BNSF attracted $4.2B investment from online rail customers in 2024
BNSF Railway says its customers invested more than $4.2 billion along its lines in 2024.
Significant investments were made by customers including CJ Logistics America, Hudson Asphalt Terminal and Bakersfield Renewable Fuels. As a result of these and other customer investments, BNSF projects supported the creation of more than 1,000 jobs in local communities.
The investments are the largest that BNSF customers and local economic development organizations have made in new or expanded facilities in the past six years.
“Partnering closely with our customers to develop tailor-made rail solutions is important to us,” Chris Danos, BNSF’s assistant vice president of economic development, said in a statement. “Doing so optimizes our supply chains and helps drive long-term growth. At BNSF, we’re committed to delivering sustainable solutions for our customers that enhance efficiency, reduce logistics costs, and meet the evolving demands of the transportation industry.”
This past year, new developments supported various intermodal, industrial and agricultural commodities in communities across the BNSF network. Highlights include:
CJ Logistics America, a prominent supply chain services provider, expanded its operations with the construction of a 1.1 million-square-foot warehouse near the BNSF Logistics Park Chicago in Elwood, Illinois. The facility is part of a $457 million investment by the Korea Ocean Business Corp.
The Hudson Asphalt Terminal LLC invested $25 million to open an asphalt storage and distribution facility at BNSF’s Logistics Center in Hudson, Colorado. By locating at the logistics center, HAT was able to quickly take advantage of increased market demand, breaking ground in October 2023 and receiving its first car 10 months later. As the newest addition to the Cenovus network, HAT serves as the exclusive operator for the shipment of Cenovus liquid asphalt, specifically for hot mix producers, shingle manufacturers and emulsion producers in Colorado. The terminal has a storage capacity of more than 280,000 barrels, features 20 heated railcar spots and includes two loading racks with scales.
Bakersfield Renewable Fuels acquired a former petroleum refinery located in Bakersfield, California. BKRF repurposed the facility to receive a variety of oilseed commodities, including camelina oil for the production of renewable diesel targeted at the California market. The BKRF facility has undergone significant rail infrastructure enhancements, including rehabilitating existing tracks, adding a crossover, and extending track to improve operational efficiency, with one track designated for BNSF to spot cars and another for pulling. The BKRF facility
is equipped to handle an initial volume of 450 to 500 rail cars per month. Carload service with tank car equipment began late in 2024.
Online retailers can make it easier for customers to return unwanted merchandise through a modified program from FedEx that doesn’t require a label or box.
The service represents the latest response to shoppers’ expectations for flexible, convenient returns options as e-commerce continues to grow. UPS introduced a frictionless returns capability a year ago with the acquisition of Happy Returns.
The latest survey data shows return policies significantly influence shopping decisions. UPS (NYSE: UPS) and the National Retail Federation in December estimated that the total value of returns in 2024 was $890 billion. Retailers estimated that 16.9% of their annual sales would be returned.
FedEx (NYSE: FDX) on Tuesday said FedEx Easy Returns allows e-commerce merchants to offer customers a hassle-free, low-cost returns solution, starting this summer with about 3,000 drop-off locations at FedEx Office and Kohl’s stores locations. The service, which is supported by supply chain management software from Blue Yonder, will also help streamline the returns process for merchants. Returns will be routed through a reverse logistics facility for recovery and consolidation, helping merchants ensure the accuracy and speed of the return, saving materials and space.
Easy Returns builds on a no-box, no-label consolidated returns service launched more than two years ago. Merchants who use Easy Returns exchange speed for cost because Easy Returns combines customer returns into one shipment. With other FedEx return solutions, each package ships individually. Other differences are the addition of Kohl’s stores as drop-off locations, the use of Blue Yonder instead of home-grown technology as the information backbone, and a lower price point, according to a FedEx spokesperson.
Consumers will be able to return items weighing less than 10 pounds without needing to print labels or use packaging, according to a company announcement. Instead, they will use a QR code to confirm their order. Plans call for fast expansion nationwide.
The integrated logistics and parcel delivery company said the service will be ideal for apparel, accessories and soft goods that fit in a poly bag.
Shippers will need a minimum average return volume of about 10 pieces per day to qualify for FedEx Easy Returns. The product is most suitable for merchants with about 3,000 returns per year or higher, the company said.
