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Vessel on-time performance up slightly in August
Vessel schedule reliability in the eastbound trans-Pacific improved in August. However, on-time performance in the largest U.S. trade lane lagged global liner performance.
Schedule reliability from Asia to the West Coast increased 2.9 percentage points from July to 29.5%. Additionally, vessel on-time performance on the Asia-East Coast trade lane rose 1.5 percentage points to 17.2%.
Global vessel schedule reliability in August improved 5.8 percentage points from July to 46.2%, the largest MoM gain of the year, as supply chain bottlenecks on some of the major east-west trade lanes began to ease.
The average delay for late vessel arrivals to the U.S. West Coast was 10.32 days. Additionally, the average delay for late-arriving vessels from Asia to the East Coast was 10.18 days. Lastly, the average delay for late-arriving vessels globally in August was 5.86 days.
U.S. ports on the East, Gulf, and West coasts continue to experience port congestion and port-related supply chain bottlenecks. The container ship backlog in Savannah at the end of July reached 40. The backlog in LA/LB on Tuesday was nine.
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No recession for U.S. warehouse demand
Warehousing demand is climbing through the U.S. as the fourth quarter approaches despite forecasts of recession. Additionally, there is no sign demand will weaken anytime soon, speakers told the JOC Inland Distribution Conference in Chicago this week.
That demand is forcing warehouse operators and customers to innovate as freight continues to pile up, filling not just warehouse space but trailers and containers as well.
New customers mostly want temporary storage. Many of these customers were among the importers that pulled imports forward in 2022 to avoid potential supply chain disruptions and stock-outs later this year.
The average U.S. warehousing vacancy rate is 3.4%. Prior to the pandemic, a rate of 6% to 8% would have been more typical.
Space is extremely tight near major seaports. The vacancy rate in Savannah is 0.1%, indicating new space is not available. Additionally, there’s little space in Southern California’s inland empire.
Inland warehouse and distribution companies trying to satisfy existing customers and take advantage of the strong pricing market in the transportation sector are facing a dilemma. They must decide between risking long-term business and turning and turning down high rates from new customers.
The chance of a recession in late 2022 and early 2023 won’t bend the trajectory of warehousing demand that much according to the speakers.
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About O’Neill Logistics
O’Neill Logistics is a leading 3PL with operations in Rancho Cucamonga, CA; Savannah, GA; and Newark/Monroe, NJ. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.
O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.
Lastly, we aim to simplify your supply chain. We deliver exceptional service and can optimize your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.