Check Call: Third Quarter losses on the rise

Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EDT. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.

In this edition: Cargo theft was on the rise over the holiday weekend; the Panama Canal wins a spot on bingo cards; and Coyote parts ways.

(Image: memegenerator.net)

Labor Day signals the unofficial end of summer. Pumpkin spice lattes have returned, kids are back in school and the flannel is waiting in the wings for fall festivals and hayrides. Not quite hiding in the shadows is cargo theft. Heading into the final four months of the year, thieves seem to be all gas and no brakes.

FreightWaves’ Mark Solomon wrote, “According to CargoNet, which tracks reported incidents of cargo theft, about 200 incidents have been reported each month so far in 2023, putting reported incidents on pace to hit 2,400 for the year, well above historical norms. CargoNet sees only a fraction of the actual incidents because most go unreported and are thus unsearchable in databases. Many theft victims are mindful of reputation risk and would rather chalk up the incidents as a cost of doing business.”

With the rise in overall theft growing, Labor Day weekend is expected to see 40 incidents of theft, most commonly with holiday goods such as consumer electronics. So that’s where all the PS5s are going. Something about Labor Day proves to be a big day in the world of cargo theft.

It cannot be stated enough to be careful with carriers and advise carriers to use extreme caution and report any incidents immediately.

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Supply chain disruptions due to canal congestion and restrictions in the Panama Canal are not something I had on my 2023 supply chain bingo card. Due to a drought in the Panama Canal, the region is down 30%-50% for expected rainfall, and hotter-than-normal temperatures leading to faster evaporation rates have caused a bit of a logjam.

FreightWaves’ Greg Miller’s article says the Panama Canal Authority “has reduced daily transits as the maximum ship draft has declined to 44 feet. The intention is to lower average transits from 36 to 32 per day, paring transits via the original Panamax locks from 26 to 22 and maintaining transits via the newer, larger Neopanamax locks at 10 per day (container ships serving the U.S. use the Neopanamax locks).”

That is less than ideal as the global supply chain was finally back on track with at least three weeks without a massive disruption. In an effort to keep freight moving, the restrictions put in place at the Panama Canal have started forcing other ships to take multi-week detours through the Suez Canal and around the Cape of Good Hope.

Forty percent of all U.S Container traffic travels through the canal so this drought is really going to create some backlog problems. Not only has the number of ships allowed through the Canal been decreased, but the weight that ships are allowed to carry has decreased by 40%. Some ships are forced to offload freight at nearby ports or ports along the way, before proceeding through the Canal.The Ever Max was forced to unload 1,400 TEUs at the Port of Balboa in order to make passage.

Most bulk commodity shippers are going to want to start coming up with alternate routes for their goods to make it within a reasonable time frame.

(SONAR TRAC Market Dashboard)

TRAC Tuesday. This week’s TRAC lane is from Atlantic City, New Jersey, to Columbus, Ohio. This 529-mile trek has spot rates at some of the highest levels since the beginning of April. It could be an end-of-summer rebound as the beach towns tourists and goods head inland for the winter. Capacity in Columbus is loosening. The outbound tender rejections in Columbus sit at 5.16% to start the month. Although this rate is hitting heights for this lane, it’s still a spot rate well under the National Truckload Index of $2.27. Rates could climb as the quarter wraps up this month, but it won’t be a money-maker lane.

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Who’s with Whom? As if the down-market cycle hadn’t claimed enough victims, another one faces issues. Coyote announced Friday that it had laid off some of its brokerage employees. According to Coyote, this was to restructure the company for “long-term” stability. This is the second round of layoffs Coyote has done this year. In February the company laid off about 200 workers.

When the market was thriving and brokerages were hiring people left and right, it could have led to an overstaffing problem now that business is down and shippers are a bit more conservative in their business approaches. This isn’t the outcome anyone wanted. To those who faced layoffs right before the holiday weekend, my DMs are open for any help.