Global Freight Update

Aerial view of a working dock and cargo ship begin loaded by a crane

Logistics Market Update – January 2023

Logistics Market Update – January 2023 690 518 Transmodal

It’s feels like the pendulum has swung—from boom to bust.

The last few years had segments of the industry beside themselves in glee as they raked in huge profits. But the boom is bust, and it’s time to stop swaggering. The party is over for ocean carriers especially, and they’re preparing for things to get even worse. To the extent that major trade lanes canceled 100 sailings between Dec. 12 and Jan. 15.

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Closer to home, trade between the US and Mexico is expected to remain steady through 2023. During 2022, cross-border commerce between the two countries remained healthy in comparison to 2021 year-over-year stats. There was only a drop of 1% against the record spending of 2021 that spurred cross-border freight. And 2023? It looks like the future is just as bright, with Mexico becoming a choice location for companies who are considering nearshoring some of their operations.

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Just when you thought it couldn’t get any worse—or, at least, after the last few years, you thought it could only get better. Unfortunately, after learning that global trade was far more fragile than we thought, we must accept that things could get even worse.

From past woes like the grounding of the Ever Given, the pandemic, the war, and more, we have a future that could be colored by currently festering issues. Issues like the Biden administration’s policies when it comes to global trade, especially with China.

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December 2022 saw a drop of 19.3% in box volumes against December 2021, but still maintained a tiny increase of 1.3% over December 2019. All thanks to tanking global trade and increasing inflation. A recent Global Port Tracker report predicts a drop of 11.5% for January and 23% for February when compared to their corresponding 2022 months. Meaning imports will be much the same as they were when COVID lockdowns first went into effect and shipping volumes tanked.

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Finally, in air freight news, air passenger traffic is almost back to normal, adding freight space capacity—almost too much capacity. Regardless, this has led to an easing of bottlenecks and fewer delays. But the industry is realizing, as things revert back, that they’re going back to a new normal, not pre-pandemic norms. And we can look to issues like a looming recession, higher energy costs, inflation, the ongoing war, and the trade war between the US and China as factors that are contributing to the change.

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Overhead view of worker in warehouse moving a pallet of goods

Logistics Market Update – April 2022

Logistics Market Update – April 2022 1000 665 Transmodal

While lockdowns in China have contributed to a 40% drop in the country’s GDP, there’s also been a drop of 31% in container volumes out of the country this month alone. And the longer lockdowns continue, the worse things will get. Unfortunately, when lockdowns are lifted and all that pent-up demand is released, there’ll be further havoc in the industry. A return to the backlogs of last year will be inevitable. However, the longer the situation in China plays out, the impact on the economy could be even more far-reaching.

Click Here to Read: Chinese lockdowns will create shocks to American supply chains (but China is the biggest loser)

Air cargo is also facing its own pressures with increased rates and decreased capacity, partly due to Russia’s invasion of Ukraine. Any feelings of optimism that the industry may have had—thanks to Covid travel restrictions ending, leading to additional passenger flights and increased cargo capacity—have waned, with some feeling that the industry could be turned “upside down once again.”

Click Here to Read: Air Cargo: Volatility Lingers

It’s not just the air cargo industry that could take a hit because of the war in Ukraine. A recent report from the World Trade Organization (WTO) expects reduced trade volume growth in 2022. Previous forecasts of 4.7% for 2022 and 3.4% for 2023 have been adjusted down to just 3% for 2022. They’re also forecasting lower export growth in Asia, Europe, and North America.

Click Here to Read: Russia-Ukraine conflict puts fragile global trade recovery at risk

For some slightly positive news, ocean carriers are reporting some headway in clearing empty containers dwelling in US ports. Hopefully, this will enable truckers to pick up more imports, thanks to fewer empty containers. However, the problem with empties in the US is far from over.

Click Here to Read: Carriers See Progress in Empties Sweep, But Issues Remain

Finally, the now-famous Evergreen is in the news again. The Ever Forward, one of Evergreen’s carriers, ran aground in the Chesapeake Bay on March 13 and remained stuck for nearly a month. The State of Maryland is requesting that a $100M responsibility fund be set up to cover the cost of any environmental effects.

Click Here to Read: Maryland seeks $100m from Evergreen to cover costs related to Ever Forward grounding