How Pressures from COVID-19 Are Affecting Transportation
There have been significant supply chain changes over the last 8 weeks that have tasked logistics companies around the world. Grocery store shelves need constant re-stocking, and e-Commerce is more ubiquitous as people are quarantined and shipping products direct to their homes. While this is paying off for land and air freight, it doesn’t seem to be helping ocean freight companies who are experiencing a slow down due to the toll that the coronavirus is currently putting on global trade.
Below is a heat map showing loads available per truck across the United States last week; conservatively three times greater than normal volumes. This is high even with the typical end of month end of quarter surge.
While ocean freight companies were initially optimistic when China’s ports finally started moving containers again in March, it has not been the result they hoped for. According to the Wall Street Journal, the virus in China alone has led to significant “blank” (or canceled) sailings for cargo container ships, with an overall projected decline of 10% in year-over-year volumes. Canceled sailings have led to a decline in spot market container rates which are speculated to drop as much as 36%.
What is likely is that until there is a vaccine for COVID-19 and people can get back to work, it is impossible to know when we can all resume “business as usual.” Until then, Langham Logistics is set to help our customers make smart logistics moves. Please reach out to your sales rep for support from our trusted business experts.
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