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Friday Freight Update: Canadian Ports, UPS Update, Bad Omens for Yellow Corp, and FedEx Pilot Strike

While the ports on Canada’s West Coast remain open, impacts continue to be felt from the 13 days of strikes earlier in July.


We’ve seen decreased rail traffic between the U.S. and Canada and continued vessel and container delays. FreightWaves estimates that the rail delays alone could take up to 65 days to resolve. Canadian National Railway Co. says that wildfires and heat across Canada, the torrential rains and flooding in Nova Scotia have further complicated shipments across Canada – but they are looking to take steps to mitigate the extreme weather in the future.


For those with vendors and projects depending on containers flowing through these Canadian ports, expect sporadic delays and impacts in the coming weeks and months as the backlog of freight clears through. Domestic US Freight, however, should remain largely unaffected.

 

Shifting our focus back to the U.S., we return back to the avoided UPS strike. As we had reported on July 25th, UPS and Teamsters had reached a tentative agreement with each other to avert the August 1st strike. We have been monitoring this story closely, and continue to see no impact to current activity. Product is expected to move through the UPS system as normal, and we will continue to monitor as the agreement goes through the ratification process August 4-22.

 

We are also keeping an eye on the Yellow Corporation, which includes YRC Freight. Compounding a narrowly-avoided strike last week from their Teamsters Union, rumors of a potential bankruptcy filing next Monday, July 31st have increased the uncertainty surrounding the low-cost LTL carrier, with many expecting a closure of their operations next week.


Yellow and YRC handled less than 10% of the nation’s daily LTL volume last year, and the market should have enough excess capacity to balance out the potential loss without a significant disruption to the nation’s supply chain. However, limited-impact, short-term disruptions and delays could be seen with some customers scrambling for alternatives. Further, those who had previously leveraged YRC for their low-cost transportation options could see costs increase.


Here at Audit Logistics, we had pre-emptively placed Yellow on NO LOAD status in June, and we expect no significant impact to our current projects or freight moves.

 

You may have heard about another developing logistics labor story, this time involving FedEx. The Air Line Pilots Association International (ALPA), a pilot union representing more than 74,000 pilots in the U.S. and Canada, announced on Monday a rejection of a proposed agreement with FedEx. This rejection is not expected to impact FedEx operations, however, and at this time we do not feel that a reselection of carrier is necessary if your project relies on air shipments with the transportation giant.

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