Logistics News

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Logistics Market Update – October 2022

Logistics Market Update – October 2022 690 518 Transmodal

Here are some of the top global shipping news stories for October.

For the last several years, the norm has been to hear about port congestion on the US West Coast. However, West Coast ports are reporting their second month of decreased congestion. On the flip side, thanks to typhoons in the East, the ports in China and South Korea are experiencing rising congestion levels. In fact, levels were higher than they were during the pandemic.

Transit times were up by at least 25% in September at the ports of Qingdao, Busan, Ningbo, and Shanghai, with Qingdao experiencing an astounding 59% increase.

Click to read: https://windward.ai/blog/a-reshuffling-of-port-congestion-in-september/

In line with the above, CNBC reports a 20% drop in ocean freight orders throughout September and October. The reason is a drop in demand across many sectors, including apparel. The CEO of United National Consumer Suppliers explains that in part, the reason for the drop is many consumers shifting to off-price or discount stores like T.J. Maxx and Marshalls. That’s leaving retailers of more prestigious brands stuck with inventory.

Click to Read: https://www.cnbc.com/2022/10/03/ocean-shipping-orders-are-signaling-a-big-drop-in-consumer-demand.html

Labor at ports continues to be a global issue for supply chains. From October 11 until October 17, Port of Liverpool dockworkers were on strike—again.

Union officials took action because, in their words, the port operator refused to establish “sensible negotiations.” Instead, officials say the operator tried to intimidate its workers, which is likely a reference to an announcement made by Peel Ports saying that due to a deterioration in volume, 132 dockworkers were issued redundancy notices. South Africa is still dealing with a work stoppage and tensions are high at US West Coast ports.

Click to Read: https://www.joc.com/port-news/european-ports/port-liverpool/liverpool-port-workers-begin-second-pay-strike-talks-stall_20221011.html

The outlook isn’t too merry as we head into the holiday shopping season in the US.

Retailers are still stuck with summer stock thanks to extreme weather events, ongoing labor issues, geopolitical problems, and continuing post-pandemic chaos. For holiday shoppers, this could mean that some retailers try to offload inventory at significant reductions instead of paying to store it—that’s the good news. However, in terms of items that are facing supply chain delays, you can expect costs to rise.

Click to Read: https://www.usatoday.com/story/money/2022/10/10/supply-chain-issues-holiday-shopping-season/8233775001/

The worldwide factory sector is experiencing increasing upward pressure thanks to higher energy prices.

The PMI states that for the first time in five months, September saw average input costs escalating at a faster rate than ever. According to data, supply chain and wage price pressures have calmed down, but energy costs remain at an all-time high. Companies reporting increased costs because of energy prices increased by 4.7 times higher than the PMI’s longest-run average.

Click to Read: https://www.hellenicshippingnews.com/worldwide-industrial-price-pressures-rise-as-higher-energy-costs-and-strong-dollar-offset-impact-of-cooling-supply-chains/

Cargo waiting to be loaded on cargo plane in the background

Logistics Market Update – August 2022

Logistics Market Update – August 2022 1920 615 Transmodal

The industry is used to hearing news about port congestion and ships loitering as they wait for berths—at least at the West Coast ports of Los Angeles and Long Beach. But the tide has shifted. As carriers try to escape the backlog in the west by moving to the east, the problem has followed along like an albatross. The Ports of Houston and New York now have as many containerships waiting for berths as Los Angeles and Long Beach combined.

Click to Read the Full Article

The summer saw still more lockdowns in China as COVID fears continued. Fortunately, Shanghai’s two-month-long lockdown was lifted and with it some speculation that leadership may relent—at least to some extent—on their zero covid policy. There is no escaping the impact on their economy, and manufacturers are becoming increasingly vocal about leaving the country and near-shoring production back to the US and Europe.

Click to Read the Full Article

According to a survey of 233 senior procurement executives done by Ivalua, nearly all procurement leaders—97% of them—say they are facing significant disruption in the direct materials supply chain. 67% say they have little to no confidence in existing technology, and 84% say modernization needs to be a priority.

Click to Read the Full Article

The Biden Administration is considering a relief package that will roll back some of the tariffs that were previously imposed on China during the Trump Administration—which raised prices on everything from diapers to clothing and furniture. The expectation is that a modest list of tariff suspensions will tamp down inflation.

Click to Read the Full Article

The FMC has a bit of a conundrum. Back in June, a vote was passed, giving them more power to handle allegedly unfair business practices carried out by ocean carriers and marine terminal operators. But now they’re saying they don’t have enough staff to enforce reforms. According to FMC Commissioner Carl Bentzel, “We have major rulemakings we’ll be starting in the short term but very few people to do the work, so we’re wrestling with that.”

Click to Read the Full Article

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