PGL had a great month of June. Here’s a glimpse at some of the moving parts:
– Sponsored the 2024 Freeman Invitational Golf Tournament
– Celebrated World Environment Day, International Supply Chain Day, Father’s Day, and National Logistics Day
– June Industry Insights
Stay tuned for next month’s update! #shipPGL
Follow us at @shipPGL and visit our website at www.shipPGL.com.
By PGL
Welcome to the PGL Industry Insights report for June 2024
Good news for the embattled Baltimore shipping channel as it was fully re-opened on July 10th, almost 3 months after the fateful bridge collision that was caused when the container ship Dali lost power.
In labor news, on June 11, the Union representing more than 9,000 Canadian border agents reached a tentative agreement that avoids a potential strike. Meanwhile, things are heating up on the Gulf and East Coasts as the International Longshoreman’s Association threatens action, canceling negotiations as the current contract is set to expire at the end of September of this year.
In the Red Sea, a second ship has been sunk by Houthi rebels in the campaign that has seen over 60 attacks since November. The U.S. Defense Intelligence Agency said that container shipping through the Red Sea has declined by 90% since December.
The Benchmark Diesel Price Index moved up for the first time in 10 weeks with the Department of Energy average weekly retail diesel price climbing 7.7 cents a gallon to $3.735 in mid-June. This is still well below the 4.00 per gallon mark last seen in early April. There aren’t a lot of apparent factors that explain the increase beyond the reported US inventories of over 114 million barrels, the highest reported since February.
NOAA released its May hurricane forecast and it incudes a warning to prepare for a potentially “hyperactive” season. The shipping industry is being cautioned about severe disruptions that could impact all modes of transportation, especially trucking and ocean transport in the gulf coast and eastern seaboard. This could mean significant changes to pricing, shifting the leverage that shippers have had over carriers over the last 5 quarters.
That’s it for this month’s Industry Insights Report. We’ll see you in July and, as always, PGL will be here to keep you informed and will keep delivering peace of mind, 24/7/365.
Follow us at @shipPGL and visit our website at www.shipPGL.com.
Welcome to the latest edition of the PGL monthly newsletter!
PGL had a great month of May. Here’s a glimpse at some of the moving parts.
We introduced our new user-friendly interface, PGL Connect, powered by Logixboard. Now you can easily keep track of what matters.
We celebrated Mother’s Day, National Defense Transportation Day, Armed Forces Day, Supply Chain Professionals Day, National Maritime Day, and Memorial Day.
Plus, a look at the key insights and events that shaped the supply chain industry in May.
Stay tuned for next month’s update! #shipPGL
Follow us at @shipPGL and visit our website at www.shipPGL.com.
By PGL
Welcome to the PGL Industry Insights report for May 2024.
We begin this month’s report with unexpected good news from gulf ports such as Houston, New Orleans and Mobile, where stronger-than-expected consumer demand is being cited for increased cargo volume in March with growth around 20% higher than last year.
Things aren’t quite as rosy for trucking. While April numbers were better than expected, the end of the great freight recession isn’t here yet. Low first quarter earnings were reported for most carriers though demand has remained stable. High operating costs and high capacity seem to be the largest contributors for this troubled sector.
Increased reliance on intermodal has also contributed to woes in trucking, though we’re seeing that in shorter-haul lanes such as the East Coast, the much more competitive rates are keeping intermodal from taking as big of a bite out of the trucking industry.
Since August of last year, we’ve been reporting on how the diesel benchmark price has continued to defy expectations, spending much of that time below the $4 per-gallon threshold, and the last month has been no exception, as the price index has consistently dropped, leading to $3.85 cents per gallon in the latest report.
In air freight, the ongoing tensions around the Red Sea have continued to boost air cargo volume with double-digit growth year over year every month so far in 2024.
That’s it for this month’s Industry Insights Report. We’ll see you in June and, as always, PGL will be here to keep you informed and will keep delivering peace of mind, 24/7/365.
Follow us at @shipPGL and visit our website at www.shipPGL.com.
