By Richie Lin.    Photo：Gustavo Fring

According to a research issued in August, there are 40% workforce in USA and Canada expecting to retire in next several years. Most of them are labors in medical and logistics industries, which took massive responsibilities during pandemic to keep societies run as much smooth as possible. After burning out for almost three years, many skilled and well-experienced labors chose to retire earlier than usual because they felt the working conditions had become worse and worse. Take logistics industry for example, when the pandemic began in the early 2020, shipping lines, airlines, railways, and trucking companies all chose to cut the supply of manpower and resources to endure the impact of decreasing demands. However, the lockdowns caused by pandemic didn’t exacerbate the logistic industry but boost the demand for more space due to the compensations from governments and well-developed e-commerce. And surging demands created consequentially the supply chain gridlocks because shipping lines, airlines or any part in logistics have restricted the supply of space to cut the expenses. Since there was less supply of space and personnel to handle the arrangements, we saw severe port congestions, railroad bottleneck, lack of chassis, lack of trucks and other kinds of logistic disasters all happened from third quarter of 2020 till the first quarter of 2022. The unexpected consumptions pushed up the demand of containers to give shipping lines a huge opportunity to make big fortunes, which was around 19 billion in 2021. Railway companies also made lots of fortunes during these two years under pandemic because they layoff many workers and huge appetite of American consumers. BNSF had a net income of nearly USD 6 billion in 2021, up 16 percent from 2020. Union Pacific’s net income was USD 6.5 billion in 2021, also up 16 percent from 2020. Compared with the record-high profits of shipping lines and railway companies, the inflation and stressful working conditions have burned out the momentum of the workers in shipping lines, airlines, railways, and trucking companies. Therefore, we saw several possible strikes in the logistics industries during these months because of stressful working conditions and painful life expenses. Political interference have involved in the negotiation between unions and companies, so the strikes have been postponed but not fully resolved. Henceforth, even the transit time has improved gradually since June because port congestions were eased after volumes have dropped significantly compared with the volumes in first quarter of 2022. We still cannot rule out the possibility of bottlenecks in the supply chain might happen again if lots of labors in logistics retire or simply go on strikes for a period of time. We have heard there is still lack of chassis and truckers in the Midwest of United States, so sometimes we need to use transload service from west coast to move the cargo to the inland destinations. Freight rate is dropping, but the inland charges and lack of equipment and personnel in railways and trucking companies will be major problems in logistics for years to come.

Ocean FCL market rate reference in week 39:

• Asia main ports to USAWC USD 3000~4000 per 40GP; 
• Asia main ports to USAEC USD 7000~8000 per 40GP; 
• Asia main ports for IPI points of USA is USD 8500~11500 per 40GP. 
• Asia main ports to Europe base ports and West Mediterranean: USD 6600~7000 per 40GP. 

Please note above rate is only for reference, carriers might only give space for higher rate, which will be from USD 4,500~12,500 per 40GP for different destinations.

Airfreight market rate in Week 39:

Airfreight rate might increase abruptly without further notice. The following market rate for your reference. 

• PVG/SZX/HKG/TPE to LAX USD 6.6/kg, 
• PVG/SZX/HKG/TPE to ORD USD 5.8/kg, 
• PVG/SZX/HKG/TPE to JFK USD 5.8/kg.

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