Commerce Express Weekly Road Map: September 7th, 2021
Keeping you informed on the latest news/insights in our industry.
Commerce Express Blog
It’s no surprise, but rail terminals are continuing to experience more congestion, as things don’t seem like they are stopping anytime soon. Chassis shortages and efforts to dig out containers at rail terminals continue to hinder the rail side of the U.S. import supply chains in some areas, according to customer advisories published this week by Maersk and Hapag-Lloyd and reported by Freightwaves. As of now, Maersk has been seeing “high impact” for rail operations serving facilities at Chicago, Cleveland, Atlanta, and Memphis, because of chassis shortages.
Recently at an annual National Grain Car Council Meeting hosted by the Surface Transportation Board, shippers noted that grain shippers will be watching whether freight railroad’s train speeds will be able to keep up with a potentially sudden ramp-up in demand, as the U.S. harvest season is getting in full swing in the next month or so.
With low grain demand over the summer masking velocity issues, grain shippers said, the rail network could potentially find itself stressed over the next 30 to 45 days. Not just because there will be more shuttle trains carrying grain, but many of those trains are heading to the Pacific Northwest, reported by Freightwaves.
There are also concerns if there will be enough train crew employees to handle the potential ramp-up in demand, and if freight rail resources will be consumed by the intermodal area, which is struggling with supply chain congestion. BNSF representative Jim Titsworth says his railroad is well prepared to handle harvest and is well staffed for forecast volumes.
2022 Truckload rates looking higher again
Early indicators are pointing to truckload rates being up again in 2022. Probably not a surprise to most, given everything that is going on in the industry currently, but another increase is likely to establish new highs for the industry. According to Freightwaves 2021 full-year per-mile rate metrics for the big carriers will be up by mid-teen percentages.
Derek Leathers, chairman, president and CEO of Wener Enterprises told investors at the Deutsche Bank 2021 Transportation Conference last week that, “it’s too early to tell how much rates will increase, but our starting point is in that 3 to 5% range for 2022.” Due to what’s currently going on with drivers, and what’s happening in truck and trailer availability at the OEM level, current inventory levels, current demand cycle, and the multitude of structural constraints on the capacity side, there seems to be no line in sight other than rates being up in 2022.