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Updated on May 18, 2023
The following information is built on market data from public sources and C.H. Robinson’s information advantage—based on our experience, data, and scale. Use these insights to stay informed, assist with decision making to potentially mitigate risk, and hopefully help avoid disruptions to your supply chain.
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Transporting freight abroad can be challenging. Available ocean capacity, shifting port receiving windows, and dray congestion are just a few common issues that arise. U.S. ports made headlines when an unprecedented number of ocean vessels stalled along the East and West coasts. This caused major delays for shippers with already disrupted supply chains.
Despite this list of ever-evolving challenges, there are several strategies you can use to overcome and avoid disruptions when exporting from the United States.
Around the world, shippers know the export market can be volatile based on the market conditions.
Shifts in ocean capacity
As an example, the U.S. export market faced tight ocean capacity when ocean carriers prioritized bringing empty containers back to Asia to meet the demands of their booming export growth rather than filling them with U.S. exports. This capacity challenge expanded globally as carriers also diverted ships from other markets to meet the growing demand in Asia.
Potential congestion at ports
Congestion at U.S ports is another issue that can make planning difficult for shippers. When vessels are left waiting for berths, expected sailing dates and earliest receiving dates (ERD) shift. These types of delays can quickly increase costs, including container pull and yard storage charges, daily chassis rental costs, and detention fees. While detention fees can sometimes be waived depending on when the ERD changes, most fees will not be.
Shortages on rail lines
Rail service disruptions are another major influencer on export schedule reliability. Chassis shortages at rail ramps can lead to a reduction of inbound rail activity and will then limit outbound rail volume as round trip moves are preferred by most rail carriers.
In addition, if there is a shortage of containers moving from ports to inland rail yards, then inland points will face a shortage of empty containers to meet export demand.
Finding the right export strategies to address these challenges while still meeting required delivery dates and budget expectations depends on your unique situation. Taking location, budget, distribution capabilities, and other factors into consideration can help ensure you find the right strategy for your current situation.
1. Adjust inventory locations
Reducing your reliance on rail transportation can help control shifting ERD timelines and manage the availability of empty containers. If available within your domestic distribution network, consider relocating cargo to warehouses that are closer to your port of exit. This way, you can load containers and dray directly to the port, taking advantage of the better inventory of empty containers compared to rail ramps.
If you can’t move cargo closer to the port, truck and transload service can be an option—albeit it can be an expensive one. There is the added risk for potential damage with the necessary rehandling of freight from truck to container at port. So, consider carefully before choosing this strategy.
2. Consider long-haul drayage
Markets like Dallas, Atlanta, or even Cleveland are all within a day’s drive to a port and allow for long-haul drayage. This makes it possible to transport freight to the port without relying on rail. While it can be more expensive than a rail-truck solution, it can help avoid potential disruptions in rail service.
To combat chassis shortages, some truckers are investing in chassis ownership. Relying on a network that includes chassis owned by carriers can help stabilize truck-to-port solutions. Keep in mind that even though this is a very positive trend in the market, there are not enough companies making this investment to meet the full market demand.
3. Look for alternate rail ramps
If dray service to a port is not feasible, you can always use a different rail ramp entirely.
Like other modes, individual ramps face an assortment of issues, from chassis shortages to insufficient empty containers, or even reduced outbound rail traffic. But the issues faced by one may not be a problem at another location.
Prepare for a potential rise in trucking costs with this strategy based on the distance to a secondary rail ramp. It’s important to determine what is more important for your shipment: lower shipping costs or on time deliveries.
Disruptions may shift, but they will never disappear altogether. Chassis shortages and port congestion may ease, but it’s important to be prepared for other potential factors impacting your business such as vessel capacity constraints, schedule reliability, and equipment availability, which continue to cause delays and impact supply chains.
Attempt to plan shipments at least three to four weeks out—potentially longer for some markets. Combined with the right export strategy for your budget and objectives, proper planning can help you keep cargo moving—no matter what you’re up against.
Need additional U.S. export guidance? Connect with an export specialist today.
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Tune in for new ways to leverage today’s softer market, and strategies to prepare for the next shift.
Demand is set to remain soft in May with sufficient capacity across most markets and general rates will continue to be competitive and stable.
Compared to the same period in 2019, direct passenger flights between the United States and China have decreased by 73% so far this year. U.S.-based airlines are currently allowed a total of 12 round-trip flights per week, while China-based airlines had been permitted 8—this number was increased to 12 in early May.
The most efficient flight path between China and the United States passes through Russian airspace, which U.S.-based airlines are not allowed to enter, but China-based airlines can. This gives them a significant cost advantage. As a result, ticket prices on China-based airlines are approximately 40% cheaper than those offered by their U.S. counterparts.
Demand for air freight between the two countries remains relatively low and manageable with current capacity. However, when additional capacity does return, it is expected to lead to further air rate declines, although it is unclear when this will occur.
Ocean freight demand on most trade lanes is generally flat. To compensate on the supply side, steamship lines continue to void sailings to balance the supply. They are also slow steaming on the backhaul legs of major East-West services. This allows them to allocate more vessel/capacity per service and save on bunker costs.