Offering merchants a good returns option is a way for FedEx and UPS to stand out from competitors because e-commerce delivery alone is a commoditized product, with many regional couriers like SpeedX, LaserShip and OnTrac able to provide two-day service to major metropolitan areas, said e-commerce consultant Derek Lossing.
The NRF and UPS report said 76% of consumers consider free returns a key factor in deciding where to shop and 67% said a negative return experience would discourage them from shopping with a retailer again. Eighty-four percent of consumers report being more likely to shop with a retailer that offers no-box/no-label returns and immediate refunds.
A January survey by Morning Consult, underwritten by FedEx, showed consumers have diverging preferences for returning online purchases based on income and generation. Two-thirds of higher-income earners and nearly 60% of baby boomers favor returning items in-store, while 20% of Gen Z and millennials opt for home pickup, with 19% of millennials also choosing mailbox drop-offs.
“Consumers are making it clear that flexibility and convenience are essential when it comes to returns,” said Jason Brenner, senior vice president, digital portfolio at FedEx, in a news release about the survey. “The continued rise in no-label, no-box returns and growing demand for home pickup options reinforce the need for retailers to offer solutions that make returns more seamless for consumers.”
Opinions on the current ease of returns are split. While 51% of consumers believe returns have improved, 32% are neutral, and 17% think the process has become more challenging, according to the survey of 2,200 U.S. consumers and 1,000 businesses. Millennials and high-income groups are the most optimistic, while Gen X, Gen Z and lower-income consumers express skepticism.
Two-thirds of respondents said they consider return policies before making a purchase. Nearly 30% of respondents said return policies directly impact whether they complete a transaction, emphasizing how transparent and flexible options can build customer loyalty and drive sales.
Rival UPS acquired software and reverse logistics firm Happy Returns from PayPal in late 2023. Consumers can drop off returned goods at nearly 8,000 locations, including about 5,200 UPS Store locations. At the time of the deal, more than 800 merchants were Happy Returns clients. UPS says the Happy Returns technology has driven a 50% efficiency increase in item sorting, while the use of warehouse robots has helped decrease by 35% the average time to ship out items to retailers.
FedEx has existing reverse logistics capabilities, including transportation, label creation and technology, designed to simplify the returns experience.
FedEx Easy Returns and UPS Happy Returns are more environmentally sustainable options for merchants that help reduce the amount of packaging and product waste by using a consolidated returns process.
FIRESIDE CHAT TOPIC: Fuller Speed Ahead: From “Internet Truckstop” to Industry Leader: Kendra Tucker On 30 Years of Truckstop
DETAILS: Freightwaves founder and CEO Craig Fuller speaks with Truckstop CEO Kendra Tucker about the company’s 30th anniversary and its unique perspective on the evolution of the freight technology industry.
KEY QUOTES FROM TUCKER:
“We want to understand how our carrier feels about the work they do every day. What we got was optimism. Greater than half of our carriers expect the next three to six months to be better than it was last year, better than it has been in the last two years or so. Our carriers are saying Q4 for them didn’t experience the hardships they experienced in previous years. Our data is corroborating that as well. Spot rates are up 1.5% since Q4 and 8% year over year.”
“We are at the beginning of the recovery. I am cautiously optimistic about it. What we can all agree on is that this recovery will feel different than previous recoveries or previous markets. As we come out of the bottom, it will feel more tepid compared to 2021. Everyone agrees that it doesn’t feel like 2022 or 2023. It has more of an uptick than previous years.”
“There are a few things we’ve added this year that help to build confidence in the relationships that carriers can build with brokers and vice versa. One of the things we’ve implemented that we’ve had good adoption on is identity verification for both carriers and brokers. Anyone who enters our ecosystem, particularly as they come through onboarding compliance, they have multifactor authentication and a government-issued form of ID to make sure they are who they say they are. We are doing the matching behind the scene to verify that it’s associated with the authority on file. It helps build trust with technology.”
“One of the things we know for sure is just because you have a new authority or just got your authority active in the last six to 12 months, it doesn’t mean that you don’t have experience in transportation. Many of the new authorities have been drivers at other companies before. Being able to expose that to brokers to increase the level of trust that they might need to build at the outset of the relationship – that’s really important, and we want to be able to facilitate that further.”
