Weekly News Updates
07/20/2023 - 07/26/2023
Texas' Continued Growth
Texas continues to prove itself as a bustling logistics hub within the US. For the fourth consecutive month, the Port of Laredo has held the #1 spot out of 450 international trade gateways in the country. The Port of Laredo saw a year-to-year increase of 14.23% in the month of March and has continued to hold the top spot since. Top exports include auto parts, gasoline, and diesel engines. Top imports include auto parts, passenger vehicles, and heavy-duty trucks.
ITA 2023 National Export Strategy
The International Trade Administration has released a blog posted (published by Uma Menon from the Office of Public Affairs) detailing the 2023 National Export Strategy. Noted objectives and priorities include support business innovations in the US and focusing on inclusive economic growth. Strategy focus areas include climate and clean technologies, manufacturing, travel and tourism, international education, global infrastructure development, agriculture, fish, forestry, and seafood. The data shows that the US is the top exporter for refined petroleum, petroleum gas, crude petroleum, cars, and integrated circuits. In 2021, top exports also included medical instruments, gas turbines, and corn. NES is beneficial to global economies as it encourages cooperation and overall global development.
07/13/2023 - 07/19/2023
Canada Back on Strike
While the Canadian ILWU seemingly ended their strike due to a tentative labor agreement with the BCMEA, they have now resumed striking after further consideration of the aforementioned tentative agreement's terms. Per the Canadian ILWU's President, Rob Ashton, "The term of the collective agreement that was given with today's uncertain times is far too long. We must be able to readdress the uncertainty in the world's financial markets for our members." Parliament is beginning to feel pressure, but they are presently out of office for summer break. UPDATE: This statement has been retracted and the strike was not resumed.
Market Growth?
More data has been analyzed to conclude the shipping market is not collapsing, rather returning to healthy pre-pandemic numbers (as previously reported). Currently, Asia to US West Coast rates are up 17% compared to 2019. This comparative data allows us to see that, since returning to a "normal" market, the market is actually growing. The shipping boom of the past few years was an unexpected occurrence. Continuing to stack those numbers against current data will skew the numbers of a standard shipping year.
Weekly News Updates
07/06/2023 - 07/12/2023
California's Port Upgrades
Container ports in California (Oakland, Los Angeles, and Long Beach) will receive state funding for upgrades (totaling $738m). These grants will go towards various initiatives, including infrastructure, clean-air projects, zero-emission cargo-handling efforts, upgrades to roadways, and the expansion of maritime support facilities.
Canadian ILWU Strike Effects
The ongoing Canadian ILWU strike is now affecting logistics in the US. As shipments are being rerouted to US ports, higher container volumes are appearing at US ports. Rail service will often import goods from Vancouver and Prince Rupert to Midwest US cities like Chicago. Some of these shipments are now being sent to US West Coast ports, causing potential delays. Reportedly, as of Tuesday the 11th of July, it's estimated that nearly 25% of Canada's daily traded goods are being disrupted.
PSA to Acquire DGT
Singapore-based PSA is set to acquire 22% of Duisburg Gateway Terminal (DGT). Group CEO of PSA, Tan Chong Meng stated, "As part of Europe's largest and most sustainable inland port, DGT will be a key gateway in providing green logistics services to Germany's dense industrial hinterland." The acquisition must still be approved by Germany's competition authority.
Weekly News Updates
06/29/2023 - 07/05/2023
Texas' Continued Growth
With Texas experiencing a "shipping boom," CPKC, CSX, and Genesee & Wyoming have decided to work together to create greater access between Texas, Mexico, and the Southeastern region of the United States. This new direct connection will allow shippers to gain access to new markets via the Myrtlewood, Alabama area. The agreement will be subject to regulatory review and approval from the US Surface Transportation Board.
The Canadian ILWU Strike
Canadian ILWU workers have been on a formal strike since Saturday, the 1st of July. Presently, it seems this strike may be prolonged as neither the Canadian ILWU or BCMEA have compromised on their demands. Prime Minister Trudeau is encouraging both parties to reach an agreement via government mediation. It is possible that the United States may release a statement or become further involved due to their proximity to the situation and utilization of Canadian ports for Midwestern US imports (and exports).
