January Freight Forwarders Update

What a difference a year can make.

Back in 2021, retailers and consumers dealt with scarcity. Retailers couldn’t stock their shelves and consumers had to go without. Early in 2022, it made sense for retailers to place orders larger than usual. Not only to make up for out-of-control demand and excruciating delays but to get ahead of peak season.

But then the scene of the world changed, the economy, the war, and ongoing layoffs meant people couldn’t or wouldn’t spend. Now, going into 2023, retailers have more inventory than they know what to do with.

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After years of China’s zero-COVID policies, they’re finally beginning to scrap curbs at ports.

Starting on January 8, restrictions that had been previously imposed on cargo ports came to an end. And while this’s good news, it comes with a bit of a sting. Many in the industry are worried that abruptly ending the policy at a time when the situation in China worsens and COVID spreads unchecked could make the health situation even worse.

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An Analysts Sea-Intelligence report shows an improvement in the container schedule reliability. Early in 2022, reliability was just30.9%. The second half of 2022 saw reliability increase to 56.6% after hovering mid-year in the range of 40%. Additionally, average delays improved in November.

Is this all thanks to a corresponding drop in trade?

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A month ago, ocean carriers were determined to continue building and ordering new ships. Jump ahead to the second week of January andit seems they’ve seen the light. Building huge cargo ships and significantly increasing capacity while trade plummets makes no sense.

Carriers are in talks to defer all delivery dates and procurement officers have been tasked with trying to return as much leased equipment as possible. Why pay huge storage fees for containers that sit empty at the port?

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After the ongoing mess that West Coast ports, thanks to labor issues throughout 2022, many logistics managers claim they’re in no rush to move trade back to the West Coast once a deal is finalized.

341 managers were surveyed and of them, 18% are willing to return 10% of their trade, 12% are willing to return 20% of their trade, and finally, 12% are willing to stand back 60%.

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