October 2022 Freight Market Update

10/18/2022 by Greg Massey

October 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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HURRICANE IAN IMPACT

First and foremost, our thoughts and prayers are with the people impacted by Hurricane Ian, particularly those in Florida and the Carolinas. 

As typically seen when a natural disaster occurs, it has an impact on freight volumes. Figure 1.1 represents the freight volume trend in the state of Florida. 

As represented by the green line, outbound freight volume had a slight increase right before the hurricane hit, most likely shippers pulling forward orders in anticipation of their business being sidelined temporarily or manufacturers looking to move inventory to an area less impacted by the storm. Inbound volume, represented in blue, began its downward descent around the same time. One would anticipate that the inbound volume will begin to rise as disaster relief shipments begin to arrive in the state. On a longer outlook, as rebuilding begins, expect van and flatbed shipments to the area to escalate as the need for building materials and eventually home décor increases. 

If you are a shipper that normally moves freight into the state of Florida, be prepared for an increase in freight shipping costs as you will be competing with relief effort shipments which typically demand a higher rate.  Normal freight patterns into the sunshine state could be out of balance for some time.

Figure 1.1 is a graph showing Inbound Freight Volume into Florida, showing a descent because of Hurricane Ian.
Figure 1.1: The blue line shows inbound freight volume going into Florida declining because of Hurricane Ian.

CONTAINER RATES CONTINUE TO DROP 

Figure 2.1 highlights the continuing drop-in container rates. Currently, the spot rate for a container headed from China to the west coast ports (shown as the green line below) sits just shy of $3,000, a third of what it was this time last year. The drop-in rates for containers heading from China to the east coast also continues its downward trend (blue line), now sitting just under $7,000.  

While we have seen a shift of containers to the east and gulf ports, a savings of almost $4,000 per container is almost too good to pass up for shippers even though better service time at those ports may be better. It is feasible to assume that west coast rates have reached a floor, but rates for eastbound containers still have room to decline.

Figure 2.1 is a graph showing the shipping rates for containers declining drastically.
Figure 2.1: The blue line shows container shipping rates from China to the west coast declining to about $3,000. 

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