Ocean Shipping Costs Decline 84%, Truckers On Verge Of Losing Money
The period between Labor Day and Christmas is typically peak shipping season. Don’t expect much of a peak this year…
No Backlog at California Ports
The Wall Street Journal reports Southern California’s Notorious Container Ship Backup Ends
Key Stats
- The queue of ships waiting to unload at the ports of Los Angeles and Long Beach fell from a peak of 109 ships in January to four vessels this week.
- Descartes Datamyne, a data analysis group owned by supply-chain software company Descartes Systems Group Inc., says container imports to the U.S. in September declined by 11% from a year earlier and by 12.4% from August.
- Shipping lines have canceled between 26% to 31% of their sailings across the Pacific over the coming weeks, according to Sea-Intelligence
- In September of 2021 the average cost for shipping a container from Asia to the U.S. West Coast exceeded $20,000. Last week, the average cost to ship a container from Asia to the U.S. West Coast had declined 84% from a year earlier to $2,720.
Extraordinary Progress
The real reason that supply chain constraints are easing is because far fewer goods are moving through the supply chain. The last time that the port of LA handled so few loaded import containers in September was during the Great Financial Crisis. https://t.co/faRSdXRz53 pic.twitter.com/aN0JZv1mud
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) October 22, 2022
2022 September vs September Prior Years
- 2022 vs 2021: -26.6%
- 2022 vs 2020: -27.2%
- 2022 vs 2019: -14.6%
- 2022 vs 2018: -17.1%
- 2022 vs 2017: -11.6%
The last positive comparison vs other years was September of 2009 coming out of the great recession.
Truck Shipping Rates Barely Positive
Today’s daily national truckload index rate was $1.78, just $.03 above the breakeven rate for some of the truckload carriers in the market. Note: this is peak season. https://t.co/n7DPRFzKlh pic.twitter.com/XHr8Tliqr1
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) October 22, 2022
Great Purge Coming Up
We are on the cusp of a Great Purge in trucking capacity, as carriers struggle to keep up with challenging conditions. The latest carrier to shutter. https://t.co/des372S3Lj
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) October 21, 2022
Shipping Rates
Mega ships work well when you have a lot of volume concentrated at single origin points, but less useful when trade is distributed around the world and at much smaller ports. Unfortunately for the container carriers, they will have these massive ships they won’t fill. 2/
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) October 20, 2022
The same thing happened in the airline industry. The large mega airliners (A380) were once viewed as the saving grace for the airlines, but were replaced by mid-sized planes that were more fuel efficient, could land in many more locations, and offer more direct service. End.
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) October 20, 2022
Aerial Reconnaissance
Doing aerial recon over the port of Newark to figure out where all the containers went after they fell off a cliff w/ @rrpre pic.twitter.com/JyWXnmhZXI
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) October 21, 2022
Great Pic!
What About Railroads?
This is why the LTLs and railroads are starting to feel the pain https://t.co/zwGHFi2JDE
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) October 21, 2022
Keep Those Rate Hikes Coming!
Keep the rate hikes coming? pic.twitter.com/9ALQ7yQSYY
— Jeffrey P. Snider (@JeffSnider_AIP) October 21, 2022
Question of the Day
Q: Are we in recession or just headed for one?
A: The question is moot.
Not only does Fed policy operates with a lag, the Fed appears committed to holding rates at a high level for some time. Sooner or later does not matter much.
READ MORE HERE
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One Comment
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Family in CA got out of the business after years of driving starting from solo all the way to owning the company.
Commie enviro laws and high cost were the factors that led to the decision.
Local diesel is almost 6$ and online is saying we might be about a month away from a severe shortage.