Here are some of the top news stories in freight for February:
On March 18, 2023, CBP will deploy the Uyghur Forced Labor Prevention Act (UFLPA) Region Alert enhancement to the Automated Commercial Environment (ACE). This enhancement will provide an early notification to importers and their representative of goods that may have been produced in the Xinjiang Uyghur Autonomous Region (Xinjiang or XUAR) and may be excluded from importation into the United States. This enhancement includes electronic data interchange (EDI) impacts.
Typically, the lead-up to the Chinese New Year would see peaks in volumes. However, 2023 started with an 8% year-over-year drop in volume recorded in December, which was a 13% drop when compared with 2019. To compensate, carriers are canceling freight bookings until mid-February.
Despite some wishful thinking that the airfreight industry would rebound in March, there isn’t enough data to support it. Factors include higher inflation rates and falling demand, both of which have a share in canceling out any improvements in the industry. Having said that, there are still a few positive metrics that could fuel some further wishful thinking.
Optimism may be a little bit more warranted when looking at factory activity for January in Europe and Asia. Even though activity contracted, the eurozone saw growth in the last quarter of 2022, which has economists forecasting a rebound on the horizon.
Newly released supply chain data shows that transportation’s downward spiral has eased a bit. This comes after a free fall in prices in December — at their fastest pace ever. Metrics are still lower than they were at the height of the pandemic, but there was a slight turnaround in January.
On the oceans, carriers have a new problem, an overabundance of 5m TEU boxes that are taking up too much space in container ports. And the high cost of storing them comes at a time when their revenues are tanking, leading to an attempt to break as many equipment leasing contracts as they can despite steep penalties.