PGL Weekly Update 3-24-23

Container Volumes Fall at Most US Ports

A combination of the Lunar New Year, ongoing labor negotiations and concern about a slowing global economy resulted in the Port of Los Angeles seeing a 43% year-over-year drop in container cargo in February.

The port processed 487,846 20-foot-equivalent containers, down from last year’s 857,764.

“February declines were exacerbated by an overall slowdown in global trade, extended Lunar New Year holiday closures in Asia, overstocked warehouses and a shift away from West Coast ports,” Port of Los Angeles Executive Director Gene Seroka said. “While we expect more cargo moving across our docks in March, volume will likely remain lighter than average in the first half of 2023.

Labor Tensions Rise in Stalled West Coast Port Contract Talks 

Tensions in long-running contract talks at West Coast ports are worsening, with employers accusing unionized dockworkers of slowing cargo handling at the ports of Los Angeles and Long Beach, the nation’s busiest gateway for imported consumer goods.

The sharp rhetoric marks a shift from a longstanding agreement to maintain public silence on issues around the negotiations, which began last spring. The two sides appear to be no closer to bridging the gap on their disagreements, pointing to the possibility of deeper disruptions to U.S. trade flows.

The Pacific Maritime Association, which represents ocean carriers and port employers, said Monday that dockworkers at the ports of Los Angeles and Long Beach had stopped staggering work shifts during mealtimes starting last Wednesday.

National diesel average falls 6.2 cents, to $4.185, reports EIA

The national average price per gallon of diesel gasoline saw another decline, for the week of March 20, according to data issued this week by the Department of Energy’s Energy Information Administration (EIA).

The national average decreased 6.2 cents, to $4.185, following a 3.5-cent decline, to $4.247, for the week of March 13. This was preceded by a 1.2-cent decrease, to $4.282, for the week of March 6, an 8.2-cent decline, to $4.294, for the week of February 27 and another 8.2-cent decrease, to $4.376, for the week of February 20, and a 9.5-cent decrease to, $4.444 per gallon, for the week of February 13. Those declines were preceded by a 1.8-cent increase, to $4.622 per gallon, for the week of January 30 and an 8.0-cent increase, to $4.604, for the week of January 23, with a 2.5-cent decline, to $4.524, for the week of January 16.

PGL Weekly Update 3-17-23

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.”

Point Global Logistics Weekly Update 3-3-23

Despite big gains in New York, Los Angeles remained top port in 2022

For a brief moment last year, the Port of New York and New Jersey made waves with a single stat: It had become the largest port in the United States, dethroning the long-standing volume leader, the Port of Los Angeles.

Though the East Coast port only kept the top spot for a few months — falling back to the #2 spot by December — its gains over the years made it the second-largest port in the nation, outpacing the Port of Long Beach in 2022. The Port of New York and New Jersey has been gaining market share since the pandemic, growing its volumes by more than 2 million TEUs in the past five years.

Gains at the top of the ranking reflect a broader trend of rising volumes for U.S. ports. See a full ranking of U.S. containerports that handled more than a million TEUs in 2022 below.

For February, Carloads, Intermodal Volume Decline

U.S rail traffic in February 2023 lagged the same month last year—down 5.2% or 101,452 carloads and intermodal units, the Association of American Railroads (AAR) reported March 1. This follows January’s 3.2% drop from the prior-year period; while carloads rose slightly during the first month of the year, intermodal experienced its worst January since 2013.

According to AAR, U.S. Class I railroads in February 2023 hauled 1,849,723 carloads and intermodal units, comprising 905,744 carloads (down 1.6%) and 943,979 containers and trailers (down 8.4%). In contrast, February 2022 U.S. rail traffic experienced big year-over-year gains largely due to severe winter storms holding back volumes in 2021; February 2019 U.S. rail traffic was behind February 2018, reflecting weather and/or economic and trade-related uncertainty.

DAT’s January Truckload Volume Index is solid to start 2023

The January edition of the DAT Truckload Volume Index (TVI), which was recently issued by DAT Freight & Analytics kicked off 2023 in strong fashion.

The DAT Truckload Volume Index reflects the change in the number of loads with a pickup date during that month, with the actual index number normalized each month to accommodate any new data sources without distortion, with a baseline of 100 equal to the number of loads moved in January 2015. It measures dry van, refrigerated (reefer), and flatbed trucks moved by truckload carriers.