Port of Savannah sets record container, rail and truck moves in February
The Georgia Ports Authority said the Port of Savannah moved 479,850 twenty-foot equivalent units, the busiest February on record and a 6% increase from the same month a year ago.
Authority President and Chief Executive Griff Lynch in a release credited the surge to the port’s role as a gateway to the Southeast. Frontloading by importers ahead of planned U.S. tariffs also helped boost U.S. container volumes across major import hubs.
On Feb. 28, the port achieved 2,246 rail lifts, a new record for a 24-hour period, at the Mason Mega Rail Terminal. The hub handles six trains daily or 42 per week, with dwell time of 19-24 hours.
The Garden City Terminal set a new weekly record with 78,950 truck gate transactions in the last week of February. Despite high volumes, the container field remained fluid, with average transaction times of just 35 minutes for single container moves and 54 minutes for dual container moves. The efficiency of dual container moves, accounting for 85% of the port’s container business in February, significantly contributed to overall operational smoothness.
The momentum continued into March, with a single-day truck gate record of 16,430 transactions on March 11 at Garden City Terminal.
To further enhance efficiency, Gateway Terminals and the International Longshoremen’s Association union local have agreed to add three new start times for vessel operations: 6 a.m., 3 p.m. and 9 p.m. This expansion to eight total start times, coupled with 24-hour vessel service, is expected to significantly reduce vessel time at dock.
The ILA and United States Maritime Alliance in February signed a new six-year master contract covering 24,000 workers at 14 Eastern Seaboard and Gulf Coast ports.
Savannah is also implementing innovative solutions to increase vessel capacity. Starting in May, a new lay berth at Ocean Terminal will be utilized to stage vessels, dramatically reducing transition times between large ships. This strategy is projected to improve berth availability at Garden City Terminal by up to 75%, potentially allowing the port to handle two more ships per week, or an additional 100 vessels annually.
Looking ahead, a second lay berth at Ocean Terminal is scheduled to come online in mid-2026, further expanding Savannah’s vessel capacity.
Port of Brunswick update
The Port of Brunswick faced a slight decline in roll-on/roll-off trade. In February, Brunswick moved 61,667 units of autos and heavy equipment, representing a 10% decrease, or 6,882 units, y/y. The Colonel’s Island Terminal in Brunswick handled 42 vessel calls for the month, three fewer than in February 2024.
Flatbed tender rejection rates spiked just before North American tariffs took effect in early March, and they spiked again in recent days. (Chart: SONAR)
“What’s happening with flatbed rejection rates?” is the question of the hour from SONAR users. It’s easy to see why – rates shot up to the mid-30s in early March, ahead of North American tariffs (which were delayed for imports that adhered to the United States-Mexico-Canada Agreement). Flated rejection rates shot up again in recent days to a latest reading of 41.6%, ahead of additional North American tariffs set to go into effect on April 2 that may include lumber, among other things.
The SONAR team believes it’s all tariff-related.
When flatbed tender rejections spiked in early March, I dug into our raw flatbed data with help from our data team. The purpose was, first, to verify that we are, in fact, seeing that spike in the underlying data we are receiving from our data vendor – we are. Second, it was to see if there is evidence of tariffs driving the spike in rejection rates, as the timing suggests. Looking at the individual geographic markets for flatbed tender rejections (which SONAR does not publish) reveals that the spike in flatbed tender rejections is fairly widespread, with multiple markets in the U.S. showing more than one-third of the number of tender rejections we have historically seen, on average, for the U.S. as a whole. The two markets that have the highest total rejections are Dallas and Portland, Oregon. Presumably, movements to avoid tariffs are taking capacity that would normally be available in those areas.
Since the SONAR Flatbed Outbound Tender Reject Index’s inception, February 2022 was the only other time the index was as high as current levels. (Chart: SONAR)
Another factor behind the magnitude of the surge in flatbed tender rejection rates is simply that it is a thin dataset, relative to other equipment types in SONAR, which makes it prone to sharp moves. Not only is there far less flatbed volume than dry van and reefer, it is more likely to move on the spot market, and therefore not go through the tender accept/reject process. According to a SONAR employee with experience brokering flatbed loads, “Generally, flatbed doesn’t move in any sort of contract manner. There are a few contract shippers scattered around the US, but most of that freight is intra-network and agreed upon in an all-in manner.”