By PGL
In this episode of the PGL Industry Insights report, we check on the aftermath of the Francis Scott Key Bridge, deliver some welcome news on the drought-stricken Panama Canal, watch as the Benchmark Diesel Price continues to defy expectations and we have one last bit of eclipse fun.
Welcome to the PGL Industry Insights report for April 2024
We begin this month’s report with an update on the aftermath of the Francis Scott Key bridge collapse in Baltimore. Great effort has been made to help with local trucking, including a temporary amendment of hours-of-service rules that allow for an additional two hours of drive time which has helped to alleviate some traffic concerns and allow for drayage drivers to temporarily shift to the port of Norfolk while authorities deal with the wreckage in Baltimore. As of April 22nd, 3 channels have been opened up to allow for traffic to and from the port, and authorities are pushing for a full reopening of the Fort McHenry channel at the end of May.
We have good news on the drought conditions that have limited passage through the Panama Canal, as recent heavy rainfall has had a positive impact on reservoir levels and allowed for increased traffic. Forecasts are indicating not only the end of the dry season, but also the El Niño conditions that have led to the historically low rainfall, and there are signs that a La Niña weather condition could be coming in August that would lead to a cooling effect and more rainfall long term.
Benchmark Diesel pricing has spent the month bouncing above and below the $4 line, continuing to subvert expectations that Middle East turmoil and Ukrainian attacks on Russian refineries would lead to soaring prices.
Lastly, as proof that logistics touches every aspect of life, we get a reminder that life also impacts logistics, sometimes in strange ways. Ahead of the eclipse that captured the attention of a wide swath of North America on April 8th, the Texas Department of Transportation halted oversize loads in 80 counties with consideration to the huge influx of umbraphiles adding approximately 1 million people to the area during the celestial event.
We’ll see you next month with another Industry Insights Report. As always, PGL will be here to keep you informed and will keep delivering peace of mind, 24/7/365.
Follow us on social media at @ShipPGL
By PGL
In breaking news: early Tuesday morning on March 26, the container ship Dali lost power, crashing into the Francis Scott Key Bridge that spans the mouth of the Patapsco River in Baltimore. The resulting collapse has shut down this portion of I-695 as well as the Port of Baltimore. As of the recording of this report, the ships crew is uninjured, and search and rescue efforts are underway for several people that are believed to have fallen into the river, including a construction crew that was working on the road at the time of the collision. Given the 45 degree fahrenheit water temperature, authorities are not optimistic about about their fate.
We can expect this tragic event to have far-reaching effects on logistics on the east coast. PGL will continue to monitor this developing situation.
Welcome to the PGL Industry Insights report for March 2024
In labor news, contract negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are strained, with a potential coastwide strike looming as the ILA warns its members to prepare for October 2024. Concerns over disruptions in East and Gulf Coast ports parallel past issues on the West Coast.
Trucking transportation prices showed growth for the second consecutive month in February, but the rate of capacity expansion outpaced pricing growth, indicating that a significant recovery in the freight cycle has not yet begun. While transportation capacity increased, utilization also rose, suggesting that the industry has not yet entered a true growth period.
Freight shipments and expenditures saw improvement from January to February. Despite remaining lower year over year, the smallest decline in 10 months suggests a potential recovery is beginning, supported by an uptick in actual freight rates and strong new equipment orders.
The benchmark diesel price experienced a slight increase despite significant gains in futures prices for ultra low sulfur diesel, highlighting a delay in reflecting wholesale price changes at the retail level.
Ocean shipping news is indicating that February’s U.S. container import volumes dipped by 6% from January, a better-than-expected performance for the typically slow season, but other indicators hint at potential softness in domestic freight for March and April.
Over recent months, Houthi rebel attacks on cargo vessels have been threatening both regional stability and global commerce. Although the assaults have introduced complexity and risk to maritime trade, the impact on commerce may be diminishing as supply chains adapt and reroute vessels, mitigating some of the disruptions caused by the attacks, leading to long-term effects in many parts of the logistics industries.
