US Port Summary
Lead times from foreign to US ports are normalizing towards pre-pandemic levels. West Coast ports handled 54% of import volume in February, which dropped to 45% in August, its lowest share since the early 1980s.
As you may recall, in January 2022, there were over 150 ships at anchor outside of US ports collectively, with the majority stalled outside of the West Coast ports. That trend has flipped, with currently more ships at anchor outside of East Coast ports. This is attributed to a slight over correction from carriers and importers trying to avoid the West Coast port delays.
An index on Long Range less-than-truckload (LTL) rates, shows that rates rose 36% from the start of the pandemic (March 2020) through June 2022 due to increases in fuel costs and demand, as well as a decrease in the available labor force. From June 2022 to August 2022, rates dropped 8%, which was the largest 2 month drop in the last 22 years of the index. A similar trend occurred with full- truck- load (FTL) rates as shown below.
Why does this matter?
Domestic freight rates are currently up 25% to 50% depending on the type of shipment, but not nearly the same magnitude as ocean freight which was up 800% or more at its peak. Even with carriers using non-traditional ports and potentially relying on trucks to move cargo within the US, we still are seeing demand decrease for both LTL and FTL shipments. Another trend that points towards fewer price increases and freight surcharges that you should expect from suppliers/distributors.
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