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The collapse of Baltimore’s Francis Scott Key Bridge is causing major disruptions in the global supply chain, impacting both international and national trade routes. Here’s what you need to know:

International Impact: The Port of Baltimore is crucial in global trade, especially for importing and exporting finished autos and light trucks. With $23.5 billion worth of imports in 2023, trading partners like Germany, Mexico, Japan, and the UK are affected. Delays in shipments could lead to wait times for high-end European cars and affect exports to countries like Australia and the UAE.

Freight Rate Surge:  Freight rates from Asia to the U.S. have doubled since the incident, reflecting the strain on transportation networks. This surge is amplified by the ongoing disruptions of the Houthi rebel attacks in the Red Sea.

National Disruptions: The collapse has led to congestion, price uncertainty, and delays for importers and exporters relying on efficient routes through the Baltimore Port. Smaller ports are picking up volume as ships reroute, adding to the challenges of logistics operators.

Agricultural Implement Impact:  Baltimore is a leading Roll-on Roll-off (Ro-Ro) port for agricultural machinery imports and exports. This could delay the shipment of farming equipment such as combines, large tractors, and balers. Farmers should expect to face delays as the upcoming planting season approaches.

The uncertain timeline for bridge restoration indicates businesses must adapt quickly. Diversifying transportation routes, optimizing inventory management, and negotiating with suppliers and carriers are helpful strategies to mitigate the impact. Stay tuned to our social platforms for more industry updates and logistics insights!

(Resources: Jason Miller and TTNews)


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Three bullet points about LTL pricing and long-term capacity. As shown in the chart below, fuel prices and Yellow’s exit have produced an increase in LTL pricing. However, how long it lasts is another question…

1.  Yellow Freight’s Impact: The demise of Yellow Freight in August took 10% of industry capacity offline, which provided a backstop against the price erosion seen over the last 12 months. However, the distribution of its market share has not been uniform. Carriers with more pricing and footprint overlap have benefited more, with Saia and XPO being notable gainers among public companies.

2. Pricing and Capacity: The worries about overcapacity have been somewhat allayed by Yellow’s exit. Carriers are trying to hold the line on GRIs and are more aggressively going after rate increases on less profitable customers. However, the tea leaves are not looking positive for LTL volumes to increase meaningfully in the near-term – ISM new orders are still in contraction territory (though it’s improving from earlier this year). We see a balanced pricing environment in the LTL space in the coming months.

3. Terminal Capacity: Longer term, terminal capacity in the industry remains constrained due to significant inflation in real estate prices. Carriers have been cautious in expanding, and the sale of Yellow’s real estate portfolio is expected to take time and require renovation. Net fixed capacity in the industry is believed to be declining. As e-commerce increases and (hopefully) the economy improves, terminal capacity could become a bottleneck leading to higher LTL rates in 2024 / 2025.

Source: US Bureau of Labor Statistics Data