The air cargo market has experienced a robust start to the year, propelled by strong e-commerce activity in Asia and disruptions in ocean freight due to the Red Sea conflict. While the growth appears significant, questions remain about its sustainability and whether it’s driven by favorable year-over-year comparisons.
We’ll be back next month with another Industry Insights Report. As always, PGL will be here to keep you informed and will keep delivering peace of mind, 24/7/365.
Follow us on social media at @ShipPGL
By PGL
Welcome to the PGL Industry Insights report for February 2024
Inventory correction and spot rates for both ocean carriers and trucking are leading to something resembling stability despite troubled canals and international conflict, but of course, the details offer a more nuanced view of things. Let’s dive into those details.
In our ongoing coverage of challenges for both the Panama and Suez Canals, we saw surprisingly increased traffic through the Panama Canal due to a wetter-than-expected November, with 24 daily transits in January, beating the projected 20. The embattled canal is not out of the woods yet, however, with water levels expected to reach all-time lows by April.
Following a dip in Houthi activity in early February, hostilities continue, leading many carriers to take the longer route around Africa. This has lead to climbing spot rates for ocean transport, but we’re seeing some correction here in the latter half of the month.
Despite the canal troubles and a gloomy outlook for the start of the year, containerized imports to the US grew at a pace not seen in 7 years. Though the first several weeks of the year don’t traditionally see this kind of growth, even when adjusting for the ramp-up to the Lunar New Year, imports outpaced expectations. Factors credited for leading to this surge are leaner inventories and greater-than-expected resiliency of the American consumer.
Since the fall, we’ve been reporting that the diesel benchmark price posted by the US Department of Energy had been defying projections, and to a degree, even the futures market with unseasonable lows. Volatility in that futures and wholesale markets has finally affected the retail pump prices with a surge of over 20¢ per gallon, landing at over $4 per gallon for the first time since early December.
Increased US imports and stabilization of spot rates paint an optimistic picture, but as this report illustrates, the world finds a way to defy expectations. Through it all, PGL will be here to keep you informed and will keep delivering peace of mind, 24/7/365.
Follow us on social media at @ShipPGL
By PGL
Welcome to the PGL look at 2023 and our forecast for the coming year.
We continue to live in interesting times, and last year was certainly no exception. The last gasp of the large scale ramifications of the pandemic came to a close with China easing its Covid Restrictions in January. Though the virus is still a threat, the global community was able to bring it to manageable levels and we continue to deal with the long tail effects relative to the logistics industry. We saw large inventories transition to something closer to the pre-pandemic normal just-in-time model this summer, allowing for more efficiency and lower warehousing costs heading into a better-than-expected holiday season.
In Ocean Freight, 2023 has seen some major events, not the least of which being that the two most important canals are experiencing serious peril in the form of a years-long drought that is having a major impact on travel through the Panama Canal leading to reservation restrictions and delays, and unrest in the Middle East that has resulted in Houthi militant attacks on multiple vessels that were perceived to have connections to Isreal, causing many to avoid the Suez Canal. The situation with both Canals has led to rerouting plans for major shipping lines and the situation continues to develop into 2024. This has had an interesting ripple effect on shipping rates, as earlier in 2023, contract rates were plummeting as shippers jumped on low spot rates heading into contract nogotiotion season. Those rates are actively rebounding. This could lead to fewer blank sailings than we saw in 2023. Stay tuned to our Industry Insights reports for more as the situation develops.
In trucking, 2023 saw the closure of one of the US’s oldest and largest carriers, the Yellow Corporation. The knock-on effect lead to a boost for many carriers who have been able to take on business that used to go to the former trucking giant. The industry isn’t out of the woods yet, however, as trucking capacity remains high after fleets were expanded in 2021, and we can expect to see more carriers close up shop in the near future until trucking capacity is closer to demand.
Air freight saw a tumultuous year as lower demand led to reduced rates through August due to high inventories, but had a bit of a rebound in the last quarter as the peak season proved to be better than projected. Additionally, the difficult situations surrounding the canals are driving more air freight for time-sensitive shipments that may have otherwise been bound for ocean freight in normal conditions. These factors have led to a surge in pricing that had rates ahead of the 2019 pre-pandemic benchmark. 2024 is showing indicators of improvement for air freight moving forward, but it’s important to note that the geopolitical landscape can and will influence that for the better or worse.
