Supply Chain Industry Insights
If you’ve been following our reports this year, one concept that will be familiar is the comparison of 2023 to pre-panedmic 2019. As we’ve noted several times, 2019 is not a “normal” that any of us would like to return to, as it was not a great year for the industry, but it has served as a good basis for comparison for what a post-pandemic world looks like. With that in mind, we have our first positive metrics that show a marked improvement over 2019 with October US imports up over 11% higher than in 2019.
While many carriers are benefitting from business transitioning away from the now-defunct Yellow Corporation, the great carrier correction isn’t over yet. Trucking capacity remains high after the industry built up fleets in 2021, and we can expect to see more carriers close up shop in the near future until trucking capacity is closer to demand.
With more tough near-term news for trucking, there are indicators that intermodal is staged for a resurgance. Due to infrastructure congestion, rail took a hit during the pandemic, but with that congestion easing, shippers are looking to intermodal to save on long haul truckload costs.
DHL Express has announced the completion of a 409 million dollar expansion of its central Asia hub in Hong Kong. This expansion increases the footprint of the facility by 50% to over half a million square feet. The hub is now able to process 6 times more shipment volume than it could in 2004 when the facility was first opened.
In our continued coverage of the drought in the Panama Canal, more disruptions are expected, and this has had an impact on shipments going straight to US Pacific coast ports, leading to dropping volume on the East coast.
Lastly, diesel benchmark pricing continues to defy expectations, with unseasonably low prices despite unrest in the middle east, OPEC volume caps and futures pointing up. The leading factor here seems to be an economic one, with interest rates high, the industry is reluctant to hang onto large inventories. At the moment, demand remains high and producers are meeting that demand. Many indicators are still pointing to rising diesel prices, but we aren’t there yet.
Trucking continues to face challenges, rail sees some growth, and imports are showing positive signs. Amidst all of these changes, PGL will continue to keep you informed and will keep delivering peace of mind, 24/7/365.
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