What’s Next? Our Logistics Predictions for the Rest of 2022
The stock market can’t predict whether a recession is “for sure” or just possible…and neither can I. But, I’ve been doing this a long time and there are certain trends that repeat. Keep reading to learn my logistics predictions for rest of 2022! Over the remainder of the year I think it’s safe to say….
Ocean freight rates will remain high due to the combination of fuel prices, container shortages/imbalances, and drayage equipment/driver shortages. Ocean transit times (door to door) will also stay longer than usual for the same reasons; and if we get the rumored longshoreman’s strike at the west coast ports later this year, expect a complete melt-down. (What to Know About Reshoring Your Supply Chain)
Air Freight rates, especially international, are essentially a derivative of the ocean capacity shortage. Expect rates to remain elevated as long as ocean rates are high. High fuel costs magnify the issue. Air transits have improved over the last 3 months, but are still a few days longer than the norm.
In the LTL market, carriers continue to work to “catch up”. Almost all regional/national carriers are running longer actual transits than forecasted. Whether because of their use of rail, driver shortages, dock worker shortages, or insufficient equipment…none of it is going to improve significantly by the end of the year. Adjust customer expectations for transit times and work with your 3PL to flex carrier selection where transit time is critical in the near term.
The full truckload (FTL) market has seen tremendous volatility over the last 18 months. While that volatility has settled, and some lane rates have even started down…the overall market has adjusted as contract rates increased substantially in the first half of 2022. With balance between contract and spot rates restored for the time being, expect price stability until shipping demand (“recession”) declines.
At Customodal, we live and breathe supply chain, shipping, and logistics! Let us help your business thrive. Reach out to our friendly team of professionals today. We’ll work with you to learn your needs and find the best solution for your budget.