North American Ground Logistics
Q3 2024 Market Update
SUMMARY: Volume and labor stabilizing, diesel fuel prices are mixed, rail strike watch in Canada
North American trucking outbound tender volumes surged 7.1% at the end of May, one of the strongest demand surges to start a summer shipping season since 2019, helping sustain spot rates at relatively elevated levels. The domestic full truckload market has been in extreme oversupply since the first half of 2022 when the impacts of the COVID pandemic on supply chains demand began to fade, overcapacity that may now be fading, presenting potential consequences of upward pressure on shipping rates. Meanwhile, trucking jobs dipped significantly in May, according to the monthly employment report from the Bureau of Labor Statistics, and now are at the level they were at last November. Large employer Yellow Freight recently defuncted, ending the employment of several thousand drivers, contributing to a seasonally adjusted decline of 5,400 jobs fromApril to May, an interesting development for the industry that has been contending with significant shortages of drivers for several years. Seasonally-adjusted warehousing jobs rose in May by 700, to 1,772,100, continuing a recent positive streak in this sector's hiring. After a year of significant declines in hiring in 2023 - warehouse jobs declined greater than 5,000 positions several months and increased only one month of the whole year – the warehousing sector seems to have rebounded somewhat with jobs steadily up 5,200 from December 2023. (FreightWaves) As this is written, rail shippers in Canada are awaiting reply comments / orders from the Canada Industrial Relations Board on federal government concerns about a potential strike by Canadian National and Canadian Pacific Kansas City rail workers. Rail worker’s union, Teamsters Canada Rail Conference, authorized a strike to start May 22, prompting federal government appeal to the CIRB for review of the matter. Negotiations between the unions and railroads are continuing. (Argus Media, CTV) Variable consumption and demand patterns present a mixed picture of fuel costs across North America at the start of the summer travel and peak shipping seasons. Diesel fuel prices averaged $1.78 per liter across Canada in the second quarter of 2024, up from $1.56 per liter the same period last year. In the US, weekly average prices for diesel declined to $3.82 in May from $4.00 per gallon in April, and down from $3.91 in May 2023. (Statista Canada, US Energy Information Administration)
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