In an earlier newsletter, FreightCaviar wrote about a WSJ report on the unraveling of the US and China trade relationship. Now, US manufacturing orders from China are down 40%, according to the latest data from CNBC. Most production will shut down for seven days starting on January 21 for the Chinese New Year holiday, two weeks earlier than in previous years.
Some numbers from project44:
- 2,475,792 vessel TEU volume from China to the US in July 2022
- 1,961,121 TEUs in November 2022, a 21% decline.
What Caused ORder Dropoff in China?
Recent China trade issues stem from strict Covid-19 lockdowns that its citizens angrily spoke out against in protests across the country. We can’t forget the general drop in global demand and overcapacity issues. So it’s easy to see why the disruption and slowdown have some brands looking elsewhere.
Apple plans to move production out of China.
The company wants to diversify its supply chain because of recent issues in China. The Wall Street Journal reports that “iPhone City” in Zhengzhou, China dealt with violent protests over Covid restrictions at its Foxconn-run factory. This one factory employed around 300,000 workers and, at one point, made 85% of Pro version iPhones, according to Counterpoint Research.
During lockdowns, workers at the factory lived on-site and limited their interaction with others. The first to grow restless were young people who climbed fences, left the factory, and began speaking out on social media against low wages and harsh restrictions, WSJ reports.
The disruptions became apparent at the end of the line: US wait times for iPhones have increased since 2020, with customers waiting 37 days, even 10 weeks after launch day in 2022.
- There was a 25-day wait time for the iPhone 12 Pro Max in 2020 at launch.
- In 2022, wait times increased to 39 days for the iPhone 14 Pro Max at launch.
Apple is now looking to India and Vietnam as new hubs of production. But they won’t be completely cutting off ties with China just yet. The country still has the workforce and consistent regulation. However, in the long term, Apple wants to ship 40% to 45% of iPhones from India.
Supply chain lines are being reworked…
…because of a series of global events that have lasting consequences. Brexit, the US – China trade war, a worldwide pandemic, and Russia’s war in Ukraine have some fearing the end of globalization. But China still plays an essential role in the supply chain for many countries. Given the current economic climate across Europe, the EU plans to ramp up ties with China despite US desires.
So no, lines with China won’t be erased any time soon. They may be redrawn or made less bold as countries reevaluate the role that the “manufacturing hub of the world” plays in their economies.
Written by Adriana Pulley
FreightWaves’ US Outbound Tender Volume Index (OTVI) shows container imports, rail intermodal shipments, and truckload demand have all fallen from their stratospheric heights during the pandemic. According to FreightWaves expert analyst Zach Strickland, these numbers may better indicate how inflation will be tamed in the coming months than the Consumer Price Index (CPI).
A Clearer Picture: Pre-Pandemic (November 2019) to Present
- Container import bookings are ~6% higher than in November 2019 after averaging 80% higher throughout 2021.
- Loaded intermodal container volumes on the rails (ORAILL) are 7% lower than in November 2019.
- Outbound Tender Volume Index is just 9% higher than this time in 2019 after averaging 50% above pre-pandemic levels from July 2020 to March 2022.
(As measured by FreightWaves’ Inbound Ocean TEUs Index)
Macroeconomic data doesn’t tell an accurate story…
…because the dollar figures they use are contaminated by emotion as well as supply and demand imbalances. For example, the scarcity effect is an economic psychological phenomenon that occurs when people believe something has a higher value simply because there is less of it. At the same time, they place a lower value on abundant objects. The scarcity effect has been one of the main catalysts of inflation these past two years.
Things look to worsen for transportation providers…
…as we enter December and January, which are typically the slowest months of the year for domestic freight movements. While truckload and import demand have not yet found their way back to pre-pandemic levels, it won’t be long before they do.
Overall, the trends remain unpredictable. The data we see on the macroeconomic level will take time to reflect what is actually taking place.
Written by Adriana Pulley
Check out our latest roundup of the top headlines from around the freight and logistics world. We gather news related to brokers, carriers, shippers, logistics startups, freight tech, and more. Here’s what we’ve got for November 21, 2022.
The winner of the 2022 World Cup will receive €75 million worth of Budweiser beer prepared before the sale of alcohol was banned during the Qatar-hosted games. Budweiser plans to sue FIFA for breach of contract for the last-minute change.
This week’s FreightWaves Supply Chain Pricing Power Index sets the negotiating power for rates at 35 in favor of shippers as carriers struggle to source freight.
Ocean carriers panic as bookings from China to North Europe and the US west coast tank and FAK rates plummet. The drop isn’t helped by a high number of recent blank sailings.
Two L.A. theft rings that have stolen more than $18 million in merchandise have been taken down. Read this guide on how to prevent cargo theft this holiday season.
New York remains the nation’s #1 port for the third-consecutive month, handling nearly 20% more trade volume than it did pre-Covid.
Written by Adriana Pulley
Australian truckload-sharing startup Ofload has raised $60 million for its digital road freight platform that sells access to empty truck space. The Series B raise was led by Singapore-based Jungle Ventures.
The investment signals the continued rise in popularity of shippers willing to pool together goods into one haul. In the US, the software-driven shared truckload platform Flock Freight reached unicorn status in October of last year. The company raised $215 million in Series D financing led by SoftBank Vision Fund 2.
Why is Shared Truckload An Attractive Option?
- Customers avoid higher costs related to loading and unloading or paying for unused space.
