WestWorld Dispatch

06/15/2022

DSV has been reported to be interested in acquiring C.H. Robinson's global forwarding unit for as much as $9 billion.

DSV has been reported to be interested in acquiring C.H. Robinson’s global forwarding unit for as much as $9 billion.

06/08/2022

A combination of rising fuel prices, lowering spot rates and falling imports makes for a freight market in transition.

05/26/2022

Canada's Port Saint John aims to double container capacity in a broader effort to attract U.S. customers from the Northeast and Midwest.

05/24/2022

A new per-package charge has been levied on Standard cross-border ground service.

UPS has imposed a new surcharge on standard ground service from the US to Canada. Surcharges for other cross-border products are going up.

05/23/2022

A major cause of inflation may have peaked; that’s good news for consumers but bad news for trucking companies.

FreightWaves founder and CEO Craig Fuller analyzes truckload contract rates and where they may be headed.

05/19/2022

Increasing diesel prices could push US into recession in 2023, experts say

Record diesel prices are fuelling fears of a recession More expensive fuel means more inflation pressures.

05/01/2022

This week: Mexico’s heavy-duty truck exports slump in March

Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Mexico’s heavy-duty truck exports slump in March; Solar component maker opens Texas production line; Trucks collide near downtown San Antonio; CBP seizes $35M worth of m...

04/25/2022

Demand for truckers has hit a 22-month low, according to Bank of America. It’s the latest indicator that a trucking bloodbath is underway.

Demand for truckers has hit a 22-month low, according to Bank of America. It’s the latest indicator that a freight recession is underway.

04/22/2022

The freight market has proved incredibly unstable over the past two years, with capacity constraints driving historic rate hikes for both contract and spot transactions. Many shippers are now looking to shorten the duration of their bid contracts to take advantage of current capacity and avoid being locked into sky-high rates as the market shifts.

Many shippers are now looking to shorten the duration of their bid contracts in order to take advantage of current capacity and avoid being locked into sky-high rates as the market shifts.

04/21/2022

Expect four more interest rate hikes this year and a recession to follow in 2023 or 2024, survey says

04/18/2022

Texas Gov. Greg Abbott ended his border policy of second inspections of commercial trucks crossing from Mexico on Friday, but experts said it already caused supply chain problems.

04/17/2022

Container shipping industry has started to slow amid U.S. inflation, Shanghai’s Covid-19 lockdown

Container shipping rates are sinking, with the World Container Index is down 16% since the beginning of the year.
This might only be the beginning of their descent.

A steady fall in the World Container Index compiled by London-based Drewry Shipping Consultants is the latest hint that Americans—and developed world consumers more generally—might be starting to spend less on goods as fiscal stimulus drains away, inflation at a four decade high eats into wage gains, reopening economies shift back toward services and the Fed initiates aggressive rate increases. Another factor might be the lockdown in Shanghai, which appears to be disrupting the flow of goods out of China—meaning less need for container shipping.

The World Container Index is down 16% since the beginning of the year, with key routes Shanghai to Los Angeles and Shanghai to New York down 17% and 16% respectively. But most striking is the steep fall since March 10—the WCI is down 13% since that date alone. That suggests that either spring retail sales data in the U.S. will hold some nasty surprises or that the large Covid-19 outbreak in China, which really started to gain steam around mid-March, is already having an even bigger impact on global supply chains than many appreciate.

Shipping companies have started employing “void sailings,” where ships continue to sail but don’t load or discharge containers at ports, to reduce their supply on offer, and therefore support rates, according to George Griffiths, who covers the global container shipping market at S&P Global Commodity Insights.

The first word on what Wall Street is talking about.
While the WCI is still far higher than it was before the pandemic, the trajectory will likely remain downward with significant new ship supply setting sail by the end of this year. The boom in container rates over the last two years was driven by the switch away from services toward goods owing to the pandemic and government stimulus. But if Americans really are beginning to tighten their belts now, shipping rates might only see a modest pickup when China’s lockdowns end.

The cost to ship bulk goods such as grain—which are facing more disruption from the war in Ukraine—has also fallen since mid-March. But the Baltic Dry Index, a barometer of that part of the shipping world, has performed better overall in 2022. It is still roughly flat for the year.

Container shipping stocks meanwhile, are a mixed bag. A.P. Moller-Maersk is down about 20% since mid-March. Evergreen Marine and Cosco, which also operates other types of vessels, have also struggled but fared somewhat better. If China’s lockdowns don’t ease soon and U.S. consumers don’t step up to bat, investors in the sector, and perhaps more broadly in retail, may ultimately wish they had abandoned ship earlier.
Source: WSJ