By Chris Donnell
Clients, Friends and Colleagues;
Scanwell January Newsletter
Good afternoon, it’s been one troublesome year in the logistics industry, from one bottleneck to another but there are a lot of things happening in the world which I highlight in today’s newsletter. Again, it’s always our business philosophy to make sure our clients are fully aware of what’s happening, what options they have and most of all support you and your business during these trying times. Please see just a couple things I thought was front page material.
Full newsletter here::
- Rates are on the rise again, which is expected as the world prepares for the Chinese Lunar New Year (CNY) shutdown and the start of the Winter Olympics. Rates have held flat for the past few months but importers should expect rates to continue to climb until March where they are expected to plateau and hopefully take a slow downward trend until the end of April
- Good News, I haven’t said that in a while so I highlighted it. The Emergency Dwell Fees which has wreaked havoc in the LA / LB basin has still yet to take hold as the terminals are refraining from charging them. While the pressure is certainly still there, maybe this is a sign of things to come. The announcement of such fees sent shock waves through the LA market and almost overnight, chassis’ become scarce and truckers increased costs – let’s face it, anything that doesn’t result in our client having to pay extra is a good thing.
- Weather is hitting the East Coast hard, Ports like Norfolk, Charleston and others have been severely hampered due to snow and other related issues – the fallout to this is more un-needed delays and yes storage as truckers are in short supply
- Covid issues continue – The port of Ningbo suffered a short shutdown but worse the city of Tianjin, home to more than 14 million people is under quarantine.
- Air Capacity is under attack again as carriers are looking at their routes and where cases of covid are high and eliminating them, taking our massive quantities of capacity out of service.
- Air rates on the decline however we will see a short spike right before CNY but that should be short lived. Rates have fallen over the past month about 10-20% versus the same time in December 2021.
- China and Hong Kong are limiting flights from some 26 countries including the United States as they try to curb the spread of the new Covid variant.
- Containers awaiting rail movement are under siege. Looters in Los Angeles are targeting containers sitting or moving on the rail. We live in interesting times but it’s about time our administration take back our country.
- The Union Pacific (UP) and Burlington Northern Santa Fa (BNSF) have eliminated their peak season surcharges as congestion has subsided some in areas like Chicago, Cleveland, Minneapolis and other critical rail ramps.
- Tonnage for OTR, Drayage and LTL are up, some as much as 4% in December. With the increase in tonnage means less drivers, less equipment on the open market and higher costs.
- Trucking fleets nationwide continue to raise wages and increase benefits packages for new drivers as the trucking industry is still short some 800,000 drivers.
Infrastructure and Governments:
- The surge in Covid cases is have a yo-yo effect on stock markets worldwide.
- China’s Xi’s calls on governments around the world to step up and help reduce the global supply bottlenecks
- Inflation number are out and they aren’t pretty. 2021 saw inflation increase 7% over 2020, making everything from Homes and cars to electronics and everyday consumables more expensive.
- December saw a record number of small business increase wages as they try to entice more people back to work however in the same month we saw an increase in unemployment filings compared to the past three months. The main culprit being covid and business transitions from one state to another as well as seasonal work being removed.
National Sales Director
Scanwell Logistics International (CHI) Inc.
2455 Arthur Avenue
Elk Grove Village, IL 60007
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