Georgia’s Port Authority continues to make steady progress on its latest rail terminal project, which is expected to be a game changer for port operations across the South and Mid-West. Although trucking companies have a reason to be excited considering the favorable pricing trends, there is still a bit of a challenge with the demand outlook as it remained mixed throughout July. Meanwhile, the demand for cold chain storage continues to grow.
We cover all the intriguing headlines across the freight world in the last month. Continue reading for more in-depth analysis.
Blue Ridge Connector, the widely anticipated Georgia Ports rail terminal project, is progressing smoothly.
This new rail terminal is near Gainesville, linking Northeast Georgia to the Port of Savannah's global container ship services. Georgia Port Authority expects the rail terminal to become a job creator while serving various industries like poultry and heavy equipment, with refrigerated cargo transport crucial to shippers. It is also a strategic move within the GPA's broader rail strategy, which includes the thriving Appalachian Regional Port.
The inland terminals reduce supply chain emissions by shifting cargo transport from trucks to rail, offering faster and more cost-effective options for shippers, and stimulating economic growth in their regions.
Trucking companies seem optimistic about a potential market upturn after the elongated period of a downturn that purged many trucking establishments.
However, no one is yet predicting a dramatic surge in business. In fact, industry leaders are containing their excitement until they get confirmation of concrete uptrends, as nothing is a ‘given’ within the freight industry. This cautious reception is despite pricing trends heading in the right direction with rising contract rates. While spot rates have exceeded contract rates in some cases, volumes for July remained sluggish for some large carriers.
Demand for cold chain storage and reefer transportation is booming. This is a welcome growth, considering 14% of food and beverages are wasted due to inadequate refrigeration facilities. But what exactly is driving cold chain storage growth?
In an interview with Supply Chain Digital, Brenda Ong, executive director of logistics and industrial at Cushman & Wakefield, highlighted some of the reasons for cold chain storage growth:
According to Ong, the cold chain market is an attractive long-term investment due to limited supply and steady growth, leading to increasing rent and capital values. However, investors must consider challenges such as navigating regulations and potential limitations of short lease tenures. Careful site selection and a clear strategy are crucial for success.
A recent explosion of a hazardous container aboard the Yang Ming vessel has led to the closure of the Ningbo port in China.
The port has been shut down to contain the incident, and no casualties have been reported. Expectedly, this situation will complicate the already strained Asian shipping schedules. The closure will be challenging for shippers, considering existing delays caused by Typhoon Gaemi and peak import demand in the US and European markets. Before the closure, there were already reports of berthing delays at other major ports, including Singapore.
The incident highlights the ongoing challenges the container shipping industry faces in maintaining efficient supply chains.
Trucking companies are facing challenges with maintaining operations due to rising costs, including insurance premiums, which have increased significantly in recent times.
But beyond that, there are other factors, such as the soft freight market, labor shortages, and concerns over large legal settlements (nuclear verdicts) that also negatively impact the industry, pushing several companies (including the larger ones) out of the industry in the last few years. Amid so many factors working against the industry, stakeholders ponder how they can ensure survival.
Fleets looking to navigate these challenges are adopting strategies to manage rising insurance costs, such as exploring alternative solutions like self-insurance and leveraging technology. Additionally, with the growing importance of cybersecurity, understanding how insurance intersects with digital threats is becoming increasingly crucial.
Shippers looking to mitigate a potential strike by longshore workers at East Coast and Gulf Coast ports are increasingly rushing to get their container imports of holiday goods into the country.
If it happens, the strike could result in catastrophic supply chain disruptions, significantly impacting businesses operating in the regions. Proactive retailers are shipping earlier and diverting cargo to the West Coast. Ongoing supply chain disruptions and higher shipping costs have already affected shipping schedules, as evidenced by the early June peak. With the potential strike increasing concerns about the operations during the peak season period, the freight industry is urging both sides to resume negotiations.
Retail sales grew in July, driven by back-to-school spending and special promotions.
Although consumers remain cautious, they have proven they are okay with spending on essentials when they find good deals. Online sales saw the biggest increase, followed by health and personal care stores and clothing and accessories stores. Overall, sales were up across most categories, with only electronics and appliance stores experiencing a decline.
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