Freight margins are razor-thin. The brokerages surviving it built nearshore teams that actually work.
Flatbed rejections hit a record 48.7%, broker numbers stop falling, and diesel jumps 30 cents overnight.
Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Question of the Day: Ocean freight prices for Asia to Europe are up ____% in the last few weeks. Scroll to our main story to find out.
Happy Friday. Today's newsletter features an in-depth update on the Red Sea Attacks and their global impact. We also have the latest on US-Mexico cross-border freight challenges, the suspension of a major Canadian trucking company, and advice on FMCSA's new broker rules. Plus, don't miss our blurbs on the surge in air cargo demand and the Carrefour-PepsiCo standoff.
Question of the Day: Ocean freight prices from Asia to Europe are up ____% in the last few weeks. Scroll to our main story to find out.
In today's email:
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🐔 WHAT’S COOKIN’ IN FREIGHT
🇲🇽 Cross Border Freight: Disruptions and Reopenings. Recent disruptions at US-Mexico rail crossings have significantly impacted cargo movement. Key crossings at Eagle Pass and Laredo, Texas, closed on December 18 due to a migrant surge, affecting 24 daily trains. This led major logistics firms like CH Robinson to seek alternatives like trucks and air freight. However, the Texas Department of Public Safety's (DPS) rigorous safety inspections at roadway entries further compounded delays. Despite the rail crossings resuming on December 26 and roadways reopening on January 4, extended wait times continue. Meanwhile, maritime solutions are being considered for their sustainability benefits, with Grupo Mexico Transportes recently investing in maritime transport of rail cars.
💥 Repeated Crashes Halt Canadian Trucking Company. Chohan Freight Forwarders, a Canadian trucking firm, faces suspension after its sixth overpass collision in two years. The latest incident, involving an oversized load striking a British Columbia overpass, led to significant traffic disruptions and structural damage. British Columbia's Ministry of Transportation, citing safety concerns, suspended the company's operations, affecting its 65-truck fleet. This move follows a series of similar accidents and introduces tougher regulations and fines for transport companies.
🪢 FMCSA's Tighter Broker Rules are in Effect. Freight brokers now face stricter financial requirements starting this month. The shift from BMC-85 trust funds to BMC-84 surety bonds is the core change designed to ensure carriers are paid promptly and fully. Nearly 4,500 freight brokers are impacted by this change. Joseph Pappalardo of Jet Insurance Company highlights the urgency this creates, as brokers must now act swiftly on bond claims to avoid license suspension.
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Are you an experienced freight agent looking to take your career to the next level? Or perhaps you're relatively new to the logistics industry and want to learn from the best. Whatever your background, Armstrong Transport Group is the partner you need to succeed. Click here to learn more.
The Red Sea, a critical maritime corridor, is witnessing an alarming escalation in security threats. Houthi attacks on commercial vessels have drawn international condemnation and prompted significant changes in global shipping routes, with wide-ranging economic repercussions.
International Response Reiteration: A joint statement from countries including the U.S., UK, Australia, and others on December 19, 2023, was reiterated on January 3rd. The governments condemned Houthi attacks, calling them illegal and destabilizing. They highlighted that nearly 15% of global seaborne trade passes through the Red Sea, emphasizing the criticality of this waterway:
Let our message now be clear: we call for the immediate end of these illegal attacks and release of unlawfully detained vessels and crews. The Houthis will bear the responsibility of the consequences should they continue to threaten lives, the global economy, and free flow of commerce in the region’s critical waterways.
Maersk Hangzhou Incident: On December 30, Maersk Hangzhou was targeted by Houthi rebels. U.S. Navy helicopters intervened, marking a severe escalation in the conflict. Consequently, Maersk suspended its Red Sea operations indefinitely.
Houthis' Defiance: Despite warnings, the Houthis remain defiant, launching an armed unmanned drone to attack ships just hours after the latest joint force warning.
Impact on Ship Routings: Shipping companies are rerouting vessels around Africa’s Cape of Good Hope instead of the Suez Canal, leading to longer and costlier journeys.
Answer to the Question of the Day: Ocean freight prices from Asia to Europe are up 300% or more in the last few weeks.
Freight Rates Impact:
Broader Economic Impact: As reported by The Guardian:
For many, the situation mirrors the challenges faced during the pandemic, but costs are far below what they were during the Covid era.
Some Companies Persist: As the Houthi conflict in the Red Sea prompts major shipping lines like Maersk to alter their routes, a few companies are braving the troubled waters. Sal Mercogliano, an expert from WGOW Shipping, highlights the continued transits through this critical region:
Overall, as tensions build, more creative solutions may be needed:
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AROUND THE FREIGHT WEB
✈️ Air Demand on the Rise. Airfreight demand surges as the Red Sea conflict escalates, driving shippers towards air cargo and potentially hiking rates.
🏛️ Legal Emissions Battle. A group of 21 states files a lawsuit against the Biden administration, challenging the scope of greenhouse gas regulations.
🛒 Supermarket Standoff. Carrefour rejects PepsiCo items in a standoff over price hikes, affecting stores across Europe.
📉 "Disappointing December." Ending the year "slightly off bottom," the freight industry enters the seasonal slowdown with a watchful eye on rate changes pre-spring surge.
💘 Tumbler Frenzy. Target's exclusive Valentine's Day Stanley Cups unleash shopper excitement, reaching a resell value of $240 a cup.
FREIGHT CONFERENCES WE'RE ATTENDING
Manifest Vegas, February 5 - 7, 2024, is the world's largest global supply chain & logistics tech event, bringing together Fortune 500 global supply chain executives, logistics service providers, cutting-edge startups, venture investors, and technology leaders. Join 4,500+ supply chain innovators to foster new strategies and relationships. Receive $200 off your ticket with our exclusive link.
FREIGHT MEME OF THE DAY
Also, check out:
Flatbed rejections hit a record 48.7%, broker numbers stop falling, and diesel jumps 30 cents overnight.
Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Ryan Schreiber breaks down everything about strategy, relationships, mindset, and AI in logistics.
Oil spikes to $120 on Iran news before settling near $106. Plus: another influencer shipment gets stolen, Wyoming can now pull your truck, 24 states sue over tariffs, and more.
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