Freight Update

Container being loaded onto a cargo plane

Logistics Market Update – June 2022

Logistics Market Update – June 2022 1920 615 Transmodal

Shippers are happy about the impending launch of three new initiatives. These are in the wake of an investigation by the Federal Maritime Commission (FMC) into ocean carriers. The three new initiatives are the International Ocean Shipping Supply Chain Program, the reintroduction of the Rapid Response Team, and the designation of an FMC Compliance Officer.

Click to Read: FMC launches new initiatives to help shippers with supply chain challenges

Brace yourselves. With most COVID restrictions in China—Shanghai specifically—lifted, terminals are preparing for waves of imports hitting already congested ports. One estimate calculates an unshipped backlog of 260,000 teu from Shanghai for April alone. This means ports are scrambling to get ready for two months of backlog while also preparing for the peak summer season. For now, there are no major disruptions, and the feared tsunami hasn’t happened.

Click to Read: Terminals around the world brace as Shanghai exhales 

It’s been a tough and expensive few years for shippers. Ongoing vessel delays have forced shippers to maintain higher inventory levels, leading to financial losses of about $10 billion over the course of the pandemic. At the same time, carriers—whose rates to shippers have skyrocketed—have made more than $163 billion in operating profit this year alone. For shippers, this has to cause some resentment, especially since that $10 billion doesn’t include losses due to delays due to missed connections and or long wait times in port.

Click to Read: Vessel delays costing shippers billions: Sea-Intelligence

The economy may be struggling, but America’s ports continue to maintain the historically high numbers we’ve had for the past few years. Specific mentions go to the Port of Long Beach, which in May had its second busiest month ever, and the Port of Charleston, which had its third-highest month ever. Although queue wait times have dropped, ports are still working through their backlogs.

Click to Read: Boom times not over yet: US container ports still near highs

With just over two weeks remaining before the longshore union contract for the U.S. West Coast ports expires, both sides felt compelled to break their self-imposed silence to refute media reports that the ports were preparing for a possible strike or lockout. Without offering any specific details, the International Longshore Warehouse Union and the Pacific Maritime Association both emphasized that the discussions are continuing and that no actions were imminent.

Click to Read: No Strike or Lockout Planned as West Coast Labor Contract Nears End

Dock crane moving a container with containers stacked on both sides

Logistics Market Update – March 2022

Logistics Market Update – March 2022 461 220 Transmodal

East Coast ports are starting to make the news—thanks to an overflow from the ports of Los Angeles and Long Beach to the west, as carriers deployed smaller ships during the peak season. As of March 18, there were 63 container ships waiting in queue at East and Gulf Coast ports. And unfortunately, things are expected to get worse. Capacity on services from Asia-East is expected to jump 40% from last year’s average.

For more on this story: East Coast ports about to get slammed by a lot more ships

The pandemic is still creating supply chain woes as China introduces new lockdowns in Shenzhen and Shanghai, where two of the largest container ports in the world are located. Container movement at these ports is expected to be restricted to some extent, capacity could be further reduced, and already high shipping prices will likely creep higher.

For more on this story: China Implements New COVID Lockdowns Creating Supply Chain Fears 

In air cargo news, shippers are being warned to consider the size of their loads, thanks to Russian commercial aircraft being removed from the market, including the AN-225—the largest commercial aircraft in the world. Shippers will now have to reconsider how they calculate loads, especially those historically based on the specifications of the AN-225.

For more on this story: Air cargo shippers: ‘think about transport before you manufacture’

In the US, policymakers continue their investigations into the industry’s unfair billing practices—by ocean carriers claimed to have formed global alliances and who have been exempt from competition laws. However, to date, they have found no evidence of collusion or antitrust activity.

For more on this story: US policymakers overreach in bid to bring ocean carriers to heel

Finally, Panjiva reports that the month of February saw sequential declines for imports and shipments bound for the US. Containerized freight imports were down 5.5% over January while shipments were down 7.7%. However, annual gains were 6.9% and 17.7% annually, respectively.

For more on this story: U.S.-bound shipments and TEU see sequential declines and annual gains, for February