Inbound Ocean TEU Volumes down 29% since the beginning of September. Inbound bookings of course a good leading indicator for future port demand.
Bookings have been falling hard since the end of May and have yet to find a floor.
US import customs data has yet to see significant declines in throughput as ports continue to work through backlogged vessels keeping upward pressure on port demand. We have already seen a tremendous reduction in vessel anchorages off the coast of Los Angeles and Long Beach in part to the slowdown of bookings destine for the West Coast – accompanied by a shift in market share to the East Coast.
YoY, the port of Los Angeles and Long Beach combined have seen a reduction in import market share of 18.9%.
While East Coast ports such as Norfolk, Savanah, NY/NJ, Charleston, Baltimore, and Philadelphia have all experienced growth. The substantial shift in where goods are entering into the US is one of the many factors as to why compliance has increased exponentially since Q1 this year.
Simply put, if carriers are not having to travel as far as they typically would in order to get goods from A to B, they decrease their turn times; creating more capacity without having to increase physical assets.
Haul lengths normally increase seasonally as they are currently, however with inventories being as high as they are for most large retailers and the fear of a rail strike ending, I’d imagine this recent increase will be more of a blip than a long-term trend.
Another 75-point increase expected from the Feds this week even as the inflationary rate of increase has slowed.
The push to keep upward pressure on rates surround the idea that the economy may still be overheated. At a glance, strong jobs data will also be a contributing factor to this week’s 3rd consecutive colossal rate hike.
New seasonally adjusted single-family housing starts may have found their floor as the 5-month consecutive drop seems to have ended. The most recent release showing a 29k unit increase from July.
Starts are also down 15% from 2021 and 9% from 2020 but are still at their highest point since September of 2007.
Multi-family starts, on the other hand, have seen significant growth recently as buyers may be leaning towards separate residential units within a single structure as a more affordable solution to home ownership.
Diesel at the pump down below $5 a gallon for this first time since April of this year.
That a 16% reduction from when fuel costs peaked back in June. The trendline relatively consistent the ULSD rack price over the same period of time.
As we inch closer to winter, both will be key data sets to keep an eye on as there are a number of lingering political factors that could push fuel prices back up before the years end.
This has been you Bridge Logistics Market Update for the week of September 19th, 2022.