Domestic Shipping and Logistics
SUMMARY: Labor unrest and rail system stress emerged as the latest serious issues affecting outbound shipping across North America.
RAIL / INTERMODEL CHALLENGES
TRUCK DRIVER PAY IS RISING A study by the American Trucking Association released in August shows that an 18% increase in annual compensation for truckload drivers compared with 2019. More than 90% of truckload fleets raised pay in 2021, with an average increase of 10.9%. Implications of this trend are reflected in continued higher prices for over-the-road freight rates. (Transport Topics News) POTENTIAL RAIL STRIKE The potential US rail strike at the end of Q3 caused inflation jitters to edge higher. A tentative deal was reached keeping 125,000 workers on the job and temporarily forestalling significant domestic supply chain disruption.
Train speeds at Norfolk Southern were down 11% and flat at BNSF into the third quarter. Dwell times, the measure of time required for truckers to drop off and pick up loads, have been reported up across the rail network 20% and 12%, respectively. Velocity has improved ever so slightly in recent weeks at BNSF (up 1%) but Norfolk Southern (down 14%) has seen further declines. Port of Los Angeles Executive Director Gene Seroka said nearly 34,000 cargo containers destined for rail remained at the docks and more than 20,000 of those have been sitting for at least nine days. In the past, the port would only have roughly 9,000 containers waiting for rail service.
(FreightWaves, Deutche Bank)
Q4 2022 Market Update
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