This week, warehousing demand declines as companies optimize inventory management, leading to warehouse consolidations and subleasing. Over 100 business groups urge for secured Red Sea travel to alleviate shipping disruptions. Despite concerns of global trade slowing, shipbuilding orders soar, driven by demand for eco-friendly vessels. Textile and apparel imports from Mexico and Malaysia increase, while U.S. diesel prices surpass $4 a gallon, hinting at transportation sector challenges. A new Senate bill aims to ensure smooth commercial operations at land ports of entry. Inflation concerns persist, potentially affecting Federal Reserve rate-cut plans. These developments reflect ongoing adjustments and challenges in global trade, supply chain management, and economic policy. Read the full articles below for more insights.
Weekly Freight Report: February 16, 2024
February 14th, 2024
Warehousing Demand Is Starting to Shrink
Retailers and suppliers are downsizing inventories and storage space, opting for facility upgrades over new openings, reflecting a shift from pandemic-driven stockpiling to leaner inventory management. Major companies like Newell Brands, Rite Aid, and Fanatics are consolidating warehouses and subleasing space amidst this trend.
Retail and apparel groups call for secured travel on the Red Sea
Over 100 business groups urge governments to secure trade routes in the Red Sea due to port congestion and shipping disruptions caused by attacks, emphasizing the importance of maritime safety for global commerce. While some industries, like retail and fashion, are navigating the challenges with contingency plans, concerns remain about the impact on supply chains, particularly for companies heavily reliant on global sourcing.
Global trade receding? Tell that to shipbuilders
Global maritime trade is thriving, with substantial growth expected as shipbuilding orders surge, particularly from China, South Korea, and Japan, despite geopolitical tensions. This growth, driven by increasing seaborne trade and the need for environmentally friendly ships, is projected to continue into the late 2020s and beyond, alongside the replacement of aging fleets.
Textile and Apparel Imports from Mexico and Malaysia Surge in 2023
Textile and apparel imports declined slightly in December but remained higher year-over-year, with total imports at 6.91 billion square meter equivalents. For 2023, imports decreased by 12.3%, totaling 92.8 million square meter equivalents, with textile imports down by 8.4% and apparel imports down by 21.7%.
Average US diesel price rises above $4 a gallon
The average price for a gallon of diesel has surpassed $4, reaching $4.109 as of February 12, with prices rising across the nation, highest in California at $5.250 and lowest along the Gulf Coast at $3.865. Global diesel stocks are below normal, and prices may escalate rapidly if industrial economies recover from recession in 2024, Reuters reports.
Senators Introduce Freight Border Bill
Introduced in the U.S. Senate, the Keeping International Land Ports of Entry Open Act aims to prevent the reassignment of Customs and Border Protection personnel from commercial ports to handle migrants, prioritizing lawful commerce. Sponsored by Sen. Ted Cruz, the bill aims to hold the Biden administration accountable for its border policies, with support from industry groups.
Inflation Tops Forecasts in Blow to Fed Rate-Cut Hopes
January’s consumer price surge may delay Federal Reserve rate cuts as inflation exceeded expectations, driven by rising services and shelter costs despite declines in used car prices and broader goods. Market expectations shifted accordingly, emphasizing the challenges in achieving the Fed’s 2% inflation target amidst ongoing economic sector fluctuations.
