Tonnage in April Drops 3.4% Year-Over-Year

Truck tonnage in April fell on both an annual and month-to-month basis as freight activity remains slow, American Trucking Associations said May 23.

Tonnage slumped 3.4% last month to 112.7 when measured against the same period a year ago, and dipped 1.7% compared with March results, according to ATA’s seasonally adjusted For-Hire Truck Tonnage Index. The index was 115.8 in April 2022.

ATA Chief Economist Bob Costello said the year-over-year decline is the largest decrease since February 2021. The April annual decline follows a 2.4% year-over-year drop in March.

AI opens new frontier in supply chain planning

Last year broke the crystal balls. Some of the largest, most sophisticated companies in the world overbought or overproduced inventory by many millions of dollars last year. The reason, at its simplest, is that consumers did not behave as predicted.

Planners don’t have the luxury of blaming consumers for not acting according to their forecasts — especially when many of those customers were reacting to historic inflation in food, fuel and housing.

“Demand planning went out the door for three years,” said Rick Jordon, senior managing director with FTI Consulting. “Now they’re picking it back up, because they have all this excess inventory everywhere. And they’ve forgotten how to do it, or they didn’t do it well before.”

Retailers Near Restocking as Inventory Paring Winds Down

Big retailers are signaling they are nearly done paring back their excess inventories and are preparing to fill their shelves with new merchandise this fall, potentially brightening prospects for freight carriers looking for revived restocking to drive a shipping rebound.

Target’s inventories at the end of the last quarter were 16% lower than the same period a year ago and Walmart cut inventories in its U.S. store operations by 9% over the past year, slashing hundreds of millions of dollars of goods from their balance sheets and suggesting space is opening up in their jammed supply chains.

Weak demand and rising capacity drive air freight prices lower

After a modest bounce during March, global air freight prices resumed their downward trend in April.

According to TAC Index, a leading price reporting agency for the sector, the overall Baltic Air Freight Index (BAI00) dipped a further 0.8% during the week to 1 May, to leave it lower by 42.5% over 12 months.

There were, as usual, regional variations, with Hong Kong (BAI30) up 1.1%, week on week, to leave it down 42.2% year on year, but Shanghai (BAI80) down 2.3% WoW, to leave it down 48.5% YoY – but with upper quintiles in the range of prices paid falling again after an uptick in March.

US imports up again in April as market mirrors pre-COVID ‘normal’

Amid all the doom and gloom on container shipping and the talk of an impending recession, U.S. imports are rising off their lows. Inventory-to-sales ratios are still much higher than pre-COVID, yet monthly imports are now either at or above 2019 levels, depending on which data source you use.

U.S. ports imported 2,020,197 twenty-foot equivalent units of containerized cargo in April, Descartes said on Monday.

That’s down 18% from a year ago, when American importers were frantically shipping in cargo. But it’s up 9% from March and 5% from April 2019, pre-COVID.

Labor Deal at West Coast Ports Comes Into View

Contract talks between unionized longshore workers and employers at West Coast ports appear to be headed into their final stretch following agreements on several major issues, potentially clearing the uncertainty that has been hanging over U.S. importers heading into their crucial fall selling season.

Some shipping officials familiar with the talks hope a tentative agreement could be reached by June, ending a contentious period in port labor relations that prompted some of the country’s biggest retailers and manufacturers to shift goods away from the region to avoid possible disruptions.

Influx of capacity brings a ‘new era’ for air cargo markets

New capacity in the passenger and freighter market is changing the parameters of air cargo this year.

Different aircraft entering the market will alter the balance, according to Frank Ziesemer, CEO of Strike Aviation. But he said these changes had not been thought through, particularly in the freighter market.

“During the pandemic, everybody was looking for freighters, because passenger aircraft were grounded. So the airlines shifted towards cargo aircraft without any clear strategy, just to satisfy the market’s needs.

“Currently, air cargo carriers are increasing frequencies and capacities to gain market share. Some of them do it without calculating the costs or profit and loss, and without receiving any state aid, which could lead to unforeseen difficulties,” he explained.

Here’s How Supply Chains Are Being Reshaped for a New Era of Global Trade

When a measure of strains on global supply chains fell earlier this year to levels last seen before the Covid-19 pandemic, it signaled to some that the product shortages, port bottlenecks and shipping disruptions of the past three years were over and that a new era of stability was on the horizon.

But industry experts say a “return to normal,” as the Federal Reserve Bank of New York described its Global Supply Chain Pressure Index in February, hardly means that companies are going back to conventional, some would say complacent, supply chains.

Instead, say academics and consultants, the experiences during the pandemic, along with changes in geopolitics, are leading to broader, potentially long-lasting changes in how companies manage the flow of goods, from the sourcing of raw materials to manufacturing and distribution.