Truckstop spot rates have risen but not by as much as the spike in rejection rates would suggest. In addition to tariffs, spring is seasonally strong for flatbed as construction projects ramp up. (Chart: SONAR)
For more detail on the divergence between rejection rates and spot rates, and why rejection rates are typically a leading indicator for spot rates, see JP Hampstead’s latest article.
The Stockout x The Logistics of Logistics
(Image: thelogisticsoflogistics.com)
Last week, I joined Joe Lynch’s The Logistics of Logistics podcast. Lynch is a prolific podcaster but had not had anyone on before to discuss consumer packaged goods supply chains specifically. CPG topics discussed included the impact of tariffs, ingredient inflation, Gen Z buying trends, health trends and how CPG companies are using AI. In addition, we discussed how CPG companies use SONAR for purposes of daily freight management, RFP management and logistics strategy.
Listen to the show here or on your podcast service of choice.
The Stockout Show: Walmart bolsters capabilities with 3PL division
(Image: FWTV)
On Monday’s The Stockout show, Grace Sharkey and I discussed Walmart getting into brokerage, as well as recent events involving FedEx, Forever 21 and the ocean market. Of those topics, Walmart’s actions have the most potential for industrywide impact and are part of a larger trend in which enterprise shippers are enhancing internal logistics capabilities.
In recent days, Walmart began emailing a select group of trucking companies about its new 3PL offering, which promises to provide carriers with steady freight flows largely from Walmart Fulfillment Services (WFS). Walmart’s ultimate goal appears to be developing a stronger WFS, a competitor to Amazon Marketplace. Amazon Marketplace has faced criticism for imposing fees and requirements that make it difficult for sellers to be profitable on the platform. That may entice sellers to move to WFS or use both platforms.The show is available on The Stockout YouTube page.
To subscribe to The Stockout, FreightWaves’ CPG and retail newsletter, click here.
Determine your bottlenecks before leveraging new AI technology
With the rise of AI technology, many brokerage firms and other logistics companies are still trying to figure out what new tools they need to keep a competitive edge. As with any technological disruption, it can be difficult to distinguish legitimately helpful products from the ones that simply take advantage of the trends.
Dhruv Gupta, CEO of Drumkit, encourages brokers and 3PLs to thoroughly explore and understand their workflow bottlenecks in order to make novel AI technology work most effectively.
Gupta has spent his whole academic and professional career interested in optimizing transportation and logistics. “I was that nerd kid in high school, and I always thought trucks and trains were just cool,” he said. “I took that forward throughout college, and so I’ve been building stuff in the transportation space my whole career.”
Much of the public, Gupta says, discounts how important transportation and infrastructure are. “Whether it’s commuting or getting the goods and services they need, most people don’t think about the supply chain or transportation until it stops working,” Gupta said. “When it works, it hums in the background and it’s the backbone of any economy, but when it doesn’t, you see really quickly how much it brings things to a halt.”
After working at multiple startups and in sectors like last-mile logistics, all surrounded by software, Gupta understood where and how he and his team could best put their talents to use. They have been building what’s now called Drumkit for the past few years and pivoted into their current product lineup about 18 months ago.
Right now, many brokers are trying to answer the question, “How do I use AI in my brokerage, and is it even worth it?” Between data analysis, chatbots, workflow automation and more, it can be difficult for brokers to determine a practical approach that meets their needs.
Before implementing AI, Gupta says, take a step back. “What is holding you back from growing?” he asked. “Are you not reaching enough potential customers, or are you failing to offer the right rates? Is it that your team can’t handle all the check calls and scheduling that they have to do? Are you having trouble managing carrier capacity or sales?”
Figuring out your bottleneck first, according to Gupta, can help you determine how to leverage new technology to find a solution. “If that solution happens to involve AI, that’s great, but you don’t need to find an excuse to use AI,” he said.
“AI will find its place when you try to solve your pain points,” Gupta said. “I’m not in the business of trying to peddle AI. I’m in the business of solving your workflow problems, and AI is one new tool that we can use.”
Sometimes, simply improving elements of your workflow like your use of spreadsheets or your standard procedures can be better timesavers than new tools.
