MARKET BRIEF | April 2021
Insights and stories for the logistics, shipping, and transportation industry.
OCEAN SHIPPING UPDATE
The challenges at U.S. ports continue — especially at Long Beach/Los Angeles, Vancouver, Savannah, and New York/New Jersey. The recurring issues of record high demand, shortage of space, and lack of equipment have been exacerbated by the Suez Canal obstruction by the grounded Ever Given. Recapping the port congestion, which should persist throughout April and May:
Vessels are so far out-of-sync, that most of them are arriving up to 10 days late to their load port. Despite this, carrier costs will continue to rise, as strategies evolve for the new contract year.
The Wall Street Journal produced a video that details all these challenges. It conveys how multiple factors have collided to lead us to where we are today.
The challenges at U.S. ports continue — especially at Long Beach/Los Angeles, Vancouver, Savannah, and New York/New Jersey. The recurring issues of record high demand, shortage of space, and lack of equipment have been exacerbated by the Suez Canal obstruction by the grounded Ever Given. Recapping the port congestion, which should persist throughout April and May:
- Vessels are bunched at ports — anywhere from 10-40 vessels anchored in harbors waiting for a berth.
- Limited space at marine terminals (or no space at all).
- Shortage of skilled equipment operators on the docks.
- Long truck queues at gates.
- Limited appointment availabilities.
- Chassis shortages, truckers hoarding chassis, and importers with long free time (10-14 days).
- Distribution facilities filled to near capacity, due to the warehouse labor shortage.
- Rail carriers are not picking up IPI (Interior Point Intermodal) containers fast enough, since there are not enough railcars.
Vessels are so far out-of-sync, that most of them are arriving up to 10 days late to their load port. Despite this, carrier costs will continue to rise, as strategies evolve for the new contract year.
The Wall Street Journal produced a video that details all these challenges. It conveys how multiple factors have collided to lead us to where we are today.
FULL TRUCKLOAD MARKET UPDATE
Coming off a strong finish to Q1, cargo volumes have decreased about 10% since the start of April/Q2. This is likely a “calm before the storm,” as demand is expected to increase throughout the quarter. The OBTRI (Outbound Tender Rejection Index) is 25.8% (up 0.55%). Going into the beginning of produce season, reefer spot rates are higher than contracted rates, so expect some short-term volatility. The reefer OBTRI is 46%. Flatbed rates are continuing to rise, with a 26.2% YTD increase, and a 9.6% load-to-truck ratio increase on DAT within the last week.
Southern California and the Southeast are the hot markets for dry vans right now. With Florida starting their produce season, and higher volumes at the Port of Savannah, there may be higher-than-normal outbound rates. Regarding the reefer market, Arizona normally starts off the produce season with melons. However, capacity is tight almost everywhere. Flatbed capacity is also very tight.
May 4 through 6 is the annual 72-hour International Roadcheck commercial motor vehicle inspection blitz. Most truck drivers will take off during this time, which will result in high rates for the trucks that are running. Delays are also expected, as trucks will be randomly taken in for inspection, which could put that truck out of service for up to half a day.
Coming off a strong finish to Q1, cargo volumes have decreased about 10% since the start of April/Q2. This is likely a “calm before the storm,” as demand is expected to increase throughout the quarter. The OBTRI (Outbound Tender Rejection Index) is 25.8% (up 0.55%). Going into the beginning of produce season, reefer spot rates are higher than contracted rates, so expect some short-term volatility. The reefer OBTRI is 46%. Flatbed rates are continuing to rise, with a 26.2% YTD increase, and a 9.6% load-to-truck ratio increase on DAT within the last week.
Southern California and the Southeast are the hot markets for dry vans right now. With Florida starting their produce season, and higher volumes at the Port of Savannah, there may be higher-than-normal outbound rates. Regarding the reefer market, Arizona normally starts off the produce season with melons. However, capacity is tight almost everywhere. Flatbed capacity is also very tight.
May 4 through 6 is the annual 72-hour International Roadcheck commercial motor vehicle inspection blitz. Most truck drivers will take off during this time, which will result in high rates for the trucks that are running. Delays are also expected, as trucks will be randomly taken in for inspection, which could put that truck out of service for up to half a day.
AERONET SPOTLIGHT: E.V. CHARGING LOGISTICS
Over the past year, Aeronet Worldwide has developed a niche in providing logistics services for the electric vehicle charging industry. Manufacturers and suppliers in that rapidly expanding business know that the increasing number of all-electric models hitting the market has accelerated the need for available charging stations. This has generated a separate, competitive industry where you want to ensure your units are the ones installed in various parking lots and structures. In order to keep up with the many players in this industry, these companies need a logistics ally with experience.
Aeronet has already become experienced designing unique solutions, and providing much needed guidance in charging station logistics. Engaging Aeronet at the early stages of the production planning cycle can help ensure an efficient process in the areas of:
Aeronet has already become experienced designing unique solutions, and providing much needed guidance in charging station logistics. Engaging Aeronet at the early stages of the production planning cycle can help ensure an efficient process in the areas of:
- Supply Chain Design
- Warehousing & Distribution
- Import / Export
- Customs Brokerage
- Warehouse Management System Design
For more information on Aeronet Worldwide, visit Aeronet.com.
