Today's Pickup: Falling unemployment rate creates a headache for the logistics industry

 (Photo: Unsplash)

(Photo: Unsplash)

Good day,

The national unemployment rate fell below 4% in April, which calls for celebration. But in the logistics industry currently going through a labor shortage patch, the news is far from welcome. Every segment in the industry - be it transportation, warehousing, or the last-mile sector - is facing a people crunch and with falling bottom line margins and increasing competition, logistics majors are struggling to retain and fill up vacant positions in their supply chain. 

These businesses would also have to contend with the warehouse space crisis. The surge of e-commerce has given a boost to warehousing, but realtors across the country are finding it hard to develop new spaces due to steep land rates near densely populated regions. A CBRE report on warehouse modernization explained that the U.S. warehouse inventory is ‘aging’ and modern warehouse space accounts for a meagre 11% of the country’s total warehouse inventory.  

Did you know?

Global seaborne trade is projected to rise to over 12 billion tonnes in 2018, working out at 1.57 tonnes for every person on the planet, according to data published by Clarkson Research. This aggregate per capita figure is up almost 70% on two decades ago, during which time the world’s population has risen by 27%. 

Quotable:

“Standards are important because if industry doesn’t set the stage for success, what happens? Government gets involved and that’s something we don’t want to happen.”

- Chris Burruss, president of BiTA while talking at the BiTA Spring Symposium

In other news:

Truckload linehaul, intermodal rates hover near record highs

The Cass Truckload Linehaul Index continued the acceleration that began in 2017 by posting a record 8.2% year-over-year increase, with the measure hitting a reading of 134.8. (Truckinginfo)

FMCSA’s Ray Martinez seeks dialogue with fleets, drivers

The head of the FMCSA spotlighted key trucking issues — including hours-of-service rules, electronic logging devices and truck parking — during remarks here at an industry meeting, and stressed that he wants his agency to build a positive relationship with fleets and drivers. (Transport Topics)

Projections for 2019 freight market: things could get ‘murky’

The current market remains strong and healthy, according to FTR's Eric Starks, but uncertainties lie ahead. (FleetOwner)

China to cut import duty on cars to 15% after truce with Trump

China will cut the import duty on passenger cars to 15 percent, boosting auto makers such as BMW AG and Ford Motor Co. just as the immediate threat of a trade war with the U.S. recedes. (Bloomberg)

MSC tries 'last-resort' emergency surcharge to offset rising cost of fuel

MSC is the first ocean carrier to react to diminishing returns caused by soaring fuel costs and announce an emergency bunker surcharge across its services. (Loadstar)

Final Thoughts:

The ocean freight rates have been on a seesaw from the start of 2018, as prices climbed over the dying weeks of December 2017 due to the high festive demand in the U.S. before faltering and stabilizing a bit for the next two months, before it had a free fall after the Chinese New Year, to hit rock bottom at $812 per FEU on March 25, down from $1412 exactly a month before. 

The trend reversed and prices started pushing up again, to nearly hit the year-on-year levels till it slipped a bit again this week to record $1334 per FEU on May 20. On the Asia-Europe trade lane, the prices are 16% below year-on-year rates, while the bunker costs have leapfrogged by around 50%. Attempts by carriers to increase FAK rates have till now ended in a failure. But as bunker oil rates keep rising, container lines are being pushed to the corner to figure out a way to recover from the Q1 debacle. 

Hammer down everyone!

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