The best approach, according to Gupta, is to start with the problem and figure out the solution incrementally. “Try fixing one variable at a time,” he said. “If you start by saying, ‘I need AI in my brokerage,’ that doesn’t really mean anything and you might not solve your issues.”
If you’re struggling with appointment scheduling problems, for instance, it might be best to start by examining your procedures. Who is in charge of that scheduling, and does that role need to be adjusted?
“Focus on yourself first,” Gupta said. “Don’t focus on what else is out there. It’s worth knowing what other companies are doing, but you have to make tools work for you and your situation. Otherwise, you’ll just be a hammer looking for a nail.”
“You should think of technology as a ladder,” he said. “Start with the basic solutions you can implement using what you have at your disposal. As you want to scale up, that’s where tools like Drumkit can really optimize your productivity. Give us a call, and we’ll help you automate what you’re already doing.”
Drumkit is designed to increase productivity in a variety of ways, such as helping to process emails 10 times faster with workflow automations specifically designed for logistics. Freight forwarders and brokers work with Drumkit to save time and book more loads.
To demonstrate Drumkit’s advantages, Gupta laid out an example of how its automation tools have helped customers. “We work with brokers who handle 40,000 loads per month,” Gupta said. “Before they used Drumkit, their win rate was approximately 10%, but the bigger problem is that they were only responding to about 40% of available shipments.”
“That’s probably for various reasons,” Gupta said. “Sometimes you don’t see all of the available loads, or you don’t want to cover a particular lane. No matter the reason, if you can bump response rate up by a couple percent with one tool, the net value to your bottom line – or your top line, in this case – goes up dramatically.”
With Drumkit’s AI automation tools, brokers can dramatically accelerate response rate, even without changing the win rate. Interestingly, Gupta says, increasing the response rate also correlates to an increased win rate.
“It’s a win-win scenario,” Gupta said. “If you have requests you can’t process and you’re not making enough top line, an AI tool can help streamline that process, read conversations, get quotes and so on.”
When it comes to routine workflows such as track and trace or check calls, Drumkit can be a huge timesaver, and that increased efficiency is a vector for growth, according to Gupta.
“You don’t want your after-hours team to really be working that hard,” Gupta said. “You don’t want senior leadership to have to continually answer calls and emails when they’re away or when they’re networking. That’s what you want Drumkit to handle. When you have tracking automated, your team can focus on sales and expanding the business.”
Part of Drumkit’s mission is to help brokers optimize ROI per employee. If, instead of making check calls, an employee can spend time solving a more complex problem, that’s a service level increase for the customer. “That means retention will be higher and they’ll like working with you, and that’s only a good thing for you,” Gupta said.
Automation doesn’t remove any responsibilities, but it does enable employees to accomplish more in a given day when the more routine tasks are taken care of.
“If you find that you have extra time in your day, go call a customer and book more business,” Gupta said. “That’s an incredible opportunity that enables you to expand. Whatever model of brokerage you have, having newfound time is an accelerant that can make you more productive in every facet of business.”
Trans-Pacific ocean container rates have eased post-Lunar New Year, despite volumes estimated to be significantly stronger than a year ago.
The latest Freightos Baltic Index pegs rates to the West Coast of around $2,200 per forty-foot equivalent unit and to the East Coast of approximately $3,300 per FEU, more than 20% below 2024 lows.
This trend is likely due to increased competition and less effective capacity management from new carrier alliance rollouts, as well as continued fleet growth, said Judah Levine, Freightos head of research, in a release.
Asia-Mediterranean rates of around $3,500 per FEU are about 20% lower than post-Lunar New Year 2024, while Asia-Europe rates of $2,565 per FEU) are 20% below the 2024 floor despite ongoing port congestion at European hubs. Without tariff frontloading as a factor, easing demand and new carrier alliances are pushing rates down on these lanes, Levine said.
Shipping is bracing for potential disruptions and shifts in trade patterns, he observed, with uncertainty remaining the predominant theme in global commerce.
While President Donald Trump has set an April 2 deadline for new tariff announcements, confusion surrounding the White House’s trade policy continues to mount. The Trump administration has indicated it will narrow the scope of reciprocal tariffs initially proposed for all U.S. trade partners with tariffs or trade barriers on U.S. exports. Only 15% of countries with a trade imbalance will face reciprocal tariffs, but these account for most U.S. imports and bulk of the trade deficit.
