Freight Market Update: September 2024

The upcoming election is critical for the trade industry, with neither candidate planning to revert to pre-2016 trade policies. If Democrats win, expect more enforcement scrutiny. Republicans, however, view tariffs as punitive to China and propose significant increases on Chinese goods, which already saw a 50–100% hike in August.

Forced labor remains a central issue, with both parties sharing a common stance against it. The Uyghur Forced Labor Prevention Act (UFLPA) has led to more companies being added to the Entity List, now totaling 68. Since its inception, over 8,465 shipments have been stopped, with about 45% released. Electronics, apparel, footwear, textiles, and industrial materials are the most affected industries.

Both parties agree on deterring forced labor while prioritizing national interests when it comes to tariffs and trade pacts. They hold buyers and sellers accountable for accurate shipping documentation. U.S. policy is expected to remain stable until April, with Republicans pushing for higher tariffs and Democrats focusing on enforcing existing laws.

Labor organization for higher wages is anticipated to continue, influenced by movements in Canada and the East Coast International Longshoremen’s Association (ILA). Buyers will face increased scrutiny on cargo mass, consignee details, and commodity descriptions. C.H. Robinson can help you navigate trade agreements and avoid delays and fines, ensuring smooth operations and market growth.

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U.S. spot market forecast

The C.H. Robinson 2024 dry van linehaul cost per mile forecast remains relatively unchanged at -5% year over year (y/y). There are some slight changes to the quarterly breakouts, including a slightly increased floor within Q3 and a smaller rate of increase in Q4. These adjustments roughly cancel each other out at the annual level.

While the cost per mile has decreased in the past month, it did not reach the previously anticipated floor of $1.50. We are seeing signs of continued loosening in the market due to the oversupply of carriers that we’ve mentioned before. This upward adjustment is reflective of August actual costs, where we had expected a sharp drop during the month but ended up seeing a steady decline. Looking ahead to Q4, we do still expect a seasonal increase to close out the year; however, we have lessened the slope of that increase given the upstream factors mentioned earlier.

This mitigated increase flows into our first half of 2025 as well. This month, we extend our forecast into Q3 of 2025. We expect that the over-supplied carrier pool combined with sluggish demand will make for a weak first half of 2025, but still an increase from 2024 levels. As we move past the midpoint of the year, we expect that decreased levels of carrier supply will result in a steeper increase in cost per mile. 

Similarly, the 2024 refrigerated annual linehaul cost per mile forecast has not changed from an annual y/y comparison but does have some quarterly adjustments. The 2024 temperature controlled forecast is at -3% y/y.

Contract truckload environment

The contractual landscape remains relatively unchanged in 2024. Because the contract environment tends to follow the spot environment, monitoring the spot market over the next few months will be important. Keep the duration of contracts in mind, as longer-term commitments may see different pricing than shorter-term commitments. The following insights are derived from TMC, a division of C.H. Robinson, which offers a large portfolio of customers across diverse industries.

Route guide depth (RGD) is an indicator of how the backup transportation provider strategy works if the awarded provider rejects the tender. As displayed in the following chart, the RGD has remained fairly flat for approximately two years. For long hauls of more than 600 miles, the RGD in July 2024 was 1.26 (1 would be perfect performance and 2 would be very poor), which is 4.1% worse than the month of June at 1.21, and 6% worse than July 2023’s RGD.

RGD performance has steadily worsened over the past 3 months but still remains at very strong levels historically. The trend for shorter hauls of less than 400 miles is similar, but less extreme. RGD for July 2024 for these shorter hauls was 1.14, which is 2.8% worse than the previous month and 3.4% worse than July 2023.

This slightly increased tension within the RGD likely incorporates some seasonal components. Geographically, the West region has shifted the most over the past few months, moving from roughly in-line with the other regions to now being the worst performing region in July at 1.23. While the other regions have all slightly worsened in performance in July, the complexities in the West have contributed to this region seeing the largest tightening.

These complexities include the activities at the West Coast ports (i.e., imports heading into retail season and potential disruptions from the then-looming Canadian rail labor issues), as well as produce season in the West (which just shifts north and doesn’t conclude like it does in the South). The Northeast experienced the second largest year over year shift as well as the largest month over month shift, as it tightened to a RGD of 1.21 in July. The Midwest and South reported the best performance in RGD in July at 1.7 and 1.9 respectively.

Despite the worsening of RGD throughout each region, performance remains relatively strong when compared historically. Monitoring the RGD in coming months will be critical in determining if these increases in RGD are just temporary blips or part of a larger shift. As mentioned, the contractual space tends to lag the spot market. Since the spot market tightening in July was seasonal and temporary in nature, it is likely that the same is the case here and we will see strong RGD performance continue in the short-term. For more information on our upcoming predictions of the market, see our U.S. spot market forecast section.

