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The Logistics and Supply-Chain Slowdown Has Begun. Here’s How to Take Advantage.

By December 7, 2022No Comments

After the pandemic-driven surge in consumer demand that triggered a frenzy of shipping activity and skyrocketing prices, logistics and transportation companies are signaling a fast slowdown.

With consumer demand wavering and retailers coping with excess inventories at overstuffed warehouses, global container volumes fell 8.6% in September, according to maritime data group Container Trade Statistics, reaching the lowest level since February during a period when shipping is usually at its strongest. The rapid falloff is hitting imports into the U.S. hard. Research group Descartes Datamyne says container imports from China into the U.S. were down nearly 23% in October from the annual high in August.

The impact is cascading across U.S. domestic supply chains, dimming cargo volumes for trucking companies and railroads. It is also bringing down the hefty freight rates that have crashed companies’ transportation budgets over the past two years, presenting an opportunity to cut logistics costs for those retailers and manufacturers that are looking to move goods.

The weekly Shanghai Containerized Freight Index, which measures shipping prices out of China, recently dropped to $1,443.29, about one-third the level it hit in early June. The separate Drewry Worldwide Container Index measuring the average price to ship a 40-foot container, reached $2,773 in early November, the lowest level in two years. Drewry, a U.K. data provider, said the average rate to ship a 40-foot container from Shanghai to Los Angeles had fallen to $2,262 in the first week of November from $11,197 in late January.

 

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