This Week in Freight
March 14, 2024
Detroit is to Canada as Laredo is to Mexico; it is the largest port of entry for commerce between the US and Canada. The Ambassador Bridge handled 1.56 million trucks. The number of crossings in 2023 dwarfs the number crossings of the second largest Port of Entry - Buffalo NY - by a factor of 2x. In 2023 Canada accounted for $774 Billion in two-way trade, coming in second to Mexico who booked an impressive $798 Billion to claim the top US trading partner spot. What about China, you ask? China’s trade came in at an anemic $575 Billion, a result that fell by 16.7 percent verses 2022, securing third place in the rankings. $26 Billion in trade is all that separates number one from number two, making the crossing in Detroit critical to trade within the United States.
When we look at the rate for a long-haul contract dry van from an asset-based provider, we see a positive rate trend developing in Detroit (depicted in the graph). In fact, the average rate of $2.17 per mile in week 10 is only 20 to 30 cents per mile off the high-water marks set last year at this time. The graph also shows us that rates for dry vans this year are better than at any time in 2022. Judge the results for yourself by setting the origin to MI_DET, carrier type to asset, equipment type to van, the transaction type to contract, mileage group to >250 miles, Rate Basis to RPM, and Fuel to Without Fuel. All signs point to near shoring as the reason for the strength in trade between the US and its top two trading partners. Near shoring primarily benefits truckload transportation and intermodal rail.
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