Voice of the carrier from C.H. Robinson

C.H. Robinson has two customer communities, shipper customers and carrier customers. What follows are aggregated insights from conversations with carriers of all sizes to offer perspective into their top concerns over the past month.

Market insights

• The market remains challenging, with only minor improvements occurring in certain geographies 
• Carrier rates are unsustainably low and carrier ability to take losses to retain volume has diminished 
• The expectation is for an increased number of carrier exits from the industry in the coming months. 

Equipment

• Used equipment remains plentiful
• Truck parts and maintenance continue to be expensive 

Drivers

• Large carriers are still seeing a fair amount of driver applications 
• Mid-size carriers have reported a stale environment with less applicants 

A key value proposition of C.H. Robinson to our contract carriers is aggregating lane volume and demand pattern variability from our vast shipper network. This provides our contracted carriers with more predictable volume from C.H. Robinson, and as a result, they are interested in and able to offer more consistent capacity and market pricing with high performance. Engage your account teams for more information on how to leverage our scale. 

Refrigerated truckload 

Produce season is well past its peak in the Southern states, although harvesting in Northern states is now in effect for several commodities. This seasonal trend results in a loosening of capacity from the Southern states while the Pacific Northwest, Mid-North and Great Lakes experience a tightening of capacity during this time. Typically, the Northeastern states tighten through August and September, but so far this year the impact there has been mild. 

Western United States 

The West Coast hit its peak produce season at the end of June and beginning of July, which follows the typical seasonal cycle. This has since seen dwindling demand and associated costs. Inbound Arizona and Pacific Northwest freight has seen an increase in costs since backhauls from these regions are not as readily available. 

Central United States

The Mid-South market continues to soften, with capacity readily available. Produce season has shifted from the Mid-South into the Midwest and Mid-North. Expect the Mid-North to continue to see more tightening in the upcoming month. 

Eastern United States

Southeast demand has retracted after its seasonal peak. We are now seeing normal Q3 seasonality with abundant capacity. The Northeast has tightened since early July, and we expect this to continue through the rest of the quarter. Same day coverage does pose capacity challenges, so to mitigate those premiums, provide sufficient lead time. 

Work with your C.H. Robinson team to stay informed on regionalized opportunities and how to best schedule freight to capitalize on the best price and service. 

Flatbed truckload

As the election approaches, the flatbed market is navigating a mix of challenges and opportunities. Economic uncertainty has slowed commitments of new projects and long-term investments, with indicators showing similar flatbed market conditions until early 2025. Recent news suggests a potential interest rate drop in the coming quarters that could stimulate activity in the flatbed market. Government spending already in the works continues, though supporting flatbed volume has weakened as we enter the back half of the year.

The election’s outcome will likely impact future infrastructure spending, which directly relates to the flatbed mode. Specifically, heightened interest rates have reduced developments in the building products vertical, and a potential rate cut could spark additional growth.

The automotive sector also stands to benefit from stabilized supply chains and increased demand if interest rates fall, in the form of increased sales and nearshoring investment opportunities. The energy sector, including renewables, utilities, and oil and gas, continues to see significant investments, driven by clean energy technologies and infrastructure. This often leads to large flatbed projects requiring batches of capacity in short time frames. C.H. Robinson’s ability to scale capacity as needed positions us to support customers throughout these verticals and project variances.

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Less than truckload (LTL) tonnage has been weak for over two years now. Nearly a year ago, this lackluster demand was a large factor in driving LTL carrier Yellow out of business. During this time, the full truckload (TL) market has been in a state of oversupply, which resulted in low truckload rates and freight shifting from LTL into TL. This low LTL tonnage has not resulted in decreased rates like those seen in the neighboring full truckload market, because the exit of Yellow left the LTL market in a contrary state of undersupply as over 300 terminals were taken out of the equation.

As we mentioned in our June Freight Market Update, some of these terminals are reopening under new ownership. This has persisted in the three months since the June report was released but are still not back to previous levels in years past. In fact, it is highly unlikely that we will reach those levels this year or even the next.

The LTL terminals had been in a rather stable state over the past decade until the demise of Yellow, and due to many of their terminals being auctioned off to companies outside of the LTL industry, we won’t get back to those higher levels even when all the remaining terminals are opened. What does this mean for pricing? As the freight was released from Yellow’s network and absorbed into the rest of the industry, LTL carriers have been able to optimize their own freight networks and maintain pricing power. We’ve begun to see some of these rate increases taper off as LTL carriers settle into the freight that works for their network.

