Industry Insights
February 2024
By PGL
Welcome to the PGL Industry Insights report for February 2024
Inventory correction and spot rates for both ocean carriers and trucking are leading to something resembling stability despite troubled canals and international conflict, but of course, the details offer a more nuanced view of things. Let’s dive into those details.
In our ongoing coverage of challenges for both the Panama and Suez Canals, we saw surprisingly increased traffic through the Panama Canal due to a wetter-than-expected November, with 24 daily transits in January, beating the projected 20. The embattled canal is not out of the woods yet, however, with water levels expected to reach all-time lows by April.
Following a dip in Houthi activity in early February, hostilities continue, leading many carriers to take the longer route around Africa. This has lead to climbing spot rates for ocean transport, but we’re seeing some correction here in the latter half of the month.
Despite the canal troubles and a gloomy outlook for the start of the year, containerized imports to the US grew at a pace not seen in 7 years. Though the first several weeks of the year don’t traditionally see this kind of growth, even when adjusting for the ramp-up to the Lunar New Year, imports outpaced expectations. Factors credited for leading to this surge are leaner inventories and greater-than-expected resiliency of the American consumer.
Since the fall, we’ve been reporting that the diesel benchmark price posted by the US Department of Energy had been defying projections, and to a degree, even the futures market with unseasonable lows. Volatility in that futures and wholesale markets has finally affected the retail pump prices with a surge of over 20¢ per gallon, landing at over $4 per gallon for the first time since early December.
Increased US imports and stabilization of spot rates paint an optimistic picture, but as this report illustrates, the world finds a way to defy expectations. Through it all, PGL will be here to keep you informed and will keep delivering peace of mind, 24/7/365.
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