forced those volume shipments onto the LTL carriers, but the mix and volume have created handling issues.

Profit oriented carriers are developing stronger metrics based on activity based and/or account specific pricing. Carriers want to deal with the most accommodating shippers that have the best freight at the fairest pricing.

How can a shipper be sure they are getting the best value? Westgate can help you sort out the “LTL Chaos”.

CONTACT US today!

 

With 2021 well under way, the logistics industry is off to a solid start and top analysts are optimistic that the transportation industry will remain steady this year.

 

The U.S. economy is predicted to be in store for record-breaking GDP growth. Goldman Sachs raised its forecast for 2021 US gross-domestic-product growth to 6.8% from 6.6% because of the expected larger coronavirus relief package. This will be a large increase especially following the anemic year we had in 2020. The US economy contracted 3.5 percent on an annual basis in 2020, the largest contraction for any full year since the demobilization from World War II in 1946. However, disposable personal income (which subtracts taxes paid and adds government benefits received) experienced the fastest annual growth since 1984 contributing to the increase in purchasing of goods in 2020.

Amid the COVID-19 pandemic in 2020, truckers did an extraordinary job supporting the US economy. The trucking industry’s response to the COVID-19 pandemic created and flood of support for drivers and greatly improved public opinion of the industry as a whole. “Consumers have witnessed now firsthand what we do all the time. Unfortunately, it takes a worldwide pandemic for that to come to the surface, but the recognition is so well-earned and deserved…” said American Trucking Associations President Chris Spear, “2020 was a very defining year for trucking.”

Online shopping was already increasing in popularity, and shoppers being isolated indoors since March of 2020 has only accelerated that shift. “For the last four years, e-commerce growth has averaged between 13% to 17% increase, and last year it was up 14.7%,” says Ron Sides, Deloitte’s vice chairman and U.S. leader retail and distribution. “This year it will go ballistic, somewhere around 25% and it may go higher” bringing last-mile delivery up to unprecedented levels.

The medical transport sector is also geared to sky rocket, though much depends on the vaccine and how fast it is distributed to the general population. American Trucking Associations Chief Economist Bob Costello said, “the vaccine will help return to ‘normal,’ which means sectors that are currently hurting — like services and manufacturing — can bounce back, leading to more freight.”

Fortunately for truckers, pay increases should continue through 2021 as capacity continues to tighten and fleets are forced to compete for drivers. As companies increase driver pay to attract new drivers, it forces others to do the same to remain competitive.

 

We haven’t missed a beat. See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends.

 

REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

 

Sources:
https://www.piie.com/blogs/realtime-economic-issues-watch/what-us-gdp-data-tell-us-about-2020
https://www.ttnews.com/articles/trucking-industry-experts-optimistic-about-2021-once-covid-over

 

Many company owners don’t realize that the greatest unforeseen cost in shipping are accessorial charges.

 

Accessorial fees, or surcharges, are common with many major carriers. That includes surcharges for residential deliveries, deliveries outside major areas, oversized packages, parcels not in corrugated boxes, fuel, additional handling cost, and others. “Accessorials can add as much as 30% spend with carriers,” said Robert Martinez, founder and co-CEO of Shipware, a consulting firm working with shippers to reduce parcel and LTL spend. “Each needs to be measured, understood, and benchmarked before asking for concessions.”

Most come as a surprise when the freight bill arrives. These are charges that carriers apply to the freight bill for services beyond normal freight costs. They are generally applied after the shipment has been delivered. These costs are difficult to forecast, and recent heightened capacity can really drive up these additional fees if you aren’t carefully checking for them.

The best way to avoid these additional costs is to understand what they are and what you must do to avoid them.

