Container Gate-Out Times Improve While Spot Freight Rates, Transit Times Plummet

The transit time from China to Los Angeles and Long Beach dropped by 85% from 50 days in December 2021 to 27 days in Apr 2022.

Port Of Los Angeles
Port of Los Angeles

The U.S. GDP fell 1.4% in the first quarter of 2022, yet saw an extremely high volume of imports in Q1, increasing 4.77% from an already record-high Q4 2021 on the back of previous orders and consumer demand, according to new research presented by Shifl.

Meanwhile, the Chinese COVID-19 situation continues to worsen as movements within Shanghai remain restricted, shackling manufacturing output, trucking activity and port throughput.

“We however expect a relief in the East Coast congestion in the near future as the impact of blank sailings created by the decrease in demand and China lockdowns will be felt in New York, albeit little later than West Coast ports due to the naturally longer transit time,” says Shabsie Levy, founder and CEO of Shifl.

From Shifl:

  • The transit time from China to Los Angeles and Long Beach dropped by 85% from 50 days in December 2021 to 27 days in Apr 2022. Although it is a significant improvement, this is still above pre-pandemic levels.
  • At the peak of West Coast congestion, customers shifted deliveries of future orders to East Coast ports at the time when they were performing better. Those shipments are arriving now, and as a result, the congestion has shifted to the East Coast.
  • While congestion outside the ports has shifted to the East Coast, the container gate-out times have been improving on both coasts. Los Angeles/Long Beach gate-out times improved by 28% dropping from 5.74 days in January to 4.5 days in April while New York had a 47% drop in container gate from 4.25 days in January to 3 days in April.

“The core reason for the continued drop in spot freight rates as we predicted previously is the reduced demand in the U.S., which we are seeing from our customers' data as well. The price of a 40-foot container continued to drop in April 2022 to $7-8,000 for the China-U.S. West Coast and around $9-10,000 for the China-U.S. East Coast,” says Levy. “Carriers have been trying to manage this drop in spot rates by implementing blank sailings while trying to lock shippers on longer-term contracts riding on the previous highs in hopes of extending their honeymoon period.”

 

 

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