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Port of Savannah moves nearly 500k TEUs in record April
The Port of Savannah handled 495,782 TEUs last month, a record for the month of April. It was the GPA’s third busiest month ever. GPA’s Garden City Terminal now handles nearly one out of every nine loaded containers crossing the nation’s docks.
GPA’s containerized trade increased 6.2%, or 29,150 TEUs in April, compared to the same month a year ago. The growth is related in part to retailers replenishing depleted inventories and making early orders to ensure product availability. For the fiscal year to date, GPA has handled 4.75 million TEUs, an improvement of 8% or 344,260 TEUs YoY.
Savannah was recently ranked the top U.S. container port by loaded export volume, handling 1.38 million TEUs in calendar year 2021.
Shippers wary over lack of clarity on Shanghai reopening
Shippers and forwarders in the Asia-US trade have mixed views about how quickly import volumes will rebound when China lifts Covid factory shutdowns in Shanghai. Some are anticipating a strong, sustained spike in imports, and others are expecting a gradual buildup in volumes along normal seasonal trends.
The strength of the recovery will determine if freight rates increase sharply as peak season approaches. On the operational side, terminal operators are concerned that if there’s a sudden surge in imports, they will face a repeat of last summer’s congestion.
The uncertainties surrounding when China will end the lockdown are making it difficult for shippers and NVOs to plan their supply chains for the year.
Continued U.S. import growth points to summer port congestion
Nonstop growth in U.S. imports from Asia through the first four months of 2022 have major ports and transportation providers warily eyeing the possibility of renewed supply chain gridlock this summer.
U.S. imports from Asia totaled 6.5 million TEU this year through April, up 2.7% from the same period last year. April imports of 1.7 million TEU were up 6.5% over April 2021 and the third-busiest month on record for Asian cargoes into the U.S.
Data also showed that imports this year have declined into the West Coast while rising at some ports along the East and Gulf Coasts. Shippers are diverting some freight away from the West Coast ahead of longshore contract talks that began last week.
The Port of LA handled 887,357 TEU last month, the second-busiest April in its history. For the four months through April, the port handled more than 3.5 million TEU, 1% ahead of its record pace of last year.
Capacity management will stabilize rates
Carriers have vowed to flex capacity to match any slowdown in volume. Therefore, shippers expecting the flood of new container ships that will be deployed over the next two years and deteriorating economic conditions to bring ocean freight rates crashing down will likely be disappointed.
The longest-lasting effect of the Covid pandemic on the global shipping industry will be that the carriers are fully committed to sacrificing the “liner” part of liner shipping when volumes come under pressure. In other words, carriers won’t hesitate to skip sailings and forgo weekly schedule integrity to keep utilization and rates elevated.
After withdrawing huge amounts of capacity at the start of the pandemic, carriers reversed course. They deployed everything that can float to support strong and sustained demand on the major east-west trade lanes. Older vessels have been kept in service and the number of inactive ships has remained at record lows.
Sourcing diversification limited by lack of manufacturing outside China
China’s massive manufacturing base and logistics infrastructure is hurting U.S. importers who are trying to shift their sourcing of goods away from China.
Since the rise of China as the world’s low-cost manufacturing hub, shippers have sought to diversify their production and procurement. However, containerized U.S. imports from China hit a record high in 2021, rising 13.9% with 42.4% of all imports sourced from China. Despite shippers’ previous attempts at diversification, China’s share of total containerized imports peaked at 47% in 2018 after nine years of steady growth.
When consumer goods demand surges, importers are willing to eat the cost of tariffs and higher ocean freight rates to bring more goods from China. They have no other viable option. The continued growth in U.S. imports from China supports this.
About O’Neill Logistics
O’Neill Logistics is a leading 3PL with operations in Rancho Cucamonga, CA; Savannah, GA; and Newark/Monroe, NJ. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.
O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.
Lastly, we aim to simplify your supply chain. We deliver exceptional service and can optimize your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.