Common Truckload Costs

  • Detention / Layover / Demurrage
  • Additional Stops / Diversion Miles / Circuitous Miles
  • Driver Assist / Count / Clean / Sort & Segregate
  • Hazardous Materials
  • Liftgate
  • Limited Access Fee
  • Pallet Jacket / Shrinkwrap
  • Redelivery
  • After-hours Delivery
  • Non-dock Delivery
  • Residential
  • Scale
  • Deadhead
  • Tolls / Border Crossing
  • Truck Ordered but Not Used

 

Common LTL Costs

  • Advanced Notification
  • BOL Correction
  • Liftgate
  • Detention Charges
  • Oversize / Overlength
  • Reclassification /Reweigh
  • Redelivery
  • Tolls / Border Crossing

 

In some cases, carriers introduce these charges temporarily but they become permanent, like the fuel charges.

“Fuel costs are way down from where they were in 2008 to 2010, but the charges never went away,” said Joel Dunkel, president of Parcel Forum trade show. While COVID-19 surcharges are new, it’s impossible to know whether they will become permanent, he said.

The Surface Transportation Board (STB) decision on demurrage and accessorial costs are part of a wider effort to “promote transparency, timeliness and mutual accountability by rail carriers and the shippers and receivers they serve.” The STB also clarified that the party responsible for demurrage should be the one in the best position to expedite the loading or unloading of railcars. “The intent is to ensure that the recipients of demurrage invoices will be provided sufficient information to readily assess the validity of those charges without having to undertake an unreasonable effort to gather information,” said the board.

Common Intermodal Costs

  • Detention/ Demurrage / Per Diem
  • Overweight
  • Rework

 

Since many of these extra fees are self-explanatory, most can be avoided by establishing a process that starts when the order is entered into your system.

 

Understanding conditions where the shipment will be unloaded is helpful: 

  • Does the site have a standard dock?
  • What type of equipment is used for unloading?
  • Are Lumpers used to unload? How are the Lumpers paid?
  • What are the receiving hours?
  • Are appointment times required?

 

Shipping department procedures are important and should be reviewed. Packaging is important and impacts pricing. The way boxes are placed on a pallet and the way boxes are labeled are important to many customers. Shippers must be careful to follow their customers guidelines.  Shipments might be refused or require rework. All at additional cost.

Shipping departments must use the correct classification on the Bill of Lading and enter the correct weight. Most LTL carriers have scanners to validate the size and weight of shipments. If a delivery cannot be made for some reason, the shipment could be subject to charges for storage, re-delivery, or return. Accessorial charges create a revenue opportunity for carriers and they have become very good at spotting those opportunities.

Westgate Global Logistics can help you identify and avoid these additional costs. CONTACT US to review how our services can help your business.

­­This peak season may seem out of the ordinary because of the pandemic, but the trends in increased e-commerce are most likely here to stay. Even though 61% of shoppers felt safe going to the store for holiday shopping, many brick and mortar stores have closed and may not ever open again.

 

Online shopping was already increasing in popularity, and shoppers being isolated indoors since March has only accelerated that shift. “It’s amazing how e-commerce has converted buying habits for so many people who previously preferred traditional brick and mortar stores,” says Mark Fiorini, President of Westgate Global Logistics, “They were forced into online purchasing initially earlier this year but now it seems they realize all the benefits and have converted their behavior.” With more people staying at home, having packages of groceries, clothing, and household items show up at their door is seductively easier than taking a trip to fight crowds and lines at the grocery store or mall.

Predictions from both Forrester and Deloitte say that online shopping will boom in the holiday season. “For the last four years, e-commerce growth has averaged between 13% to 17% increase, and last year it was up 14.7%,” says Ron Sides, Deloitte’s vice chairman and U.S. leader retail and distribution, “This year it will go ballistic, somewhere around 25% and it may go higher.”

As a result of this boom, transportation capacity has been tight with inventories running low at many places. At the same time, the boom in e-commerce is good for the trucking industry when it can keep up, particularly if companies are connected to order fulfillment. There are more LTL and final mile shipping needs with a high demand for at-home delivery. While LTL has risen, the truck volumes will most likely stay consistent, with the length of hauls and types of shipments changing. Couriers or ride-share type shipments are being seen as innovation in new services, where e-commerce middleman warehouses do order fulfillment and distribution. Because of the increased demand for goods, spot rates were up 10% year over year in July and have continued to trend upward, according to DAT. The current rebound could be a result of suppliers catching up to pent up demand.

