This week:
- US truckload spot rate hits positive metric for first time in 27 months
- SC Ports to pause construction project in effort to relieve vessel backlog
- US truck tonnage soars in May, according to ATA announcement
- India-US East Coast ocean route faces significant shakeup, demand fluctuations
- ILA talks stall, threatening half a century of labor peace at US East Coast and Gulf port
After 27 Months, US Truckload Year-Over-Year Spot Rate Turns Positive
DAT, one of North America’s leading providers of transportation data, said this was the first positive year-over-year showing for the spot rate metric in 27 months. DAT Principal Analyst Dean Croke told the Journal of Commerce last week he expects the new rate to remain in place for a while, saying the US truckload spot market may finally be “on the cusp” of a long-awaited inflection point.
The announcement follows DAT’s positive news for spot truckload rates in May, especially for van and refrigerated freight. Compared to May 2023, van and reefer rates were significantly higher, while flatbed rates were lower.
Subscribe to JMR’s Weekly Supply Chain Roundup!
Stay informed with the latest supply chain news, trends, and insights. Get it delivered directly to your inbox every week.
SC Ports to Pause Construction Project to Ease Vessel Backlog
The construction project shut down one of three berths at the Wando Welch Terminal. In addition, a computer glitch shut down the port for multiple days in May, causing a further backlog. All three berths will be open while the construction project is on hold.
Barbara Melvin, CEO of SC Ports, recently announced the plan, although she has yet to confirm the exact date the pause will start.
ATA Announces Strong US Truck Tonnage Increase in May
The American Trucking Associations (ATA) recently reported a spring surge in freight demand pushed US truck tonnage numbers up in May. ATA said the increase stands both before and after seasonal adjustment.
The seasonally adjusted ATA for-hire truck tonnage index rose 3.6% month-over-month in May, following a 1% drop in April. This figure also represents a 1.5% year-over-year gain. ATA recently revised the April decrease slightly upward from its original projections.
The May tonnage increase marks the first seasonally adjusted gain for the ATA’s critical measure of trucking demand since February 2023. The unadjusted gain in tonnage from April to May was 7.1%.
According to ATA, trucking serves as a barometer of the US economy, as it accounts for 72.6% of tonnage carried by all modes of domestic freight transportation. ATA calculates its tonnage index based on surveys from its members, a practice it has followed since the 1970s.
Ocean Capacity Shakeup on India-US East Coast Trade Route
Hapag-Lloyd is ending its decades-long partnership with CMA CGM on the Indamex service, a leading network between West India and the US East Coast. This major transformation occurs as analysts forecast shakeups in the route due to shifting trade patterns in Asia.
Starting in early August, Hapag-Lloyd will launch its own independent service on this route, called the TPI. Hapag-Lloyd has been a significant partner in the Indamex service in conjunction with CMA CGM for decades. Indamex added a complementary string in 2021, designed to capitalize on pandemic-related demand fluctuations.
Since then, global events have disrupted trade patterns. However, industry observers predict new opportunities for Asian ocean trade, noting that trade activity has surged in the region due to the emergence of alternate trade routes. Since the pandemic, trade volumes between China and Europe via Central Asia have quadrupled, demonstrating the potential for economic growth in the region.
ILA Labor Talks Stop Ahead of September 30 Contract Expiration
On June 10, The International Longshoremen’s Association (ILA) halted contract negotiations with the United States Maritime Alliance (USMX) over the use of automated technology at ports. The move threatens nearly 50 years of labor peace on the US East and Gulf coasts, as the current contracts expire on September 30.
The ILA alleges that APM Terminals and Maersk, a member of USMX, are using an “auto gate” system that bypasses union labor, violating their current agreement. Maersk denies this claim, stating they are in full compliance with the contract.
The ILA, representing 85,000 members, is demanding a resolution to this issue before resuming talks. The breakdown in negotiations has raised concerns about a potential strike, prompting shippers to shift cargo orders to US West Coast ports.