So, in the current economy with sluggish demand, a large increase in prices isn't likely soon, unless triggered by a significant event. The upcoming U.S. election and potential decreases to interest rates will not likely cause enough of an increase in demand to see LTL rates shoot up again this year, but they could keep pricing power with the carriers. The rebalancing of the truckload market—or a shift from oversupply to undersupply—would, however, push freight out of the full truckload market and back into the LTL market. This could certainly be enough to see LTL rates increase to a similar magnitude of the past year. However, this is unlikely to occur in 2024.

We recommend that LTL shippers pay close attention to the truckload market cycle shift, as timing there could have large impacts to LTL volumes and pricing. For more details, see the North America Truckload Trends & Forecasts section above or reach out to a C.H. Robinson representative.

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Despite ongoing port congestion and labor challenges, proactive negotiations and strategic rerouting are establishing the future dynamics of global trade.

The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) agreement ends on September 30, 2024, which covers most U.S. East Coast (USEC) and Gulf ports (36 ports from Maine to Texas), and the negotiations target a new agreement for the upcoming six years. ILA continues to communicate that they are ready to strike on October 1, 2024, if no new agreement is in place.

Some shippers have begun to re-route freight via the West Coast. To date, C.H. Robinson has seen around 5% of historic East coast volumes be diverted to the West Coast, meaning that some shippers have re-routed freight potentially as risk mitigation against a potential strike. Forward looking data into Los Angeles/Long Beach shows an expected 10–15% increase in volumes during the second half of September.

This increase in volume into Los Angeles/Long Beach is likely a combination of multiple factors, including diverted East coast freight, pull-forward freight, and normal seasonal volume increases. While the port expresses ability to take on this volume, shippers should be aware that port terminals and rail capacity could be impacted in September.

Asia–U.S.

Traditionally, September is the culmination of peak season. However, spot rates started to soften in August and may continue to fall on selected trades such as the Transpacific-West Coast (TPWC), Latin America (LATAM), and Mediterranean. Spot rates from Asia to the Mediterranean are falling faster than to North Europe, due to the summer holiday impact.

For the Transpacific trade, West Coast rates have been dropping faster, while East Coast rates are still holding up better due to more capacity added to the West Coast. The risk of an USEC port strike is still hovering and we have started to offer alternative service options via the West Coast to our customers who wish to mitigate any supply chain risk.

Port congestion in Southeast Asia hub ports (Singapore, Port Klang, and Tanjung Pelepas) has improved, but we do see port congestion picking up in North Asia ports such as Shanghai and Ningbo.

North America Ocean Exports

The shipping industry is set for significant changes in 2025 with the dissolution of the 2M Alliance between MSC and Maersk. MSC is gearing up to operate independently, having acquired substantial vessel capacity, while Maersk is forming a new alliance with Hapag called the Gemini Cooperation. This new alliance aims to enhance schedule reliability through a hub-and-spoke network, although its success will depend heavily on the effectiveness of their transshipment program. Meanwhile, the Ocean Alliance has extended its agreement until 2032, providing some stability amidst the upheaval.

U.S.–Europe

Demand on the Transatlantic-West Bound (TAWB) trade is on the rise as we approach the peak season, with ocean carriers reallocating larger vessels to more in-demand trades. Although no service strings are being canceled, there is an uptick in blank sailings, especially among Ocean Alliance carriers, with one expected each month until year-end. Space remains tight from the U.S. West Coast (USWC) to Europe due to limited sailing options, but CMA and OOCL are offering rail services via Houston as an alternative.

U.S.–Asia

Carriers are experiencing a surge in demand for services via the USWC, driven by ongoing challenges with Panama Canal appointments and extended transit times through the Cape of Good Hope. This has led to a remarkable 20% increase in volumes at USWC ports compared to the same period in 2023. Despite some schedule unreliability due to port congestion in Asia and at certain USEC ports like Charleston, the Transpacific-East Bound (TPEB) trade remains strong, resulting in relatively low numbers of planned blank sailings.

U.S.–Oceania

Due to ongoing congestion and operational challenges in Charleston, Hapag, MSC, and Maersk have shifted their direct services to the Savannah port. While demand in Oceania has softened since Q4 2023, leading some economists to declare a recession, the traditional peak season in Q3 brings uncertainty about its strength this year. Vessel space to Oceania is tightening as the peak season begins.

Key factors for September include potential ILA labor strikes, possible congestion at the Port of Los Angeles due to volume shifts, and risks from the Atlantic hurricane season affecting port operations.

U.S.–LATAM

Southern Brazil ports are facing significant congestion and delays, particularly at Navegantes and Rio Grande, leading to blank sailings and port omissions. Heavy rains have exacerbated these issues, prompting many carriers to bypass these ports and transship via Santos. Carriers are advising customers to use Itapoa and Paranagua ports, though congestion is increasing there as well. The tight space from the U.S. Gulf Coast to East and West Coast South America ports is mainly due to these delays and congestion at transshipment ports.