The list of targeted countries includes China, Mexico, Canada, the nations of the European Union, as well as potential alternative sourcing partners such as India and Vietnam. Tariff levels will vary based on foreign tariff rates for U.S. exports.
Levine noted that despite earlier reports of postponements, Trump stated that global duties on automotive and pharmaceutical imports would be announced soon, possibly before April 2. Additionally, an executive order signed Monday will apply 25% tariffs on top of existing tariffs to goods from any country purchasing oil from Venezuela, potentially impacting China, Singapore, Vietnam and India.
Further clouding the outlook, the U.S. Trade Representative this week is also holding public hearings on proposed port call fees targeting Chinese-made vessels. American cargo owners, exporters, port labor and ocean carriers have objected, citing major threats to their businesses.
Heightened fears of steep U.S. tariffs on EU alcohol imports led the U.S. Wine Trade Alliance to advise members to halt all shipments. However, overall U.S. import demand suggests shippers continue to frontload due to tariff uncertainty. This is reflected in the recent buildup of empty containers at the ports of Los Angeles and Long Beach.
White Paper: Cannabis, Compliance, and Driver Retention
As marijuana usage becomes more culturally accepted and legalized across the U.S., the trucking industry faces new challenges—particularly around driver retention. Navigating the complex relationship between state-level legalization, federal regulations, and Department of Transportation (DOT) policies is proving to be a critical issue for carriers and drivers alike.
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Don’t miss out—download your free copy now to gain a deeper understanding of the challenges and opportunities in this critical area of the trucking industry.
Survivor of massive I-35 crash sues Amazon, ZBN Transport for over $100M
According to the lawsuit filed by Nathan Jonard, attorney Bradley Beckworth said his client’s life “was forever changed by an act of unimaginable destruction” when Solomun Weldekeal Araya rammed his tractor-trailer into a line of traffic.
The complaint, obtained by FreightWaves, seeks over $100 million in damages from Amazon Logistics, ZBN Transport and Araya himself – who was arrested a day after the incident and charged with five counts of intoxication manslaughter and two counts of intoxication assault.
It stated that Jonard was southbound on I-35 when construction on the interstate halted traffic. At the same time, Araya was behind Jonard, hauling a full load of cargo for Amazon as an independent contractor with ZBN Transport.
Once Jonard’s vehicle stopped, the complaint stated Araya failed to slow down or stop, resulting in a high-impact, high-speed collision.
“Eyewitnesses later confirmed the horrifying reality: Defendant Araya never even touched the brakes,” the complaint stated. “He slammed into car after car after car, unleashing destruction across the highway.
“The force of the collision caused Plaintiff to lose consciousness. He woke up in a mangled vehicle, disoriented, and in agonizing pain. His head and legs were bleeding. His ribs throbbed with unbearable intensity.”
Emergency responders arrived and transported Jonard to Dell Seton Medical Center, where doctors treated him for a number of injuries from broken ribs and other bones and a herniated C5/C6 disc “causing excruciating nerve pain” and lacerations all over his body.
The complaint stated that Araya failed a field sobriety test after the incident and a detective determined that he was impaired by CNS depressants at the time of the collision.
“CNS depressants are an overarching category of medications that include sedatives, tranquillizers, and hypnotics, and are known to slow down signals sent between the brain and the body,” the complaint stated.
Furthermore, the complaint stated that Araya had multiple previous hours-of-service violations and prior hazardous moving violations while operating commercial vehicles.
The complaint accuses Araya, Amazon “and/or” ZBN Transport on several counts of negligence.
“This is a tragedy for all involved,” said Beckworth in an emailed statement to FreightWaves. “And perhaps the most tragic part of it is that it was completely avoidable. Amazon and ZBN Transport used a driver who had multiple prior moving violations and had several violations for exceeding his allowable driving time limits in the week before this tragedy. And, he failed 6 different drug and intoxication tests taken after the wreck. These defendants needlessly endangered our entire community. On behalf of Mr. Jonard, we intend to hold them accountable and, hopefully, we can prevent other tragedies like this from happening in the future.”