US Department of Transportation Grant
The US Department of Transportation is creating a $5.8bn grant for infrastructure-related projects that emphasize supply chain improvements and innovations. Funding is supported by the Bipartisan Infrastructure Law, with three separate programs allocating funds to various port authorities and transportation companies pursuing these initiatives.
Weekly News Updates 06/21/2023 - 06/28/2023
West Coast Port Disruptions - What Happens Next?
Following the reported disruptions amidst negotiations between the ILWU and PMA, officials are seeking to create legislation which might prevent similar events in the future. The proposed legislative changes would rule that longshore workers couldn't participate in intentional work slowdowns or work disruptions. As of now, it is considered "unlikely" that this legislation will be passed. Four senators introduced the bill last week, titled "Preventing Labor Union Slowdowns" or "PLUS." One stated, "Reducing slowdowns by eliminating unfair labor practices imposed by unions is best for maritime workers and their livelihoods while allowing companies to compete in a modern marketplace." However, others in legislative positions believe that this ruling is unfair and goes against the rights of the workers. Only time will tell if this bill passes. Despite the resolution between the PMA and ILWU, many are looking towards new policies and automation initiatives to prevent similar actions in the future, while others are vying for workers and unions to maintain their full autonomy.
US Customs & Border Patrol Agency Updates
The Continuing Education for Licensed Customs Brokers Final Rule (aka 88 FR 41224) was announced by the US Customs and Border Protection Agency. This ruling will ensure that customs brokers have up-to-date training and knowledge to establish and maintain compliancy. This new rule requires that brokers, who are individually licensed, must earn 36 continuing education credits every three years with a certified completion status, per the Triennial Status Report. To create a smoother transition period, these changes will be implemented slowly at first and the Office of Trade's Broker Management Branch has a dedicated web page to educate brokers and industry professionals about these changes.
Going Green Globally & At Tanera!
Per a recent survey conducted by Breakthrough, reducing emissions is predicted to be a top priority for logistics and transportation next year. Approximately 95% of industry executives believe that consumer demand for sustainability will ensure the reduction of carbon emissions over the next months and years. The data confirms this notion. Presently, electric and alternative-fuel vehicles are in high demand. Most shippers (nearly 99%) would like to take advantage of these innovations and updates to current technology. Almost all carriers (97%) see great value in incorporating EVs and other alternative vehicles to their fleets, with nearly 60% having plans to do so by the end of the year. Per Matt Muenster, the Chief Economist at Breakthrough, "Inflation, volatile fuel prices, and capacity fluxes will continue to weigh heavily on the transportation industry, making it more important for organizations to practice efficiency measures. Despite these economic hurdles, the desire for sustainable practices remains. With an abundance of intermodal capacity and a surge of investment in alternative energy technology and vehicles, shippers and carriers have an opportunity to shift towards more eco-conscious operations."
"Going Green" continues! Our HR Manager shared a video about our new recycling initiative at Tanera Transport. Make sure you check it out on our social media platforms including Instagram, LinkedIn, TikTok, and the RED.
New Trade Lanes
HMM will be launching service to the Mediterranean and India from other Asian countries in August. The first ship is set to sail from Busan, South Korea. As global capacity is outweighing demand in most cases, carriers are looking to find new trade lanes which will allow them to maintain and grow more profits. Ports in this trade lane will include Busan, Kwangyang, Shanghai, Ningbo, Shekou, Singapore, Port Klang, Kattupalli, Nhava Sheva, Mundra, Karachi, Jeddah (Suez Canal), Damietta, Piraeus, Genoa, Valencia, Barcelona, and DaChan Bay.
Weekly News Updates 6/14/2023-06/22/2023 -
Shipping & Freight Forwarding Updates
Per expectations, we experienced a spike in spot rates during the first half of June. These rates began to fall rapidly, with an even greater decline in motion this week. The industry's traditional peak season of July-August, typically comprised of back-to-school shipments, accounted for 9% of annual sea freight imports each in 2022. Reports show this number is down 13% from last year as of May, with footwear, apparel, and backpacks down by 25%, 12%, and 5%, respectively. This is likely due to cooling consumer demand and multiple companies currently facing destocking challenges.