January’s van freight TVI—at 223—was up 2.8% compared to December and also up 2.8% annually. The refrigerated TVI—at 174—was up 3.0% compared to December and up 3.6% annually. And the flatbed TVI—at 218—was up 10.7% compared to December and was up 12.4% annually.

Point Global Weekly Update – 1-27-23

Ports Post Strong Volume for 2022 Despite December Drop-Off

Despite a significant slowdown in the second half of 2022, two major West Coast ports approached the record-setting pace they had in 2021.

Port of Los Angeles officials said the facility still finished as the nation’s busiest container port for the 23rd consecutive year, processing 9,911,158 20-foot-equivalent units, down nearly 7.2% from 2021’s 10,677,609.

For December the port processed 728,871 containers, down 7.3% to 786,588 year-over-year.

“We started 2022 at that same frenetic pace with 109 vessels in our queue, yet we ended with a disappointing 20% decline that began last August,” Executive Director Gene Seroka said during his annual State of the Port address.

Industry study tracks China tariffs’ added costs to importers and consumers

For nearly five years now, consumer goods industries that rely heavily on Chinese imports for low-cost sourcing have been waging a campaign against the Section 301 tariffs.

In the years since the Trump administration raised concerns about a modern trade war, China’s share of imports to the U.S. have fallen in those consumer goods categories covered in the report. Once again, it’s difficult to parse out the effects from tariffs from those arguably much larger impacts from supply chain risks and costs relating to the pandemic and China’s internal response to it.

From 2017 to 2022, China’s share of total apparel imports has fallen from 34% to 22%, according to the study, which was released by the American Apparel & Footwear Association (AAFA), the Footwear Retailers & Distributors of America (FDRA), the National Retail Federation (NRF), the Retail Industry Leaders Association (RILA), and the United States Fashion Industry Association (USFIA). China’s share of 301 tariff-specific apparel imports fell from 92% to 88%.


West Coast Port Labor Contract Talks Remain in Limbo

Long-stalled West Coast port labor talks are showing no signs of progress, according to people familiar with the negotiations, extending uncertainty for U.S. retailers who rely on the coast to import goods from Asia.

Shipping industry and Biden administration officials had hoped the talks, which began in May, would conclude last fall. But, people familiar with the negotiations say the parties haven’t made progress since the summer on regional issues that are delaying discussion of major contract provisions, including wages and automation.

One person familiar with the talks said there was a growing sense of frustration in the maritime industry. ”Everyone would like to see this conclude so there’s no more uncertainty in the market and we can move on,” the person said.

Point Global Weekly Update 1-20-23

New ‘five-year plan’ to revive China as a modern logistics giant

Increased demand has exposed cracks in China’s logistics infrastructure, but it’s hoping its new ‘five-year plan’ for the sector may be enough to stop an expected exodus of western multinationals.

The General Office of the State Council last month announced its first long-term plan for modernising China’s logistics system, with a focus on improving efficiency resilience and safety.

Although it is a five-year plan, according to state news agency Xinhua: “By 2025, a modern logistics system featuring supply/demand adaptation with internal and external connectivity will basically be in place.


South Korea’s First Smart, Electric Ship Begins Service

Hyundai Heavy Industries recently commissioned South Korea’s first large next-generation electric propulsion ship which incorporates smart technology. The unique vessel is dual-powered with the ability to operate either fully from its battery or an LNG-fueled engine or a hybrid mode with the battery supplementing the engines. The vessel will operate as a demonstration ship and undertake tourist voyages from the city of Ulsan along the Korean coast.

Construction on the 1,400 gross ton vessel began in October 2021 at the Hyundai Mipo Shipyard. Named Ulsan Taehwa, the vessel features an electric propulsion system developed by Korean Shipbuilding & Marine Engineering that includes an energy storage system that enables selective operation of the DC Grid-based LNG and marine diesel oil power plant.


U.S. Container Imports Tumbled Close to Prepandemic Levels in December

U.S. ocean imports closed 2022 extending a monthslong slide closer to prepandemic levels, according to a new report, leaving the shipping sector bracing for deeper declines in container volumes this year.

American ports handled 1,929,032 inbound containers in December, measured in 20-foot equivalent units, or TEUs, down 1.3% from November, according to a report released Tuesday by Descartes Datamyne, a trade intelligence database owned by supply-chain software company Descartes Systems Group Inc. December marked the lowest level for seaborne imports since June 2020, just before a pandemic-driven rush to restock depleted inventories triggered a surge in imports.