The congestion at southern Brazil ports has increased transshipment cargo volumes, causing significant delays at key transshipment hubs like Panama, Caucedo, Cartagena, and Kingston. CMA and COSCO have shifted their Brazil Express (BRAZEX) service from Navegantes to Imbituba due to berthing constraints. MSC, Hapag, and Maersk have extended their service suspension to Navegantes and Salvador until mid-October 2024, also suspending calls at Mobile port to maintain schedule integrity. Additionally, carriers have announced General Rate Increases (GRIs) due to growing congestion at LATAM transshipment hubs.

Operational challenges continue with Yang Ming Line suspending service to Ecuador and low water levels in the Amazon River leading to cargo restrictions and surcharges at Manaus port. New services and port changes are being introduced to improve reliability, such as Ocean Network Express (ONE)’s new AN2 service and COSCO’s port call change in Costa Rica. The early and severe hurricane season is expected to cause further disruptions and delays. ZIM has canceled calls at Chilean ports on their Colibri service, focusing on Ecuador and Peru instead.

U.S.–South Asia, Middle East, Africa (SAMA)

The risks of transiting through the Suez Canal, exacerbated by piracy attacks from Houthi rebels in Yemen, have led carriers to divert vessels via the Cape of Good Hope, increasing transit times and blank sailings. Services to Red Sea ports are largely suspended, with significant surcharges for those still operating, causing congestion at West Med port hubs.

Limited services are available to Persian Gulf ports, with major carriers omitting calls at Jebel Ali since January 2024. Increased piracy off Somalia’s coast has further complicated routes. Congestion at Southeast Asia and Jebel Ali ports have led carriers to expand transshipment hubs to alternative ports, which are now also experiencing congestion. Severe weather and civil unrest in Bangladesh are adding to delays and disruptions.

The longstanding partnership between CMA and Hapag on the USEC to India trade is ending, resulting in significant blank sailings while new service configurations take effect. New services are being launched, but some are already facing challenges, such as reduced sailings and erratic schedules. Dockworkers in India are threatening to strike, which could further impact operations.

Additional Market Dynamics

Panama Canal

On August 15, 2024, the Panama Canal Authority advised an immediate draft increase as well as an upcoming additional transit slot. From September forward, we can consider the canal to begin a pathway back to sustainable, standard capacity. The latest update on Panama Canal crossing capacity overview is below:  

Effective August 15, 2024, Neopanamax locks imposed a maximum authorized draft of 15.24 meters (50 feet) TFW.

Due to high demand globally, space availability on services typically routed via the Panama Canal can remain a challenge for exceptional cargo such as out of gauge or overweight.

Suez Canal

Ship attacks in the Red Sea Gulf of Aden continue to limit Suez Canal access. Since December 15, 2023, most maritime carriers have announced they will avoid the Suez Canal following a sequence of attacks on container vessels launched from a part of Yemen.

The majority of the vessels now travel around the Cape of Good Hope, which adds, on average, 14 days to transit time. This longer transit time has a significant impact, not just to trade that moves via the Red Sea, but across all global trade lanes. Blank sailings and service changes may continue. It is estimated that 6–9% of global capacity is absorbed by this alternative routing.

Asia–Europe

The Asia to Europe trade lane is currently experiencing a dynamic shift, driven by fluctuating demand and evolving geopolitical landscapes. Air freight rates have stabilized after a period of volatility, while ocean freight capacity is gradually increasing as new vessels enter the market. This has led to more competitive pricing and improved reliability for shippers. Booking in advance and leveraging digital supply chain solutions remains the surest path to enhance visibility and efficiency.

Europe

Labor disruptions in Italy, Germany, and France have been frequent over the past couple of months. Impact is limited, unless it compounds with other existing issues (congestion in the Mediterranean).

Space remains constricted, and though late-stage bookings may be accommodated, the best practice remains booking as early as three weeks prior to sailing.

Canada

Labor tensions are threatening the rail network as well as West Coast port terminals. The Canada Industrial Relations Board (CIRB) has rejected Teamsters Canada Rail Conference (TCRC) order for work stoppage. Striking union workers were ordered back to work effective midnight, Monday, August 26, 2024. The union will appeal in federal court but abide by CIRB’s decision and return to work.

In Prince Rupert/Vancouver, increased import volumes, rail car shortages, and a recent Canadian National Railway (CN) rail embargo due to Jasper wildfires are causing dwell times and congestion at rail ramps.

LATAM

Severe drought and infrastructure continue to create cargo reliability issues, but the market continues to grow, as the volume of road implement registrations grew by 5.69% from January to July 2024 compared to the same period in 2023. According to World ACD data, significant growth is seen across major trade lanes: North America to Central and South America up by 17% in June 2024 compared to June 2023. Asia to Central and South America was up by 22% in the same period.