Simultaneously, there has been a substantial decline in China's exports with the value of goods exported to the US declining by 18%, as of May. It is expected that the current market rate is rock bottom and will not stay this low for long, due to the operational costs carriers face. A GRI/PPS is expected in July, but it is predicted there will be a decrease the second week of the month. CULines began their USWC services in July 2021, during the "shipping boom." The carrier is removing itself from long-haul lanes as current freight levels cannot compensate operating costs and they do not have scalable economies to be a top competitor with mainline operators. This signals that other smaller players are likely going to begin exiting the market, due to the aforementioned obstacles and weakened markets. Ultimately, this positions bigger players to regain larger and better shares of the market.
ILWU & PMA Agreement
Amidst disagreements and reported disruptions, the ILWU in the US has finally reached an agreement with the PMA. Both parties released a joint statement, saying, "We are...pleased to turn our attention back to the operation of the West Coast ports." They also added that the new deal, "was reached with assistance from Acting US Secretary of Labor, Julie Su." Neither party is yet releasing details of this agreement. However, for the foreseeable future, the ILWU and PMA are in alliance and working together once again. If we are to go by a statement from Julie Su, it seems as though the agreement presents a bright outlook for the industry, "The tentative agreement delivers important stability for workers, for employees, and for our country's supply chain."
The RED
Tanera Transport has officially launched the first Chinese platform, The RED. Over the past two weeks, we have gained 10,737 views in total, 320 profile visits, and 58 subscribers! Our posts have been shared over 100 times by our readers! We are super excited that our Chinese clients enjoy our daily news and industry insights and about logistics, and we will keep it up!
Going Green
At Tanera Transport, we believe it's crucial to take the necessary steps to embrace sustainability and grow to become more "green." In Southern California, we've experienced the rainiest Winter ever with unpredictable weather patterns. This is simply one manifestation that's the result of global warming. We want to do our part to ensure we keep the Earth clean while moving towards greater sustainability. As a company, our documentation department has gone fully paperless, we have adopted the use of recycling bins, and we are working on several other programs to optimize sustainability within the office! Though we are a small, privately-owned business within a large industry, we want to leave the legacy of a more sustainable and eco-conscious world for future generations.
BREAKING NEWS: WEST COAST PORT CLOSURES & UPDATES (As of 06/05/2023)
By: Faith LeMasters
06/05/2023 - West Coast ports are currently unable to operate at full capacity as union workers refuse to show up amidst wage negotiation struggles between the union and port management. The Port of Oakland was first to halt operations on Friday morning (06/02/2023), as too few dockworkers showed up to work. This is expected to spread throughout the rest of the West Coast as union workers protest over aforementioned wage negotiations. Despite such a decrease in labor (however temporary it may be), it is not a formal strike. As of Sunday the 4th of June, 2023, the ports of Los Angeles and Long Beach have had terminal shut downs as well. The two ports combined see an estimated total of 40% of imports from Asia. International Longshore and Warehouse Union has also allegedly engaged in similar protest, resulting in "shutting down or severely impacting terminal acts at the ports of Oakland, Tacoma, Seattle, and Hueneme" (per the Pacific Maritime Association). According to ILWU's President, Willie Adams, they are striving to reach an agreement and do what's best for the dockworkers, "We aren't going to settle for an economic package that doesn't recognize the heroic efforts and personal sacrifices of the ILWU workforce that lifted the shipping industry to record profits." We will continue providing updates as they become available.
06/06/2023 - According to an article published by Progressive Railroading, all terminals at the Port of Los Angeles were operating as normal "with appropriate staffing" (per the Port of Los Angeles Twitter account). The Port of Long Beach, however, did see a temporary closure of two out of six terminals due to lack of adequate staffing. Despite this, it was predicted that there would be adequate coverage for the evening shift (no further updates have been posted to confirm or refute whether this was the case after all). This informal "strike" of sorts shouldn't come as a surprise, as dockworkers have been without a contract since last July - nearly a year ago. It is alleged that negotiation terms are getting closer to closing, so it is likely an agreement will be reached soon and all terminals will be up and running as usual. As always, we'll continue to provide you with the latest news and updates regarding this issue.