The normal holiday shipping surge on top of an already tight capacity market has been challenging for many supply chains. Companies are scrambling to re-evaluate the resilience of their supply chains, looking for more transparency in their value chain, and diversifying the sources of their products so they can shift more easily when hit by a disaster.

When the pandemic shifted purchasing habits to be online, shipping patterns changed. The Resilience360 and Business Continuity Institute survey found almost 15% of shippers had seen their ocean transport significantly affected by the pandemic. The drop in in-store shopping severely disrupted east-west shipping routes, and put pressure on the ships delivering goods to the west.

But now that people are used to ordering more online, the trend may continue even after the pandemic is over. “E-commerce is likely to slow once social distancing is lifted,” said Bob Costello, chief economist at American Trucking Associations. “However, I suspect that some of the market share gains that e-commerce grabbed will remain with e-commerce.”

 

 

SOURCES:
https://apnews.com/press-release/business-wire/b6847791fbed49af98a47d1dcd6293a7
https://www.ttnews.com/articles/e-commerce-spike-likely-outlast-covid-19-pandemic-experts-say
https://abc7news.com/holiday-shopping-covid-19-delivery-delays-online/7365574/
https://www.forbes.com/sites/pamdanziger/2020/09/27/e-commerce-will-explode-this-holiday-and-put-retailers-online-strategies-to-the-test/?sh=2212e1962f18
https://www.supplychaindive.com/news/pandemic-peak-freight-ocean-airfreight-truck-railroad-rates/582718/
https://www.ft.com/video/4a7e38ee-0ca3-47b9-aabf-9afd6a185d19
https://hbr.org/2020/09/global-supply-chains-in-a-post-pandemic-world
https://www.digitalcommerce360.com/article/coronavirus-impact-online-retail/

Recently, the Federal Motor Carrier Safety Administration (FMCSA) updated the mandate of the hours of service (HOS) regulations which went into effect September 29, 2020.

 

These rule changes are already helping shipments move more efficiently. Here’s what your need to know about the updates and how they could impact shipping:

  • 30-MINUTE BREAK REQUIREMENT: Drivers can now take a 30-minute break during their 8-hour driving times through an “on-duty, not-driving” status rather than an “off-duty” status.
  • SLEEPER BERTH PROVISION: Drivers have two options for splitting their 10 off-duty hours — 8 hours in the sleeper berth and 2 hours off-duty, or 7 hours in the sleeper berth and 3 hours off-duty.
  • ADVERSE DRIVING CONDITIONS EXCEPTION: This exception maximizes driver safety by allowing another two hours on top of the two additional hours while facing dangerous road conditions like snow or flooding.
  • SHORT-HAUL EXCEPTION: This extends the short-haul exception to 150 air-miles and allows a 14-hour work shift that may occur as part of the exception.

 

So, what does this mean for shippers? In the big picture, the increased flexibility for drivers will mean a smoother shipping process altogether. These HOS rule updates will make more drivers available for longer periods of time, decreasing freight capacity shortages.

 

What can the freight industry expect to see in Q4?

 

Grocery stores and retailers have begun stockpiling groceries in preparation for a possible “second wave” COVID-19 cases this winter season. The fear of another COVID surge is creating a lot of doubt about the holiday retail season, a time that historically sees higher demand for truckers to haul freight.

Manufacturers are also working to stockpile inventory in an effort to avoid the kind of shortages seen in March this year at the beginning of the pandemic. DAT Freight & Analytics statistics show that “American consumers increased shopping by 33% over the course of this year, with nearly two-thirds mentioning that most of their shopping is done online due to the pandemic.”

E-commerce shipping logistics company released a national ShipStation consumer study detailing consumer buying tendencies and the impact the pandemic has had on freight, “The COVID-19 pandemic has largely been a positive for e-commerce companies, as people turned to buying online when cities shut down.”

