Chart of the Week: Inbound Ocean TEUs Volume Index – Port of Los Angeles, Port of Savannah, Port of Recent York/Recent Jersey, Port of Long Beach SONAR: IOTI.USLAX, IOTI.USSAV, IOTI.USNYC, IOTI.USLGB
Bookings for twenty-foot equivalent units (IOTI) spiked well above last 12 months’s levels for freight certain for the nation’s top 4 port complexes heading into Chinese Recent Yr (CNY).
The IOTI is an index that measures container volumes being booked by departure date from the port of origin, about 15-30 days before landing within the U.S. A spike in orders occurs in front of the Lunar Recent Yr celebrated in China annually.
The biggest amount of maritime containerized freight heading to the U.S. originates in China. This makes it essential for importers to get their freight ordered in front of the most important Chinese holidays as production goes offline for long periods of time. This 12 months’s data is showing a dramatic shift.
Recent Yr, recent supply chain
Last 12 months’s spike was minimal as inventories were still fat from overordering through the pandemic era when supply chains were overwhelmed. Lunar Recent Yr landed on Jan. 22 last 12 months versus Feb. 10 this 12 months, greater than two weeks later.
Bookings demand shows 40% higher in comparison with the 10-day Chinese Recent Yr lead-in last 12 months. What’s more interesting is the disproportionate growth of volumes on the Southern California ports in comparison with the 2 largest East Coast ports.
The Red Sea conflict has potentially had some influence while the drought in Panama might be a greater factor as to why the East Coast has lost some share. This may occasionally not be felt as significantly because of the annual growth.
Rates have grown disproportionately higher on containers heading from China to the east coast versus the west, based on Freightos Baltic Exchange. Spot rates averaged around $1,300 to the west coast last 12 months and at the moment are near $5,000. Rates to the east coast were $2,600 and at the moment are near $6,700 for forty-foot equivalent units.
Geopolitical conflict is basically guilty for the speed increases, though some would argue that is more of a sentiment than something driven by capability shrinkage.
Regardless, importers clearly see enough risk to pay the value increases to make sure that their goods are in place for the spring.
Watch the West
The takeaway for domestic transportation providers is to keep watch over Western origins for demand spikes this spring. January and February are typically slow months for domestic shipping and particularly for goods coming out of California.
The maritime data just isn’t only showing that shippers predict a good demand-side environment this spring, but they’ve reverted back to the pre-pandemic pattern of bringing most of their goods into the Los Angeles ports.
But don’t sleep on the East
Demand has not grown as significantly into the Eastern ports, however the IOTI is signaling that there may be potential for some increased activity in the approaching weeks. The common transit time reported by carriers is around 32 days for freight moving from Shanghai to Savannah, Georgia, but there may be currently a mean delay of nine days on top of that, based on project44.
SONAR Container Atlas transit data shows roughly a 32-day journey, including delays for freight moving from Shanghai to the Ports of Recent York and Recent Jersey.
Not all freight hits the road after it hits the port, so there might be some warehouse stuffing that stifles the transportation potential. Regardless, it could be sensible to look at each ends of the country for increasing activity. Early March for the West and late March for the East.
In regards to the Chart of the Week
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