The Weekly Freight Report for October 21st, 2021
The Top 5 Stories in Freight
Here’s what’s happening this week:
- The industry goes all hands on deck to eliminate bottlenecks
- Record warehousing workers leave the industry as the holidays approach
- Imbalances in lanes affect capacity triggering high costs
- Anticipation for Lunar New Year raises rates and impacts shipping timelines
- Blame Hurricane Ida for decreased production across multiple sectors
The hottest stories in freight can be found here, in the Weekly Freight Report:
1. The industry goes all hands on deck to eliminate bottlenecks
The Port of Los Angeles and Long Beach are operating 24/7 to move cargo across it’s docks in an effort to unclog congestion. But will it work? If the remainder of the supply chain does not follow suit to adjust operating hours, cargo will continue to pile up. Terminals. Truckers. Distribution centers. All of these players must synchronize their efforts to get inventories moving. Here’s why the plan is struggling.
2. Record warehousing workers leave the industry as the holidays approach
With more than 490,000 job openings in the warehouse and transportation industry in July, the gap between job applicants and job openings will continue to widen as the holidays approach. 4.3 million workers quit in August, which equates to 2.9% of the workforce. Warehouses are planning to operate 24 hours a day as they gear up for the holiday surge… but will they be able to find willing workers? Here’s what adjustments need to be made.
3. Imbalances in lanes affect capacity triggering high costs
Los Angeles has entirely too much freight leaving and too little returning. This imbalance is causing round trips to the area to be extremely costly. The solution? Reducing outbound demand or increasing inbound freight flows… but that is much easier said than done. With railroad bottlenecks, tight drayage capacity, increasing consumer demand, and labor shortages there do not seem to be any signs of relief in sight. Learn more about the flow imbalances and see the data for yourself here.
4. Anticipation for Lunar New Year raises rates and impacts shipping timelines
Transportation employment numbers see improvements With the Starting almost 2 weeks earlier this year, the Chinese New Year in 2022 falls on Feb. 1, 2022.Shippers are already feeling the impact of this holiday as they are moving products sooner causing prices to increase. At $7,928 per TEU, spot rates of 32 days or less have risen 39% with long-term rates for 88 days or more rising to 53% to $2,524 per TEU. Find out which modes will impact shippers plans most here.
5. Blame Hurricane Ida for decreased production across multiple sectors
Hurricane Ida is still leaving her mark as U.S. industrial production fell 1.3% in September which covers the manufacturing, utilities, and mining industries. Among lingering effects from Ida, the semiconductor shortage continues to plague the automotive industry as production output declined by 0.7%. How did capacity fare after Ida? Industrial sector capacity utilization fell 1% in September to 75.2% which is approximately 4.4% below its average. Check out the full report here.
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