Beckworth asked anyone who has information about the wreck or people involved to call his office, Nix Patterson LLP.
Beckworth added that he thinks this case “should serve as a strong message to our legislators who are meeting in session in Austin.”
“Right now, powerful big money corporations are doing everything they can to limit the right to a jury trial in cases like this,” he said. “They want to limit the amount a family can recover for pain and suffering to $500,000 for their entire life. Yet, at the very same time, they are trying to protect big corporations from having a jury find out that they hire truck drivers who are on drugs and alcohol or who have had prior violations that should have kept them from ever being hired.”
“Hopefully, when legislators see facts like we are dealing with here they will think twice before they choose big corporations who are trying to take away our right to a trial by jury,” he continued.
“This is a horrible tragedy, and our thoughts are with all those involved,” said Amazon spokesperson Maureen Lynch Vogel in an emailed statement to FreightWaves. “We’re cooperating with all investigations.”
FreightWaves has reached out to ZBN Transport for comment.
The ongoing geopolitical realignment and escalating trade tensions are sending shockwaves through global commodity markets, reshaping long-established trade routes and supply chains. From copper to cocoa, and even the U.S. trucking industry, these shifts are creating both challenges and opportunities for businesses and investors alike.
The most visible impact of the trade wars has been on major freight flows, particularly in the crucial eastbound trans-Pacific ocean container lane connecting Chinese exporters to U.S. importers. This vital artery of global commerce has seen weaker volumes and falling rates, with the Freightos Baltic Daily Index showing rates at $2,188 per forty-foot equivalent unit, the lowest since December 2023. This decline reflects the uncertainty and disruption caused by protectionist policies and retaliatory measures between the world’s two largest economies.
However, the ripple effects of these trade tensions extend far beyond container shipping, touching various commodity markets in profound ways. Perhaps nowhere is this more evident than in the copper market, where the threat of U.S. import tariffs has created unprecedented arbitrage opportunities and is reshaping global supply dynamics.
Copper, often referred to as “Dr. Copper” for its ability to predict economic trends, has seen its U.S. futures prices surge to record highs on the Comex exchange. This dramatic price action is driven by traders pricing in the possibility of hefty tariffs on the crucial industrial metal. The price gap between U.S. copper futures and the global benchmark on the London Metal Exchange has widened to record levels, creating a powerful incentive for traders to shift copper into the United States.
Copper futures prices have reached a new record on tariff fears. (Chart: Bloomberg)
Kostas Bintas, head of metals trading at Mercuria Energy Group Ltd., estimates that 500,000 tons of copper is heading to the U.S. in March, compared to normal monthly imports of around 70,000 tons. This massive inflow is leaving the rest of the global market, particularly top consumer China, facing a potential shortage. Bintas predicts that this unprecedented situation could drive LME copper prices to over $12,000 or $13,000 per metric ton.
The copper market’s dislocation highlights how trade policies can create unintended consequences and market inefficiencies. While U.S. manufacturers may face higher input costs, traders with the ability to navigate these complex dynamics stand to reap substantial profits. Meanwhile, the global copper supply chain is being reshaped, with potential long-term implications for producers, consumers and investors worldwide.
While the copper market grapples with potential shortages, the cocoa market faces a different set of challenges stemming from historically high prices. Cocoa futures nearly tripled last year due to supply concerns from West Africa and are currently trading near $10,000 a ton in New York. These sky-high prices are having a significant impact on chocolate manufacturers and consumers alike.
Cocoa futures have experienced extreme volatility. (Chart: Bloomberg)
JPMorgan Chase & Co. analysts have trimmed their deficit estimates for the current 2024-25 cocoa season to 40,000 tons, down from their earlier forecast of 108,000 tons. This revision is primarily due to an expected 1.8% fall in demand as historically high cocoa prices deter consumption. Chocolate makers are feeling the squeeze, with recent earnings reports suggesting that previously resilient demand is weakening.
Cocoa price volatility is being driven by a mix of supply-side challenges and market dynamics. Extreme weather, particularly in West Africa, which produces about 70% of the world’s cocoa, has hammered yields. Droughts, heat waves and erratic rainfall – linked to climate change and events like El Niño – have stressed cocoa trees, while diseases like the Cocoa Swollen Shoot Virus have wiped out significant farmland, especially in Ghana and Ivory Coast. Aging tree stocks and underinvestment in farms compound the problem, keeping supply tight.
