Shipping Trends in 2022 and Beyond
Biden-Harris Administration Announces New Initiative to Improve Supply Chain Data Flow
With the Biden-Harris Administration focusing on current supply chain issues, lowering the cost of living for families in need, and speeding up the transportation of much needed goods, the future looks promising. The administration also looks to address long term weaknesses caused by underinvestment, outsourcing jobs, and offshoring rather than investing in sustainability. This looks to bring more resilience to the supply chain globally.
The Biden-Harris Administration has announced the launch of Freight Logistics Optimization Works (FLOW), an information-sharing initiative to conduct key freight information exchange between parts of the cold supply chain. It is designed to support businesses throughout the supply chain and improve the accuracy of information from end to end. With 18 initial participants representing diverse perspectives across the supply chain working together to ease supply chain congestion, speed up the movement of goods, and cut costs for American consumers.
FLOW looks to continue to build on ongoing supply chain achievements, including:
- Reduced Dwell Time in Los Angeles and Long Beach
- Alleviated congestion at the Port of Savannah
- Secured commitments to move towards 24/7 operations
Click Here to learn more about the positive impacts of FLOW.
Truck Tonnage Up 2.4% Year-Over-Year in February
Truck tonnage in February increased 2.4% compared with the same month a year ago, and American Trucking Associations’ advanced seasonally adjusted For-Hire Truck Index equaled 115.3, the federation announced March 22. The index remained unchanged month-to-month, after moving up 0.4% in January, said Bob Costello, ATA’s chief economist. “February was the first month that the index didn’t increase since July,” Costello said. “Despite a string of gains, the index is still off 1.8% from March 2020. The index is also off 4.2% from the all-time high in August 2019.”
Trucking represents 72.5% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods, ATA said. Trucks hauled 10.23 billion tons of freight in 2020, and motor carriers collected $732.3 billion, or 80.4%, of total revenue earned by all transport modes. Meanwhile, the National Retail Federation is forecasting that retail sales in 2022 will increase between 6% and 8% to total between $4.86 trillion and $4.95 trillion. While the 2022 forecast is somewhat lower than the 14% annual growth rate in 2021, it is notably stronger than the 10-year, pre-COVID-19 pandemic growth rate of 3.7%. The NRF (National Retail Federation) said non-store and online sales are expected to increase between 11% to 13% to a range of $1.17 trillion to $1.19 trillion as consumers continue to embrace e-commerce. The NRF projects full-year GDP growth of around 3.5%.
The most recent spike in fuel prices has hit smaller carriers especially hard. Since they are less likely to negotiate bulk fuel discounts, price fluctuations more severely impact their cash flow.
Trucking Sees Little Benefit from Diesel Tax Relief Plans
With fuel prices increasing weekly and U.S. citizens seeing record high prices, there has been a move by states to suspend diesel fuel taxes temporarily. In Maryland, gasoline and diesel taxes have been suspended as the state stopped collections of its approximately 37-cents-per-gallon motor fuel tax for 30 days. Georgia has also suspended its 29-cents-per-gallon gas tax and 33-cents-per-gallon diesel tax until May 31. There is a discussion of other states to follow. However, truckers whose job is to drive long routes daily will have little benefit to this new diesel tax relief plan. Motor fuel taxes are collected at both the federal and state level. At the federal level, 18.4 cents per gallon for gas and 24.3 cents per gallon for diesel goes to the federal government.