Commerce Express Weekly Road Map:
January 7th, 2025
Keeping you informed on the latest news/insights in our industry.
Traffic Congestion’s Impact on the Trucking Industry
While nationwide traffic congestion may have decreased, the costs have risen on an annual basis. The American Transportation Research Institute’s latest congestion analysis, “Congestion to the Trucking Industry: 2024 Update,” reveals that congestion on major highways and in key cities across the U.S. continues to cost the trucking industry (and commuters) billions of dollars.
In the 2024 ATRI report, from 2021 to 2022, the overall year-over-year cost of congestion rose by 15% ($14.2 billion). This rise is attributed to the 7.8% inflation rate between 2021 and 2022, according to the report. (Note: this is the most current available date on the topic). So, where are congestion costs the highest? Texas, California, Florida, New York, and Georgia lead the top five states.
Traffic congestion is an inevitable challenge that will always impact the supply chain. Rising congestion for truckers can have some impact on the cost of goods and services. Prolonged time spent in traffic not only increases fuel consumption, driving up fuel costs for businesses responsible for delivery, but these higher operational costs often get passed on to consumers in the form of price hikes. This ripple effect shows how traffic congestion can directly contribute to increased costs throughout the supply chain.
On a similar topic… truckers driving into Manhattan’s central business district will see a congestion toll starting this month. According to the New York Governor’s congestion pricing plan, E-ZPass truckers will need to pay between $14.40 (small trucks) or $21.60 (large trucks) during weekday peak hours (9am to 9pm), truckers without the E-ZPass subject to more. Overnight fees are expected to be cheaper (about $3.60-$5.40 for truckers).
Commerce Blog
Small to medium-sized businesses typically don’t hold formal bids over annual cycles on their projected transportation requirements. However, this doesn’t mean they should blindly award freight to whatever the carrier is the flavor of the week. They need to ensure, beforehand, their freight needs are covered by well-vetted and qualified service providers. Read more for some ideas on what should guide conversations between these types of shippers and their prospective transportation providers.
U.S. Labor Uncertainty: The ILA and USMX are reportedly set to resume negotiations Tuesday, January 7th, as the current Master Contract is set to expire next week, January 15th. U.S. East/Gulf Coast dockworkers are expected to go on strike if a tentative contract is not reached by January 15th or an extension is made.
Weather: Significant winter weather conditions have made their way to regions in the U.S., making traffic potentially difficult for some truckers.
Ohio Valley to the mid-Atlantic: A significant winter storm, including snow, ice and freezing rain, made its way starting yesterday (January 6th). This region is expected to get hit by a winter storm again, later this week Thursday/into Friday.
Down south: On Thursday and into early Friday morning, parts of the southern Plains (Texas, Oklahoma, etc..), is expected to receive rain, snow, ice, and cold temps.
As a reminder – winter weather can create disruptions for truckers and shippers of domestic freight. Be on the lookout for possible delays throughout this week, with possibly fluctuations in rates/demand.
Diesel Update: The average price of diesel increased 5.8 cents a gallon, putting the average price of diesel at $3.561 a gallon, according to the U.S. EIA.
Truckload Rates & Capacity: FreightWaves SONAR data reveals a notable surge in the dry van market over the past week, although it remains lower on a year-over-year basis. In contrast, the reefer market continues to show robust strength, with both weekly volumes and year-over-year figures reflecting significant increases. Furthermore, high-demand markets like Atlanta and Dallas are experiencing a return of capacity.
Infrastructure: Reopening on Interstate 40 along the Pigeon River Gorge have unfortunately hit a roadblock. With reopening originally projected to happen in early January, it is now being delayed, due to a chunk of asphalt falling from an eastbound lane of I-40. Damage will need to be properly assessed before the area is safe for drivers to use the narrow, two lane.
Cross-Border Rail: A new railway bridge (Patrick J. Ottensmeyer International Railway Bridge) connecting Texas to Mexico has officially opened. Construction began in fall 2022 and reached completion mid-December this year. Per Transport Topics, freight capacity is expected to double along the Laredo and Nuevo Laredo rail route.
Recent Comments