During our Q3 Market Insights Live! webinar, C.H. Robinson experts provided in-depth analysis of current supply and demand trends, our updated forecast, and the impact of global import volumes on North American freight transportation. We also answered many of your questions live. With a record number of attendees, we were unable to get to many great questions. So we’re sharing some of the most common ones here. These topics are highly relevant to a wide range of shippers, and the answers may help you make more informed supply chain decisions.
The carrier community has been aggressive in attracting drivers in the following ways:
- Increased compensation
- Increased guaranteed compensation (a blended base salary with mileage compensation)
- Updating and professionalizing benefits packages
- Offering newer, well-equipped tractors (allowing the driver to pick out options like color)
- Giving increased attention to relays that turn a driver back sooner
- Broadening recruiting outside of traditional labor pools (especially among veterans and women)
2. Is the shortfall in drivers going to advance the push to self-driving, long-haul freight operations?
The near-term and long-term challenges surrounding driver employment are certainly front and center in the carrier industry. Some larger carriers are clearly interested in supporting the testing of autonomous trucks as part of their long-term business strategy. However, the thresholds of technology, regulatory, legislative, and social acceptance that still need to be met—that will eventually impact the driver situation—are still many market cycles away. Progress will continue toward increased testing and implementation in phases.
3. How does the port congestion and increased port freight affect national trucking capacity? Do we find that drivers leave the long-haul market to work more directly?
National truck capacity is influenced by regional and seasonal demands. The capacity migrates to the opportunities. With imports currently at strong and sustained levels, capacity that might not normally be attending to inland from California is now interested, as there is regular freight and high pricing. However, this does disrupt some of the historical patterns that some carriers have pursued and can influence the capacity and pricing experiences in corridors unrelated to serving import volumes.
Generally speaking, we have not heard that drivers are leaving longer haul services for drayage en masse. Most of drayage is serviced through owner-operators serving other drayage companies, conducted under an independent contractor relationship. To increase the frequency with which they can get their drivers home, we do see the national and super-regional carriers more attracted to shorter length of hauls in today’s market. Because of this, it appears there is a shift to a growing percentage of long- haul loads being handled by smaller carriers.
4. Do you have any information regarding new vessels and the production of containers to support the crisis?
The ocean carriers have signed more than 300 vessel orders in 2021 already. These will have a slot capacity of 2.88 million 20-foot equivalent units (TEU) or 11.75% of today’s overall container capacity. In addition, the carriers and container leasing companies have placed new container orders to help alleviate the situation. However, with global congestion, simply flooding the market with new empty containers is not the answer, as we could see an oversupply of containers once the market stabilizes.
5. One historical disruptor has been parked vessels. Do the steamship companies still have vessels parked? If so, why?
The idle vessel landscape has changed a lot. A year ago, 11% of the fleet was idle or deployed with smaller trades. This has decreased to 2.5%, which includes ships out of service for compulsory surveys or repairs. Therefore, one can hypothesize that nearly all the available vessels are in rotation right now. The reason it doesn’t feel like it’s helping is directly related to the current congestion.
6. How long does C.H. Robinson expect container rates to remain as high as they are? Are there any recommendations to reduce the container costs for freight that have to go inland? Are there recommended alternatives to taking the containers inland, such as transloading at the ocean port? Are some U.S. ocean ports better equipped to weather the current market conditions?
The container rates are expected to stay elevated if imports remain strong. Based on historical data, we can see that spot rates tend to decline when volume softens. Leveraging transloading options at the port is a strategy to mitigate costs as three 40’ containers can move in two 53’ dry vans. However, proper planning is necessary for this solution because there are several moving parts. While some U.S. port terminals are more fluid than others, how capacity is deployed can sometimes make these options a challenge.
7. Do you believe the lack of chassis for container loads will be solved anytime soon?
As we indicated in our webinar, the lack of chassis is impacting specific locations. Imports and exports are equally affected. It ‘s hard to predict when the lack of chassis will be alleviated. While the solutions are complex, the main catalysts to resolve this issue are lower demand and better turnaround on empty containers to the container yard depots.
8. How are carriers and border drayage transfer companies in Mexico prioritizing their crossings?
Unfortunately, there is no standardized process across the transfer community for prioritization. However, transfers contracted by C.H. Robinson are held to a first in, first out prioritization, based on receiving appropriate customs documentation and trailer arrival.
9. Is Central Canada (Ontario and Quebec) under similar impacts as the eastern regions of the United States?
The current truckload environment for intra-Canada freight transportation from the origins of Ontario and Quebec is much more balanced than the current environment within the United States. We are starting to see some imbalances develop for volumes from the United States into these provinces. However, the resulting shippers do benefit from the additional lead time for planning.
Watch the webinar recording for more freight transportation market answers
Thank you to those who attended our live event. If you missed it or would like to watch it again, the Market Insights Live! recording is available on our website.
Our next Market Insights Live! webinar is coming up in November 2021. Watch for the date and find the latest trends, in-depth analysis, and ideas to prepare you for what the market has in store by visiting our North American Freight Market Insights and Global Forwarding Insights hubs.