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Logistically Speaking - HOT SHEET - Week 19

Ocean Shipping Reform Act Update
The bipartisan Ocean Shipping Reform Act of 2022 aims to level the playing field for American exporters and importers by providing the Federal Maritime Commission (FMC) the tools it needs to improve oversight over international ocean carriers and crack down on rising shipping fees facing consumers.

  • The act passed the House in December and the Senate by voice vote at the end of March.
  • Once both chambers agree to the language it will head to President Bidens desk.

 

China Tariffs
The Biden Administration is looking at ways to bring down inflation including easing tariffs on imports from China.

  • One proponent of easing the tariffs on some of the $360 billion in imports is treasury secretary Janet Yellen.
  • This comes as the U.S. Trade Representative is required to look at the impacts of the 2018 tariffs.
  • The situation has become a hot topic with many wanting to remain stiff on China while others want to tamp down inflation.
  • Solution: Dunavant will be watching closely to see if the administration removes tariffs on certain products and will relay that information as it arises.

 

China Covid Update
The Port of Shanghai is starting to see some alleviation after the lengthy shutdown with dwell times and delays dropping off.

  • While parts of the city are still shut down the port is starting to gain velocity.
  • The major bottle necks are still drivers needing covid testing/passes to enter certain regions and manufacturers/warehouses still under lockdown.
  • As container velocity picks up in Shanghai we can expect this flow of freight to hit the US during the already busy summer season.

 

Trucking
Spot market volume continued to decline in April shifting into the contract environment.

  • According to FTR, 2022 spot rates are forecasted to decline by 2% y/y and contract rates to increase by 7.5%. $2.81 was the average rate per mile for van transport on truckload’s spot market in April, Including fuel surcharges, down 7% from March 2020 and up 8.5% from April 2021.
  • With diesel at $5.55 a gallon, that equates to a $0.38 increase per mile pre pandemic.
  • The increase in fuel costs has been affecting cross boarder trade with rates rising 3%-5%.
  • This will surely hurt cashflows for certain carriers.
Posted by Andrea Wiley at 13:08