This Thanksgiving, North American transportation providers were surely feeling gratitude for the trend sweeping the supply chain: nearshoring. As manufacturers increasingly move operations to Mexico, transportation providers are quickly expanding operations south of the border. This week, we’re taking a look at how major players in the transportation industry are keeping pace with the nearshoring boom. Here are the seven headlines you need to know in an industry that's always moving.
BNSF, J.B. Hunt Transport Services, and Grupo Mexico’s Ferromex (GMXT) are partnering on a new intermodal service. The service, beginning on Jan. 1, 2024, will cut a day off of current transit times between Monterrey and Chicago and offer customers a competitive edge in fast-growing Mexican markets.
“Our organizations are committed to growth in Mexico and this joint service offering is a direct reflection of that commitment,” Katie Farmer, BNSF president and CEO, said in a Nov. 13 press release. “By utilizing the capacity and expertise of the largest intermodal railroad in the U.S., the largest railroad in Mexico, and the largest domestic intermodal carrier, this product will seamlessly connect the North American intermodal network.”
According to reporting from Supply Chain Quarterly, between 2018 and mid-2023, imports from Mexico to the U.S. grew by a staggering 35%. Imports from Mexico have now outpaced imports from China, which saw import levels sink by 16%. This increase in imports from Mexico results from a recent nearshoring push among U.S. manufacturers, with many still wary of reinvesting amid volatile U.S.-China relations and a still-fresh memory of COVID-era shipping delays.
ITS Logistics has recently opened a $100 million facility in Texas with the aim of bolstering distribution and fulfillment services in the U.S. The 1 million sq. ft. facility is located in Fort Worth at the Intermodal Logistics Center, adjacent to BNSF Railway’s Alliance Intermodal Facility.
“The Dallas-Fort Worth center is a big one, and … we’re starting a heavy-haul special projects division that’s going to focus on cross-border, really heavy industry freight that supports oil and gas, aerospace, and manufacturing that’s going to be spearheaded through Houston,” Paul Brashier, vice president of drayage and intermodal at ITS Logistics, told FreightWaves. “We’re going to start really building out that triangle from Houston to Dallas, down to Austin, San Antonio, back to Houston.”
On Jan 21, 2024, the U.S. Postal Service will implement price hikes throughout its service range. Rates will increase on crucial services, including USPS Ground Advantage, Parcel Select, Priority Mail, and Priority Mail Express, per a filing with the Postal Regulatory Commission:
These rate hikes come as the postal service continues to struggle financially, with recent reports showing that the USPS is still operating under significant financial losses.
In the latest contribution to its growing operational footprint in Asia, DHL has opened a new hub in Hong Kong. The new facility will increase peak shipment handling capacity by roughly 70%, representing a 50% increase in size over the facility it replaces.
“Asia is home to some of the fastest growing markets in the world. Since it was established in 2004, we have seen a continued increase in air cargo demand driven by trade between Asia and other regions, and cross-border e-commerce. Even as global trade normalizes after the pandemic, we have seen over 30 percent growth in throughput between Asia and other continents in the first three quarters of 2023 when compared with the same period in 2019, far exceeding the pre-Covid level,” Ken Lee, CEO for Asia Pacific, DHL Express said in a Nov. 14 press release. “Additionally, the strategic location of the Hub in Hong Kong opens doors to many opportunities for our customers in this region. We are confident that the expanded CAH will foster interconnectivity and underpin Asia’s status as a powerhouse of global growth.”
The Hong Kong facility joins facilities in Leipzig, Germany, and Cincinnati, Ohio, as one of three global air hubs in DHL’s parcel network.
The United Auto Workers union has announced that union employees at each of the Big Three U.S. automakers–Ford, Stellantis, and General Motors–have officially ratified their new contracts. Under the new arrangements, workers will see significant benefits to retirements, wages, and pay scale. Additionally, the contracts will see substantial investments in American-made EV infrastructure.
“The members have spoken. After years of cutbacks, months of our Stand Up campaign, and weeks on the picket line, we have turned the tide for the American autoworker,” UAW President Shawn Fain said in a Nov. 20 press release. “The Stand Up Strike was just the beginning. The UAW is back to setting the standard. Now, we take our strike muscle and our fighting spirit to the rest of the industries we represent, and to millions of non-union workers ready to Stand Up and fight for a better way of life.”
Over the course of the fiscal year 2024, which began on July 1 for the Georgia Port Authority, the Port of Savannah has seen an 18% drop in YoY volumes. The Port of Savannah saw 449,000 TEU in October, according to reporting from FreightWaves. While this reflects a decrease of 22% YoY, October’s volumes remained 5% higher than those in 2019, signaling a lasting shift from pre-pandemic norms.
While volumes may not reach past heights for the foreseeable future, the Georgia Port Authority is nonetheless reinvesting in high-volume infrastructure at the Port of Savannah with the recent renovations of a major berth at the port: “For the first time in two and a half years, all berths are open at Garden City Terminal for faster, more efficient cargo handling,” Georgia Ports Authority President and CEO Griff Lynch said in a Nov. 17 press release. “We appreciate our customers’ patience during the renovation of Berth 1, and look forward to providing the world-class vessel service they have come to expect from GPA.”
With nearshoring trends set to continue into the foreseeable future, shippers are increasingly demanding tech-enabled strategies to remain resilient in the face of fast-changing marketing dynamics. With Intelligent Audit, shippers can access an invaluable suite of transportation assets:
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