Mediterranean/Indian Sub-Continent

A transportation strike also threatens Nhava Sheva port, although it has been deferred from August 20, 2024, to September 9, 2024, thanks to a positive trend in negotiations.

Mediterranean origins are subject to congestion and space is becoming critical, leading liners to push increases in rates. Bookings are 3–4 weeks out. 

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U.S. exports to Latin America are facing tight capacity and rising rates due to a shift in freighter capacity from Europe to Asia. European shippers are rerouting cargo through the United States, causing backlogs. The transatlantic market remains stable for now, but capacity will decrease in September as passenger travel demand drops. U.S.–Asia routes are expected to remain consistent, though reduced transatlantic capacity may affect India.

Asia

Ecommerce cargo demand, which was soft in early August 2024, has turned around and is expected to rise sharply in September 2024. General cargo is following a similar trend, driven by new product introductions in consumer electronics and high demand for AI infrastructure-related cargo in the United States. Demand for general cargo has also surged in Southeast Asia, particularly in Thailand and Vietnam, even surpassing China. This trend is expected to continue in September.

Current conflicts in the Middle East and Ukraine are still affecting airline cargo capacity between Asia and Europe. Cargo charter demand from Asia to the U.S. is expected to increase. New aircraft deliveries are causing issues for airlines for the rest of the year. Overall, we anticipate a continued capacity shortage, higher demand (especially in late September), and rising rates.

Europe

Airfreight volumes between Europe and North America are on the rise. Last week saw a 5% increase in overall volumes from Europe to North America and a 2% increase in the opposite direction. Despite some shifts in freighter capacity, the market remains robust and full of potential.

LATAM

Airfreight volumes in and out of Latin America continue to remain consistent and growing. Galeão Airport has reported its best six-month cargo period since 2014.

Oceania

Oceania to North America passenger plane capacity has stabilized with additional capacity planned for Q4. Limited freighter capacity has increased demand and pricing for oversize cargo. Oceania to Europe faces interruptions due to extended flight paths, leading to longer flight times and reduced cargo weight allowances. Oceania to Asia has abundant capacity with pre-COVID rate levels, while Trans-Tasman markets remain stable. 

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Intermodal

The Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) are currently at the bargaining table with the Teamsters Canada Rail Conference (TCRC). However, initial negotiations stalled and after a day of work being shut down, the Minister of labor in Canada ordered the Canada Industrial Relations Board (CIRB) to intervene requiring binding arbitration.

With labor being ordered back to work while negotiations take place, freight began to flow again. It may take some time for supply chains to return to normal, as backlogs are cleared and diverted freight is potentially rerouted again, so some disruptions may still occur.

The U.S.-based lines of both the CN and CPKC continued to operate fully during this period. This situation remains fluid, so follow our LinkedIn page, monitor our client advisories, or reach out to your account team for the most up to date information.

Market conditions

Growth in intermodal has remained strong, primarily driven by international trade. North American intermodal volume performance is up 8.7% y/y. This growth has been driven by West Coast demand and inland ocean container deliveries. There are rumblings of an ocean container shortage, in which case the ocean providers will incentivize transloading on the West Coast driving demand for domestic intermodal.

We may also start to see a slight uptick in demand if ships heading to Vancouver divert to the United States. Along with this, we have noticed a trend from inventory managers who have been bringing in stock for Q4 earlier than normal to avoid potential delays.

All this leaves the West Coast feeling a bit like the peak seasons of old. However, the peak feel is not expected to last long. The larger North American market has ample capacity with an estimated 20–25% of container supply stacked ready to deploy. We don’t expect long term effects from the Canadian strike on overall North American intermodal.

Pricing prospects

Increasing prices are anticipated for the last quarter of 2024 and is expected to continue through 2025 in the low single-digit range. U.S. railroads have new labor agreements that are driving up labor costs combined with inflationary pressure that will drive these rate increases. The pace of rate increases will continue to be held back by the competitive over the road market. However, if shippers wait for truck rates to increase before acting on intermodal pricing, they will miss out on lower rates and lower baselines for future pricing.

Service metrics

Intermodal service, as measured by train speeds, is tracking just below the five-year average. However, the number of trains being held at terminals is running well below five-year averages indicating the equipment and workforce supply is healthy.

With strong service and low pricing, contact your C.H. Robinson account team to see how you can best take advantage of intermodal within your portfolio today.

Rail

The blank sailing program on the Asia trade has intensified equipment shortages at rail ramps, crucial for U.S. and Canada exports. Delays in import containers via the Cape of Good Hope have caused significant short-term shortages of empty containers for exports. With rising demand on TPEB and Asia–Europe trades, carriers are repositioning many containers back to Asia, reducing availability in North America.