Intermodal freight has proven to be a bright spot, as the congestion that led to much of the business leaving rail freight at the height of the pandemic has been dealt with, and lower rates compared to trucking are revealing opportunities for a resurgence for intermodal performance with shippers looking to save on long-haul trucking costs.
In the energy sector, diesel benchmark pricing defied expectations in 2023 with unseasonably low rates in the last quarter of the year, even in the wake of conflict in the Middle East and production caps by OPEC. Crude oil per-barrel prices averaged almost $20 less than in the prior year. With interest rates high, the industry is reluctant to hang onto large inventories. At the moment, demand remains high and producers are meeting that demand. Many indicators are still pointing to rising diesel prices, but a short spike in the first week of 2024 has already been reversed, and traders are not viewing trouble in the Middle East as an imminent threat to the market.
Labor disputes defined much of 2023 in the logistics industry. Though the over 400 work stoppages in the year is roughly equivalent to the number set in 2022, they involved significantly more workers and had far-reaching effects in 2023, such as UPS, Dock Worker Unions, the United Auto Workers and more. Major factors for the significant labor issues faced last year include the fact that many contracts were set to expire and inflationary pressures. Labor disputes always have a large impact on logistics, and we can expect that to continue for the foreseeable future.
We hope you have enjoyed this look at 2023 as well as some predictions for what the coming year may bring us. PGL will continue to keep you informed and will keep delivering peace of mind, 24/7/365.
Follow us on social media at @ShipPGL
There is good news for the holiday season with stable inventories and strong consumer spending that has outpaced predictions, resulting in over 200 million shoppers participating in the Thanksgiving holiday shopping season, surpassing last year’s record by over 18 million shoppers.
In trucking, volumes remained high at the beginning of December, outpacing the same time last year as well as in the same period in the often-cited pre-pandemic 2019. While capacity remains high, and trucking continues to face challenges, we’ll take whatever good news we can get.
Spot rates for ocean freight have continued to fall. This is bad timing for shipping lines as contract rates are due for renegotiation in the new year, and low spot rates set the tone for unprofitable contract rates. This would likely lead to more blank sailings to reduce capacity in 2024.
The situation in the Panama Canal is getting even worse as wait times more than triple for ships that do not have a reservation. This is a result of the Panama Canal Authority cutting the number of daily reservations slots from 32 at the beginning of November to 22 with another planned drop to 18 by Feb. 1. We can expect further decline in traffic well into 2024 and perhaps beyond, as the years-long drought takes its toll on the embattled canal.
In addition to the Panama Canal, things have been heating up around the Suez Canal with multiple attacks from Houthi rebels as an extension of the unrest in the Middle East that has disrupted normal activity through the canal. This has led shipping giant Maersk to pause all container shipments through the Red Sea. We will continue to monitor the situation.
The benchmark diesel price continues to slide as it has the last few months. Factors leading to this decrease include on-going high volume production from US producers, high inventories and the late start of winter weather.
A strong holiday shopping season, trucking gets a little good news, ocean rates remain perilous, and diesel pricing continues to fall. It has been a tumultuous year, but PGL will be here to keep you informed and will keep delivering peace of mind, 24/7/365.
Follow us on social media at @ShipPGL
If you’ve been following our reports this year, one concept that will be familiar is the comparison of 2023 to pre-panedmic 2019. As we’ve noted several times, 2019 is not a “normal” that any of us would like to return to, as it was not a great year for the industry, but it has served as a good basis for comparison for what a post-pandemic world looks like. With that in mind, we have our first positive metrics that show a marked improvement over 2019 with October US imports up over 11% higher than in 2019.
While many carriers are benefitting from business transitioning away from the now-defunct Yellow Corporation, the great carrier correction isn’t over yet. Trucking capacity remains high after the industry built up fleets in 2021, and we can expect to see more carriers close up shop in the near future until trucking capacity is closer to demand.
