Category Archives: Publications

Industry Insights

December 2024

By PGL

Welcome to the PGL Industry Insights report for December 2024

Season’s greetings from all of us here at PGL. We hope you have a wonderful holiday and a prosperous 2025 ahead of you!

We start this month’s report with news that the uptick in rail freight continues with intermodal volume up almost 10% this year over 2023. This was buoyed somewhat by an uncharacteristically large slump the week of Thanksgiving, but volume is still up for the year, and there are indications that it will continue to perform well in the new year.

In ocean freight, Labor tensions and political uncertainty with regard to future tariffs kept late November container rates to the US high, with Asia-to-US rates well over $5,000 per FEU and heading up. Forecasters are identifying both the West and Gulf Coast ILA labor fight as well as trepidation surrounding the unknown timing and overall impact of proposed tariff increases as factors for shippers to try to beat these issues to the punch, increasing volume and therefore, cost, ahead of what should prove to be an impactful January.

Speaking of the current ILA labor issues, President-elect, Donald Trump has commented repeatedly in recent days that he backs the Union’s stance to block port automation. It is unknown how this may affect the big picture, or how a long-term work stoppage would be received by the administration. PGL will keep an eye on how this develops ahead of the January 15 negotiation deadline.

Twice this month, US warships successfully defended three US-flagged merchant ships in the Gulf of Arden. The Destroyers were able to intercept several different ballistic and cruise missiles that were launched by the Houthi rebels that have been hunting vessels in the Red Sea for over a year.

After a tiny bump at the beginning of the month, benchmark diesel price dropped again, going below its lowest point in over three years that was hit in November. Early this month, OPEC+ held a meeting that led to an extension of the production cuts that were due to be adjusted for higher volume in December. The futures market remains bearish, with no signs of increasing prices on the horizon.

That’s it for this month’s report. Subscribe to our channel to make sure you get the latest supply chain insights. As always, PGL will be here to keep you informed 24/7/365.

Follow us at @shipPGL and visit our website at www.shipPGL.com.

Industry Insights

November 2024

By PGL

Welcome to the PGL Industry Insights report for November 2024.

We start this month’s report with news that the Environmental Protection Agency’s Clean Ports Program has awarded 3 billion dollars to 55 ports across 27 states to secure new electric drayage trucks and cargo handling equipment, as well as the changing infrastructure to accommodate the new additions. This effort should make ports more efficient and have a positive impact on the environment.

In labor news, on November 14th the Canada Industrial Relations Board ordered all parties to resume operations after the International Longshore and Warehouse Union Ship & Dock Foremen union began a November first strike, followed by a subsequent lockout. A binding arbitration process is underway to resolve outstanding issues.

In the Boeing strike, the International Association of Machinists and Aerospace Workers union ended labor stoppage after 53 days with the approval of a new contract.

As we’ve reported before, 2024 is shaping up to be a strong year for intermodal freight, as according to a recent report from the Association of American Railroads, 2024 intermodal volume is up 9% over last year.

The benchmark diesel price dropped again this month, reaching its lowest point in over three years, just below the $3.50 mark.

The futures market remains undecided on the heels of a Trump presidential win, but expectations of decreased regulation and an intention to “drill baby drill” may keep prices low.

That’s it for this month’s report. Subscribe to our channel to make sure you get the latest supply chain insights. As always, PGL will be here to keep you informed 24/7/365.

Follow us at @shipPGL and visit our website at www.shipPGL.com.

Industry Insights

October 2024

By PGL

Welcome to the PGL Industry Insights report for October 2024

The month had a turbulent start with the International Longshoremen’s Association East and Gulf Coast dockworkers strike that began on the first of October. Work quickly resumed on October 3rd as a tentative agreement was reached between the ILA and United States Maritime Alliance with 61% pay raise and contract extension for the 45,000 dock workers. Talks will continue to resolve outstanding issues that will hopefully be sorted out and ratified by union members by the January 15, 2025 deadline.

The promised heavy storm season is certainly delivering, with Hurricanes Helene and Milton storming the East coast in quick succession. These storms provided the expected hardships of fuel shortages, flight cancellations and general mayhem for the logistics industries. Rail was particularly hard-hit, forcing the closure of the Norfolk Southern Line into Asheville, North Carolina for at least 3 months to rebuild after Hurricane Helene, and 10 ports in Florida and Georgia were forced to temporarily close after Hurricane Milton.

On the West coast, the Port of Los Angeles saw record volume in September of over 950,000 TEUs in September, a 27% increase over last year, leading to an all-time volume high of over 2.8 million TEUs in the third quarter. Experts point to rising consumer confidence and shippers avoiding the Suez Canal as main contributing factors to this boom.

The benchmark diesel price experienced one of its biggest yo-yo months in recent memory with a large spike early in the month and projected higher futures, followed swiftly by the largest one week drop in almost a year. Continued high production in the US as well as speculation that OPEC will increase production in 2025 are contributing to the price drop.

That’s it for this month’s report. Subscribe to our channel to make sure you get the latest supply chain insights. As always, PGL will be here to keep you informed 24/7/365.

Follow us at @shipPGL and visit our website at www.shipPGL.com.

Industry Insights

September 2024

By PGL

Welcome to the PGL Industry Insights report for September 2024

We start with news about the the benchmark diesel price used to calculate most fuel surcharges, which rose last week for the first time in 10 weeks, with the price rising to just over $3.50 per gallon, still well below the 4 dollar mark where the price usually hovers over the last few years.

