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Market Update 1/11/24

GENERAL MARKET TRENDS

POTENTIAL MARKET DISRUPTORS

PORT IMPACTS:

  • Red Sea Crisis Impact: The ongoing crisis in the Red Sea, including Houthi rebel attacks, is prompting shifts in shipping routes, leading to longer transit times and increased costs. This has resulted in a surge in ocean-shipping rates and additional fees, as carriers divert from the Red Sea to avoid conflict zones.
  • Airfreight as a Mitigation Strategy: Shippers are considering the use of airfreight to counter delays caused by the Red Sea crisis. However, airfreight rates haven’t yet shown significant changes, but an increase is anticipated in the near future.
  • Future Rate Trends: Despite the current rate hikes due to the Red Sea situation, there is an expectation that rates might decline post-Chinese New Year, as the industry adapts to the routing changes and deals with the excess capacity challenges

SEASONAL TRENDS:

  • Winter Weather Impact: With the onset of winter, expect disruptions in freight movement due to severe weather conditions, including snow and blizzard-like events.
  • Produce Market Influence: The influx of produce entering the market in the Southwest has sparked an increase in rates, with the additional volume from the produce market, expect a tightening of capacity.
    • The end of 2023 saw muted freight demand with tender rejections and spot rates below 2022 levels, yet early 2024 has brought a modest rise in spot rates.
  • The market is witnessing a quick recovery in tender volumes post-holiday season, suggesting an upturn in freight flow, while the ongoing Red Sea crisis and global events like the Chinese New Year continue to influence shipping routes and costs, potentially impacting future rates and market dynamics.

TRANSPORTATION EVENTS:

UPCOMING HOLIDAYS:

  • Chinese New Year, February 10th
  • Valentines Day, February 14th
  • Start of Ramadan, March 10th

WEATHER IMPACT

  • Eastern U.S.: Expect a major winter storm, with heavy snow (6-12 inches) and blizzard conditions from eastern Nebraska to central Michigan. Minor flooding is possible in the northern Mid-Atlantic and Northeast.
  • Southern Plains to Michigan: Rapidly intensifying low-pressure system bringing severe weather, including possible tornadoes and wind gusts.
  • Northern Rockies and Plains: Dangerously cold temperatures persisting, with highs below zero in some areas.
  • Forecast for the Week:
  • Midwest and Ohio Valley: Cold arctic air following the storm, with below-average temperatures continuing.
  • Intermountain West and Rockies: Multiple snow events, especially heavy along the Oregon and California coasts.
  • Implications:
    • Prepare for potential disruptions in the Eastern U.S. and Midwest.
    • Monitor local advisories for safety and operational planning.
    • Expect possible delays and adjust logistics accordingly.
  • WPC’s Short Range Public Discussion (noaa.gov)

TEMPERATURE TRENDS

  • Storm warning across North America

INDUSTRY NEWS TO KNOW

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