Global supply chain pressures ease as spot rates and indices dip
The Global Supply Chain Pressure Index (GSCPI) reported a level of 1.05, for September 2022, which is a mere quarter of the peak reported in December 2021, suggesting that things, at least in terms of supply chain disruption, have gotten better.
The level is akin to the one reported in Nov-Dec 2020. While select ports such as Houston, have been seeing high levels of congestion (about five to six weeks) over the spurt in volumes, global port congestion seems to have eased, as against the peak of December 2021- January 2022. While the ‘Chinese Golden Week’ played last leading to no updates on the Shanghai and Chinese Container Freight Indices, the Freightos Baltic Index took a 9% hit, to end at US$3,699, almost on par with the Drewry’s World Container Index, dwindling to one third of its peak level quote.
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FBX12 which reports quotes from North Europe to #China/Asia reported a 22% dip to register its lowest quote ever on the index at US$375, while the China-US West Coast Rates (FBX01) are reportedly at US$2,435, even lower than those reported by #Drewry’s.
The volume play in US ports also seems to indicate/reflect this, with the August volumes for New York, New Jersey, Los Angeles and Long Beach being lesser than the equivalent volumes, last year, which was around the time the indices peaked (September 2021). The dips have been anywhere from -0.5% to -16%. Global Schedule Reliability of 47% is near December 2020 levels, again something reflected in the Global Supply Chain pressures.
The US has seen transport prices dropping/contracting significantly as explained by the Logistics Managers Index and the Logistics Managers survey. This is the major detractor/contracting indicator, other than warehouse capacity, while inventory prices have been rising, and expect to rise further, thanks to rising US interest rates.
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All eyes will now be on the September #inflation report for the #US, expected this Thursday (13 October).
This could give freight analysts signals about how/where rates are heading, in near future. There has been sheer unpredictability of rates, given that the holiday season coincides with peaking demand, however, this year there has been prior planning from importers and retailers and we can see the kind of inventory glut in the US.
While China reopens this week, some analysts see the large dip in spot rates as a selling proposition to further up the country’s exports, which have been lukewarm. In spite of the overall negative picture, rates on US-Europe trade lanes are at record highs as reported earlier by Drewry’s , however China/Africa and Europe/South America rates, too have been buoyant.
Source: Container News
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