06/06/2023 - Labor negotiations have resumed this afternoon. This follows the previous four days where they were stalled. ILWU locals continued their trend of: not showing up for work, intentionally slowing work, or taking a calculated group lunch break to pause work. Sources claim that while these methods of "protest" have been the same along the coast, the port(s) affected by these actions changes daily. According to another source, ILWU locals in Oakland, CA and throughout Washington state have been intentionally slowing cargo-handling operations - but Southern California has still been hit the hardest by these acts of "protest." This is nothing new - there was an intentional slowdown of cargo-handling along the West Coast in April to "gain leverage on local issues." After approximately a month, wage discussions began in May. The wage debate continues.
Potential Trucking Strikes - 06/07/2023 - In light of recent events with the informal "strikes and protests" along the West Coast ports, it's worth noting that Teamsters, UPS, and Yellow Corp. may be on the brink of organizing and experiencing similar events within the trucking industry. This week, UPS Teamsters will take a vote to determine whether the union's leaders will initiate a strike if they believe that UPS will not negotiate an amenable agreement before the current contract expires on the 31st of July. Voting will be completed within nine calendar days, and voting in favor of the strike doesn't inherently promise its initiation. If voted in favor of, it will only be utilized if an agreement is not reached. It is, essentially, a bargaining chip so that the union can reach an agreement with UPS that reflects the needs of its workers. Yellow Corp., on the other hand, informed Teamsters that they're unable to wait for formal negotiations at this time and sent over a letter of proposed contract modifications for immediate approval. Currently, Yellow Corp. maintains they have made changes and updates "in good faith," and offered to increase wages once funding has been received. yet this wait period is a point of contention. Allegedly, a call was had yesterday between leaders. No further information is yet available. Yellow Corp.'s spokesperson alleges the union is "stonewalling" the company's progress and jeopardizing the jobs of its members.
06/07/2023 - Presently, the unpredictable walkouts are a concern. There are currently no updates regarding formal strikes in the US, but union members in Canada will vote this week to determine if there will be a 72-hour strike at the ports of Vancouver and Rupert. There are signs of congestion inland along the USWC, however, there is currently no noticeable buildup at the terminals. Judah Levine, the head of research at Freightos, shared some thoughts should these actions continue in the coming days or weeks, "The recovery from a significant slowdown could be shorter than in 2015 [referencing the 2015 slowdown] due to new COVID-era strategies like off-site overflow yards and improvements in truck scheduling that could help unclog terminals themselves and speed the rate at which waiting ships can be unloaded and cleared."
06/08/2023 - Throughout the day yesterday (Wednesday), ILWU continued their productivity disruptions throughout West Coast terminals. The Port of Oakland was closed during their first shift of the day and was set to reopen for their second shift. Due to lack of productivity, the Port of Seattle has essentially closed its operations. Dockworkers were dismissed from their work as productivity was only at 30% when compared to usual operations. Presently, the Port of Tacoma is still operating, though productivity is reportedly at 50% the usual rate. There are delays at the ports of Los Angeles and Long Beach that have been caused by the ILWU not sending out an appropriate number of lashers to secure containers to the vessels - meaning approximately half a dozen ships were unable to depart. These ships were Cosco Portugal, Cosco Oceania, Cosco Shipping Rose, CMA CGM Amerigo Vespucci, CSCL Yellow Sea, and YM Unicorn. Delayed arrivals included: Aitolikos, Cosco Denmark, Cosco Netherlands, Cosco Taicang, and MSC Jeongmin. The number of vessels set to dock at Los Angeles and Long Beach is increasing as slowdowns continue, which in turn has impacted the entire supply chain including railways, trucks, and ocean carriers. Over the past several months, anchorage wait times have averaged at 0.5-1.5 days, with a service time average of 2-5 days, resulting in a maximum total of 7.5 days. Currently, vessels are waiting a total average of 9 days - a full day-and-a-half longer than usual. Per Captain Adil Ashiq, head of North America MarineTraffic, "This indicates we've broken past the 'normal' and are back into a stressed supply chain."
