Jaguar Freight | The Weekly Roar

In this week’s Roar: a new Office of Multimodal Freight Infrastructure, confused shippers in the EU, air operators flying high, a shrinking pool of container boxes, and benchmark diesel prices continue to fall.

Cyber Monday brought some upgrades to the Department of Transportation—a new Office of Multimodal Freight Infrastructure and Policy. With $2m in funding for the current fiscal year and a request for $7.3m for the next, the aim is to maintain and improve U.S. supply chains. Announced by the White House, the new bi-partisan founded department expands the port envoy initiative started in 2021 and is in place to help align a mishmash of state freight plans.

Upcoming changes to the EU Emissions Trading Scheme (ETS) have caused confusion for shippers. Starting in 2024, the ETS—a carbon pricing system that covers shipping emissions—will cover 40% and escalate to 100% by 2026. To complicate things further, any service that starts or ends outside of the EU will be charged at 50%. The real issue is carriers are planning to recover costs through surcharges and those charges aren’t consistent. This has shippers concerned about a lack of transparency and a fear that surcharges won’t reflect the real cost of the ETS. Look for more information from Jaguar Freight on ETS soon.

In air cargo, charter operators are flying high. One significant factor is a shortage of widebody freighter aircraft, but the energy, automotive, and government/humanitarian sectors—and let’s not forget ecommerce—have driven demand sky-high. As an example, there are rumors that the pricing for long-haul charters is hitting $1.3m.

Shipping lines have been offloading all those containers they added over the last few years, and they’re not being replaced. That translates to a shrinking pool of boxes, with one estimate putting the decline at 2.6% for 2023 but an even greater contraction for 2024. However, things are expected to improve in 2025, as carriers begin to purchase containers again, as global trade hopefully starts to rebound.

Benchmark diesel prices have been heading down. For the eighth time in the past 10 weeks, the Department of Energy/Energy Information Administration benchmark diesel price fell. The latest average weekly retail diesel price is $4.146 a gallon, the lowest since July 31. It’s been down five consecutive weeks since Sept. 18,. At a meeting on Nov. 30, OPEC members made no major announcements about cutting production which is likely to further dampen prices.