Freight capacity and rates were already at elevated levels leading into the holiday season amid a possible resurgence of COVID-19 cases. Dean Croke, principal analyst for DAT iQ, the freight data and analytics operation for DAT Freight & Analytics, expects the increased e-commerce freight to put final mile shipping in high demand.

“E-commerce is expected to be at record-high levels during the holidays and retailers are restocking their inventories, especially those coming from international suppliers that had seen difficulty making regular deliveries early on during lockdown,” according to the report for the index. “Logistics services are in higher demand as consumers rely more heavily on e-commerce due to the COVID-19 pandemic. The growth has been significant, with e-commerce up 44% as a percentage of total retail in the U.S.”

It’s impossible to know how these new shopping and shipping trends will impact the overall long-term truckload market, but we do know that retail-related freight volumes are expected to remain high through year-end, while manufactured goods volumes are expected to slow.

 

We haven’t missed a beat. See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

Did you know that there are over 3.5 million professional truck drivers in the United States? These highly skilled truck drivers:

 

  • Deliver 10 billion tons of freight each year
  • Deliver to the 80% of our nation’s small cities, towns and villages
  • Have a crash rate that is 29% lower than the average driver

 

Don’t worry, you can show your gratitude to professional truck drivers during National Truck Driver Appreciation Week. This is the perfect time of year to pay tribute to these hard working truck drivers for the important work they do to make our lives more comfortable and more convenient. Here are a few simple ways to thank our valued road warriors:

  • Prize Giveaways
  • Free Lunch
  • Thank You Card
  • Drivers Night Out
  • Give A Radio Shout Out
  • Post On Social Media
  • Give A Gift

 

Giving a gift your drivers will actually use allows you to show your appreciation while adding a personal touch. Here are some great gift ideas:

  • Electric Blanket
  • Wireless Bluetooth Headset
  • Pressure Relieving Cushion
  • Audio Books
  • XM Satellite Radio

 

Truck drivers work hard and commit their lives to one of the toughest jobs in America. So, this National Truck Driver Appreciation Week, be sure to thank him or her for the remarkable work they do, every day.

 


 

Reach out to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.

 

>REQUEST A QUOTE<

In June of 2019, Westgate hosted an incredible logistics webinar featuring industry expert, Noël Perry. Noël gave his thoughts and insights on what he saw ahead for the freight industry.

 

Here is what he predicted and what has happened so far…

 


 

Noel talked about ‘The Last Cycle’ and how the world we live in and transportation will change radically. In June of 2019, he expected this cycle of economic recovery to behave normally until around 2023 or 2024. Transportation follows along with economic changes so as GDP drops, freight drops as well. And when it goes up, our industry goes up as well. He talked about how GDP changes since 2000 usually only change a little from quarter to quarter.

2020 UPDATE: In the fourth quarter of 2019, current-dollar GDP increased 3.5 percent, or $186.6 billion. In the first quarter of 2020, decreased 3.4 percent, or $189.4 billion in response to the spread of COVID-19, as governments issued “stay-at-home” orders in March. [i]

 


 

In 2019 we were seeing the lowest, and slowest recovery since WW2 to help us set our expectations. The tendency is for the economy to have modest growth and that is what Noel saw ahead. He predicted a lower GDP rate in 2020 and said there was also more of a chance for a recession in 2020. His strong advice was that 2019 was the time to figure out what you will do if this outcome happens. He also said shippers should be watching their budget because he anticipated a cut will be ahead.

 2020 UPDATE: The National Bureau of Economic Research said the expansion peaked in February after a record 128 months, and we’ve been sliding into a pandemic-driven recession since. The usual definition of a recession involves a decline in economic activity that lasts more than a few months.[ii]

 


 

Noel spoke in 2019 about the retail revolution and how we have 30,000 fewer store locations than in 2013 due to the boom of online sales. These online retailers are also changing expectations on delivery times since consumers are used to 1-day delivery.

