November 2022 Freight Market Update

11/15/2022 by Greg Massey

November 2022 Freight Market Update

Stay up to date on the latest information on conditions impacting the freight market, curated by Trinity Logistics through our Freightwaves Sonar subscription.

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MARITIME SHIFT

Clearly, we are seeing a shift regarding import activity this year. As manufacturers and shippers wrestled with the labor and equipment challenges on the west coast, import freight was diverted to less congested and more labor-secure ports, primarily on the east and gulf coasts. 

The Port of Los Angeles for years has been the top destination for inbound containers. In figure 1.1, you will see that LA handled almost 20 percent of the container volume with just over 558 thousand twenty-foot equivalent units (TEUs) moving through its port. This year, that volume has dropped, with LA handling just 13 percent of the container volume for the U.S. Other ports have been the beneficiaries of the uncertainty with west coast ports, with Newark, NJ seeing their percent of U.S. container volume increase 28 percent, Houston increasing 22 percent and Savannah, GA increasing nine percent.

Figure 1.1 shows the amount of twenty-foot equivalent units year over year across many different port locations.
Figure 1.1

LESS ACTIVITY FROM CHINA

Overall, import volumes are pacing to be 22 percent lower than last year. Much of that decrease in volume has been seen in import activity from China.

As seen in Figure 2.1, while 2021 and early 2022 saw container volume trending above prior years, the last three-quarters of 2022 will see year-over-year volumes from China decline. Much of this is due to less consumer demand, as consumers have increased spending on services versus goods. Part of the decrease can be attributed to the labor uncertainty in China as it continues to implement its zero Covid policies. Additionally, the U.S. has sought to decrease its reliance on China, a country that accounts for almost $430 Billion in goods imported to our ports. Expect the U.S. to continue its near-shoring activities as it looks to stabilize supply chain gaps that were exposed during the past few years.

Figure 2.1 is a graph showing the inbound ocean twenty-foot equivalent units from China to the U.S. year-over-year.
Figure 2.1

LONG, MID, OR SHORT SHIPMENTS?

Finally, as we have seen over-the-road freight volumes decline, that decline has been felt in a certain length of haul shipments more than others.

As seen in Figure 3.1, long-haul freight (green line) and city freight (blue line) have trended downward but not to the extent of those mid-haul type shipments (orange line).

E-commerce has been a big reason for shorter mileage shipments being a bigger percentage of the overall volume. Additionally, mid-haul shipments are not as sought out by carriers as they tend to be less efficient based on regulated driver working hours. As a shipper, one would anticipate shorter or long-haul type freight to be more sought out by carriers, something that will be seen regarding shipment rejection rates and overall dollar-per-mile rates for these lengths of hauls.

Figure 3.1 is a graph showing outbound tender volume index from December 2022 to November 2022. There are three lines showing long haul shipments, city shipments, and mid-haul shipments. Long haul and city shipments are more sought out by carriers than mid-haul shipments.
Figure 3.1. The green line represents long-haul freight, the blue line represents city freight, and the orange line represents mid-haul shipments.

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