- Moller-Maersk intends to acquire Pilot Freight Services, for a planned transaction price of $1.68 billion. Maersk’s vision is to keep building an integrated logistics offering for its customers. Pilot brings 87 stations and hubs throughout North America.
- The ability to acquire is driven in A.P. Moller-Maersk’s record earnings in 2021. Maersk reported year-end results of $24 billion profit. Revenues increased 55% to $61.8 billion while EBITDA was reported at $24 billion allowing for $16.5 billion in cash flow.
- U.S. oil production is expected to eclipse 12.3 million barrels a day production set in 2019 in 2023 as producers rally with the expected price of oil continuing to climb. Globally, consumption is expected to hit 100.6 million barrels a day in 2022.
- Brent crude rose to its highest level since October of 2014, hitting $96.16 per barrel. Potential sanctions and market concerns with the possible Russian invasion of Ukraine are setting off uncertainties in the market.
- According to the International Energy Agency (IEA), one of the biggest reasons for the tighter market is due to OPEC and its allies struggling to meet their self-imposed output targets resulting in outages, capacity and technical issues.
- The American Transportation Research Institute (ATRI) illustrates the annual list of the top 100 bottlenecks for US truckers. For the 4th year in a row, the intersection of I-95 and SR 4 in Fort Lee, New Jersey tops the list with an average peak speed of 22.4 mph.
- LTL carrier Yellow Corp. reported mixed results in 2021. Revenue increased 13.7% to $5.1 billion. However, Yellow reported a net loss for the year, which was impacted by a pension benefits transfer. Operating ratio has been improving with Q4 reflecting a 95.7 ratio. Yellow is the 8th largest LTL carrier in North America.
Top Trucker Congestion Points
ROCKFARM One View
Game on as higher truckload rates took hold to start 2022. The Rockfarm Truckload cost per mile rate rose to $3.85 and increased again through the first half of February to $3.95 per mile. Capacity remains tight as shippers scramble to find drayage and truckload shipment options. The ports remain relatively stable as imports continue to backlog the ports with ships waiting for berths. Adding to the challenges are unstable sailing schedules that bypass ports, creating export challenges as shippers and drayage carriers attempt to
identify empty containers for loading.
Looking toward the horizon, shippers are moving toward flexible truckload bid strategies that lock in rates for 30, 60 or 90 days versus the annual bid cycles. Outside of the rising freight expense, the challenge for shippers is maintaining a systematic process within their traffic and logistics workflows to avoid disruptions to shipment schedules. A higher percentage of spot freight tends to push logistics teams to maximum work capacity, resulting in potential shipment delays and higher instances of missing customer delivery dates.
Fuel costs are a part of the overall rise in truckload rates as January’s national average rose to $3.72, followed shortly afterward to $3.90 for the first week of February. With market uncertainty within the global crude market, the price of oil is not heading down any time soon. Demand is up from last year and production commitments are not being kept by OPEC and its partners. As a result, U.S. production is ramping up, quickly illustrating a robustness to meet the demand. At $3.90 per gallon, we still have a way to go to hit the high crude make we saw in July of 2008 when the average cost per gallon reached $4.76.
Work With the Experts
For more information on TMS automation and securing the best e-commerce solution for your business please reach out to our Supply
Chain Coach team.
FOR MORE INFORMATION, PLEASE REACH OUT TO INFO@ROCKFARM.COM.
By Brad Stewart
Brad’s journey into logistics began as a Marine Officer and transitioned from the LTL docks to the non-asset side within the logistics service provider arena. As a co-founder of Rockfarm, Brad drives our business development efforts and delivery of our promise. An Arizona native, Brad enjoys spending time outdoors in his home state with his wife and family.
“Our approach to the market allowed us an opportunity to push forward in 2008 and enable our mission, “lower the cost to serve” to stand as a cornerstone to our company today.”
Wolf, C. (2022 February) Maersk to Buy Pilot Freight Services
Tobben, Sheela. (2022 February). US Sees Record Oil Production Next Year Moving Even Higher
The Maritime Executive. (2022 February). Maersk Reports Record-Setting $24 Billion Profit for 2021
Hellenic Shipping News. (2022 February). Oil steadies near seven-year high on Ukraine-Russia tensions
Hellenic Shipping News. (2022 February). IEA warns of ‘small cushion’ in oil markets, expects supply
shortfall to deepen
Supply Chain Digest. (2022 February). Supply Chain Graphic of the Week: The top 100 US Truck
Bottlenecks in 2022
Ronan, D. (2022 January). Yellow Reports Mixed Q4 2021 Results