06/09/2023 - As of yesterday, the ports of Los Angeles, Long Beach, and Oakland have resumed business as usual with sufficient staffing, though workers are managing a backlog due to previous actions taken earlier in the week. A total of 41 ships have been delayed over the past week. It is predicted that with a sufficient number of workers being dispatched, this issue should be resolved "relatively quickly." Work began to resume as ILWU met with PMA to discuss wage negotiations and potentially start to finalize a contract - a full 13 months after first initiating negotiations. While we are seeing great improvements throughout California in productivity, the same can't be said for the ports of Seattle and Tacoma. Tacoma is lagging in comparison to their usual productivity, and sources allege that Seattle is only at approximately 10% their usual rate of productivity.
06/12/2023 - Reportedly, disruptions at the ports of Long Beach and Los Angeles resumed yesterday (Sunday, 11th June, 2023). While it seemed as though business would be back to usual along the West Coast ports, particularly in Southern California, this business-per-usual did not last. Per the Journal of Commerce, disruptions today have been "in full force." Julie Su, the nominee for US Labor Secretary, was poised to meet with the PMA today in order to help settle negotiations. Both ILWU and PMA refuse to confirm or deny whether they would be meeting with Su. According to the PMA, Seattle and Southern California experienced sporadic disruptions throughout the weekend. Los Angeles and Long Beach were not provided with enough lashers, meaning departure times were postponed (again, causing a backlog to begin to build). PMA made the following statements regarding disruptions, "The union also did not fill orders for labor from several terminal operators despite the fact they were placed properly and on time." Looking at the events in Seattle, the PMA had the following to say, "In some cases, the union slowed down operations, resulting in longshore workers being sent home. On another shift, the union failed to dispatch longshore workers, which effectively shut down the shift." ILWU, on the other hand, is reporting otherwise. Per their President, Willie Adams, "Despite what you are hearing from the PMA, West Coast ports are open as we continue to work under our expired collective bargaining agreement." ILWU and PMA releasing separate statements is concerning to some - in previous years, even in times of negotiation, joint statements would be made. We'll continue to provide you with the latest updates. Canada's ILWU has taken a vote in favor of striking if an agreement is not reached with maritime employers for a new contract. BCMEA (The British Columbia Maritime Employers Association) made a statement today confirming these actions.
06/13/2023 - Karine Jean-Pierre, the White House Press Secretary, has avoided confirming whether or not there will be government intervention in the ongoing negotiation process between the ILWU and PMA. She alluded to the administration being in favor of the parties sorting the matter on their own without intervention. Despite this, several organizations are hoping for intervention as they're experiencing shipping interruptions, including: the Retail Industry Leaders Association, National Retail Federation, American Apparel & Footwear Association, and the National Association of Manufacturers. With a handful of organizations calling for intervention or a return to "normalcy," only time will tell how negotiations work out.
According to the Journal of Commerce, things were back to (mostly) normal at West Coast ports as of yesterday evening for the night shift. Both the ILWU and PMA agreed in a meeting with Julie Su, nominee for Labor Secretary, to reach a "cooling off" period. During this time, they plan to reach an agreement regarding the wage negotiations. Last night and this morning have provided stable results along West Coast ports - including Seattle and Tacoma, which were hit particularly hard in the latter half of last week and over the weekend.
06/14/2023 - With the current negotiations between the PMA and ILWU, West Coast ports have potentially been affected to varying degrees. According to a new report from FreightWaves, those speaking to the press may, allegedly, be leveraging the press to support their own agenda. Despite this, there is data readily available which can be analyzed in order to see the broader picture of what's been occurring along West Coast ports. The Port of Los Angeles' Executive Director, Gene Seroka, has spoken out on recent press coverage, stating, "These past couple of weeks have been challenging, and at times confusing for all of us out here at the West Coast ports. There have been claims, counterclaims, and daily concerns...Of course we're all concerned. The deal's not done yet. Patience is wearing thin. Neither side imagined it would take this long. While Seroka did note there have been some spotty days along West Coast ports, he reassured that, "the data suggests the overall impact has been minimal...the cargo is flowing." The PMA and ILWU have made contradictory statements, with one side claiming there is essentially an unofficial strike and the other claiming ports are operating without closures. Seroka held his position and refused to pit either side's statements against the other. Instead, he considered the available data via MarineTraffic. According to ship-position data, nine ships were waiting offshore the US West Coast on Tuesday, but the same number of ships could be seen offshore on the East Coast and Gulf ports - where no disputes or negotiations are presently occurring. Data from Project44, which is more capricious, shows that export times have extended past import times for Long Beach and Oakland, while import times have extended past export times in Seattle. This latest update provides a more balanced view of what has been occurring.
