Commerce Express Weekly Road Map:
August 20th, 2024
Keeping you informed on the latest news/insights in our industry.
Reefer Market: Fall Harvest Approaching, Watermelon Season Ending Soon
Watermelon Season – the typical growing season is from April to September; peak shipping volumes typically occur in July and August. Per data from DAT, in the last 30 days watermelon production has surged, now making 20% of the national volume and surpassing potatoes, tomatoes, and apples.
Interestingly enough, the USDA reported a shortage of reefer capacity in Southwest Indiana and Southeast Illinois during last month, even though last week Indiana contributed to nearly 30% of truckload volume last week.
Reefer load postings dropped by 11% last week and are down 18% year-over-year, according to DAT. The USDA reports that truckload produce volumes were 7% lower compared to the same time last year.
Produce season’s impact on truckload: can influence truckload market’s supply and demand dynamics. Not just impacting produce shippers, but also those shipping other foods and beverages. As trucks head into produce-shipping areas to capitalize on temporary rate increases this influx can affect capacity across the entire market.
Commerce Blog
The Commercial Vehicle Safety Alliance’s annual Brake Safety Week will take place from Aug. 25-31 this year.
The upcoming week is an enhanced law enforcement initiative with an acute focus on brake-safety awareness in fleets and professional truck drivers. In other words, trucking stakeholders will see an uptick in brake-related inspections. For fleet managers or truck drivers who are irreverent, or at least ignorant, when it comes to vehicle maintenance, their vehicles are at a higher risk of being taken out of service if brake violations are discovered.
Canada Labor Uncertainty:
TCRC union officially issued their strike notice to CPKC and will walk out starting just after midnight on Thursday August 22nd, unless a contract agreement is reached. Additionally, CN Railway issued their official lockout notice. These official 72-hour notices are mandatory under Canadian law.
In preparation for this worker stoppage, Canadian National (CN) and Canadian Pacific Kansas City (CPKC) railways issued freight embargoes, in an effort to plan for the challenges that come with work stoppage.
According to the railway, some of the embargoes include shipments of hazardous/dangerous goods (as of August 19th), all shipments originating in Canada, all shipments originating in the U.S. destined to Canada, and all carload traffic destined to Canadian interchange (August 20th).
What, if any, impacts could this have? Our team believes it really depends on how long the work stoppage lasts. If work stoppage lasts a while (i.e.. 2-3+ weeks), there might be more heightened concern versus just a few days of work stoppage.
Diesel Update: This week the average price of diesel dipped 1.6 cents to $3.688 a gallon, per the U.S. EIA.
Intermodal: Following along in CN, CSX, and UP railways footsteps, NS will mandate a reservation systems, making trucking companies having to reserve slots when dropping off both international and domestic containers, JOC reports. This is set to begin in phases starting September 4th. NS hope this will help improve terminal efficiency, but certainly may have its challenges.
U.S. Labor Uncertainty: The East/Gulf Coast Dockworker contract expires on September 30th and recently the International Longshoremen’s Association announced they will present their final contract demands to union delegates at a meeting September 4-5th and will also outline strike strategies if an agreement is not reached before the contract expires. A couple key issues in these negotiations are wage increases and automation issues.
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