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Supply Chain Industry Insights – April 2024

Industry Insights

April 2024


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.

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Supply Chain Industry Insights – March 2024

Industry Insights

March 2024


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.

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Supply Chain Industry Insights – February 2024

Industry Insights

February 2024


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.

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Supply Chain Industry Insights Special Report: A Look at 2023


Industry Insights Special Report: A Look at 2023

January 2024


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.

Ocean Freight:

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:

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.

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Industry Insights Special Report: Moving Past 2022 and Looking Ahead to 2023


Industry Insights Special Report: Moving Past 2022 and Looking Ahead to 2023

January 2023

By Tim Gundlach

As a leading logistics service provider, PGL does more than move cargo for our client/partners. Much of our “value add” is in keeping them advised of current conditions and offering our best advice on what we see coming that can have an impact on their business. As such, thank you for watching and allowing us to share some thoughts on what lies ahead.
First let’s discuss 2022…

It was another highly challenging year for all of us involved in the global supply chain. The story of 2022 cannot be told without discussing “Black Swan Events”. “Black Swan Events” are defined as an unpredictable event that is beyond what is normally expected of a situation but that has potentially severe consequences. The truth is that “Black Swan Events” are nothing new to the logistics business. However, the frequency and severity of facing so many events within such a short period is unprecedented and a “Black Swan event” in itself. In 2022, these events included things such as Chinese covid lockdowns of entire cities, massive port and rail congestion, actual or threatened labor strikes, geopolitical events such as the war in Ukraine, blockage of the Suez Canal, etc. All of these events would have profound consequences on their own, but when combined caused additional layers of complexity resulting in a “bull whip” effect going from one extreme to another in a short period of time.
As we enter 2023, let’s examine the current status of the two of the major modes of international transportation:

Ocean Transportation:
With the sudden rise in capacity and drop in demand, rates have plummeted reaching near pre-pandemic levels. With the abundance capacity, Steamship Lines are increasing blank sailings to help mitigate further collapse in rates. Labor issues have been pushed down the line for now, and rail congestion issues are clearing up.

Air Freight:
Air Freight volumes ended 2022 with nine consecutive months of decline. Some of the factors leading to this decline are related to the return of supply on the ocean transportation mode as a more cost-effective option for non-urgent or low valued merchandise. The drastic fall in ocean rates is pulling many shipments back to the ocean freight mode. Additionally, the return of increasing capacity via belly space on passenger aircraft now that travel recovery is gaining momentum. Although considered weak by the pandemic era, performance in many regions remain 85% above the pre-covid levels.
Looking to the future, the following are thoughts on what we might expect on the industry and the major events that impacted us in 2022.

Ocean Freight:
Demand should remain well below 2022 level at least until major retailers have cleared out the stockpile of inventory carried into 2023. Growth in capacity can be predicted accurately with an increase in fleet growth by ship builders to the tune of 7% in each of 2023 and 2024; however, it could in fact be as high as 10% if projected vol of fleet scrapping doesn’t take place as expected. On-time performance, which has shown improvement in late 2022 due to a clearing of the port and rail congestion, will continue improvement only hampered by the increase in blank sailings again adding some level of schedule unpredictability although at a much lower level than 2022. Pricing should remain near current levels with some industry experts even predicting a rate war between carriers sometime in 2023.

Air Freight:
For air cargo, the first part 2023 continues with decreased demand due to the economy and increasing supply with the resurgence of passenger travel. Normally, one would expect rates to decline under these conditions however, fuel and inflation are expected to push back resulting in a slow stabilization and the return of near pre-pandemic pricing.

There are many challenges facing the rail industry in 2023. One of the biggest is how to improve service and address labor issues. Both shippers and unions are pressing Congress to pass legislation that would give the Surface Transportation board more regulatory authority.

Although predictions by financial institutions vary greatly, most have agreed that some degree of recession is on the horizon. Global growth in 2023 is expected to be below 2% which would result in one of the weakest years in nearly four decades. Experts disagree on the severity of the recession and the timeframe for recovery; however, many US companies are now announcing mass lay-offs as a precautionary cost saving measure driven by the weakening economic forecasts.

Labor Strikes:
There were 374 worker strikes started in 2022, representing a 39% increase over 2021. To name only a few there were actual or potential strikes by US Longshoreman, Portuguese rail workers, Airport Workers in the UK, and lockout of tugboat crews in Australia. Fueled by anger over working conditions and high inflation, the low employment rate and worker shortages gave workers more leverage, but this isn’t the whole story. One of the biggest factors was led by wins of other labor unions. The belief being that conditions were right and if your labor union doesn’t secure its biggest raises now, they are leaving money on the table.

Global Conflict:
The Russia-Ukraine conflict has affected the global logistics market on every level. The war has impeded the flow of goods, fueled cost increases and product shortages, and created catastrophic food shortages around the globe. Russia has been destroying Ukraine’s agricultural infrastructure, thereby disrupting the entire supply chain. The Black Sea and Azov Sea had been blocked by Russia, and the Ukrainian grain shipments were hijacked in the early months of the attack. In July, Russia and Ukraine signed a United Nations (UN) deal to unblock Ukrainian grain exports from three Black Sea ports to ease shortages. Despite the deal, Russia attacked Odesa’s seaport with cruise missiles hours after signing the deal. The uncertainty has had a snowball effect on supply chains across the globe.

China Covid Lockdown Policies:
China has reversed its pandemic policies. Even with a 30-40% decline in orders, logistics managers are still having to warn clients of delays in their factories being able to complete orders. This is because with the reversal of these policies, there is now a massive wave of infections impacting the labor force there. Some projections have this as high as 75% of labor being impacted and unable to work. As we enter Lunar New Year celebrations where migrant workers return to their hometowns, the further spread to more rural areas seems imminent. This is already impacting the major Chinese ports. Continued disruption after the Lunar New Year holidays are expected but should gradually improve as China’s population develops some immunity to the virus.

Global Protectionist Strategies:
More and more countries are implementing, or considering implementing, protectionist strategies to stem exports and protect domestic needs. The Chartered Institute of Procurement and Supply (CIPS) says the trend is one of global concern. It has identified food and oil as common targets for protectionist schemes, but that the range of product categories affected is expanding. These schemes are intended to offer protection during a crisis, but the continuing rise in their adoption can have a huge impact on the freight forwarding industry.

The wave of crises that arose over the last five years –from COVID and the China-US trade conflict, to high inflation and the Russian invasion of Ukraine– gave pause to developed economies in the West who have for long been overly dependent on Asia as a source of raw materials and cheap, manufacturing power. Consequently, the terms “nearshoring” and “friendshoring” gained prominence. A recent survey conducted by Capterra which surveyed 300 Small to Medium sized businesses show that 88% plan to or are currently switching at least some of their suppliers closer to the US in 2023. The big lesson for manufacturers in 2022 was: to not put all of their eggs in one basket. Many are considering a “China +1” policy meaning to continue sourcing from China but to also have other suppliers in other countries to diversify risks.
In conclusion: We view 2023 as not the end of the pandemic era, but perhaps the beginning of the end and a return to something resembling a new normal. However, we should remain diligent in remembering lessons learned with one key takeaway: “Always expect the unexpected”. PGL will do our part to keep you updated. As always, my colleagues and I remain available to discuss your particular needs or concerns at any time. We are here for you, please let us know how we can help.

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