West coast container imports drop by 37%
Good morning! Happy Tuesday - let’s get the ball rolling. 🚛💨
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Imports to West Coast ports plummeted 37% in February 2023 from the record highs of 2022. Numbers are showing that imports plunged all the way to 1,454,438 TEUs - the lowest it’s been since the height of the pandemic panic in March of 2020. Even the Gulf Coast ports are recording dips in movements, declining 18.7%. Houston, Texas was the only port to record an increase of 12.7%, year-over-year. There may be multiple reasons why the once-busiest ports have faced such steep declines, but the Port of Los Angeles suffered the most with a 41.2% collapse of container imports. These problems may be due to coastal route shifts, lingering union issues, and an assortment of supply chain challenges.
Check out today's featured article from The Loadstar to read about why the port's container imports have been declining this year. Will those numbers begin to rise once again? come back up? Or have the ports experienced the height of their heyday?
Featured Article:
West coast ports suffering as US container imports plunge by 37% | The Loadstar
“As anticipated, US container imports in February were massively down from the highs of the previous year, with US west coast ports in particular suffering a huge 37% drop.”
American Politics & Regulations 💰
Congress remains divided over bank failure solutions
The collapse of the Silicon Valley Bank and First Republic Bank has caused an uproar among the American public. The federal government has rushed to stifle fear as new bills are quickly being penned and filed through Congress with hopes of nipping this problem in the bud before the point of no return. President Joe Biden proclaimed to Congress that there need to be stronger regulations in place for banks to prevent any other further disruption, but Congress members seem to be divided on how to go about this in practice.
While both sides of the political aisle are angry, there are a few “quick” legislative risks. Additionally, there are a variety of reasons why Congress may not want to make stricter rules for banks. Banks and financial institutions often have significant lobbying power and can use their influence to sway lawmakers in their favor. Stricter rules for banks could increase their operating costs and lead to reduced lending, which could have a negative impact on the economy. Congress may also need to balance the interests of various stakeholders, including consumers, businesses, and financial institutions when considering new regulations.
Deliveries & Money Matters 💰
FedEx preparing “dynamic pricing” for better profit during peak season
With so much loss in package volume this year, FedEx is strategizing to maximize its efforts and make as much money as possible from every single delivery. FedEx Express reported a daily volume drop of 14% in the most recent quarter. However, with this company’s ability to adjust surcharges, they absorbed $150 million in profit over last year’s peak season.
The dynamic pricing that FedEx is utilizing changes the surcharge based on individual’s weekly peak factors. This means that the parcel delivery company will track how many extra packages a customer has been shipping compared to a different time of year. The extra shipping behavior is likely to occur around Christmas, which means surcharge fees increase the closer to the holiday season that an individual or company ships goods. In addition to these standard surcharges, FedEx may also apply dynamic surcharges that are adjusted based on market conditions or other factors. For example, during periods of high demand or when shipping to certain areas is more difficult, FedEx may adjust its surcharges accordingly to reflect the additional costs of providing shipping services under these conditions. FedEx's surcharge dynamic pricing is designed to allow the company to adjust its prices based on the specific circumstances of each shipment, ensuring that it can cover its costs while providing reliable and efficient shipping services to its customers.
Let’s Get Global 🌎
🇺🇸 Renewal of the US trade deal is delayed. The Generalized System of Preferences (GSP) expired in 2020, ending the tariff-free access over 100 countries had to the United States market. This renewal delay is leading to many US companies turning back to China for sourcing due to changes in financial calculations for sourcing in an overseas country. Under the GSP, developed countries offer preferential tariff rates to developing countries on certain products, typically raw materials and semi-finished goods. The idea is to help promote economic development in these countries by encouraging them to export their goods to developed countries. This, in turn, can help boost economic growth in developing countries and reduce poverty.
🇷🇺 Two maritime giants are keeping Russian oil deliveries alive and well. Gatik Ship Management and Fractal Shipping have seemingly sprung out of nowhere to run $2 billion in tanker assets between the two of them. Both of these firms have numerous ship fleets and have been utilizing those fleets to transport Russia’s oil after the West’s sanctions. Notably, the European Union banned seaborne oil imports from Russia at the end of last year in retaliation to Russia’s February 2022 invasion of neighboring Ukraine.
🚛 By 2030 there are expected to be over 600,000 hydrogen vehicles shipped annually. While hydrogen-powered vehicles are still in their infancy, over 18,000 H2 units were sold in 2021 alone and 90% of those units were passenger cars. South Korea currently dominates the hydrogen-fueled vehicle market, but Japan and America are following closely behind them. One of the biggest challenges facing the hydrogen-power car market in the US is the lack of infrastructure. Another challenge facing the market is the high cost of hydrogen fuel cells and the vehicles themselves. Hydrogen-powered cars are generally more expensive than comparable gasoline or electric vehicles, and the cost of fuel cells has not yet come down enough to make the vehicles more affordable for the average consumer.
iLevel With You 🏡
More topics for the average American household to consider…
📨 USPS mail volume is slowing down. The decline has been consistent for the last 15 years, but speeding up in the short term. This drop is bad news for a communication medium that is often cited as being the agency that makes the nation one. Many people believe that the USPS will be forced to resort to an electronic medium, but a transition of that sort seems impossible to consolidate in today’s world. There are too many items that the mailing system delivers that cannot be electronically sent, causing a hiccup in the digital plan.
🔋 Blame the Feds for lack of charging stations at interstate rest stops. Many are still vying for charging stations at interstate rest stops, despite the 1956 Federal-Aid Highway Act. This act limits what can be sold at rest stops along the interstate, and Biden did not create a commercial exemption for EV-charging stations in his $5 billion funding plan. This conundrum highlights the larger problem involved with creating an EV-charging network: the top-down blueprint of central planners. Will state planner create a framework for this new infrastructure without the proper incentives?
🤨 Is giving up your personal data to retailers a benefit of personalization or privacy violation? Many retail stores now now inviting their online customers to create a personalized shopping experience, but when does that effort cross the line and create a privacy violation? Offers such as discounts, free shipping, or loyalty “points” often persuade shoppers to give up very important information about themselves. Many retail stores say that the future of e-commerce depends on these details and would not survive without them. In general, personal information can include any information that can be used to identify an individual, such as their name, address, phone number, email address, and payment information.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
🇨🇳 The Chinese EV market is declining after massive growth. After a successful 2022 for the market, Chinese electric cars are beginning to face some trouble with growth in 2023. Regardless of the hurdles, the market is still expected to overcome sales of vehicles housing internal combustion engines by 2030. From 2021 through 2022, China witnessed a 10% increase in EV sales, punctuating massive growth. However, that growth is expected to remain at a 5% increase, despite this slow start.
📲 10 things to do to optimize your mobile device in the supply chain. Nowadays, everyone has a mobile device (or 2) that they use every single day… most of the day. Many believe cellular devices are a distraction when doing work, but there are tips on how to fit your phone into your supply chain workday. There are many mobile apps available that can help you manage your supply chain, such as inventory management, order processing, and logistics tracking. Using these apps on your cellular device can help you stay organized and manage your supply chain on the go.
🚛 Is the driver shortage because of underutilization? Over 70% of transporting goods across the country is done by truck drivers, creating revenue of over $732 Billion. Somehow, there is still an 8,000-person shortage of drivers, and many claim it is massive delays in the work day and consistent pay issues to blame. Additionally, a driver shortage can lead to overworked drivers, who may be more prone to accidents or driving while fatigued. This can increase safety concerns for both the driver and other motorists on the road.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 28, 2024, from iLevel Logistics Inc.