Commerce Express Weekly Road Map:
December 13th, 2022
Keeping you informed on the latest news/insights in our industry.
Commerce Express Blog
The U.S. ranks both third in the world for its population and land size. While it’s a well-developed country with adequate infrastructure in place, there are still significant issues that exist for many Americans.
Among these issues is immediate healthcare access. The U.S. is big and, in terms of land, the vast majority of it is rural. Across America’s many prairies, mountain passes, forests and deserts are small communities—faraway from the bustling cities which have these available resources.
The U.S. Pacific Northwest Sees Seasonal Demand and Weather Increase Rates
The Pacific Northwest region – Washington, Idaho and Oregon – is seeing higher tender rejection rates than typical. Tender rejection rates (OTRI) are the percentage of loads being rejected for coverage by a carrier – as defined by Freightwaves.
Currently, this region leads the U.S. with a 6.1 percent OTRI value, which is rare for that region.
Some reasons for this atypical shift in market behavior are: the holiday season, harvest season, and winter weather.
As Oregon is one of the main producers of Christmas trees – which can carry premiums on the sport market – sometimes carriers deem grabbing those more lucrative tree loads over the typical cheaper freight that’s moving out of the region.
Additionally, it’s harvest season, with that comes its own set of challenges. Specifically, apples and potatoes were the highest volume produce shipments by weight moving via truck. Over 70 percent of the apple volumes came from Washington, with less than 50 percent of the potatoes coming from Idaho and Washington throughout the last month – Freightwaves reports.
Furthermore, winter weather conditions certainly plays a role in this. In the last month the region has been impacted by several large winter storms. Snowy conditions can delay trucks where they end up missing pickups and run out of hours.
Iowa is Dedicating $6 Million for a new effort, Iowa Entry-Level Driver Training Program
In an effort to create more innovative solutions for those interested in obtaining a CDL, Iowa Governor Kim Reynolds announced $6 million in grants going towards an Entry-Level Driver Training Program. This would reimburse eligible employers and help remove obstacles for new truck drivers who want an entry-level CDL.
This program is for Iowa-based employers, employer consortia and nonprofits who hire Iowa CDL drivers and provide entry-level driver training either in-house or with third-party certified training providers, Transport Topics details.
Furthermore, the grants can be used to reimburse in-house CDL programs for instructor wages, curriculum materials and maintenance needs Regarding third-party providers, employers can receive funds to pay for tuition for entry-level driver training.
It should be noted that once documentation for training certification and a CDL exam (within 30 days of a participant’s first day of either behind-the-wheel training or theory instruction is required before the state will administer grant reimbursements. You can read more about this program here.
No Hearing for a New Preliminary Injunction Blocking AB5 till May
With AB5 into effect in the California trucking sector, after the U.S. Supreme Court rejected the California Trucking Association’s appeal this past June, ongoing litigation has been occurring.
Recently, a federal district court in California said they will not have a hearing for new preliminary injunction blocking independent contractor law AB5 until May 1st – Freightwaves reports.
As reported, this means that any hope California’s trucking sector had regarding a potential preliminary injunction stopping AB5 being enforced in the state, has been put on hold for at least five more months.
Weather Alert: Stay Informed
Snow and ice will impact at least 15 western states from the border with Canada down to Mexico.
Blizzard warnings throughout the middle of the week in the upper Great Plains will occur.
Parts of Louisiana, Texas, Mississippi and Arkansas could see some tornadoes on Tuesday (Dec 13th)
Lastly, Central Florida could see severe storms on Thursday (Dec 15th).
Did You Know: Wreaths Across America is Coming Up
Wreaths Across America is an event that occurs every December to “Remember, Honor and Teach.” It is carried out by wreath-laying ceremonies at over 3,400 National Cemetery locations in all 50 U.S. states and several U.S. territories.
This year, Wreaths Across America is taking place on December 17th. About 2.5 million wreaths from Maine will be delivered to over 3,700 cemeteries.
These wreaths are moved by all types of transportation, but the majority of the haul is by trucks and their drivers. Just last year, 525 truckloads of wreaths were delivered – represented by 390 different carriers, the official website shows.
Norfolk Southern Officials Understand That Restoring Resiliency is Crucial
It’s been a difficult year for rail service, with many U.S. shippers losing confidence in moving freight by rail due to many things, but one of them being consistent service disruptions. Officials at NS realize the importance that restoring resiliency has on winning long-term business.
During the pandemic, NS furloughed thousands of employees and like other railroads, has struggled to rehire and retain the employees necessary to handle the increase in intermodal volumes.
The CEO of NS, Alan Shaw, says the key is to build resiliency so NS can handle “boom-and-bust cycles better than in the past.”
NS has already taken to address these service issues, one being, iteration of precision scheduled railroading which includes simplifying its network out of Chicago – where NS operates four container terminals – the Journal of Commerce reports.
Additionally, next year NS plans to put all ocean containers into stacks in an effort to address the long-term growth in port volumes. This will help the railroad increase terminal capacity.
The STB has Concerns with the Lack of Information Regarding Embargoes
After receiving Union Pacific’s prehearing filing – as executives from UP will be in Washington for a hearing with the STB Tuesday and Wednesday to explain why the railroad’s use of embargoes has significantly increased since 2017 – the STB does not feel like it addressed the issue adequately, as they noted in a letter to a UP official.
UP presented the STB with a nine-page PowerPoint presentation, after the previous request of the STB. However, the STB notes they did not specify details on the eight different topics related to the increase in embargoes.
The STB expects UP to further add more information after this week’s hearing.
Total U.S. Rail Traffic for the Week Ending December 3rd, 2022
Total U.S. weekly rail traffic was 495,472 carloads and intermodal units, which is down 6 percent compared to the same time last year – data from the Association of American Railroads reports.
Breaking it down a bit, carloads for the week ending December 3rd were 241,307 carloads – down 5.4 percent compared to the same time last year. With U.S. weekly intermodal volume at 254,165 containers and trailers – down 6.7 percent compared to the same time frame.
Coal, motor vehicles and parts, and farm products (excluding grain and food) were all commodities to post increases compared to the same time last year. While chemicals, grain, and forest products were all commodities to post decreases compared to the same time last year, data shows.