Freight flows continued to rebound through mid-August, bouncing back from pandemic lows as some regions of the country continue to reopen for business, restock warehouse inventories, and prepare for students’ return to school, recent reports show.
Transportation and logistics trends strengthened in recent weeks, particularly in California and the U.S. west coast, as ocean freight imports showed a sharp increase and port and rail terminals showed signs of labor shortages, according to a report from Baird Equity Research, an investment firm covering the transportation sector.
That rebound of freight volumes has already triggered network constraints, leading to rising prices in the spot truckload market and a rise in surcharges imposed by other modes like air/ocean freight, parcel, and rail, according to Benjamin Hartford, a senior research analyst with Baird. Overall, the sector has shown a rebound from its April low-point, when initial coronavirus shutdowns began, posting “robust” results through the typically weak months of summer in July and August.
However, some logistics providers question whether that rebound can continue, pointing to a lack of visibility about freight demand during the second half of 2020.
According to Baird, at least one variable suggests that rising freight volumes will continue, since several large retailers recently reported e-commerce sales growth of more than 100%. That hot growth could create a “new normal” after the pandemic, forcing carriers to adjust to different freight patterns as e-commerce reaches higher levels as a percent of total retail spending, the Baird report said.
Another report today suggested that maritime exports are also recovering, with the Port of Savannah saying it moved the highest number of loaded export containers of any U.S. port during the first five months of 2020. The port’s Garden City Terminal handled a total of 593,195 twenty-foot equivalent container units (TEUs) of loaded exports during the first five months of the calendar year, giving it a 12.2% market share.
Of course, year-to-date activity remains down at the major east and west coast ports as the pandemic crimps cargo volume. That includes Georgia's deepwater ports, with the Port of Savannah handling 360,700 TEUs for July, down 6.8% from the same month last year. But the facility has seen steadier trade numbers than other U.S. ports, according to Georgia Ports Authority Executive Director Griff Lynch. "With the expansion of the Panama Canal, and the transition of larger vessels to East Coast services, cargo owners are making the strategic decision to keep imports on the water longer," Lynch said in a release. "Subsequently, export customers enjoy greater empty container availability in Savannah, lower container slot costs on Neo-Panamax vessels, and unmatched cargo fluidity through road, rail, and terminal services."