Source: Linerlytica
While congestion is mostly gone, the need for some flexibility remains as blank sailings and service adjustments continue to impact lead times.
As congestion eases globally, ocean carrier schedule reliability improved to 62.6% in March 2023. It is interesting that carrier schedule reliability on the U.S.-Asia trade lane is far below the average, at only 42.4% to/from U.S. West Coast (USWC) ports and 44.6% to/from U.S. East Coast (USEC) ports in March.
Source: © Sea—Intelligence
The Panama Canal is imposing lower draft restrictions due to drought conditions/falling water levels at nearby lakes that form part of the waterway. The restrictions went into effect at the end of April. This means container ships seeking to cross the canal connecting the Atlantic and Pacific Oceans must reduce their payloads. This will have the impact of tightening vessel space as carriers will have to load less cargo on these routes.
Carriers successfully implemented the mid-April general rate increase (GRI) on Transpacific and Asia-Latin America trade lanes, however rates are under continued pressure.
With the idle fleet continuing to shrink, carriers are reversing the slow steaming program introduced in the first quarter. The active containership fleet has reached a new record high this spring as the new ships delivered have added more than 360,000 TEUs of incremental capacity.
Asia-Europe spot rates are still holding steady, despite the high-capacity utilization and relatively healthy demand on European routes.
The frequency of blank sailings on the export trade, especially on the USWC, increased in April. On many service strings, the sailings are reduced to almost fortnightly.
There is generally more capacity supply than space demand on trade lanes out of Europe. There are many national holidays in Europe in May, which will only reinforce the current imbalance.
The backhaul trade to Asia has reached very low rate levels, while export rates to North America are almost back to pre-pandemic levels.
Dockworkers in France have reached a new agreement, so no further labor strikes are expected. The daily four-hour strikes, which had been ongoing for weeks, are now over. It will still take some weeks for the ports in France to clear out the congestion and completely resume normal operations. However more union workers continue to participate in the general strike action over the increase in the retirement age.
Imports remain soft year over year due to inflation and normalizing demand from the largest importers, including retail, furniture, electronics, and home improvement, which represent over 50% of U.S. imports.
Many shippers are waiting to order more, while seasonal shippers have not yet started to increase their volumes.
April U.S. container import volumes increased over 2 million TEUs (~9%) from March. This is up 5.3% from pre-pandemic April 2019. If the curve keeps following the 2019 trends, May should see an increase over April, even if it is small.
While Los Angeles and Long Beach terminals spot slowdown actions are not significantly impacting cargo flow, shippers keep looking to USEC and Gulf ports as alternatives. This solidifies the shifts occurred during the pandemic.
U.S. export capacity is generally open, and rates continue their downward trend. Expect additional capacity entering the market in the coming months to support increased travel demand.
The trans-Tasman market has softened. Space and equipment availability is open. Rates are dropping with the introduction of new options on this trade lane.
The market continues to soften. Rates will continue to slowly decline as carriers compete for market share. Space continues to be tight on the USEC but easing on the USWC.
Port calls to New Zealand for exports from the USWC have been upgraded to weekly, and transshipment service options are increasing with reduced congestion through Asian ports.
The Europe export market remains stable, with space and equipment readily available for dry cargo. Rates are still gradually being reduced by all carriers as supply continues to outweigh demand.
Ocean carriers operating between Northeast Asia and Oceania still experience bottom rates. To prepare for the upcoming GRI in mid-May, they have begun to implement certain measures—increasing blank sailings (canceling entire vessel sailings) or even temporarily suspending services to bolster their position.
Up to 17% of available capacity has been cut in the Asia-Europe trade so far in 2023 according to Drewry.
Rates decreased marginally by 4% in April despite the cuts in vessel capacity, signaling a continuing weak market demand. As a result of the carriers’ capacity management, rates have remained relatively stable and spot rates remain 20% higher than pre-pandemic levels.
The Southeast Asia rate decline has slowed. There is no inclination of a potential GRI, but there may be one if the increases in Northeast Asia rates hold. Blankings on Southeast Asia (origin to transship port) continue to be the main issue.
Carriers caution that vessels are approaching full capacity due to increased blank sailings, despite no reports of congestion in Singapore or Malaysia. This has resulted in some shipment delays, caused by both origin service and port of destination blanking, which means that the vessel will not be calling at that port.
The recent political unrest in Pakistan continues to evolve. The city of Karachi is under control. In the north, (Lahore, Faisalabad, Islamabad, and Sialkot) the situation is slightly elevated, and suppliers/shippers are exercising caution to ensure the safe transportation of goods. Expect more updates as they become available.
General updates
Drop/pick, street turn programs, and alternate routings are gaining appeal as more businesses look for ways to control costs in the final mile. Contact your C.H. Robinson representative if you have questions or would like to explore your options.
Canadian ports and terminals continue to battle the backlog since late spring of 2022, because of congestion combined with equipment, railcar, and driver shortages. The most affected port is Vancouver, where the average dwell time for rail cargo is 13 days. The most congested rail terminal in Canada continues to be Toronto.
