511 - Market Update Q4 2022

Ocean Freight and Logistics

SUMMARY: Import demand remains at record levels, causing port congestion to spread from primary to secondary facilities across North America. Ocean freight rates begin to pull back, relief that will take several months to cycle through domestic inventories.

U.S. IMPORT ACTIVITY KEEPS HUMMING Imports totaled 2.53 million twenty-foot equivalent units in July up 18% year on year and 15% from July 2019, pre-pandemic. Canadian imports are up similarly, 19.6% over 2021, 26% since September 2019. As a result, port congestion across North America remains critically high. (American Shipper / Freightwaves.com, fxstreet.com) CONTAINER SHIPPING COST EASES September saw Freightos’ Baltic Index of Global Ocean Container rates recede per average container shipment, which is good news, certainly, but any cost relief for importers, operators and consumers will take months to appear, and may be tenuous because profit- hungry ocean freight lines can limit capacity and drive-up rates at any time simply by removing vessels from their fleets. And large initiatives have begun across the ocean shipping industry to convert fleets to cleaner-burning fuels, likely bringing new temporary constrictions of container berth availability and increased costs. WEST COAST JAMS TRIGGER BACKUPS AT EAST, GULF COAST PORTS Queues dozens of container ships-long have formed off ports in New York, Houston and Savannah, while the lineup of vessels waiting to get into Los Angeles and Long Beach has dwindled from an armada that once counted more than 100 ships. The queue at the Port of New York and New Jersey has reached about 20 vessels, while 40 container ships were waiting recently off the Port of Savannah. Port Houston, a growing destination for ships from Asia traveling through the Panama Canal, had 25 container vessels in-queue late in Q3. Industry executives and port officials said a surge in inbound cargo in recent months has swamped landside operations, straining storage capacity and the availability of container- handling equipment while slowing the ability of dockworkers and trucking companies to handle shipments. (Wall Street Journal) Georgia Ports Authority reported that its container unit volume of 5.76 million TEUs for fiscal 2022 was its highest ever volume, growing by 8% compared with fiscal 2021 container volume at ports. Organic growth, West Coast labor talks, and delayed access to rail at West Coast ports, prompt the significant shift in vessel calls to Port of Savannah. ( FreightWaves)


A White House pilot to share freight data among shippers and supply chain stakeholders has doubled in size, with participants beginning to exchange information. The Freight Logistics Optimization Works initiative has expanded to 36 members, with ports, terminal operators and major carriers such as BNSF and J.B. Hunt joining as partners. US Department of Transportation expects the voluntary program to grow in the coming months and plans to hold listening sessions with small businesses and technology experts. A participating said in a statement that so far “participants have shared critical data that will collectively give us the ability to solve some of these supply chain bottlenecks.” (Supply Chain Dive)

Q4 2022 Market Update


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