Advisories

Typically, shippers’ cost pressures increase during peak season as individual companies (UPS, FedEx, etc.) institute higher surcharges to cover increases in their operating costs.

UPS announced its 2024 rate increases, which are set to go into effect on 26 December 2023. Rates for UPS Ground, UPS Air, and International services will increase by 5.9%. 

FedEx matched UPS’ figure, announcing its own 5.9% increase.

The U.S. Postal Service (USPS) will not institute any peak season surcharges, ending a practice that began in 2020.  

Amazon’s ground transport service will not add peak season fees, undercutting much of the market. 

Transpacific capacity will increase by as much as 25% on the U.S. West Coast and 35% on the East Coast in the coming months. Expect low freight rates but also potential degradation in both service and schedule reliability. 

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The widening imbalance between available air cargo capacity and demand has dragged global rates to their lowest level since the start of the pandemic. Demand growth in air cargo “simply does not exist” and the sector may not see any growth for several quarters, according to several industry analysts.

Source: Baltic Air Freight Indices powered by TAC 

These informative documents highlight important supply chain news and events using information from the industry’s leading journalistic sources. Content sections include market trends, disruption, technology advancements, infrastructure investments, government regulation, tariffs, and much more! You can subscribe to future editions here.

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The Panama Canal will maintain a draft of 44 feet (13.41 meters) in the coming months. The Panama Canal Authority reduced the total number of ships that can pre-reserve a transit from 19 to 14, with that reduction expected to last through 21 August 2023. This reduction means <34 ships can move through the canal in both directions each day, compared with the 34-42 it normally handles at peak capacity. Panama Canal administrator Ricaurte Vásquez called the ongoing low drought situation “unusually severe” and warned that “significant restrictions” would remain in place until September 2024.

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Effective 1 October 2023, US Customs and Border Protection (CBP) will increase the minimum and maximum Merchandise Processing Fee (MPF) for formal entries. The MPF minimum will increase to $31.67 (currently $29.66), and the maximum fee will change to $614.35 (currently $575.35); however, the percentages will remain the same. The MPF ad valorem rate of 0.3464% will not change.

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Yellow Corp. representatives recently notified union officials that the company will cease operations and file for bankruptcy. Yellow was essentially a conglomeration of short-haul trucking firms bought in recent decades, and the 99-year-old company grew to become a major less-than-truckload (LTL) stakeholder over time. The Nashville-based company had been struggling with considerable debt, and the shutdown impacts roughly 300 cargo terminals and 30,000 employees.

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Teamsters’ local unions representing 340,000 full- and part-time workers at United Parcel Service Inc. (UPS) voted 161-1 to endorse a tentative agreement reached on July 25th, recommending its passage by the full membership.  

The agreement, estimated at roughly $30B by the union, provides wage increases, one more paid holiday, and air conditioning in the delivery trucks. The deal also eliminates a two-tier pay system and forced overtime for delivery drivers.  

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