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April Market Update: Transportation Industry News

MarketUpdateTrans

The U.S. economy added 215,000 jobs in March, nudging the unemployment rate to 5%. Despite the positive numbers, according to The Washington Post, a close eye is still being kept on the weakening global growth from the slowdown in China. Learn more about this and other marketplace topics in this month’s update. We welcome your thoughts on the issues that are impacting the transportation industry and your business.

Large Scale Market Indicators
As China imports and exports continue to decline, so does shipper confidence. February trade volume showed a significant decrease in China imports and exports, including a 25.4% decrease year over year for exports. Read more.

Carrier Capacity
According to the recent Freight Analysis Framework study by the United States Department of Transportation’s (DOT) Bureau of Transportation and Federal Highway Administration, freight tons moving on the U.S. transportation network are expected to grow 40% over the next three decades to 25 billion tons. Read more.

Driver Shortage
In an effort to ease the way for veterans who want to become truckers, the Federal Motor Carrier Safety Administration (FMCSA) submitted a Notice of Proposed Rulemaking that calls for extending the time period for applying for a skills test waiver from 90 days to one year after leaving a military position that required the operation of a commercial motor vehicle. The goal is to give veterans a better opportunity to obtain a commercial driver’s license, while not impacting safety. Read more.

Government Regulations
The U.S. Food and Drug Administration (FDA) finalized a new food safety rule under the FDA Food Safety Modernization Act (FSMA) to help prevent food contamination during transportation. Most temperature controlled freight covered by this rule will need to be compliant within one year; small businesses have two years to comply. Read more.

Global Forwarding
West Coast ports are viewing 2016 as the year they’ll return to their normal 5% annual growth trend. In February, container volume in Los Angeles increased 42% year over year, while Long Beach increased nearly 36%. Read more.

Comments

Justin

If China's year over year exports are down 25% but the West coast ports are up 42% and 36%, where is the increase to the ports coming from?

The ports are planning for year over year growth of 5%, so is the panama canal expansion not going to effect them much?

4.18.16

Reply

    Steve Raetz

    Hi Justin. We have to keep in mind that there are many versions and publications on statistics. Most would represent throughput and also taking collective global trades into consideration. When we look at specific US census statistics* we show exports out of China to US grew 3.14%. The increase is modest. From our analysis, the USWC ports lost market share to the USEC ports through 2015 due to the issues stemming from the USWC labor negotiations. Since the resolution of labor contract, we have seen gradual shifting of volumes back to the USWC. As it pertains to the Panama canal, the expansion will allow larger vessels to come through the canal and also to aggressively compete with the Suez Canal. Should capacity surpass demand, as projected, in 2016 and 2017, most shipping lines may be inclined to deploy these assets through the panama canal directly and avoid a transshipment via feeder.

    * https://www.census.gov/foreign-trade/balance/c5700.html

    4.25.16

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