Inland Port Dillon
South Carolina ports celebrate the five-year anniversary of Inland Port Dillon with record number of containers handled at the rail-served inland port. Driven by agriculture, the Inland Port Dillon connects the Pee Dee region to the Port of Charleston via rail, helping existing companies grow and also attract new investments to the region.
Jacksonville cold storage
A new cold storage facility is breaking ground in Jacksonville less than 10 minutes from JAXPORT to address the growing demand for pallet space in the market. The Jacksonville cold storage facility will boast an impressive 216,297 square feet and 30,254 pallet positions with blast freezing capacity to freeze more than 6 million pounds of product a week. Clearing the site for construction has already begun. Arcadia expects to open its doors to customers in early 2024.
Queen City Express
The Queen City Express is the prioritized two-day transit service between the Port of Wilmington and the CSX ramp and/or Charlotte Inland Port. North Carolina ports also offer a link to the Heartland of America with the Wilmington Midwest Express, which provides service to Chicago and Northwest Ohio in five days and St. Louis in seven via the CSX Carolina Connector.
NY/NJ
Furloughs resulting from the International Longshoremen's and Warehousemen's Union (ILUA) have caused gate slowdowns at most terminals, although turn times within the ports remain unaffected. It is important to note, entry into the ports has significantly worsened.
Drivers can sometimes see a three-hour delay in entering the port to complete their first transaction. Although the ports in this area are currently seeing delays, no port congestion fee will be assessed in this region, and standard wait time rules should apply.
Warehouse transloading options have opened completely, as the lack of freight moving into this region's ports has caused warehouse space to clear out.
Detroit
Weather in this region has impacted operations. However, no significant impact is being seen with the reduction in inbound freight into this area.
Memphis/Nashville
The IMC Depot in Memphis remains a challenge when returning empties, with about 2–3 hour average wait time. Most carriers are not implementing any congestion surcharge at that location. MCCP chassis pool has improved capacity, with only about 85% being utilized. The average street dwell time on their equipment is 25 days for 40ʹ containers and 29 days on 20ʹ containers.
Chicago
The UP Global IV’s lift fee increased from $50 per lift to $115 per lift effective May, 1 2023.
Minneapolis
Capacity is open, chassis are becoming more available, carriers are simply at the mercy of the efficiency of the ramps. Carriers are reporting that the BN is placing containers on chassis that need repair before they can pull. The CP has numerous times unloaded trains late on a Friday and made last free day Sunday.
Kansas City
For 40' chassis, supplies are becoming more available (almost 35% pool availability now) and dwell is down to 26+ days. Driver capacity is open, many carriers in the market are looking to keep their drivers moving.
St. Louis
Capacity is open in this market. Pool chassis are dwelling 20+ days and are only 14% available.
Port of Los Angeles/Long Beach
Message from Matt Schrap, CEO at Harbor Trucking Association:
On Friday April 28, 2023, at 11:35 a.m., the State of California air quality regulatory agency, the California Air Resources Board (CARB) unanimously adopted the historic Advanced Clean Fleets Rule (ACF).
For drayage operators, this means that any drayage truck put into service after January 1, 2024, MUST be zero emissions. This means battery electric or hydrogen fuel cell only. No more internal combustion engines, no alternatives, no renewables.
If carriers’ fleet needs additional capacity to meet customer needs, after January 1, 2024, carriers will ONLY be able to add in trucks equipped with zero emissions drivetrains. Furthermore, carriers will be prevented from moving containers on the same bill of lading to other trucks that are not registered to do business at Ports or Class 1 railyards through the state’s “Drayage Truck Registry.” If it is not in the Registry, it will be subject to enforcement action.
The domestic transportation market is gradually recovering, but demand is decreasing compared to last year. Fuel rates have slightly decreased since the end of April, and the domestic freight market is still experiencing a fierce price war due to unbalanced demand.
Customs clearance times between Shenzhen and China are speeding up for both imports and exports. Transit time in the Pingxiang port from China to Southeast Asia remains at two to three days. The congestion situation has improved considerably compared to the previous month while the cross-border trucking demand is decreasing from the perspective of the entire China-Southeast Asia trucking market.
Australia port logistics and landside container transport services are currently operating at levels within capacity, and there are no reports of service issues at any of the major ports nationally.
Two major container terminal operators have completed their annual review of terminal ancillary charges. The terminals have continued investments in equipment upgrades to ensure service levels meet expectations.
The refrigerated logistics sector has seen one of Australia’s largest cold chain refrigeration companies, Scott’s Refrigerated Logistics, placed into receivership (a form of debt restructuring). This has the potential to place additional pressure on the cold chain logistics market.
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Use these insights to forecast how capacity changes and trends impact your business. Create customized, shareable reports by adding your preferred trade lanes. Check back each month for the latest updates in the lanes you care about. Updated ocean and air freight market insights will be available the third Thursday of each month.
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Stable: Green – Relatively open capacity and low spot market rates
Strained: Yellow – Capacity is tight and mid-level spot market rates
Critical: Red – Backlog of capacity and high spot market rates
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