Joe Biden issued a new Executive Order on July 9, 2021, aimed at curtailing the skyrocketing transportation costs weighing heavily on manufacturers and retailers. Many organizations such as the National Retail Federation and American Apparel & Footwear Association have asked the White House to address the strain on supply chains. For example, the cost of transporting one shipping container has risen 195% in the past year and that is coupled with new fees and surcharges.
With 2021 right around the corner, most shippers are still fully-engaged in trying to finish out 2020’s shipping needs as efficiently and cost-effectively as possible. Everyone has done the best they can weathering the freight storm of 2020, but many are wondering if 2021 will bring that much relief or be as volatile as the past 10 months. We at M&A don’t have a crystal ball telling us exactly what 2021 will bring, but we do have a fair forecast of what to look out for in the next year.
Beyond almost every prediction, COVID cases continue to rise as we enter late November, further hindering the economic recovery and reprieve that the logistics industry desperately needs. Even though the economy is trending upward, most companies are still reeling from supply chain disruptions. The coming of Peak Season likely brings a demand increase as much as 50% compared to 2019, which will result in increased rates and transit.
On July 1, 2020, a new trade agreement between the United States, Mexico, and Canada will replace the 25-year-old North American Trade Agreement (NAFTA). On January 29, 2020, President Donald Trump signed the U.S.-Mexico-Canada Agreement (USMCA), a bipartisan agreement that has been ratified by Mexico and Canada. Each country has its own name for it:
Hours of Service (HOS) Regulations have been lauded by some as pivotal to roadway safety and loathed by others who feel they are heavy-handed. The Federal Motor Carrier Safety Administration (FMCSA) operates under the authority of the United States Department of Transportation (US DOT). The current hours of service regulations have been in effect since 2012 and are now being eased in some areas to give commercial drivers a little more flexibility in how they use their on-duty hours and off-duty hours. The proposed changes are expected to become the new law of the land in September of this year (just in time for the 4th quarter economic rebound everyone is hoping for).