Cain Adams with Trinity Logistics/Longboard Logistics in Meridian, ID, told us on Jan. 27 that freight pricing has gone down, and the Coronavirus factors in.
With a tagline of “Corona or bust!” on his column, Cain said, “Corona and a lime sound good about now, but hold the virus.” And, he continued, “Shippers are back in charge of freight. Changing of the guard if you will. We expect freight pricing to keep sliding through February and level off late in the month. A shipper in McAllen let us know onions will start loading on the Feb. 1.”
Cain added, “Fuel has dropped to $52 a barrel due to the Coronavirus and China’s Lunar New Year Celebration, which lasts 23 days. That’s going to be one lousy party! Fewer steamships are moving. Steamship owners are worried their vessels will become quarantined and cancelling pickups. Twenty-nine was the number cancelled as of Jan. 24, so if your Amazon order looks behind, you may want to just buy American.”
There’s more, he said, “The virus has created uncertainty in the markets, which seems to outweigh the unrest in the Middle East. Maybe this is a good time to look for buying opportunities in the stock market?”
Optimistically, he said, “Once this virus is gone, demand will definitely be back. I just hope the backlog of ships is completed before we start in California, or we can expect some inflated freight rates.”
On the East Coast, he noted, “We are seeing more freight coming out of Alabama due to the expanded port. That’s going to push rates up coming out of the South but lower rates going into that area. We need to watch this develop. In coming years we may see more freight circumventing the West Coast ports. which will help reduce rates out of there during the summer months. This has been the plan for a while and the reason the Panama Canal was widened. It’s working!”
Cain also said that housing starts for 2020 “are looking great,” adding, “Permits for building in the South are on the books. That means freight rates should look similar to 2019 freight prices and a touch higher. Interest rates are still low, and consumer confidence seems good.”
And, he concluded, 2020 “is going to be a great year!”
If you have specific questions for Cain, contact him at Longboardload@gmail.com. He extends an offer to treat you to a Corona. Beer, that is.