US West Port (LA/LB) Congestion (‘22/12W)

The SCFI freight rate index, which represents the containership market, has been on a downward trend for 9 consecutive weeks since its peak on January 7, 22-year. Let's take a look at the congestion status of the US West Port (LA/LB), which has been the cause of the surge in freight rates since November of last year.

 

1.     Current status of port congestion in western US

 

In November of 21-year, the number approached 90 ships on standby, showing a sharp decline in recent years. However, in the case of the number of days waiting for an outer port, it is necessary to consider the reduction effect of the measures that put ships on standby in the outer anchorage near the LA/LB port implemented on November 16, 21-year. Nevertheless, according to most industries, it shows that the body weight has decreased by about 40% compared to the peak.

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2.     SCFI Freight Comparison

 

Looking at the freight rates by route, it can be seen that the current freight rates have generally declined compared to the 22-year average. It should be noted that the freights of USWC and USEC. Current freight rates for S.America/Southeast Aisa have fallen by more than -16% compared to the annual average, showing a clear downward trend. However, the decline is insignificant at -0.2% for USWC and -3.8% for USEC.

For this reason, it is difficult to see a change in the SCFI rate trend in the industry so far, despite the many signs of a freight rate decline, such as the Chinese Winter Olympics, the re-spreading of the corona virus in China, inflation, and a slowdown in volume due to the Russia-Ukraine war.

 

 

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3.     National Retail Federation (NRF), Monthly Imports

The graph below shows that US retail imports have slightly increased compared to the same period as predicted for April-July 2022. We believe these positive signals are also supporting the current high freight rates and downside in the US West Coast. However, if consumer purchasing power declines due to a high inflation rate and interest rate hike by the US Fed, SCFI rates may fluctuate rapidly, so need to look carefully.

 

 

B. regards