Transfix Take Podcast | Ep. 33 (Week of Jan. 19)
Rollercoaster Continues, as Izzy Storms Through
If you thought 2002 might let us off the supply-chain rollercoaster ride, strap on your seatbelt.
The first few weeks of the year opened with extreme tightness throughout the country, but capacity has softened a bit and tender rejections decreased. For the first time in a while, shippers operating on the West Coast are in a better position than those in much of the country. We may see lowering rates there, as the rest of the country deals with capacity constraints. With improving weather, California rates steadily decreased through last week, but don’t get too excited yet! There are still more than 100 ships waiting to deliver imports, while ports struggle with workforce capacity due to the COVID omicron surge.
National truckload tender volume reached back to the numbers we saw in mid-December. Reefer capacity is still a nightmare for shippers: Load-to-truck ratios (LTRs) reached more than 30 to 1, but this could be a peak if reefer issues ease in the coming weeks. These reefer capacity problems could have resulted from record cold weather forcing shippers to use reefer units to protect cargo from freezing.
The past week has brought some of the most challenging conditions shippers in coastal markets have seen, as winter storm Izzy wreaked havoc in more than a dozen states. Just when shippers started to feel some easing, markets took a turn for the worse. As recent stories of drivers stuck on I-95 in Virginia for more than 12 hours due to a snowstorm remain fresh in our minds, issues caused by Izzy could create a domino effect on supply chains. States such as Georgia, South Carolina, North Carolina, Tennessee, Alabama, Mississippi, and Virginia are not as equipped for or as fast at treating roadways, making it potentially unsafe for drivers to use major highways more suitable for ice skating than driving. Izzy also packed a powerful punch of winds and arctic air, leading to power outages in several states. Some drivers rejected pickups or were delayed in transit to the affected areas. As carriers struggle to move on roadways, shippers are also facing related issues due to power outages and a shortage of workers. Ultimately, this all causes freight to slow its move along the supply chain.
Vaccine Mandates and Coronavirus Shutdowns Take Center Stage
Many shippers and carriers are celebrating the recent U.S. Supreme Court decision striking down vaccine mandates that would have included trucking companies with more than 100 employees. Opponents argued a mandate that affects drivers could force a significant decrease in capacity.
On the flip side, Canadian authorities clarified erroneous reports that said the country had dropped a vaccine mandate for its truckers. “Unvaccinated Canadian truckers re-entering Canada from the United States must get tested for COVID-19 and quarantine themselves starting Jan. 15. … Unvaccinated foreign truckers will be barred from entering Canada starting Saturday (Jan. 15),” according to Reuters.com.
“The United States has also said that foreign truck drivers must show proof of inoculation to enter that country starting on Jan. 22. If both countries keep their bans on unvaccinated foreign drivers, it would be the first policy measure since the pandemic began that could limit cross-border trucking.” Many industry groups on both sides of the border are urging leaders to reconsider these mandates.
Additionally, importers and manufacturers are keeping an eye on what’s happening overseas in China. “China’s zero-tolerance coronavirus policy could throw a wrench in the global conveyor belt for goods this year,” The New York Times reports. With Asian Lunar New Year on the short horizon — Feb. 1 — we’ll be keeping both eyes on developments in the region.
The movement of freight is changing in every mode, as shippers do their best to keep up with record demand while fighting congestion at multiple points throughout the supply chain. Shippers who think forward, use data and think outside the proverbial box on solutions, while partnering with companies such as Transfix, will come out of this ongoing freight rally in a better position and well ahead of competitors. The one huge win through this pandemic has been speeding up the digital transformation of the transportation industry.
With the uncertainty and volatility surrounding the U.S. economic recovery, shippers need a partner that can help them adapt and excel — no matter the circumstance. Shippers turn to Transfix for our leading technology and reliable carrier network. As volumes drive higher, we are here to help: Learn more about our Core Carrier program and Dynamic Lane Rates. As part of our ongoing market coverage, we’ll continue to provide breaking news, resources and insight into emerging trends and the pandemic’s impact on the transportation industry.
This communication may contain certain forward-looking statements that are not statements of historical facts. All such statements are based on current expectations as well as estimates and assumptions that, although believed to be reasonable, are inherently uncertain. These statements involve numerous risks and uncertainties, and actual results may differ materially from those expressed in any forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements contained herein, whether as a result of new information, future events, or otherwise.
