6 The Journal of Commerce
|
April 1 2019 www.joc.com
Spotlight
More trans-Pacific
blankings ahead
US importers and exporters should anticipate
increased blank sailings in the coming weeks as
carriers respond to declining imports from Asia
and the seventh consecutive week of spot rate
declines by attempting to match capacity with
demand in the eastbound Pacific. Not only is
capacity and demand forecast to be in relative
balance this year, but carriers have become better
at adjusting capacity to demand, Philip Damas,
head of Drewry's Supply Chain Advisors, said
March 4 at the 2019 TPM Conference in Long Beach.
Carriers had announced 35 blank sailings through
February and into early March, including 22 to the
West Coast and 13 to the East Coast, compared
with 11 last year, while ocean reliability fell to
40 percent in January, according to SeaIntelligence
Maritime Consulting. Maritime analyst Alphaliner
in its March 6-12 newsletter noted that the Ocean
Alliance of APL/CMA CGM, Cosco Shipping, OOCL,
and Evergreen canceled 10 additional trans-Pacific
sailings for March-April. "This is the strongest sign
of discipline by carriers we have seen since 2010,"
Damas told TPM 2019. US imports from Asia in
January-February totaled 2.73 million TEU, down
slightly less than 1 percent from 2.75 million TEU
in January-February 2018, according to PIERS, a
sister product of The Journal of Commerce within
IHS Markit. The decline points to a weak first
quarter, which is not surprising given that retailers
and manufacturers front-loaded spring season
imports in late 2018 to avoid paying the Trump
administration's threatened 25 percent tariffs on
imports from China.
Omaha supply chains flooded
Record-breaking floods sweeping the Midwest are
disrupting the flow of domestic and international
freight, swamping rail lines and turning highways into
rivers. The damage will be long-lasting, and shippers
should expect cargo delays and diversion in the short
term as well as higher freight costs in the long term.
Trucking and transportation companies in the region
face more immediate concerns. Flooding has turned
many towns and cities in Nebraska into isolated
islands, impeding relief efforts. "All roads into and out
of Omaha are closed; every one of the bridges is out,"
Derek Leathers, CEO of Werner Enterprises, told The
Journal of Commerce on March 20. Werner has more
than 7,000 trucks running throughout the United
States, but it's stymied by flooding in its home state.
In terms of available trucking capacity, the impact of
the floods will extend far from the Midwest. Nebraska
has the highest concentration of truck drivers in the
United States at 27.36 trucking jobs per thousand
employees, according to the US Labor Department.
Odds are many of those drivers are headed home to
assess damage or help their families as soon as they
drop their current load.
The Journal
of Commerce
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+14.0%
+2.6%
-2.8%
-0.7%
+4.8%
+8.1%
-0.9%
+9.3%
+16.6%
+8.4%
+21.8%
+4.8
-6.9%
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
1,600,000
1,700,000
Feb-18 Mar-18 Apr-18 May- 18 Jun- 18 Jul-18 Aug- 18 Sep- 18 Oct-18 Nov- 18 Dec- 18 Jan- 19 Feb-19
TEU
Asia-to-US trade growth slowed in February
Source: IHS Markit © 2019 IHS Markit
Total TEU volume of US imports from Asia with year-over-year change