On the demand side, global appetite for chocolate remains strong, but recent data shows grinding (processing) hasn’t fully offset deficits, with three consecutive years of shortfall. The 2024/25 season might see a slight surplus, but inventories are still low, leaving little buffer. Market mechanics amplify this: Low liquidity in futures trading, driven by speculative funds and algorithmic trading, has led to wild swings – prices hit $12,000 per ton in April 2024 before crashing 27% in a single day due to margin hikes and position unwinding.
Structural issues, like concentrated supply from just a few countries and regulatory shifts (e.g., the EU Deforestation Regulation), add uncertainty, keeping volatility high. High prices might eventually spur more planting, but that takes years to pay off, so the roller coaster isn’t stopping anytime soon.
Turning our attention to the United States, we find that the trucking industry, often considered a commodity itself, is also feeling the effects of these broader economic shifts. The U.S. trucking market has experienced significant volatility in recent years, with the pandemic creating unprecedented challenges in securing transportation capacity.
Current data indicates that the U.S. truckload market is nearing a state of equilibrium between supply and demand, a balance not seen since 2022. This shift is exemplified by the Outbound Tender Reject Index (OTRI), which tracks the percentage of truckloads that carriers reject. Since May 2023, this index has displayed a gradual but consistent upward trend, signifying a move away from the oversupply that previously characterized the market.
Rejections have outpaced spot rates, suggesting that spot rates will likely increase. (Chart: SONAR. To learn more about SONAR, click here.)
The national outbound tender rejection rate (OTRI.USA), which measures the percentage of truckloads that are electronically tendered by shippers and rejected by carriers, has climbed to 6.88%, near the level that we consider to be inflationary for spot rates.
Meanwhile, the National Truckload Index (NTI.USA), SONAR’s national average truckload spot rate inclusive of fuel, stands at $2.25 per mile, continuing its downward trend since its most recent peak at $2.53 per mile on Jan. 11.
In other words, tender rejections have diverged upward from the spot rate trend, opening up a gap. Typically, after tender rejections move (either up, when capacity is tightening, or down, when capacity is loosening), spot rates follow in the same direction. When capacity is tightening relative to demand, rates go up; when capacity is loosening relative to demand, rates go down.
For that reason, we believe that truckload spot rates are set to go up.
The Outbound Tender Reject Index shows the percentage of truckloads rejected by carriers. (Chart: SONAR. To learn more about SONAR, click here.)
In regions like Dallas and Atlanta, the OTRI figures have surpassed the national average, at 9.9% and 8.53%, respectively. This indicates tighter capacity, with carriers in these areas more frequently rejecting tenders. The underlying reasons for this increase can be traced back to a convergence of reduced capacity and shifting priorities among carriers who now favor loads offering better financial returns. The focus has been on maximizing operational efficiency amid fluctuating demand.
Furthermore, specific areas like the Pacific Northwest have seen a notable rise in the Flatbed Outbound Tender Reject Index (FOTRI), driven in large part by strategic cross-border timber and lumber shipments to Canada in anticipation of impending tariffs. This increase highlights the targeted manner in which capacity is being allocated according to market conditions and anticipated economic pressures.
The truckload market’s incremental move toward equilibrium displays a restrained but deliberate tightening as capacity adapts to the current economic landscape. While this realignment presents challenges, particularly in securing optimal loads and building density in desirable lanes, it also underscores the market’s ability to adjust and respond to prevailing economic conditions.
Notably, while tender volumes have declined significantly in recent months, rejection rates have remained relatively stable. This suggests that the truckload market has tightened more than many realize, with carriers becoming increasingly selective about which loads they accept. Large fleets have been parking and selling trucks over the past year, with enterprise carriers like Werner and Marten Transport reporting significant reductions in tractor counts.
The ongoing geopolitical realignment and trade tensions are reshaping global commodity markets in profound and often unexpected ways. From the copper market’s unprecedented arbitrage opportunities to the cocoa industry’s struggle with record-high prices, and the U.S. trucking market’s delicate balance, these shifts are creating a new landscape for businesses, investors and policymakers to navigate.
Perhaps the only safe bet to make right now is on more volatility, for longer.