06/15/2023 - As of today, the PMA and ILWU have reached a tentative agreement. Ports are back to operating as usual with no contradictory reports.
Texas' Logistical Boom - 06/05/2023
By: Faith LeMasters
One state has been in the news repeatedly over the past few weeks for their continued growth and record-breaking numbers - Texas. Two weeks ago, Port Houston made headlines as they continued to see record numbers, outpacing export numbers recorded in 2022. Reported by the port as of April, export volumes are up 17% when compared to last year, with a record 1,026,260 loaded TEUs handled through April. This number eclipsed the 1-million mark more briskly than previous years. In addition to this record number of exports, the port has begun to find stabilization and normalization with the height of the pandemic passing. Currently, they're the fastest growing port in the US and the fifth largest port in the country (to date).
While Port Houston is exporting a record number of goods, the city of Laredo, Texas, is currently the top gateway for international trade in the US (out of 450 trade gateways). During March, Laredo saw a 12% year-to-year increase, totaling in $28.6bn USD. One large contributor to this uptick in gateway traffic is the country of Mexico. As of the month of March, they ranked as the top trading partner for the US. Top US imports from Mexico to Laredo, Texas include: auto parts, passenger vehicles, heavy duty trucks, and fresh produce (strawberries, blueberries, and avocados). Top exports leaving Laredo were auto parts, gasoline, and diesel engines. Commercial truck crossings have seen a 5.5% increase compared to last year.
With these record breaking numbers, it should come as no surprise that the state just completed a $146m USD container terminal expansion at Port Freeport. This particular port borders the Gulf of Mexico, making it an excellent place to increase trade. This expansion will help the port to accommodate larger container and tanker vessels. Last year, the port saw 85,630 TEUs. It is estimated that this expansion could allow the port to now see up to 2,000,000 TEUs per year. All in all, Texas seems to be positioning itself as one of the top logistical hubs!
Air Freight Update - 06/02/2023
By: Cat Chen
Domestically, Cincinnati/Northern Kentucky International Airport (CVG) is positioning itself as an attractive hub for shippers seeking faster turnarounds and less-crowded international gateways. Starting June 5, 2023, British Airways will launch nonstop service from London Heathrow to CVG. This initiative is expected to draw substantial interest in transport, benefiting companies with headquarters and manufacturing facilities in the area, such as GE Aviation, Safran, and Procter & Gamble. Offering this new service, CVG is likely to enhance connectivity between American and European regions.
In the Asian market, exporters shipping goods to the US are experiencing an increase in LCL shipments via ocean freight and a decrease in air cargo due to surplus capacity and smaller shipments. This increase in capacity is likely due to spotty consumer demand and excess inventory at key destinations. Shippers can reduce costs by shipping smaller and more frequent shipments. At the same time, this decline in air cargo rates signifies a softened demand for capacity, leading to an influx of belly-hold space in long-distance flights. With more summer flights added for east-west trade lanes, rates have been consistently trending downwards according to the BAI. The tonnage carried fell by 7%, and the overall rates on Asian export routes plummeted 44%.
South America's Container Shipping Trade Soars - 05/25/2023
By: Faith LeMasters
While most of the world is reverting back to their pre-pandemic numbers, South America's import industry continues to perform exceptionally well. The CEO of Hapag-Lloyd, Ralf Habben Jensen, spoke of the industry hotspot saying, "It seems to be a bit more robust than some of the others [import markets]. We have secured a very significant chunk of our business on contract. All in all, we're happy with this trade." While the importing industry for other regions around the globe seems to be mellowing out to reflect 2018-2019 numbers, South America's imports are not declining so rapidly.
