🎣 Empty Container Surge

Happy Labor Day. In today's newsletter, we explore the surge in empty containers entering the LA market, the factors behind Illinois-based Triton Logistics' fatal 2022 crash, and the significant volume increase experienced by U.S. ports in July.

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🐔 WHAT’S COOKIN’ IN FREIGHT

🚛 Triton Logistics Investigation Concludes. The National Transportation Safety Board (NTSB) investigation has revealed that Triton Logistics, based in Illinois, allowed drivers to falsify logbooks, violating Hours of Service regulations. These violations contributed to a fatal 2022 crash between a semi-truck (on cruise control, going 70 mph, driven by a fatigued driver) and a poorly maintained party bus (going 25 mph), resulting in three deaths and multiple injuries. The 61-year-old trucker had been driving commercial vehicles for seven consecutive days. The NTSB recommends stricter oversight and improved fatigue management.

🛡️ JAS Worldwide Confirms Ransomware Attack. JAS Worldwide, a major freight forwarder, suffered a ransomware attack that disrupted operations last week. While no group has claimed responsibility, the company assured that its email and website systems are secure. This incident recalls the 2022 ransomware attack on Expeditors, which cost the company approximately $60 million, as Flexport's Ryan Petersen pointed out. Cybersecurity experts are actively investigating the situation at JAS, and the company has committed to providing ongoing updates as they become available.

🚢 US Ports Set Container Volume Records in July. U.S. ports reported record container volumes in July, driven by early holiday shipping and back-to-school demand. The Port of Los Angeles experienced a 37% increase in volume compared to last July, while Long Beach saw an impressive 52.6% rise. Other major ports, including those in New York, Seattle, and South Carolina, also recorded significant gains. These numbers provide a positive outlook as we head into Q4.

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What You Should Know about the Uptick in Empty Container Moves

As mentioned in the What's Cookin' in Freight section, West Coast ports, particularly the Ports of Los Angeles and Long Beach, experienced a substantial increase in volume in July.

The influx of container shipments from Asia has significantly impacted the number of empty containers entering the Los Angeles area.

According to a report by FreightWaves on Saturday, there has been a 70% year-over-year increase in empty rail containers entering the LA market.

What Is the Cause Behind This Increase In Empty Containers?

When finished goods like electronics, furniture, or apparel arrive at West Coast ports, their final destination is often the East Coast of the U.S. Typically, these containers are transported from the ports to their destinations via rail. However, once they reach the East Coast, there isn’t enough freight to fill them for the return journey to the West Coast. This imbalance has led to a large number of empty containers being shipped back to Los Angeles and Asia.

The trade imbalance between these two directions (Asia to the U.S. and vice-versa) is not a new phenomenon; it has existed for decades. What is noteworthy, however, is the significant year-over-year change reported by FreightWaves.

Notable Data Points:

• 20% increase in truckload tender volumes out of Los Angeles in June of this year. However, volumes and rejections have declined since then.
• 10% year-over-year increase in loaded domestic intermodal container volume out of Los Angeles in August.

Zach Strickland, Market Expert & Analyst at FreightWaves, commented on these data points:

The data suggests intermodal had taken share from the truckload market and provided a way to relieve pressure on capacity.  

Therefore, even though West Coast ports have seen a surge in volumes, much of this increase has been absorbed by intermodal, which, unfortunately, has not significantly impacted rates and capacity in the trucking sector.

However, this surge in empty containers indicates that more freight is likely on the way. While truckload capacity is currently abundant, the ongoing instability in the trucking sector—such as potential carrier exits—could quickly change this situation, especially as we approach the holiday season.

The Bottom Line

Zach Strickland does not foresee the market tightening significantly in September. Improved port and rail infrastructure since the pandemic has enabled intermodal carriers to handle more volume, which has inadvertently hurt over-the-road trucking companies.

Yet, with the spikes we're seeing now, demand may push capacity to tighten faster than expected later in Q4.

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🌎 AROUND THE FREIGHT WEB

🏌️‍♂️ CJ Logistics Backs Golfer. Im Sung-jae finished 7^th at the final PGA Tour playoff event with a strong final round in Atlanta. Fun fact: He is sponsored by CJ Logistics.

🚚 Stolen Porsche Shipment. A tractor-trailer carrying $1.5 million in Porsche race cars and parts was stolen from a Florida business. The truck was eventually found, but the cars and parts are missing.

📅 Broker Carrier Summit. The Broker Carrier Summit is scheduled for October, offering insights, networking events, and a meeting of the minds between carriers and brokers.

🚨 Cocaine Seizure at Border. CBP officers at the Rio Grande City Port of Entry seized $3 million in cocaine, thwarting a major smuggling attempt.

🚂 Canadian Rail Recovery. Canadian rail carriers face a prolonged recovery after the work stoppage, with full operations possibly taking weeks to fully recover.

🎣 THE FREIGHT CAVIAR CORNER

Podcast: In this week’s episode of The FreightCaviar Podcast, we sat down with Kevin Nolan, Founder at Nolan Transportation Group, and Andrew Silver, Co-Founder at MoLo Solutions. They talk about how they met, their future plans, managing emotions as business leaders, and what they are bullish on in the industry.

Listen to the entire interview on Apple Podcasts or Spotify, or watch it on our YouTube channel.

Blog Post Feature:

Ari Levy, Content Writer & Meme Maker at FreightCaviar, recently wrote about the importance of culture and relationships at brokerages:

It comes down to Culture and Relationships

There isn’t much that differentiates most 3PLs. Some brokers will boast they have some sort of technology that gives them an edge. Almost all of them will say they don’t buy trucks off DAT when that is a blatant lie. And finally, most of them will promise the best service

FreightCaviarAri Levy

FREIGHT MEME OF THE DAY