This week, U.S. ports, including the Port of Vancouver, are contending with challenges such as potential strikes at Canada’s major freight railroads, which could severely disrupt operations. Meanwhile, the ongoing Red Sea crisis has kept ships on the Asia-North America trade unusually full, pushing spot rates to significantly high levels. In other news, FedEx Freight is planning to close seven service centers across the U.S., aligning with the evolving needs of the less-than-truckload industry. Furthermore, salvage operations at Baltimore’s Francis Scott Key Bridge, where a section collapsed onto the cargo ship Dali, are progressing, with plans to refloat the ship by May 10. Additionally, the increased risk of Houthi rebel attacks in the Red Sea is prompting companies like Maersk to reroute ships around Africa’s Cape of Good Hope, anticipating longer journey times and higher costs. Read the full articles for comprehensive coverage on these developments.
Weekly Freight Report: May 10, 2024
May 10th, 2024
Trade Deficit Steady as Imports, Exports Both Tumble
In March, the U.S. trade deficit remained stable at $69.4 billion as both imports and exports fell, reflecting decreased trade in goods like passenger cars and cell phones, alongside minor gains in pharmaceuticals and crude oil.
Maersk Says Red Sea 'Risk Zone Has Expanded
Maersk is warning of heightened risks from Houthi rebel attacks in the Red Sea, leading to increased shipping delays and costs, and prompting vessels to reroute around Africa’s Cape of Good Hope. The situation has escalated, causing industry-wide capacity shortages and pushing Maersk to boost its capacity with over 125,000 additional containers to manage the increased costs of longer, more fuel-intensive routes.
Baltimore Bridge Collapse: Salvage Teams Prepare to Remove Section of Bridge from Atop Dali
In Baltimore, salvage crews are preparing to remove a section of the Francis Scott Key Bridge that collapsed onto the cargo ship Dali. The operation involves intricate planning and the use of specialized equipment to safely manage the wreckage, which includes road pieces and crushed containers. Efforts are underway to refloat the Dali by May 10 as part of the broader initiative to reopen the Port of Baltimore. This follows a tragic incident where a ship collision resulted in the deaths of six roadwork crew members and left one construction worker missing since March 26.
FedEx Freight to Close 7 Service Centers Nationwide in 2024
FedEx Freight is set to close seven service centers across the U.S. this year as part of ongoing adjustments to its freight network, representing about 1% of its overall door count. The closures are a response to the evolving less-than-truckload industry and are aimed at aligning with projected demand and business needs. Some affected employees will be offered positions at nearby FedEx locations, although no specific closure dates or the total number of affected workers have been disclosed. The affected locations include Cedar Ridge, Illinois; London, Kentucky; Kenova, West Virginia; Mount Vernon, Illinois; Wilmar, Minnesota; Yuma, Arizona; and Zanesville, Ohio. This follows the closure of 29 service centers from May to August 2023.
Vancouver Works Through Rail Dwell Woes While Warily Eyeing Labor Talks
A potential strike by conductors and engineers at Canada’s major freight railroads could significantly disrupt operations at the Port of Vancouver, threatening recent efforts to reduce the backlog of long-dwelling rail containers at the country’s largest port. This strike risk, heightened during the current contract negotiations, reflects a pattern where last-minute agreements are typically brokered with federal intervention. However, stakeholders including container lines, railroad executives, and forwarders have expressed increased concern about the risks in this negotiation cycle since early 2024.
Import Demand, Weather Strains Already Stretched Shipping System
The disruption in the Red Sea, initiated by Houthi rebel activities in Yemen starting late December, continues to impact shipping on the Asia-North America route, keeping ships unusually full and spot rates significantly high—about two and a half times higher than usual annual contract rates for midsize imports. Initially, lower demand mitigated some effects of these disruptions, which deterred container lines from Suez Canal transits, leading carriers to adjust capacity and constrain Asia outbound slots.