The economy is in a ‘freight recession,’ with China trade decline continuing

As the big East and West coast ports jockey for supremacy in total trade volume coming into the country, the pie is getting smaller as the economy softens.

The latest trade data from the Port of New York and New Jersey, the nation’s largest container port on the East Coast, points to a slight uptick in container processing but future ocean freight orders continuing to pull back.

In the month of March, the Port of New York and New Jersey handled 574,452 TEUs (20-foot equivalent units) making it the nation’s third-busiest port. But the difference between the Port of Los Angeles, which processed the most containers in March, and the Port of New York/New Jersey, was 48,781 TEUs.

FDA expects COVID-related shortages to normalize this year

The FDA’s medical device shortage page as of December 2022 listed 16 supply disruptions that were forecast to last for the duration of the COVID-19 public health emergency. With the U.S. government set to end the public health emergency in May, the regulator has revised its forecasts for most of the products.

The FDA now predicts the supply of multitarget respiratory specimen nucleic acid tests, micropipettes, microbiological specimen collection devices and other products used in response to the pandemic will return to normal in the first half of the year. Many of the shortages date back to the creation of the list of supply disruptions in August 2020.

 

Trans-Atlantic container rates still double pre-COVID levels

Container shipping rates are not back to normal quite yet. Trans-Pacific rates have returned to pre-COVID levels, but pricing in trans-Atlantic markets has not.

Spot container rates from Europe to the U.S. — while falling — are still more than twice pre-pandemic rates. U.S. imports from Europe remain strong, with building materials supporting volumes.

Drewry and FBX spot assessments

The Drewry World Container Index (WCI) spot-rate assessment for Rotterdam, Netherlands, to New York was $5,061 per forty-foot equivalent unit in the week ending Thursday. That’s down 32% from last year’s peak but still 2.5 times rates in March 2019.

 

Nationwide German transport strike causes major disruptions

Almost all planes, trains and buses in Germany were at a standstill on Monday after a nationwide 24-hour strike began at midnight.

Preparations for the strike had already caused major weekend travel disruptions.

Two major unions are deadlocked in negotiations with public sector employers in several transport sectors — including rail, local public transport, and airport ground staff — and organized the strike to coincide with the start of a third round of talks.

Frank Werneke, head of the Verdi union that represents around 2.5 million public sector employees, spoke of the biggest strike in decades.

Long-distance and regional trains and local public transport all affected

The German rail network was similarly paralyzed. The EVG union said more than 30,000 railway workers have joined the strike.

February still busy for Georgia Ports despite year-over-year, sequential dips

Despite the headwinds of inflation, rising interest rates and high warehouse inventories, the Georgia Ports Authority said it had its second-busiest February ever.

February container volumes totaled nearly 395,000 twenty-foot equivalent units, down from 460,400 TEUs in February 2022 but still 30,400 TEUs higher than pre-pandemic February 2020, GPA said Tuesday.

However, February’s volumes of 394,793 TEUs were also 6% lower than January’s volumes of 421,714 TEUs. January’s volumes also marked a year-over-year decline, with weather and reduced orders in retail and manufacturing contributing to less cargo.

Retail Sales Slip 0.4% in February After January’s Burst

NEW YORK — America’s consumers trimmed their spending in February after a buying burst in January, underscoring the volatility of the economic environment.

The government said March 15 that retail sales slipped 0.4% after jumping a revised 3.2% in January, helped by an increase in auto sales. Retail sales were down in November and December, the critical holiday period.

The February retail sales figure was weighed down by a 1.8% drop in auto sales as well as declines at restaurants and stores selling furniture and clothing. Excluding autos, sales slipped 0.1% from January, according to the Commerce Department.

Sales at furniture stores fell 2.5%, while business at restaurants declined 2.2% in February from January. Sales at department stores slid 4%. But shoppers spent more online and at electronics stores, health and beauty stores and food retailers, according to the report.

Trade slows at Port of Long Beach

Cargo moving through the Port of Long Beach slowed in February due to full warehouses, reduced consumer spending, and the closure of east Asian factories during the Lunar New Year holiday.

Dockworkers and terminal operators moved 543,675 twenty-foot equivalent units (TEUs) last month, down 31.7% from February 2022, which was the Port’s busiest February on record. Imports declined 34.7% to 254,970 TEUs and exports decreased 5.9% to 110,919 TEUs. Empty containers moving through the Port were down 38.3% to 177,787 TEUs.

“Trade continues to normalize following the record-breaking cargo numbers we saw at the start of last year,” said Port of Long Beach Executive Director Mario Cordero. “We are investing in infrastructure projects that will keep us competitive as we collaborate with industry stakeholders to focus on trade volume.”