Freightos Baltic Daily Index reported an assessed average spot rate of $4,184 USD per FEU on Wednesday (24th May, 2023) for Europe-to-South America West Coast shipments. This is 3.1 times higher than 2019 rates. The index also reported an assessed spot rate of $2,505 USD per FEU for South America's East Coast, which is more than double pre-pandemic numbers. The average long-term contract rates from Europe-South America are now $4,846 USD per FEU; 37% higher than average spot rates.
This level of resiliency extends far beyond imports from the EU. Long-term rates from China to South America's West Coast average $3,728 USD per FEU, which is 2.5 times higher than pre-pandemic numbers. In fact, long-term rates are up 77% from May 2019, and short-term rates are up 52% (per data from Xeneta).
Hapag-Lloyd reports that findings suggest this increase isn't inherently linked to the pandemic, but to "increasing industrialization of emerging economies" and "additional opportunities for growth in container shipping in 2023 as a result of new economic and trade agreements."
The Truth About Freight Forwarding & Logistics Data - 05/17/2023
By: Faith LeMasters
There are many headlines circulating at the moment about a "drastic decline" in shipping volume, but is there any truth to this? Yes and no. It's a bit more nuanced than the headlines might lead you to believe. This year's numbers are being directly compared against last year, which was a historically successful year for the supply chain and shipping industries at large. With society slowly returning to its old ways as the pandemic has become more contained, it is more statistically honest to note this year's numbers in comparison to 2018 or 2019. For example, the Port of Long Beach reported a 22% decline this year in comparison to LY. However, in comparison to previous years, shipping volume has remained stagnant, and in most cases, has seen some improvement. Additionally, it's important to note that the numbers have been improving YTD since February. So, while it will be difficult to compete with the past few years when making year-to-year comparisons, this supposed "decline" in shipping is simply a return to expected numbers - as opposed to the "shipping boom" we've seen in recent years.
06/07/2023 - Presently, the unpredictable walkouts are a concern. There are currently no updates regarding formal strikes in the US, but union members in Canada will vote this week to determine if there will be a 72-hour strike at the ports of Vancouver and Rupert. There are signs of congestion inland along the USWC, however, there is currently no noticeable buildup at the terminals. Judah Levine, the head of research at Freightos, shared some thoughts should these actions continue in the coming days or weeks, "The recovery from a significant slowdown could be shorter than in 2015 [referencing the 2015 slowdown] due to new COVID-era strategies like off-site overflow yards and improvements in truck scheduling that could help unclog terminals themselves and speed the rate at which waiting ships can be unloaded and cleared."
06/08/2023 - Throughout the day yesterday (Wednesday), ILWU continued their productivity disruptions throughout West Coast terminals. The Port of Oakland was closed during their first shift of the day and was set to reopen for their second shift. Due to lack of productivity, the Port of Seattle has essentially closed its operations.
Texas' Logistical Boom - 06/05/2023
By: Faith LeMasters
One state has been in the news repeatedly over the past few weeks for their continued growth and record-breaking numbers - Texas. Two weeks ago, Port Houston made headlines as they continued to see record numbers, outpacing export numbers recorded in 2022. Reported by the port as of April, export volumes are up 17% when compared to last year, with a record 1,026,260 loaded TEUs handled through April. This number eclipsed the 1-million mark more briskly than previous years. In addition to this record number of exports, the port has begun to find stabilization and normalization with the height of the pandemic passing. Currently, they're the fastest growing port in the US and the fifth largest port in the country (to date).
While Port Houston is exporting a record number of goods, the city of Laredo, Texas, is currently the top gateway for international trade in the US (out of 450 trade gateways). During March, Laredo saw a 12% year-to-year increase, totaling in $28.6bn USD. One large contributor to this uptick in gateway traffic is the country of Mexico. As of the month of March, they ranked as the top trading partner for the US. Top US imports from Mexico to Laredo, Texas include: auto parts, passenger vehicles, heavy duty trucks, and fresh produce (strawberries, blueberries, and avocados). Top exports leaving Laredo were auto parts, gasoline, and diesel engines. Commercial truck crossings have seen a 5.5% increase compared to last year.
