Tucson, Ariz. – Jim Richie, President and CEO of RedStone Logistics, said at the International Colloquium on Sweeteners on March 1 that he expects logistical problems to improve in the second half of 2022, but freight rates will remain high.
The data showed that freight problems began to improve in the late third quarter of 2022 and continue to improve in the fourth quarter, Mr Richie said. He said there were more truck drivers than before the pandemic and there would be more. He said small fleets (20 to 100 trucks) and medium-sized fleets (100 to 1,000 trucks) increased capacity to record levels, while megaflots (more than 1,000 trucks) did not add much power but focused on others. indicators to increase efficiency. But that doesn’t mean conditions return to pre-pandemic levels.
“Tariffs will never go back to the same because the truck driver was not paid,” Mr Richie said. “They’ve caught up in the last two years.”
But he noted that drivers in small fleets no longer work. They actually worked for less money.
“It’s a quality of life,” he said.
He said tender rejections (loads rejected by truckers in favor of other cargo) had fallen, which tended to lead to lower freight rates, “but no price easing has occurred”, in part due to high diesel prices.
“I see that everything will return to normal, it will be more predictable,” said Mr. Richie.
However, he said he expects the growth of e-commerce that took place during the pandemic to continue. He stressed that there is no such thing as “free shipping”, because the buyer pays for it, regardless of whether he is charged or not.
Mr Richie said he also expected stabilization in the rail market, but that “players will fight to keep prices inflated because they are making record profits”.
Ports remain “the biggest wild card,” Mr Richie said. The three-year contract of the International Union for Long Distances and Warehouses, which covers about 22,000 workers in 29 West Coast ports, expires on July 1. He said the number of ships awaiting unloading at ports would “deteriorate” due to leverage for ILWU. The main contentious point is automation, which ports see as a response to improving port performance, but unions know it will cost jobs. According to him, the union could lose at least 40% of its members.
He said shippers should strive to make purchases continuous to smooth out demand for freight. He added that shippers should also strive to become the “carrier of choice” of the carrier so that their cargo is given priority over other shippers.
“Don’t leave the trucks waiting,” he said. “Challenge the status quo.”
Logistics has improved in the second half of 2022
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