COSCO has announced they are suspending acceptance of single 20-ft container bookings from U.S. rail ramps effective immediately due to issues with finding 20-ft mates to get the 20-ft containers moving. COSCO will accept 20-ft container bookings made in multiples of two-at-a-time.

Los Angeles/Long Beach

Due the strong increased import volume through Los Angeles/Long Beach ports, we are seeing delays with rail—particularly off dock rail connections, which require the use of a trucker and chassis to bring the containers into the port.

Port of Montreal

The Canada Industrial Relations Board (CIRB) have rejected TCRC’s order for work stoppage and striking union workers went back to work on Monday, August 26, 2024. The union will appeal the decision in federal court, but have abided by CIRB’s decision, and returned to work.

United States East Coast ports

The ILA labor union’s contract for USEC and U.S. Gulf Coast (USGC) ports is set to expire on September 30, 2024. The union has recently issued their 60-day notice on intent to strike if a deal is not reached by the expiration date. Despite recent negotiation challenges and the threat of a coast-wide strike, the business community is actively seeking government intervention to mediate a solution.

With a history of no labor disruptions since 1977, there is optimism that a fair agreement can be reached before the deadline. The focus remains on finding a balanced resolution that benefits both parties and ensures continued smooth operations at the ports.

Vancouver and Prince Rupert ports

Negotiations with a smaller union of foremen in Vancouver and Prince Rupert are ongoing with the British Columbia Maritime Employers Association (BCMEA). It has been revealed that the main sticking point in the current negotiations involves semi-automated cranes operating at the DP World terminal in Vancouver.

The BCMEA has filed a complaint with the CIRB to request government intervention and mediation. The CIRB scheduled hearings that took place August 6–9, 2024. The CIRB then reported they needed to hold additional hearings, which are scheduled for early September.

The union intends to take a strike vote and be ready for further strike action, pending the results of the CIRB hearings. 

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Box rules investigation

The FMC ruled in February 2024 that truckers do not have to use a specific pool provider, which allowed draymen to use any chassis provider they preferred to move containers. However, after continued reports of chassis providers violating the ruling, the FMC has decided to investigate further. This could result in chassis availability challenges, notably in Chicago and Memphis and, to a lesser extent, at the ports of Los Angeles and Long Beach.

North America: Ports and terminals

Southeast

Charleston

Charleston port is still experiencing significant congestion stemming from a terminal system shutdown, an oil spill, and repair work that led to one of the terminals being closed. At present, 8–12 vessels are waiting to secure a berth, with data showing an average of ten days to book a berth for vessel discharge. Ocean carriers have reacted quickly and have taken the below actions:

• The Ocean Alliance carriers OOCL, CMA, Evergreen, and COSCO have systematically omitted Charleston port on their Europe service since June and will not return to regular calls at Charleston until mid-September 2024.
• Maersk, Hapag, and MSC have moved their USEC–Oceania service to Savannah port to avoid the worst of the port congestion. This service is not expected to return to Charleston until November 2024 at the earliest.
• THE Alliance carriers (ONE, Hapag, YML, and HMM) are changing around their USEC port calls on their Asia service loops to call other ports before Charleston and have omitted Charleston altogether in a handful of cases.
• COSCO has advised that their AWE1 service from USEC to Asia will be omitting Charleston port until November 2024.

Norfolk

Norfolk port is growing to be a challenging market for our carriers due to the strict appointment system and limited appointment slots. We are still seeing capacity constraints and increased wait time in this market. Proper carrier onboarding and lead times are needed to secure capacity and ensure reliable on-time delivery.

Savannah

Import dwell time is four days, and the waiting time for vessel berth at the terminal is up to one day, depending on the vessel's size.

Northeast

New York

We are seeing a continued lack of available empty return appointments. Consequently, many of the carriers are changing return locations resulting in additional charges. Carriers are visiting terminal websites 15–20 times per day trying to find available appointments or cancellations. Most terminals are thoroughly congested with the steep influx of arriving cargo.

New York City Department of Transportation (NYC DOT) Commissioner Ydanis Rodriguez announced on September 2, 2024, that applications are open for the Off-Hour Delivery Incentive Program to help reduce truck deliveries during the busiest hours of the day. All New York City businesses who make or receive commercial deliveries are eligible to apply and if approved would be reimbursed for off-hour delivery related expenses. The program aims to boost productivity and ensure the safe and efficient movement of commercial deliveries by incentivizing businesses to make deliveries between 7 p.m. and 6 a.m. for a minimum of one year.

Central/Ohio Valley

Inland rail terminals across the country are operating normally with plenty of capacity and equipment to support volumes.

