Logistics Market Updates | October 2022

October 18, 2022

Download and read the latest on Operations and Carrier updates.

Got questions or need assistance? Our team is ready, don't hesitate to contact our experts.

At Crane Worldwide Logistics, we are equipped to navigate the changes to best support our clients. We will continue to monitor the situation globally to keep you informed.

To see our previous updates, please visit our COVID-19 Resource Center.

All our facilities and warehouses are operational. We have space, and ground transportation options globally, book air charters, and fill space on ocean carriers.

Road Freight - October insights

Current State

  • During a QBR with a large retail shipper, we discussed the “Current State” of domestic ground. Our contact noted that TL capacity continues to loosen, and she is getting more inbound calls from asset-based carriers looking for more freight. This shipper recently completed TL/intermodal bids, and overall rates declined 10%, at the lower end of her expectations of 7%-10%. Within this, intermodal rates held flattish, and over-the-road TL rates declined over 10%. As a result, this shipper will shift about 3% of the impacted business from intermodal to TL. And since incumbent intermodal providers have been unwilling to lower rates, this shipper plans to add new intermodal providers in upcoming bids to help secure lower rates. Meanwhile, on the LTL side, our contact postponed her bid a few months ago since her LTL volumes are down nearly 30% year to date, primarily due to TL consolidation. As she bid with less freight, our contact plans to diversify her LTL carrier base by adding a few more regional carriers to the bid. As a result, our contact now expects her LTL rates to come down a bit next year. Finally, this shipper discussed supply chain congestion and inventory trends. Looking at 2023, this shipper believes her total freight will be much lower, with expectations for lower rates, fuel surcharges, and volumes.

Market Forecast

  • For-Hire trucking Ton-Mile index analysis. Implication: many folks claim that trucking freight is a leading economic indicator. Though some tend to disagree since trucking activity represents derived demand from manufacturing, mining, wholesaling, retailing, and warehousing, the TTMI data for August makes clear that the U.S. economy is almost assuredly not in a recession. You don’t have year-over-year ton-mile increases of 3% during a recession. Also, in 2019, ton-miles declined by ~1% from 2018, which is consistent with an actual freight recession. We are not in one of those (yet).

Read all Road Freight Updates

Ocean Freight - October insights

Current State

  • The third largest railroad union rejected its deal with freight railroads on October 9th — renewing the possibility of a strike. The Brotherhood of Maintenance of Way union agreed to delay any strike until five days after Congress reconvenes in mid-November to allow time for additional negotiations. This situation will continue to cause severe disruptions in container ports.
  • Hurricane Ian's initial economic damages are currently estimated at USD60 billion. Due to this natural disaster, ports were shut down, and operating hours were reduced, causing cargo imports and exports in the South to be disrupted.

Market Forecast

  • Schedule reliability continues to improve gradually as the year goes by. In August 2022, vessel delays dropped to 7.9%, whereas in January, the vessel delays were up to 13.8%. This means congestion issues have been cut by almost 50%. Comparing fleet absorption improvement from 2022 with 2015, experts say shipping strains are about halfway to normal. The graph below shows that the rate change for both years is quite similar, meaning if the current pace continues and no major supply chain disruptions happen, supply chain normality should be expected to occur in 2023. Moreover, if we compare the current rate of improvement, the graph indicates that 2022 is faster, but it also started at a higher level.

Read all Ocean Freight Updates

Air Freight - October insights

Current State

  • Available cargo tonne-kilometers (ACTKs) increased by 6.3% YoY while they were 0.5% down from the July level, contributing to the first positive growth in industry-wide load factor since January 2022.
  • Asia Pacific saw the most significant increase in seasonally adjusted ACTKs from 2.4% YoY in July to 12.4% YoY in August, and Latin America maintained its double-digit growth of 24.7% YoY.

Market Forecast

  • September saw rates drop 19% year on year out of Hong Kong to North America, while out of Shanghai, they fell 42%, according to the TAC Index.
  • Asia to Europe, rates fell 25% from Shanghai and were flat from Hong Kong, but all lanes are still significantly – between 92% and 175% – above pre-Covid levels.

Read all Air Freight Updates

Commercial Air Operations Update

IATA released an information page listing airlines' status globally, free for all to access. Visit the IATA page here.

Charter Operations and Aircraft Availability

What charters do Crane Worldwide Logistics have available?

  • Capacity is available for charters globally. Contact us for current rates and availability.
  • If you have an opportunity, send us the details, and we can work on the current part charter capacity and pricing. Charter prices are based on current availability, and that could change rapidly. So, size and rates have been fluctuating over the past few days.
  • Crane Worldwide Logistics must have a signed charter authorization from our client before signing the charter contract with the provider. Make sure you have someone standing by to sign agreements; capacity and rates change quickly.
  • On all charters, funds must be received before they wheel up.

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