The Weekly Roar

In this week’s Roar: import volume down, China to Europe rail spiking, more Union trouble at a key UK port, softening air cargo rates, and a lower, but healthy Logistics Managers’ Index.

In what is often a good bell weather for the global economy, US import volume is lower—and expected to decline even further. At least that’s what the most recent Port Tracker report suggests.

The just-released report, which surveys several US ports, shows a significant drop in volume in June (the most recent data available)—although it must be taken into account that May was a record month. Despite the decline, volume remains above 2021 levels.

Also, trending down is the price of diesel in the US, at its lowest level since March (see the graphic).

We all know that many countries are dealing with extreme inflation, too. Taken altogether, are these more signs of a slowing global economy?

Moving to China-Europe, rail connections there saw a spike in volume. The China State Railway Group reports 1,517 Silk Road trains running in July, representing an 11% year-on-year increase. Volume is up by 12%. What’s behind the spike? Not surprisingly, port congestion, which is, in turn, pushing an increase in trucking and rail options.

In addition to the aforementioned port congestion, labor issues at ports remain an issue for supply chains. In the UK, mediation talks between unions and workers at the Felixstowe container port have broken down, sparking a strike that’s expected to cripple the port. 1,900 port staff and employees will walk out starting August 21. Felixstowe is the UK’s largest container port. It handles about half of all imports into the UK, leading union officials to predict that, “it [the strike] will generate massive shockwaves throughout the UK’s supply chain.”

In air cargo news, The International Air Transport Association (IATA) has released data indicating global air cargo markets are healthy and stable, at least overall. The data-point for North American carriers shows a 6.3% decrease in cargo volumes in June 2022 (the latest data available) when compared to June 2021, with high inflation partially to blame. Both Asia–North America and Europe–North America markets are in decline. Like lower fuel costs, this is a budget-friendly development for supply chains but still a potential indicator of bigger economic problems on the horizon.

Finally, the July 2022 Logistics Managers’ Index is down from June, putting it at 60.7, the lowest reading since May 2020 – and down (-4.3) from June’s record reading of 65.0. Despite this downward trend, the industry remains healthy based on this figure. The index indicates there’s increasing transportation capacity in the market, but that warehouse capacity remains constrained.

For the rest of the week’s top shipping news, check out the article highlights below.