With these record breaking numbers, it should come as no surprise that the state just completed a $146m USD container terminal expansion at Port Freeport. This particular port borders the Gulf of Mexico, making it an excellent place to increase trade. This expansion will help the port to accommodate larger container and tanker vessels. Last year, the port saw 85,630 TEUs. It is estimated that this expansion could allow the port to now see up to 2,000,000 TEUs per year. All in all, Texas seems to be positioning itself as one of the top logistical hubs!
Air Freight Update - 06/02/2023
By: Cat Chen
Domestically, Cincinnati/Northern Kentucky International Airport (CVG) is positioning itself as an attractive hub for shippers seeking faster turnarounds and less-crowded international gateways. Starting June 5, 2023, British Airways will launch nonstop service from London Heathrow to CVG. This initiative is expected to draw substantial interest in transport, benefiting companies with headquarters and manufacturing facilities in the area, such as GE Aviation, Safran, and Procter & Gamble. Offering this new service, CVG is likely to enhance connectivity between American and European regions.
In the Asian market, exporters shipping goods to the US are experiencing an increase in LCL shipments via ocean freight and a decrease in air cargo due to surplus capacity and smaller shipments. This increase in capacity is likely due to spotty consumer demand and excess inventory at key destinations. Shippers can reduce costs by shipping smaller and more frequent shipments. At the same time, this decline in air cargo rates signifies a softened demand for capacity, leading to an influx of belly-hold space in long-distance flights. With more summer flights added for east-west trade lanes, rates have been consistently trending downwards according to the BAI. The tonnage carried fell by 7%, and the overall rates on Asian export routes plummeted 44%.
South America's Container Shipping Trade Soars - 05/25/2023
By: Faith LeMasters
While most of the world is reverting back to their pre-pandemic numbers, South America's import industry continues to perform exceptionally well. The CEO of Hapag-Lloyd, Ralf Habben Jensen, spoke of the industry hotspot saying, "It seems to be a bit more robust than some of the others [import markets]. We have secured a very significant chunk of our business on contract. All in all, we're happy with this trade." While the importing industry for other regions around the globe seems to be mellowing out to reflect 2018-2019 numbers, South America's imports are not declining so rapidly.
Freightos Baltic Daily Index reported an assessed average spot rate of $4,184 USD per FEU on Wednesday (24th May, 2023) for Europe-to-South America West Coast shipments. This is 3.1 times higher than 2019 rates. The index also reported an assessed spot rate of $2,505 USD per FEU for South America's East Coast, which is more than double pre-pandemic numbers. The average long-term contract rates from Europe-South America are now $4,846 USD per FEU; 37% higher than average spot rates.
This level of resiliency extends far beyond imports from the EU. Long-term rates from China to South America's West Coast average $3,728 USD per FEU, which is 2.5 times higher than pre-pandemic numbers. In fact, long-term rates are up 77% from May 2019, and short-term rates are up 52% (per data from Xeneta).
Hapag-Lloyd reports that findings suggest this increase isn't inherently linked to the pandemic, but to "increasing industrialization of emerging economies" and "additional opportunities for growth in container shipping in 2023 as a result of new economic and trade agreements."
The Truth About Freight Forwarding & Logistics Data - 05/17/2023
By: Faith LeMasters
There are many headlines circulating at the moment about a "drastic decline" in shipping volume, but is there any truth to this? Yes and no. It's a bit more nuanced than the headlines might lead you to believe. This year's numbers are being directly compared against last year, which was a historically successful year for the supply chain and shipping industries at large. With society slowly returning to its old ways as the pandemic has become more contained, it is more statistically honest to note this year's numbers in comparison to 2018 or 2019. For example, the Port of Long Beach reported a 22% decline this year in comparison to LY. However, in comparison to previous years, shipping volume has remained stagnant, and in most cases, has seen some improvement. Additionally, it's important to note that the numbers have been improving YTD since February. So, while it will be difficult to compete with the past few years when making year-to-year comparisons, this supposed "decline" in shipping is simply a return to expected numbers - as opposed to the "shipping boom" we've seen in recent years.
