Both Ontario and LA rejections drop to ’19 levels as compliance increases to 98%.
The significant shift in market share from the west coast to the east coast, accompanied with slowed consumer demand, may be to blame even as conditions have clearly improved out west; trans-pacific rates continue to decline as inbound TEU bookings remain around pre-pandemic levels.
More than likely no immediate market share reversal as rerouting goods for most BCO’s is not an overnight adaptation; reworking supply chains can be a complicated, time intensive endeavor.
New home sales saw double digit declines last month, now down 12.6% from its last reading and 29.6% for the year.
As we’ve discussed previously since the Feds made their rate hikes announcement at the beginning of the year, consumers had been in pull forward mode to lock in historically low interest rates as federal fund rates were hovering around zero at that time.
Since then, we’ve seen rates jump 4 consecutive times this year with a high possibility of a 3rd back-to-back 75bps increase if job figures remain robust.
Unfortunately, the result of home affordability reaching a 33-year low has caused mortgage applications to plummet to their lowest level in 23 years – causing some lenders to trigger layoffs.
Additional weakening evidence surrounding housing coming from the most recent Homebuilder Sentiment falling into contraction territory: dropping from a 54 to a 49.
Pandemic aside, the sentiment hasn’t fallen into contraction territory since June of 2014.
This all relevant as it relates to trucking of course as the predominant means of transporting building materials in the early stages of a home require a high level of flatbed compliance.
The effects of a slowdown will be seen much sooner here than the downstream decrease in demand of large interior items such as furniture and appliances that move by means of dry van.
Diesel at-the-pump back on the rise, as was a concern last week given the intense bump in the ULSD rack price since the 2nd week of August.
As the spread between retail and rack prices continue to narrow, so will mega fleets purchasing-power over smaller trucking companies who are forced to purchase fuel at retail cost.
For now, the advantage still remains on the fuel and volume sides as contractual rates are sliding, but still abnormally high.
This has been your Bridge Logistics Market Update for the week of August 29th, 2022.