Good day,
As we move into the final month of the third quarter, the nation’s ports have turned on. Coastal freight markets like Los Angeles, Savannah, and Elizabeth, New Jersey have some of the highest headhaul values in the country. Headhaul values are calculated by subtracting inbound volumes to a given market from that market’s outbound volumes. If a positive score results, the market is more attractive to carriers; if the score is negative, it’s a backhaul market with low outbound rates.
Memphis has maintained its strong headhaul score despite weak intermodal volumes on all of the Class 1 railroads; Milwaukee and Ontario, California are producing an excess of freight, too.
Deep backhaul markets today include the usual markets like Boston, Miami and Phoenix, but Austin and Charlotte have also dropped into negative territory.
Did you know?
Yesterday (September 4), the Baltic Dry Index (BDI), which tracks rates of bulkers in multiple segments, hit 2,518 points, its highest level since November 2010, almost nine years ago.
Quotable
“You know, if consumers in Mexico want to buy potatoes grown in Mexico because they think they are higher quality or because they’re a better price or because they want to shop local, that is just great. We just want to be on the same playing field in that we could get our potatoes in there and give customers an option to buy USA potatoes.”
– Shawn D. Boyle, president and general counsel of the Idaho Growers Shippers Association.
In other news
A British truck driver who’s worked in the U.S. for years says the biggest problem with trucking in America comes down to how drivers are paid
Being paid by the mile instead of by the hour forces drivers into hazardous conditions and leaves them undercompensated for detention, said trucker Mick Flynn. (Business Insider)
China, U.S. to hold trade talks in October as mistrust remains
Both countries are making a show of good faith to resolve their differences, but markets are skeptical that substantial progress will be made. (Bloomberg)
The human cost of Amazon’s fast, free shipping
Amazon requires that its contractors, often driving leased trucks, make 999 of 1,000 deliveries on time, but has repeatedly stated it has no responsibility for accidents. (The New York Times)
Cowen Global Transport Conference takeaways, day 1
Precision scheduled railroading progress remains on track at Union Pacific, Kansas City Southern and Norfolk Southern, which will suppress the market for locomotive new builds and railcar orders. (Railway Age)
Precious metals enjoy resurgence in negative yield world
Gold has broken above $1,500/ounce, a six-year high, as retail investors and central banks look for alternative havens to negative-yielding sovereign bonds. (Wall Street Journal)
Final Thoughts
The Chinese New Year in the first quarter is well-known as a time when Chinese manufacturing production and shipping crawls to a halt and the Transpacific trade lane slows to a trickle. But less publicized is China’s Golden Week, a smaller-scale holiday with a similar impact on maritime shipping.
This week, OOCL and CMA CGM said they were cutting sailings in the first few weeks of October, effectively removing capacity from the lane because of anticipated lower demand. The void sailings will affect volumes to the West Coast, from Los Angeles/Long Beach up through the Pacific Northwest, while cuts by the OCEAN Alliance and 2M will cancel arrivals at the Ports of New York and New Jersey and Houston.
See this morning’s Port Report by Mike Angell for full details.
Hammer down everyone!