Point Global Logistics News of the Week — 1.13.23

What the latest warehouse data is signaling about inflation and the economy

National warehouse storage rates remain elevated, but the prices did not rise quarter over quarter in Q4 2022, according to WarehouseQuote’s just-released Warehouse Pricing Index report.

“Rates remain at these levels as a result of warehouse inventories not coming down significantly in November and December,” said Jordan Brunk, chief marketing officer of WarehouseQuote.

Warehouse pricing and inventory data are indicators of consumer strength. Even as supply chain inflation slows, warehouse rates are high because there is a lot of inventory, which leaves less available space.


Congestion Easing at Ports, Along Southern Border, TRB Speakers Say

WASHINGTON — Nearly three years after the beginning of the COVID-19 pandemic, global supply chains and international ocean carriers have seen cargo volumes return to pre-pandemic levels.

Now, many manufacturers are considering reshoring and nearshoring their operations to lower costs and make their companies less vulnerable to shipping interruptions, such as those they experienced in 2020 and 2021.

That was one of the conclusions from Maria Boile, a former Rutgers University professor now with the Department of Maritime Studies at the University of Piraeus in Greece.


Labor Disruptions at Ports Quadrupled Globally in 2022

Labor unrest took an unusually heavy toll on ports around the world in 2022, and the outlook for continued economic instability could bring even more upheaval to global supply chains in 2023.

There were at least 38 instances of protests or strikes affecting port operations last year, more than four times as many as in 2021 when the pandemic upended global trade, according to Crisis24, a maritime security consultancy. There were nine incidents in 2020, according to data beginning in July. Crisis24 changed its tracking system at that time, and comparisons with previous years are unavailable.

Workers are feeling the impact of higher fuel and food prices in the wake of Russia’s invasion of Ukraine while their wages have remained stagnant, said union experts, freight forwarders and shippers.

Point Global Logistics News of the Week – 12.23.22

Ports on Both Coasts See Drop-Off in Volume in November

Port container volumes on the West Coast and East Coast declined in November, although shippers were focused on different factors.

Labor talks between the 22,000-member International Longshore and Warehouse Union and Pacific Maritime Association, which represents 29 port and storage locations, continued to weigh on volumes. On the East Coast, cargo levels were driven by concerns over the economy.

However, in the past six months, East Coast ports have seen a significant uptick in container handling, even with the slightly lower November number.

Top disruptions that shook supply chains in 2022

Geopolitical conflicts, strike threats and weather-related disasters tested supply chains in 2022, adding new headaches for businesses still grappling with the fallout from the pandemic.

Russia’s invasion of Ukraine led to tight supply and high prices for certain commodities, forcing some companies to overhaul operations and rethink their sourcing strategies. Meanwhile, COVID-19 lockdowns in China sent businesses scrambling for alternatives as some suppliers idled production.

New York continues streak as nation’s No. 1 port as LA cargo volume hits level not seen since 2009

The Port of New York and New Jersey took the top spot in the country for trade in the month of October, the third-consecutive month it has topped California’s big ports as more cargo volume shifts to the East Coast in what seems with every month to look more like a permanent shift.

New York handled 792,548 twenty-foot equivalent units (TEUs), nearly 19% more than in October 2019.

Earlier this week, the Port of Los Angeles posted its lowest level of October since 2009. Port of Los Angeles executive director Gene Seroka cited protracted negotiations and fears of a labor strike among port workers as the reason for the shift in trade at a press conference earlier this week.

Point Global Logistics News of the Week — 12.2.22

Decaying demand sees China’s ports building empty container mountains

Amid a “very quiet” end-of-year shipping season, empty containers are piling up at Chinese ports.

According to Alice Tang, China-Europe land transport planner at ITS Cargo, there has been a complete reversal of the severe equipment shortages of last year’s pandemic-induced cargo boom.

“Empty containers are piling up at ports including Guangzhou, Yantian, and Shekou,” she told The Loadstar.

House Passes Rail Deal, Senate to Schedule Vote

To avert a railroad strike projected to cost the economy $2 billion daily, the U.S. House of Representatives on Nov. 30 passed a bill outlining a labor agreement between rail carriers and workers.

The legislation, which advanced to the U.S. Senate, would implement provisions negotiated in a tentative agreement reached in September by the Presidential Emergency Board.