West

Los Angeles/Long Beach

The potential for ILA strikes at U.S. East Coast and Gulf ports could challenge that region if a deal is not reached before September 30, 2024. This will drive volumes to the USWC as some shippers may want to avoid the USEC routings. Week 31 is seeing a slight decrease in volumes by 12.16% compared to last week but still an increase y/y by 24.14%.

Seattle/Tacoma

Hapag-Lloyd, in a recent customer advisory, reported that import rail container dwell times for Tacoma are 5.8 days at the Husky Terminal and 9.6 days at Washington United Terminal (WUT).

Marine terminal congestion often occurs when rail container dwells consistently exceed three to four days. “Rail car supply is in severe deficit, causing higher import rail dwell times,” Hapag-Lloyd shared. “No major improvement [is] expected during the month of August.”

ONE in the coming weeks will change the rotation of six of its transpacific services that had made Tacoma the first inbound call. Instead, the first call on those services will be to Vancouver before proceeding to Tacoma. “The Port of Tacoma terminals are experiencing severe import rail congestion, which is impacting vessel operations,” ONE reported. ONE is an exclusive partner to Union Pacific Railroad in the Western United States. 

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North American cross-border shipping to Canada and Mexico remains strong despite rising costs and logistical challenges due to fuel prices, infrastructure issues, and security concerns.

U.S.–Mexico

Slowing new investments amid strong export performance

Despite historic highs in Mexico’s Foreign Direct Investment (FDI) in early 2024, new investments are slowing. This is due to investor caution ahead of U.S. elections and Mexican reforms. Asian companies have paused major projects, while European and American projects continue at a slower pace.

In contrast, Mexico’s exports remain robust, growing 5.5% to the U.S. in the first half of 2024, expanding its market share to 15.9%. Truck crossings from Mexico to the United States hit a record high with 4.3% growth in Q2 2024. The Mexican customs authority reported a 2.9% increase in foreign trade operations from January to June 2024.

Economic slowdown: Indicators of a stalling Mexican economy

Mexico’s economic growth is slowing, with GDP growing just 0.2% in Q2 2024, bringing annual growth to 1.1%. The manufacturing sector saw a 2.7% annual decline in July 2024, and retail sales fell by 2.8% in June 2024. Analysts predict less than 1.5% growth for the year, the slowest since 2020. The economy remains vulnerable to volatility and shifts in export demand.

Disruptions and rising costs: Impact of road blockades, protests, and theft

Mexico’s logistical network faces increasing disruptions from weather events, road blockades, protests, and deteriorating infrastructure, raising logistics costs. These issues could cost Mexico up to 12% of its GDP. The recent closure of the Mexico–Puebla highway due to protests stranded over 130,000 vehicles, impacting industries and highlighting safety concerns and financial pressures.

Costs and capacity outlook (carriers)

Carriers face rising costs from fuel, maintenance, and security, along with congestion and demand variability. Efforts to enhance efficiency and capacity may stabilize costs, but higher operational expenses are expected. Fuel prices and congestion on key routes lead to delays and reduced capacity. Maintenance issues further strain fleets, while unpredictable demand and security concerns add to operational challenges.

Fuel prices remain high, which continues to detrimentally impact operational costs for carriers. In response to these costs, carriers are focusing on improving fuel efficiency by optimizing routes and investing in technology. Additionally, congestion and disruptions in high-demand routes, discussed in the section above, have led to delivery delays and reduced truck capacity.

This has prompted carriers to explore alternative schedules and allocate more resources to the most congested areas, impacting previously less-travelled routes. Maintenance issues have further strained fleet availability, leading to increased costs and repair times. To mitigate this, carriers have intensified preventive maintenance programs and updated inspection procedures to minimize downtime.

Carriers are also grappling with unpredictable demand, as strong exports create significant regional fluctuations making it challenging to maintain consistent service levels. To address this, Carriers have adopted flexible scheduling strategies, to improve truck utilization. Meanwhile, thefts and security issues persist on certain routes, which we have discussed in prior reports. This has impacted both the safety and efficiency of operations.

In response, carriers have enhanced their security measures, including the use of real-time monitoring and tracking systems, and have adjusted their routes to avoid high-risk areas, making it hardest to procure capacity in high-risk zones. These challenges collectively contribute to a complex and costly operational environment for carriers.

Connect with a C.H. Robinson representative today and take the first step toward optimizing your Mexico cross-border shipping strategy. Let's navigate the complexities together, leverage our more than 30 years of experience operating in Mexico, and unlock your cross-border supply chain's full potential.

Automotive industry insights

In July 2024, Mexico's vehicle production saw a modest increase of 2.7%, while exports declined by 1.5%. Mexico has solidified its position and is now the third-largest automotive exporter globally, surpassing Japan and the United States in 2023. However, the U.S. economic slowdown, summer shutdowns and political uncertainty in both countries resulting from elections, is impacting Mexico's automotive sector, with exports to the U.S., Mexico's largest automotive market showing signs of decline.

