Major fleets and single owner-operators alike need real, unbiased, and up-to-date data and analytics. Finding it is very hard because of what is known as the backlash effect.
In my own words, most people distort new information to support their preconceived notions. The stronger the argument the more they attack/ignore the source.
Crying wolf or putting on rose-colored glasses is something we need to be mindful of when presenting information.
It is also something to which you need to keep your B.S. meter precisely tuned in order to detect.
Let’s get to it.
The above SONAR chart is a follow-up.
I told you it would not last long. Maritime imports and truckload outbound tender volumes do not move out of sync for very long.
There is a cause and effect and it is imports that drive the effect.
Notice they have fallen toward the outbound tender volume levels and not the reverse.
This is not a departure from the logic outlined above. It is an indication of the freight funnel drying up.
Just a week ago it was reported that the queue in San Pedro Bay was down to 20 ships from 109.
But, imports are still high!
Yes, and it takes time for a funnel to clear – even after the source is shut off completely. This is due to the fact that the spout is still only so wide.
We can see in the SONAR chart above that bookings began to fade just two and half months ago. That was the start of the tightening of the freight spigot. Righty tighty, lefty loosy. You remember.
The last time I checked, an index of 76 is almost half of 143.
In this next SONAR chart, we are looking at TEUs. This is the result of those bookings.
Again, an index of 114 is less than half of 234. Someone check my math here…
The SONAR chart above is displaying ocean rates. Notice how they have been slowly declining all along. No big drop off – just a nice steady decline.
Carriers are blanking sailings – reducing capacity to avoid a crash in rates.
Is it because imports are so strong? Hmm…
Look at the charts in this order and think of a funnel with water.
Bookings, TEUs, backlog in San Pedro Bay, rates, maritime import volumes vs. OTVI.
Can you see the valve shut and the water continue to swirl and eventually empty until you knock the cone against the container wall to get the last drop?
The point is that the market is soft and it is going to get softer. We may never see the cliff because the valve was too small to allow for a sudden drop-off of water (or in the real world, a drop in freight).
Nonetheless, here we are.
The SONAR chart above shows Order (Nondefense Capital) and Industrial Production (MFG) both in year-over-year change.
The SONAR chart above is showing Goods Imports year-over-year change.
Both of these charts are upstream from the maritime bookings chart above.
The point here is that the upstream demand needed in order to change the import and truckload volume direction is not there at this time.
Hopefully, a strong holiday season will keep the descent in check.
This last chart before we go full circle is showing booking lead times.
The lead time needed to book a container is not dropping “off a cliff” because of high demand.
So? So remember the first chart?
Expect more of that for the time being.
Get yourself in the know, stay on top of the trends, and watch the spigot!
Don’t ever get caught looking away from the spigot, especially during a water fight!
Peace and love!
