Scanwell Monthly Logistics Report | April 2022
The latest news in the ocean, air, rail, and trucking industries
By Chris Donnell
Clients, Friends and Colleagues;
There’s a lot of things happening in the transportation world and while I wish I was able to provide you with a glimmer of hope that things are getting better but I’m afraid we’re not out of the woods just yet. Based on our analytics, current global affairs and what could potentially be happening this summer, I’m afraid we’re in for what is looking like a wild ride, at least for the next 4 to 5 months. Attached to this email is my most recent newsletter which highlights just some of the more pressing issues within the transportation and supply chain industries. Have a wonderful weekend and here re just a few topics which take precedence in today’s ever changing transportation market.
Ocean Carriers, Freight Rates and Ports:
- Capacity is opening up however with what’s happening in China, the rebound effect will could be catastrophic.
- Carriers are warning that rates could go higher due to the shutdowns in China
- Long Beach and Los Angeles prepare for yet another wave on container vessels and congestion is expected to get worse.
- The ILWU container is set to expire on July 1st, could we face a potential West Coast port strike?
- Carriers are under the scrutiny of DOJ and FMC and are heading into contract negotiations with a different approach and it’s not good.
- Airline carriers are bypassing places like Shanghai due to Covid-19 issues, further complicating that struggling air market, what’s going to happen once Shanghai opens? Some are predicting air rates to reach into the stratosphere.
- Even with places like Shanghai, Yantian and Hong Kong having shuttered due to Covid, air rates have somewhat flatlined as of late; while air rates are still more than 200% higher than they were pre-pandemic.
FULL SCANWELL REPORT:
- Rail continue to struggle and they failed to adapt to the surge in IPI as they have stranded countless rail cars in places like the Midwest even though they are sorely needed on the West Coast. Could greed be the culprit?
- Congestion at major IPI (Inland) rail depots still remains. Places like Kansas City, Chicago, Memphis are still seeing elevated numbers. Chassis shortages are still happening and further adding to the rail ramp issues.
- Fuel surcharges and per mile costs are on the rise. Last March the average fuel surcharge averaged around 23% whereas today figure averages at 45% or higher. Linehaul, drayage and delivery costs are roughly 30% higher today than a ear ago.
Infrastructure and Government:
- China’s current COVID situation is about to impact on the global supply chain and it’s forecasted to not be pretty. Europe is seeing their own wave of Covid and will only further worse that fragile global supply balance.
- Inflation is at a 40 year high and expected to continue to rise, consumers need to be prepared.
- The DOJ and FMS are investigating the ocean carriers, the alliances they have established and are weighing removing anti-trust immunity, this could cripple the shipping industry.
Chris Donnell | National Sales Director
Scanwell Logistics International (CHI) Inc.