MARKET BRIEF | October 2021
A BRIEF look at what’s happening in the logistics and shipping industry.
PORT CONGESTION UPDATE
The “old news” that seemed to become the new focus of the media — even prompting intervention by the top levels of the U.S. Government — is something that us in the industry have been living with for most of this year … Port congestion continues to be a major issue, which is a piece of the puzzle of global supply chain issues. Unfortunately, only asking ports to work longer will not solely alleviate the situation. Instead, it will still take time for the situation to slowly unravel and (hopefully) get back to normal.
Other congestion updates:
TRUCK MANUFACTURING UPDATE
Class 8 truck orders dropped 29%, month-over-month, for September. This is not a decrease in demand for new trucks, but rather, manufacturers are offering less build slots for new equipment. While chip shortages have been a consistent factor, that is masking the fact that truck manufacturers are struggling to source a number of non-related components.
The “old news” that seemed to become the new focus of the media — even prompting intervention by the top levels of the U.S. Government — is something that us in the industry have been living with for most of this year … Port congestion continues to be a major issue, which is a piece of the puzzle of global supply chain issues. Unfortunately, only asking ports to work longer will not solely alleviate the situation. Instead, it will still take time for the situation to slowly unravel and (hopefully) get back to normal.
Other congestion updates:
- Space has been opening up in China. However, CMA will be suspending service to some East Coast ports, which will drive up rates once again.
- The average delay of container ships arriving in China from North Europe has risen to 18 days.
- The Ports of Long Beach and Los Angeles have urged retailers to pick up more cargo off-hours. Those ports’ leadership, along with leadership of the other top U.S. ports, are asking the Biden Administration to encourage, and even incentivize, importers and transportation providers to use extended gates.
- Port congestion is also having major negative effects on local small businesses, with merchandise typically being delayed up to two times as long. This is obviously affecting retailers preparing for the holiday season. However, it’s not just port congestion contributing to this. It’s also shortages in warehouse workers and truck drivers that compound the problem.
- Despite extra ships arriving at the Ports of New York and New Jersey to sweep up empty containers, truckers are blocked more than usual from returning those empties to the ports. This results in lost driver efficiency and unfairly assessed late fees.
TRUCK MANUFACTURING UPDATE
Class 8 truck orders dropped 29%, month-over-month, for September. This is not a decrease in demand for new trucks, but rather, manufacturers are offering less build slots for new equipment. While chip shortages have been a consistent factor, that is masking the fact that truck manufacturers are struggling to source a number of non-related components.
For more information on Aeronet Worldwide, visit Aeronet.com.
