Commerce Express Weekly Road Map:
July 11th, 2023
Keeping you informed on the latest news/insights in our industry.
Commerce Express Blog
Last month, the U.S. Army Corps of Engineers didn’t just launch a study, but a MEGA study with a goal of guiding effective management of the Lower Mississippi River.
The project has a timeline of five years and a price tag of $25 million invested into its mission. The Corps said the study will identify recommendations for managing this proven volatile region.
Trucking Update
Class 8 Orders in June Were Soft as Backlog Continues to Drop
Preliminary orders for Class 8 trucks in June ranged from 13,800 (per FTR Transportation Intelligence) to 16,200 (per ACT Research) – depending on which estimate you look at.
“With all the order slots filled for 2023 and 2024 slots yet to be fully opened, it is unclear when these ordered trucks will be built. OEMs have hinted for months that they are willing to keep build activity elevated well into Q4.” – FTR Chairman Eric Starks
“Given robust Class 8 orders into year-end 2022 and the ensuring backlog support, coupled with normal seasonal order patterns, orders were expected to moderate into Q2 and remain at relatively soft levels into mid-Q3 2023.” – ACT Vice President and Senior Analyst Eric Crawford.
ACT reports that Class 8 orders increased 5 percent year-over-year and 4 percent over May. While FTR showed orders flat compared to May and down 7 percent compared to last year.
A Waiver Allows Yellow Corporation More Time to Resolve Dispute
The amended and restated credit agreement between Yellow Corp. and an association of lenders originally had a testing deadline for covenant compliance on June 30th, but that since has been delayed.
Yellow Corp. is required to submit weekly liquidity reports and budgets and admit an in-house operational advisor.
The agreement for one quarter is with the U.S. Treasury and two quarters with its term lenders. Additionally, per Freightwaves, part of the waiver agreement requires Yellow to provide its lenders with regular reports on the state of its finances.
CARB and the EMA Reach Agreement on Emission Rules
The Advanced Clean Truck Rule – the removal of internal combustion engines from California roads by 2045 – still remains in place. But, the state of California will now follow the EPA’s plans regarding the reduction of nitrogen oxide emissions in 2027, instead of the prior plan of 2024.
One of the biggest frustrations from the OEMs regarding these emission rules was the lack of time that was required to make compliant engines by the following year.
This agreement, the Clean Truck Partnership, allows the flexibility needed to meet the standards of reducing soot-causing nitrogen oxide emissions.
You can read more in the news release, here.
Did You Know: Weather Issues This Produce Season Dampen the Potential of a Boost in Freight Demand
Produce season, which runs from February to July, saw a weaker season this year due to a variety of factors.
Typically, California produces up to half of the produce volumes in a typical year. This year was a different story, as many weather related conditions impacted the whole northern coast of California.
This caused slow-downs, delays and even destroying some of the produce season growing areas.
Rail Update
Dockworker Strike in Canada Impacting Freight Rail Operations
As labor disruptions continue out on Canadian West Coast ports, CNBC reports that the U.S. West Coast port workers’ union members will stand in “solidarity with our Brothers and Sisters in ILWU Canada.”
Their members will not work containerships that were originally destined for the Port of Vancouver and are now being diverted to the Port of Seattle.
How is this impacting freight rail operations?
Some of the major Class I railroads have been taking steps to help “mitigate” service disruptions to Canada’s West Coast supply chains.
Canadian Pacific Kansas City has stated they’ve been in direct communication with customers regarding the strike. They also have implemented temporary embargoes for export traffic that is destined to the Port of Vancouver.
Norfolk Southern said in a Thursday service update, per Freightwaves, that they are no longer able to ingate at Deltaport and Roberts Bank (in Vancouver and the Port of Prince Rupert), due to CN and CP no longer accepting interline shipments for those regions.
CPKC, CSX Creating a Direct Interchange with Access to Mexico, Texas, and the U.S. Southeast
Canadian Pacific Kansas City, CSX and Genesee & Wyoming railroads are set to create a direct CPKC-CSX interchange near Myrtlewood, Alabama.
CPKC and CSX will each have or operate portions of the 168-mile Meridian & Bigbee Railroad – which is a railway owned by Genesee & Wyoming Inc, per Freightwaves.
The CPKC President and CEO says this acquisition will bring more shipping options to intermodal, automotive and other customers by having a new and efficient corridor. And it’ll extend their reach and convert more freight traffic to rail and off our highways.
Weekly Rail Traffic for the Week Ending July 1st, 2023
- For the week ending on July 1st, total U.S. weekly rail traffic was 474,443 carloads and intermodal units – which was down 3.2 percent compared to the same time last year – per the AAR.
- U.S. weekly intermodal volume for that same time period was at 251,189 containers and trailers, which was down 4.5 percent.
- Motor vehicles and parts, non-metallic minerals, and metallic ores and metals all posted increases. While grain, coal, and forest products all posted decreases.
- For the first 26 weeks of this year, rail volume in North America was at 18,816,097 carloads and intermodal units – down 4 percent compared to last year.
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