U.S.–Canada

The Canadian government has ordered the Teamsters to return to work at both the CN and the CPKC railroads, ending the union’s most recent attempt to strike. It typically takes approximately one week for the railroads to fully reset and for operations to run smoothly again, but it will take much longer than that to catch up with backlogged shipments. Railroads are like an outdoor conveyor belt that never quits running. They’re designed to operate 24/7, not stop and start. Similar to how it took a ramp-down period to turn off operations before the labor shut down, it will take some time to restart the conveyor belt.

Trains sitting at the ports would have continued getting loaded as container ships arrived during the lockouts, because port labor loads at the dock and wouldn’t be impacted by the rail labor issues. Trains there have been able to move out fairly easily. The congestion at the Port of Vancouver, however, is different because roughly 13,000 containers were already stacked up at the rail ramps before the shutdown, and one of the three container terminals there had reached maximum capacity. The port has requested that ships on the water slow down their arrival to prevent further congestion as they work through the backlog.

For our customers we’ve switched from rail to trucks to keep their supply chains flowing. We’ll continue helping them get their most critical freight to and from the ports and across the border until the railroads are completely fluid again. Spot rates for trucking in Canada may remain elevated for a bit longer until the dust settles and then slowly return to their pre-strike levels.

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Section 301 China tariff exclusion updates

In May 2024, the Office of the U.S. Trade Representative (USTR) issued a notice about the exclusion process for eligible machinery subheadings. This process is classified in Chapter 84 and 85 of the Harmonized Tariff Schedule of the United States (HTSUS), outlined in Annex B of the May 28, 2024, Federal Register notice. Additional proposed information requirements for exclusion requests were announced August 15, 2024, and comments are due September 16, 2024.

Quick response (QR) code requirements on the southern border

As of August 11, 2024, CBP is requiring inbound trucks at southern bridge crossings to print a QR code in the manifest/cover sheet and display it on their windshields. The process will help establish consistency across Laredo Field Office port personnel on non-intrusive inspections.

U.S. Department of Agriculture’s National Organic Program updates

Effective September 19, 2024, U.S. importers facilitating organic trade must obtain the National Organic Program Import Certificate (NOP-IC) prior to the shipment departing the foreign port of lading to avoid adverse enforcement actions by the agency. The NOP-IC cannot be issued after the product has departed. If a valid NOP-IC is not available at the time of entry filing, the shipment must either be changed to a conventional (non-organic) status or be re-exported. View our recent client advisory for more details.

Visit our Trade & Tariff Insights page for the latest news, insights, perspectives, and resources from our customs and trade policy experts.

Oceania

The Department of Agriculture, Fisheries and Forestry (the Department) and the Ministry for Primary Industries (MPI) have recently announced the measures for the 2024-25 Brown Marmorated Stink Bug (BMSB) season.

BMSB seasonal measures will apply to targeted goods manufactured in or shipped from target risk countries, that have been shipped between September 1, 2024, and April 30, 2025 (inclusive), and to vessels that berth, load, or transship from target risk countries within the same period.

The following amendments have been advised by the Department to the Australian 2024-25 seasonal measures:

• China and the Republic of Korea have been added for heightened vessel surveillance only
• In addition to the target high risk goods, 94 and 95 will be subject to random inspections for emerging risk countries only

Last month, Australia and Indonesia signed a Mutual Recognition Arrangement (MRA) adding to the list of benefits applied to Australian Trusted Traders (ATT). ATT registered businesses will gain faster, more efficient, and more secure access to one of the world’s fastest growing economies. More details will be advised as the countries finalize the details of the Arrangement. If you’d like more information on becoming an ATT, please connect with a C.H. Robinson expert.

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United States

As the election approaches, and trade actions continue to shape our global economy, staying ahead of these changes will be crucial for all stakeholders in the trade community.

Remember, it takes some time to adjust trade policy. Proactive engagement and preparation are key. But any changes likely won’t be made immediately on January 21, 2025, but will instead be working through various agencies. By staying informed, conducting comprehensive risk assessments, and embracing supply chain diversification, you can successfully position your business to navigate the complexities of the current—and future trade landscape.

For more details on how you can prepare for potential changes, read this blog on how the 2024 election could reshape global trade.

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Retail diesel's national U.S. average price per gallon of $3.70 in August is down from $3.81 in July, and much lower than the $4.37 average from August 2023.

The visual below, created with data provided by the EIA, shows fuel is down year to date (YTD), currently at the lowest level since the start of 2022.

Despite the overall decrease of diesel rates, crude oil prices have generally increased YTD. There are many factors that play into the cost of diesel, but crude oil prices are the largest, so there remains an upside risk for diesel if oil prices remain elevated or increase any further.

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