Freight for Thought: US Import Container Rates from China hit lowest point since 2016
The following insights are provided by Sunset’s Strategic Account Management team.
Trends and discussions range from seasonal manufacturing and agriculture trends that affect available capacity to general insight into outside factors affecting freight volumes.
Below is a summary of the April industry insights:
- U.S. average cost of Diesel is $4.116 as of 4/17 – up $0.018 from the week prior, yet still down -$0.985 from a year ago.
- OPEC announced oil output cuts of around 1.16 million barrels per day effective May 2023. This will bring the total volume of cuts by OPEC+ to 3.66 million bpd according to Reuters, or 3.7% of global demand.
- U.S. Truck Tonnage rose 9.3% in March showing some seasonal strength, but not as much as expected.
- U.S. manufacturing production grows to 49.2 in March, though still contracting for the 5th straight month.
- Next month, a federal rule similar to California’s controversial AB5 could expand the worker reclassification requirements nationwide, eliminating the independent contractor model for truck drivers.
- Intermodal carriers are boosting their service between Mexico and the U.S. ; CPKC (Canadian Pacific Railroad and Kansas City Southern) and UP (Union Pacific) have made moves to acquire and service new lanes and offer additional capacity on existing lanes. (Source)
- Last week, U.S. Import Container Rates from China hit the lowest point since tracking began in 2016, at just over $1k/FEU. They quickly rebounded 14% in one week due to newly implemented carrier GRI’s. More to come on May 1. (Source)
- The ILWU has reached a tentative agreement with the Coast employers on “certain key issues”, indicating a final deal is in the works for the workers in the Ports of LA/LB. (Source)
Short Term Expectations
Sunset expects fuel prices will stay steady until summer, then retract towards Q4.
KEY LOGISTICS INDICATORS
Industry data is pulled and summarized weekly from key proprietors and industry experts using multiple publications and sources. Sources include, but not limited to: FreightWaves, Cass Transportation Index, DAT, Journal of Commerce (JOC), PYMNTS, NRF, Cleveland Research. The information is discussed with Sunset Managing Directors and validated prior to publication of summary data in this posting.