2020 UPDATE: As people have quarantined at home, more than 8,700 stores are closing in 2020. We may be entering a retail apocalypse rather than a revolution![iii]

 


 

These radical changes were already happening in our supply chains before COVID altered our social and economic lives in the United States. Westgate hasn’t missed a beat during these trying times and over the decades has been through many difficult cycles.

Contact us for custom solutions with a trusted logistics partner!

 

SOURCES:

[i] https://www.bea.gov/news/2020/gross-domestic-product-1st-quarter-2020-third-estimate-corporate-profits-1st-quarter-2020

[ii] https://www.nber.org/cycles/june2020.html

[iii] https://www.forbes.com/sites/walterloeb/2020/07/06/9274-stores-are-closing-in-2020–its-the-pandemic-and-high-debt–more-will-close/#735eec53729f

The Freight Market Braces for the Full Impact of the Coronavirus on the International Economy

 

As the Coronavirus pandemic makes its way across many parts of the world, people are struggling to calculate the impact not only on the economy at large, but on industry across America. For the freight industry however, the market outlook is substantially better than some other areas of American industry.

The retail and grocery industry especially has experienced a sharp increase in demand for food, beverages, and other household goods. It is expected that the demand for food, beverages, household cleaners, and medical supplies will continue for the second quarter.1

American Trucking Associations’ chief economist, Bob Costello forecasts that if America can flatten the curve of the coronavirus and reopen the economy, the fourth quarter could show the signs of a recovery. “You’ll go from seeing the worst quarter in our lifetime to some of the best quarterly numbers, in the fourth quarter that we have seen in decades,” says Costello.2

“While many trucking fleets are exceptionally busy,” Costello said, “there is a significant disparity in the industry. For example, trucking firms that supply grocery stores, hospitals and clinics are working around the clock. But those that carry items such as automotive parts to plants or deliver food to restaurants are struggling.”2

 

US Department of Transportation Expands National Emergency Declaration3

 

Due to the continuing spread of the Coronavirus pandemic, the U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) has issued an expanded national emergency declaration.

“Under Secretary Chao’s leadership, FMCSA is providing additional regulatory relief to our nation’s commercial drivers to get critically important medical supplies, food, and household goods to Americans in need. The nation’s truck drivers are on the front lines of this effort and are critical to America’s supply chain. We will continue to support them and use our authority to protect the health and safety of the American people,” said Jim Mullen, Acting Administrator of the FMCSA.

The expanded declaration stipulates regulatory relief for freight operations that are supporting emergency relief such as:

  • Medical supplies and equipment related to the testing, diagnosis, and treatment of COVID-19
  • Supplies and equipment necessary for community safety such as masks, gloves, hand sanitizer, soap, and disinfectants
  • Food, paper products, and other groceries for restocking
  • Fuel

 

Impact on US Imports as Coronavirus Amplifies Trade War with China

 

Despite the continued trade war with China, Chinese manufacturing is recovering, and its products are expected to hit the US markets sooner rather than later.1

In fact, these products are currently being transported via airfreight providers to hasten their desperately needed arrival to the market.4 Transportation companies are expecting a major capacity crunch as they arrive into the US.5

 

What Can Freight Logistics Expect for Q2 and Beyond into 20206

 

As the Coronavirus takes its course, the performance of the markets in the second quarter will heavily depend on the severity and longevity of the virus outbreak and market closures. If America can successfully flatten the curve, then this disruption in freight should be relatively temporary. However, if it persists as it has up until now, the US economy could slide into a recession, which will only exacerbate the projected outlook for many industries across the nation.

While volumes continue to underperform during these chaotic times, capacity is expected to decline for the immediacy. But as with all trends, after a fall there is usually a rise and the retail economy should recover when the economy reopens.

 

Sources:

    1. Zipline Logistics
    2. Transport Topics News
    3. FMCSA
    4. DAT Freight & Analytics
    5. Supply Chain Dive
    6. Freight Waves

 

 

See for yourself why businesses are depending on Westgate to improve their shipping processes and to keep them informed of industry trends. REACH OUT to us to experience our boutique approach to streamlining logistics through an extensive network of resources, trained brokerage experts and unique personal service.