In Asia, the typhoon season has been more destructive than normal, having significant impact on port operations. The Atlantic Ocean and Gulf of Mexico are in for a continued rough season as well, as we soldier on through a season that’s been forecasted to be tougher than most. For example, the World Trade Bridge in Laredo, Texas, the busiest U.S.-Mexico commercial crossing in the nation was forced to shut down temporarily on September 14 due to hurricane Francine causing a roof collapse in the customs area and Hurricane Helene has beared down on Florida and the East coast just this weekend.

In labor news, International Longshoremen’s Association East and Gulf Coast dockworkers are threatening to strike on October 1st. Bargaining talks broke down months ago, and at the time of this recording, talks have still not restarted.

On September 18, the US Department of Justice filed a claim for over $100 million against the owner and operator of the Dali, the container ship that struck the Francis Scott Key Bridge in March. A DOJ representative described the incident as “an entirely avoidable catastrophe”.

Continued hostility in the Red Sea is having a dramatic impact on insurance rates, especially for vessels with ties to the US, UK and isreal. Some coverage is available, but insurance companies are becoming more selective and imposing rising costs and restricted options for shipowners.

In Intermodal news, US rail is performing well with container and trailer volume up 13.% year over year. You’ve just taken a big step to being more informed.

Subscribe to our channel to make sure you get the latest supply chain insights. As always, PGL will be here to keep you informed 24/7/365.

Follow us at @shipPGL and visit our website at www.shipPGL.com.

Industry Insights

August 2024

By PGL

Welcome to the PGL Industry Insights report for August 2024

The Houthi-rebels have struck again. Sounion, a Greek-flagged oil tanker carrying 150,000 tons of crude oil across the Red Sea, exploded when Houthi rebels attacked on August 21, with fires still visible almost two weeks later, sparking fear of environmental disaster. If a spill occurs, it could be the worst oil spill in history. The Sounion is the third vessel operated by Athens-based Delta Tankers to come under Houthi attack this month. The militants said Delta Tankers had violated their ban on “entry to the ports of occupied Palestine”. The Houthis continue to target tankers, with two hit with ballistic missiles and a drone on Monday.

August has brought a surge in ocean freight rates, driven by an early peak season demand, coupled with congestion and ongoing labor issues at major ports. Despite shipping lines rolling out new vessels, the capacity is struggling to keep pace. Initially, rates are expected to stay high, but there’s some good news on the horizon – they might start to ease as the month progresses.

In Europe, we’re seeing strong import growth, particularly from China, fueled by the e-commerce boom. However, while rates from Asia to Europe remain steep, rates from Europe to other regions have seen a decline. Plus, new inland infrastructure developments in the UK are set to enhance supply chain efficiency, especially with the opening of Maersk’s inland container depot in the Midlands Freeport Zone.

But it’s not all smooth sailing – geopolitical tensions, particularly in Ukraine and the Middle East, and an above-average hurricane season in the Atlantic pose significant risks to the supply chain. These could lead to delays and increased costs across the board.

On the labor front, an order was issued on August 24 from the Canada Industrial Relations Board imposing binding arbitration between the Company and the Teamsters Canada Rail Conference. This action voided the pending strike and requires that no labor stoppage can occur during the arbitration process.

Those in the trucking industry also face some challenges. Driver shortages and rising fuel costs are driving up transportation expenses and causing delays. New emissions regulations are pressuring companies to upgrade their fleets, but the high costs and slow adoption of automation and electric vehicles are adding to the strain.

As of today the diesel benchmark price has remained steady at $4.2 per gallon, following a significant increase from last week. This stability contrasts with recent volatility in the futures market, where ultra-low sulfur diesel prices saw fluctuations.

In a landscape as complex as this, staying agile and well-informed is key. Subscribe to our channel to make sure you get the latest supply chain insights. As always, PGL will be here to keep you informed 24/7/365.

Follow us at @shipPGL and visit our website at www.shipPGL.com.

Industry Insights

July 2024

By PGL

Welcome to the PGL Industry Insights report for July 2024.

The gulf coast got it’s first taste of the NOAA’s predicted “aggressive” hurricane season in early June, as Hurricane Beryl rocked the Texas coast on July 8, leading to multiple temporary port closures and at least 20 Houston area deaths.

A new bill proposed by Representative David G. Valadao introduced the bipartisan Safeguarding our Supply Chains Act to combat organized cargo theft. The bill aims to improve coordination between the Department of Homeland Security and the FBI, establishing the Supply Chain Crime Coordination Center and a Supply Chain and Theft Task Force.

In Ocean Freight, spot rates are soaring, driven by continued hostilities in the Red Sea and limited capacity. We’re about halfway through the traditional busy summer in preparation for the holiday season, so it will be interesting to see how this plays out.

There is trouble brewing in Canadian rail labor, as Canada’s Minister of Labour asked the board to decide on maintaining critical shipments during a work stoppage, delaying potential strikes by the Teamsters Canada Rail Conference to August 9th.

In trucking, reporting has shown a lack of capacity growth for the first time in two years. This could be an indicator of normalization for the trucking industry, leading to fewer empty trailers and stabilization of pricing.

The diesel benchmark price has fallen a bit after 4 weeks of increases, but still short of the $4.00 mark. With high inventory and lowering demand, speculation is pointing to lower prices ahead.

Lastly, with a supply chain industry that seems to be contracting, PGL is growing and hiring. If you are a logistics operator or sales representative, we want to hear from you!

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.

Industry Insights

June 2024

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.

Industry Insights

May 2024

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.