With more tough near-term news for trucking, there are indicators that intermodal is staged for a resurgance. Due to infrastructure congestion, rail took a hit during the pandemic, but with that congestion easing, shippers are looking to intermodal to save on long haul truckload costs.
DHL Express has announced the completion of a 409 million dollar expansion of its central Asia hub in Hong Kong. This expansion increases the footprint of the facility by 50% to over half a million square feet. The hub is now able to process 6 times more shipment volume than it could in 2004 when the facility was first opened.
In our continued coverage of the drought in the Panama Canal, more disruptions are expected, and this has had an impact on shipments going straight to US Pacific coast ports, leading to dropping volume on the East coast.
Lastly, diesel benchmark pricing continues to defy expectations, with unseasonably low prices despite unrest in the middle east, OPEC volume caps and futures pointing up. The leading factor here seems to be an economic one, with interest rates high, the industry is reluctant to hang onto large inventories. At the moment, demand remains high and producers are meeting that demand. Many indicators are still pointing to rising diesel prices, but we aren’t there yet.
Trucking continues to face challenges, rail sees some growth, and imports are showing positive signs. Amidst all of these changes, PGL will continue to keep you informed and will keep delivering peace of mind, 24/7/365.
Follow us on social media at @ShipPGL
Welcome to the PGL Industry Insights report for October, 2023.
The UAW strike, now well over a month old not only continues, but is expanding as the Detroit big 3 automakers make adjustments in pursuit of a tentative agreement. According to economic analysts, Anderson Economic Group, projected losses from the strike have topped 7.5 billion dollars and the longer it goes on, the more suppliers may struggle to resume operation once the strike ends.
Container import volumes are showing some positive signs with steady increases since the February low and positive numbers relative to the pre-Covid conditions of 2019. As we’ve noted before, 2019 is not a great benchmark for defining “normal”, as it was not a great year for the supply chain industries, but as we search for some indication of what a post-panedmic reality looks like, current conditions do look like a good sign for international ocean freight. Further bolstering this cautious optimism, despite developments in near-shoring manufacturing to places like Mexico, Imports from China are showing more signs of recovery.
DHL Express has announced a rate increase of 5.9% on U.S. originating shipments to take effect on January 1, 2024. This rate increase is on pace with FedEx and UPS rate increases, though it’s worth noting that this year’s price bump is less significant than last year. If you’ve been considering engaging with a DHL Express Authorized Reseller like PGL, now is the time to start that conversation as purchasing power is extended to customers offering attractive discounts for international express service.
Diesel prices have continued to fall in October, but futures and uncertainty surrounding conflict in the middle east are driving futures higher, so we can expect this recent break in diesel pricing to reverse itself sooner rather than later.
In more news affecting North American Trucking, Q3 earnings are projected to be higher for carriers in the wake of the recent closure of Yellow Freight and other carriers. It appears that the the loss of some big players in the space is allowing the surviving LTL carriers to benefit.
It’s best to approach these positive indicators with cautious optimism, but good news is always more fun to report. As always, PGL will continue doing what we do best, delivering peace of mind, 24/7/365.
Follow us on social media at @ShipPGL
Welcome to the latest edition of the PGL monthly newsletter! In September, we attended Aero Engines Europe in Madrid, Spain and the GSE Expo in Las Vegas and celebrated Labor Day and the United States Air Force 76th birthday. We also Sponsored the Tee It Up for the Troops North Texas golf tournament in Farmers Branch, TX benefiting those who have been wounded in defense of our freedom.
We also announced that our DHL Express customers can now benefit from the new dedicated flight to Argentina.
Our latest Featured Product video and helpful tip focuses on our domestic tradeshow department. Lastly, we have a fresh Industry Insights video to get you caught up with the latest in industry news and started a new LinkedIn page to serve as a handy resource for Industry Insights reports.
Enjoy this recap of the month and in the meantime, PGL will continue to deliver peace of mind, 24/7/365.
