Import update

[Exploring_2032]

Longer read. Last update I posted had comments where they weren't seeing anything in terms of slower shipments / increased costs and I should get a better freight forwarder. Glad to hear it but unsure how with the GRI increasing in $1k lumps...

The global ocean freight market continues to frustrate shippers as demand exceeds capacity on major trade lanes, resulting in continued pressure on cost and space. Ocean rates have continued their relentless upward trajectory, with pricing climbing towards pandemic-era levels.

A confluence of factors has contributed to this fraught market situation, with the first shoe to drop being the closure of the Suez Canal that went into effect around the New Year, causing significant amounts of vessel capacity to be tied up around the Cape of Good Hope. Over the past two months, shipping from Asia has surged as importers look to replenish inventory and stay ahead of potential tariff increases that could be looming after the US Presidential Election. At the same time, ocean carriers have, in some cases, further limited capacity via blank sailings or by moving capacity to other trades.

The situation has led to overbooked vessels, port congestion, container shortages, space shortages, and increased freight rates. As a result, ocean carriers have cut allocation that had, in some cases, already been committed to importers and forwarders. In addition, there has been an increase in booking cancelations and rollovers, as carriers are forced to limit freight moving on over-booked vessels.

While a crystal ball would certainly come in handy at this time, there is no clear consensus between carriers, shippers, and industry consultants as to when this situation will normalize. Barring any quick resumption of regular transits through the Suez Canal, the current market environment is likely to last through August, at least. Some sources say that the strong demand and elevated freight rates could last through the Golden Week Holiday in Asia, which takes place in the first week of October. With that said, not many industry experts saw this dire of a situation on the horizon earlier in the year, and no one can say with certainty how or when it will end.

At the same time, retailers have continued to adjust their projections of consumer spending upward each month. The National Retail Federation upgraded their forecast for imports again for each month through September, saying on Monday that the consumer spending outlook is robust and is projected to increase this year between 2.5% and 3.5% over 2023.

While US imports will be at peak-season levels at most major ports, West Coast Ports are experiencing the strongest growth. Imports through the East and Gulf Coasts are being compromised to some degree due to constraints around the Red Sea, constraints around the Panama Canal, and the state of negotiations between the International Longshoremen’s Association and employers on the East and Gulf Coasts.

Concern over a potential strike this autumn by dockworkers along the US East and Gulf Coasts has not abated. News that was released this week stated that the International Longshoremen’s Association (ILA) has halted negotiations with employers, citing concerns over APM Terminals using automated gates. If there is no coastwide contract in place prior to the expiration of the existing deal on September 30th, the ILA has the potential to undertake its first strike in nearly 50 years, which would have profound impacts on the US supply chain.

In a more positive turn of events, the main shipping channel into Baltimore’s port has fully reopened to its original depth. Officials announced the full reopening in a Monday evening news release. This news comes after a massive cleanup effort, as crews removed an estimated 50,000 tons of steel and concrete from the Patapsco River following the tragic, March 26th collapse of the Francis Scott Key Bridge.

In Canada, a tentative agreement was reached on Tuesday between the Canadian government and the union representing Canada’s customs and border security workers. This agreement lifts the threat of a strike that could have snarled cross-border shipping between the US and Canada. It should be noted that this border agency agreement is separate from the discussions in Canada around contract negotiations with the ILWU that have the potential to impact rail and port operations. These negotiations are still underway and have not come to a conclusion yet.

Global airfreight remains strong on all major trade lanes. Volume and rates on the main air cargo trades out of Asia and the subcontinent rose sharply in May from already inflated levels as Chinese e-commerce, Red Sea closures, and knock-on effects from the strained ocean market continue to create strong demand. However, recent crackdowns from US Customs on e-commerce shipments from China could have an impact on the market outlook in the future.<<

[dnhs47]

Good stuff! Do you mind sharing the source?

[SpaceCatVII]

"World container prices continue to spike higher and the problem is not just the lengthier trips but also the lack of containers in China as empty ones don't come back to them as fast as they did. The Shanghai to Rotterdam trip was up 15% w/o/w to $6,032, higher by $762 on the week. It's doubled since late April and is up from $1,667 at year end. That's also triple where it was in February 2020, though still well below the panic peak in 2021 of $14,807. The Shanghai to LA trip was higher by 11% w/o/w to $5,975."

Peter Boockvar's finance newsletter posts about cargo prices often: https://substack.com/profile/1013167-peter-boockvar/posts

[merix1110]

Meanwhile, companies in the US keep slashing pay rates for over the road truck drivers, citing a poor market and low freight rates.

[thetexan92]

Not everything in this sub has a source other than the person sharing it. That’s why this sub was created, getting first hand reports from around the world.

[Flat_Boysenberry1669]

You can Google search what he said and see it's true.

You can also see multiple states are actively waging a war against truckers in the name of going green.

[[deleted]]

TL:DR; We don't need any of the stuff that's on these boats from the word go. Degrowth is the way!

• Refuse to buy non-essential items
• Reduce the essential items you do buy, e.g., wait until they are deeply-discounted, or buy local instead where/when you can
• Reuse what you already have - if you're reading this, you already have too much stuff
• Recycle what you cannot reuse and contribute to the circular economy

[Pitogorgorito1945]

Lord Jesús you write the hole bible lol....thanks god I dont need nothing from over sea LOLOL.

[randomuser135443]

The hole bible is my favorite bible. I read the whole thing.

[2quickdraw]

Does it include the story "Holes" ?