Shipping and Logistics

October Logistics Update

Written by Sandy Williams

Shipping in the various transportation sectors is relatively subdued in October.

Low freight rates for seaborne cargo continues to be a problem for carriers, according to the Oct. 15 MID-SHIP Report. Low volumes, weak worldwide economies, and a strong dollar are affecting rates for both bulk carriers and container lines.

The Baltic Dry Index was at 762 as of Tuesday, Oct. 20, up 15 points from yesterday but well below its high point this year of 1222 on Aug 5, 2015. The Cape Index rose 87 points giving support to the BDI increase. The Panama and Supramax Indexes fell 9 and 2 points, respectively. The BDI is the weighted composite index of the Cape, Panamax and Supramax indices. The BDI tracks shipping rates for dry bulk cargos like iron ore, coal and grain and is considered a barometer for global steel trade.

Barge traffic is slowing with grain shipments down 5 percent from last week and 32 percent from the same time last year. Grain exports are down and river traffic is relatively flat. Winter maintenance is scheduled for locks on the Upper Mississippi ending barge loads heading to points north of Quincy, Illinois.

The American Trucking Association reports that For-Hire Truck Tonnage increased 0.7 percent in September after decreasing 0.9 percent in August.

“Right now, we’re in a bit of a soft patch because inventories are higher than one would expect,” ATA Chief Economist Bob Costello said during ATA’s Management Conference & Exhibition. “Once that normalizes, we should see a healthy rebound in freight volumes.” Costello added that business is generally good across the sector but that the shortage of drivers makes it difficult for fleets to add capacity. Earlier this month, ATA reported that there will be a shortage of 48,000 drivers by the end of 2015.

DAT Trendlines reported that flatbed rates dropped 2 cents to $2.01 per mile during the week of Oct. 4-10. Highest rates were reported in the Northeast at $3.09 per mile. Diesel fuel averaged $2.53 per gallon as of Oct. 19.

Rail traffic for the week ending Oct. 10 fell 2.78 percent year over year to 556,233 carloads and intermodal units. Metallic ores and metals carloads were down 23.5 percent to 20,084 carloads.

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