The measure’s passage in the House by a vote of 290-137 with bipartisan support came on the heels of President Joe Biden urging Congress to legislate on the ongoing labor dispute between railroads and key freight rail unions.

Georgia Ports Authority puts customers, drivers first as demand surges

West Coast ports have been slammed with a slew of headwinds recently, including record-breaking congestion and labor disruptions. As a result, East Coast ports have gained popularity with shippers — and carriers — of all types.

The Port of Los Angeles saw throughput fall 25% year over year in October, and the Port of Long Beach experienced a 24% year-over-year drop. In contrast, the Port of Savannah experienced a 2% year-over-year climb, and the Port of Charleston realized 7% annual growth.

While a portion of the West Coast’s dropping volumes can be attributed to waning consumer demand for durable goods, the growth seen on the East Coast makes it clear that companies are beginning to favor the Eastern Seaboard.

Point Global Logistics News of the Week — 11.18.22

Third Railroad Workers Union Turns Down Pact

The possibility of a nationwide freight railroad strike is increasing after another union turned down a tentative agreement that was negotiated in mid-September among the major Class I carriers, a management council and the Biden administration.

The International Brotherhood of Boilermakers voted down the agreement, according to the union and the railroads. The precise vote was not made available.

While the union is the smallest of the bargaining units with only about 300 workers who repair and rebuild diesel locomotives, if any union votes to go on strike and picket lines are set up, it is expected the more than 115,000 workers, including locomotive engineers and conductors, would honor the strike.

Imports Into Southern California’s Ports Plunged 26% in October

Imports into the nation’s busiest container port complex in Southern California are plummeting as U.S. trade sputters and retailers and manufacturers shift their supply chains amid increasingly contentious West Coast port labor negotiations.

The neighboring ports of Los Angeles and Long Beach handled 630,231 loaded inbound containers in October, down 26% from the same month a year ago and the lowest volume of goods coming into the ports since May 2020.

Gene Seroka, the executive director of the Port of Los Angeles, said Tuesday that the biggest factor in the cargo declines, which began in August, is that importers are moving more of their goods to East Coast and Gulf Coast ports “due to protracted labor negotiations.”

US imports from China falling faster than from other countries

America and China remain intimately intertwined via trade despite worsening tensions over Taiwan and the Russia-Ukraine war. More than a third of all U.S. containerized imports arrive from China. More than a sixth of China’s export value derives from U.S. purchases.

But there are growing signs of at least some decoupling. In recent months, America’s imports from China have fallen faster than total imports. Other Asian countries are increasingly taking U.S. market share from China, a trend that began before the pandemic and has continued.

According to new data from Descartes, U.S. containerized imports in October were flat (up 0.2%) versus September. But imports from China fell 5.5% month on month, by 45,071 twenty-foot equivalent units. The decline from China was entirely offset by gains from Thailand, South Korea, Taiwan, Japan and other countries.

Point Global Logistics News of the Week — 10.28.22

Goods-Trade Deficit Widens for the First Time Since March

The U.S. merchandise-trade deficit widened in September for the first time in six months as imports grew and some exports plunged.

The shortfall widened 5.7% to $92.2 billion last month, Commerce Department data showed Oct. 26. The figures, which aren’t adjusted for inflation, compared with a median estimate for a gap of $87.5 billion in a Bloomberg survey of economists.

Exports declined 1.5% to $177.6 billion. Imports rose to $269.8 billion, also the first increase since March.

Another Railroad Union Rejects Contract

Members of another railroad union rejected a tentative agreement on wages and work conditions reached with the freight railroads in September, further clouding the outlook for labor peace after the White House brokered a deal to avert a strike.

The latest vote, by the Brotherhood of Railroad Signalmen, sends the two sides back to the negotiating table. Failure to agree on a revised deal could result in a strike as early as December.

U.S. West Coast Ports Beat Congestion, But Slowdowns at Houston Remain

Congestion has cleared up at the twin ports of Los Angeles and Long Beach, which together make up the busiest container-terminal complex in the United States. But the slowdown hasn’t gone away: Instead, the same overabundance of cargo can now be found at Houston, which is the biggest container port on the U.S. Gulf Coast.

“We currently see a lack of storage in Houston, as well as minimal chassis availability and vessel congestion at Houston area terminals,” said Paul Brashier, VP of Drayage and Intermodal for ITS Logistics, in the company’s latest supply chain index report. “Houston is seeing higher inbound volumes, a chassis imbalance and terminal congestion above normal levels.”