Supply Chain Industry Insights
August 2023
Welcome to the PGL Industry Insights report for August, 2023.
UPS suffered larger-than-expected shipment losses due to labor concerns. After a tense July that threatened labor disputes that were ultimately avoided, UPS has posted lower Q2 volumes, due to lost business that had been shifted over to other providers.
As expected, Yellow has filed for bankruptcy, leading to the largest filing in trucking history. At the time of this writing, a bidding war is taking place for the defunct trucking company’s assets.
Transportation prices fell again in July but at a slower rate than in the prior two months. According to data provided by the Logistics Managers’ Index, the projected falloff was not as steep as expected. At the tail end of the inventory bubble, the report indicated that some companies are transitioning back to just-in-time inventory strategies in order to avoid the increased warehousing cost that has come with the swell in inventory.
DHL Continues to make moves with plans to build a $192M maintenance hangar at CVG superhub. The Kentucky Economic Development Finance Authority approved $1 million worth of incentives for the 305,000-square-foot facility. CVG is the main point for connecting DHL’s express network to the rest of the world, with 130 daily flights conducted by a fleet of 60 aircraft.
Trans-Atlantic rates point to a shift in strategy. It appears that trans-Atlantic rates are on track to mirror the conditions of the trans-pacific shift that happened in the second half of 2022. In that scenario, some carriers offered discounts mid-contract to keep the market from moving to more affordable spot rates that are currently less than half of the current contract rates.
The Diesel Benchmark price is on the rise. The benchmark price that is used to calculate most fuel surcharges is on the way up to its highest level since February.
July import volumes continue to mirror pre-COVID ‘normal’. July ocean imports are up 5% vs. June and flat compared to July 2019. That sounds like it could be good news, but if you’ll recall, 2019 was a historic downturn before the pandemic turned the world upside down. The return to “normal” could be an indicator of excess inventory finally coming down, which could be good news for a more stable future, but 2019 is certainly not the baseline we want to return to.
During a summer full of labor disputes, the industry seems to be cooling off, even if the weather isn’t. As always, PGL will continue doing what we do best, delivering peace of mind, 24/7/365.
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