R2 Logistics

February 2022 Market Updates

February 2022 Market Updates

Logistics Market Updates: Canadian Truckers Shut Down Busiest US-Canada border crossing

A convoy of Canadian truckers and protesters disrupted the US-Canada border crossing at the Ambassador Bridge linking Detroit and Windsor, Ontario. On February 8, the border crossing was closed to Canada-bound traffic, and trucks had to use another cross point more than 50 miles away. On Monday, citizens initially blocked the approach to the bridge in Windsor, and others joined in solidarity.

The Federal Highway Administration (FHA) says the bridge is a crucial trade link. Traffic over the Ambassador Bridge accounts for about 27% of the annual $400 billion trade between Canada and the US. The alternate route reported two-hour delays for truckers.

The continued protests stem from COVID-19 vaccination requirements announced last month by the US and Canada, requiring unvaccinated truckers to quarantine after crossing the border.

Freight Costs Expected to Climb 25% in 2022

Higher freight rates and costs associated with navigating congestion at the border push freight spending higher. The expenditures subindex increased 6.6% (seasonally adjusted) sequentially in the month, establishing another record in the dataset beginning in 1990 – researchers cite contribution from higher volumes as driving the increase more than the rise in freight rates.

$1.2 billion Towards the Rural Freight Network

On Tuesday, the Biden administration released $246 million worth of funding in the Fiscal Year 2022 to complete a 3,000-mile rural freight and passenger network to save time and money for long-haul truckers.

The funding is part of a $1.2 billion, five-year package authorized in the Bipartisan Infrastructure Law for the Appalachian Development Highway System (ADHS), extending from New York to Mississippi. The ADHS began in 1965 because the interstate highway system bypassed the rugged terrain in the Appalachian region, underserving that area. The 33 corridors link to interstate highways and connect truckers to regional and national markets. It is approximately 85% completed and expected to be 100% complete and open to traffic by 2040.

Freight-carrying trucks account for 4.3% of traffic on the roads of the 13 Appalachian states. Still, truckers represent about 14% of all vehicle hours of travel (VHT) time savings attributable to the ADHS routes, according to the Appalachian Regional Commission (ARC).

The value of travel efficiency savings and market access productivity expect growth in 2025, 2035, and 2045 from vehicle miles traveled and vehicle hours of travel reductions.

As we near system completion and see continued growth in the market for ADHS travel, the value of travel efficiency expects gains from $587 million by 2025 to almost $2.3 billion in 2045, with the most significant improvements represented by travel time and reliability savings..

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