The GFG’s member for Illinois and Wisconsin kindly shares their knowledge…
“…Cold and snowing here which is playing havoc with getting cargo delivered.
You may be aware of the truck power shortage in the U.S. Below is a summary of the situation that we have sent to some partners as they request deliveries.
Would you be so kind as to send this out to all of the GFG partners?
We want to make sure that all partners are aware of the current severe shortage of truck power and drivers in the U.S.
The shortage of equipment and drivers is the most extreme in our experience with full container deliveries.
In Chicago, Texas and most of the southeast U.S. we are seeing, in many cases, that truckers are booked and can’t accept deliveries until mid – February. This is resulting in additional storage and demurrage for the account of the importer.
As well, on steamship line door moves we have had 2 steamship lines tell us they could not find truck power for 1-2 weeks. They advised that our options were to have the cargo can sit at the port/ramp and accrue thousands of dollars in storage and demurrage or they would be happy to terminate the shipment at the port/ramp and we can arrange our own delivery. In both cases the containers were already on storage when the steamship line dropped this in our lap.
Within in an hour we were able to find 2 truckers that could pull the container within 2 days. In both cases the truckers were preferred carriers for these 2 steamship lines. Our take on this is that the steamship lines are not really trying to find a better solution. It appears that they give the delivery to the first trucker that will accept it regardless of when the delivery date is.
We strongly urge partners not to book any steamship line door moves for the foreseeable future.
When we can find a truck that can deliver in 1-2 days, in many cases higher rates apply.
Here is a recent article describing the issues some very large importers are having:
A Shortage of Trucks Is Forcing Firms to Cut Shipments or Pay Up
A nationwide truck shortage is forcing thousands of shippers into a tough choice: postpone all but the most important deliveries, or pay dearly to jump to the front of the line.
Michelin North America Inc. cut its daily shipments of synthetic rubber from one plant by a fifth earlier this month and is at times paying double its usual price for temperature-controlled trucks, said Eric Stuch, a logistics manager at the tire manufacturer. Meal-kit service HelloFresh S.E. recently enlisted one of its produce suppliers to help move shipments to the airport in a snowstorm.
Several factors have converged to overwhelm the trucking market. Freight volumes in December hit near-record levels for that time of year, on the back of a strengthening economy. Retailers are replenishing stocks after one of the strongest holiday sales seasons in recent years. Manufacturers are also shipping more cargo; in December, industrial production had the largest year-over-year gain since 2010, according to the Federal Reserve.
What’s more, bad weather and a new federal safety rule that took effect in December have crimped the supply of available trucks. Diesel prices are near a three-year high, adding to transportation costs.
In the spot market, where shippers hire trucks on short notice, there were about 10 loads waiting to be moved for every available truck in the week ending Jan. 20, compared with three in the same week last year, according to online freight marketplace DAT Solutions LLC.
Spot-market prices for dry vans, the most commonly used big rig, are up more than 20% year-over-year. Analysts expect long-term contract rates that shippers negotiate with carriers to rise by between 5% and 8% this year.
Beer distributor Constellation Brands Inc. and food companies Campbell Soup Co. and the J.M. Smucker Co. have all cited rising freight costs in recent earnings calls.
“Literally every possible thing that could be going against a shipper is happening right now,” said Michael Redisch, a principal at Chicago-based freight broker Atomic Transport LLC.
Trucking fleets are adding capacity, but it can take months or even years to catch up with demand. Meanwhile, they are getting pickier about which manufacturers and retailers they work with. Companies sometimes find it hard to convince truckers to pick up cargo at warehouses known for long loading times or traffic jams at the gate.
Mr. Stuch, the Michelin logistics manager, said the company “hit a wall in December,” when some regular carriers didn’t want to haul its cargo because of wait times at a few plants.
Michelin pushed employees to speed up receiving and is prioritizing shipments needed to keep production running over less-essential freight. Orders are spread out to avoid overloading carriers at the end of the week.
The company can only do so much, particularly when it needs a temperature-controlled truck, where loads outstrip available big rigs by a ratio of about 15 to one, according to DAT. In Louisville, Ky., Michelin is paying $2,600 on the spot market for some of those trucks, roughly twice its long-term contract rates. Some non-refrigerated loads are being shifted over to rail.
A new federal safety rule in December requiring drivers to track their hours behind the wheel with electronic logging devices, or ELDs, has exacerbated the problem. Prices shot up for some routes that now might take two days instead of one because of stricter timekeeping.
January is typically a quiet month for freight. But in the first three weeks of January, national average spot truckload rates were higher than during the peak season in 2017, according to DAT.
Director of Logistics
M. E. Dey & Co., Inc