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Strong February imports signal more congestion
U.S. imports from Asia rose 16.4% year-over-year in February. They also increased 50% compared to February 2020. Therefore, the pandemic-fueled import surge that has overwhelmed supply chains is not slowing down.
As we approach the summer-fall peak shipping season, import volumes should accelerate. Therefore, vessel backlogs will likely continue or worsen. Lastly, backed-up inland supply chains will deteriorate.
Small & mid-sized importers pay steep Asia-U.S. fees
Many small and mid-sized U.S. retailers were unable to lock in their annual trans-Pacific service contracts until this month, They are now feeling the impact. Retailers who move less than 150,000 TEU a year are signing contracts at rates $2,000 per FEU higher than those signed in late 2021 with the largest importers.
Smaller importers will pay as much as $4,000 per FEU more to the West Coast than the largest retailers. Vessel capacity is extremely tight. Therefore, carriers are quoting rates with a “take it or leave it” attitude.
East Coast ports to get slammed by more ships
As of last Wednesday, 64 container ships were waiting off East and Gulf Coast ports. Conditions are set to worsen as the number of liner services calling from Asia will surge to record highs in the coming months. Therefore, the East Coast vessel backlog will increase. Additionally, service for importers should deteriorate significantly.
In 2020, Asia-East Coast services per month held steady at around 19. According to American Shipper, services increased to 24 in December. In March, services increased to 28. Lastly, in May, services are expected to rise to 30. In June, deployed capacity is expected to increase 40% over the 2021 full-year average to 889,000 TEUs.
West Coast Asia imports drop to record low
U.S. imports from Asia to the West Coast dropped to a record low through the first two months of 2022. Port congestion and labor disruption worries were the main causes for record low volumes. As a result, import volumes at East and Gulf Coast ports rose to record highs.
The West Coast’s share of U.S. imports from Asia fell to 58.2% for January and February. This is down from 60% in all of 2021. On the other hand, the East Coast’s share rose to 34.7% for January and February, up from 33.6% for all of 2021. Gulf Coast ports also increased their share of imports from Asia from 6.1% in all of 2021 to 6.8% for the first two months of the year.
Maersk to deploy 300 Einride electric trucks
Einride and Maersk signed a five-year deal for 300 Einride Class 8 electric trucks. The first deliveries will happen in 2023. Maersk will use the vehicles in its North America warehousing, distribution, and transportation businesses. The trucks are expected to move more than 1 million shipments during the life of the contract.
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.