- Shipments are delivered more quickly, as well.
- Carriers can fill trucks to capacity–increasing sustainability and profit.
- The platform pools shipments in real time, maps terminal-free routes, and calculates the shipper’s risk with patented technology.
In 2021, on the heels of a Covid recession, the U.S economy grew 5.7%, partly thanks to a 7.9% resurgence in consumer spending. Shipping is an integral part of the supply chain that delivers goods to consumers, so today, we will share ten of the largest U.S ports by container throughput.
The list below will provide information about the ports, and the rankings are determined by how many twenty-foot equivalent units (TEU) they handled in 2021. We will also share some exciting facts about each Port, like its economic impact and how many people it employs.
Read on and find out which ports handle the most containers and facilitate global trade with the U.S. Our countdown begins with Port # 10 on the list…Miami Port.
# 10: The Port of Miami
Location: Miami, Florida
Annual container volume: 1.25m TEU (2021)
- Port of Miami is the largest passenger port in the World and one of the largest cargo ports in the United States. The Port accounts for approximately 334,500 jobs and has an annual economic impact of $43 billion on the state of Florida.
- It is the busiest cruise/passenger port in the World and also serves as the homeport of one of the largest cruise ships in the World, Symphony of the Seas. Over 5.5 million passengers pass through the Port of Miami each year.
- The Port primarily handles containerized cargo with small amounts of breakbulk, vehicles, and industrial equipment.
# 9: The Port of Oakland
Location: Oakland, California
Annual container volume: 2.4 million TEU (2021)
- Port of Oakland was the first significant Port on the Pacific Coast of the United States to build terminals for container ships.
- In June 2016, the Oakland City Council voted unanimously to ban the handling and storage of coal and coke at the Port.
- The Port also operates Oakland International Airport.
# 8: The South Carolina Ports
Location: South Carolina
Annual container volume: 2.75 million TEU (2021)
- The South Carolina Ports Authority handles international commerce valued at more than $75 billion annually. It generates 1 in 10 jobs in the state, and port-supported jobs pay 32% higher than the state’s average annual wage.
- According to a 2019 study, the total economic impact of the SCSPA on the state of South Carolina is approximately $63.4 billion.
- South Carolina ports account for 224,963 jobs.
#7: The Port of Virginia
Annual container volume: 3,522,834 TEU (2021)
Facilities of the Port of Virginia are four marine terminals:
- Norfolk International Terminals (NIT)
- Portsmouth Marine Terminal (PMT)
- Newport News Marine Terminal (NNMT)
- Virginia International Gateway (VIG)
The Virginia Port Authority maintains its Own Police force of fully certified and sworn law enforcement officers of the Commonwealth of Virginia.
#6: The Port of Houston, TX
Location: Houston, Texas
Annual container volume: 3.5 million TEU (2021)
- It is the U.S.’s largest Port for waterborne tonnage.
- Port of Houston is responsible for creating 1.35 million jobs in Texas and 3.2 million jobs nationwide.
- It has an economic impact of $801.9 billion in the U.S.
#5: The Northwest Seaport Alliance, WA
Location: Tacoma, Washington
Annual container volume: 3,736,206 TEU (2021)
- In 2021 NSA’s top origin country was China (820,939 TEU)
- Its top destination country was Japan (159,223 TEU)
- The Northwest Seaport Alliance comprises the seaports of Seattle and Tacoma(Washington State)
#4: The Port of Savannah, GA
Location: Georgia, U.S.A.
Annual container volume: 5.6 million TEU (2021)
Satellite terminal facilities of the Port of Savannah include:
- Garden City Terminal
- Ocean Terminal
- Sea Point Industrial Terminal Complex
- Target Corporation Facility
- IKEA Facility
- Heineken USA Facility
#3: The Port of New York and New Jersey
Location: New York
Annual container volume: 8.9 million TEU (2021)
- The Port of NY/NJ is the largest container complex in the World.
- The Port’s top trading partner is China, followed by Italy and Germany.
- Its top import is beverages, followed by vehicles.
- New York and New Jersey are the 3rd leading states for total exports to foreign countries.
#2: The Port of Long Beach
Location: Long Beach, California
Annual container volume: 9.38 million TEU (2021)
- The Port generates approximately $100 billion per year in trade.
- It employs 316,000 people in California.
- Port of Long Beach launched The Green Flag incentive Program, which gives discounts to ships to slow down within 20 nautical miles of the harbor to decrease fuel consumption and reduce air pollution.
#1: The Port of Los Angeles, CA
Location: Los Angeles, California
Annual container volume: 10.7 million TEU (2021)
Coming in at number one is the Port of Los Angeles which ranks as the nation’s largest Port by container throughput. Some interesting facts about the Port include that:
- It accounts for employing 3 million people in the U.S.
- The Port boasts 7 500 acres of land and water, which include:
- Passenger terminals
- Cargo terminals with facilities for automobile, dry and liquid bulk, breakbulk, and warehousing.
- Port of LA is in charge of the Los Angeles Waterfront, which welcomes millions of visitors annually.
In conclusion, the ports listed above have a substantial economic impact on the country and employ millions of people. In addition, they facilitate U.S trade with other countries and provide a gateway for some of the goods we use daily. We hope you found the list of the largest U.S ports by container throughput informative and continue to follow Freight Caviar as we share valuable facts and figures about the logistics industry.