Despite continued supply chain hurdles and the enduring Russian-Ukrainian conflict, the overall transportation market is steadily improving, and in some cases, matching pre-COVID-19 levels.
Below are the summaries for each mode of transportation based on input from our global providers.
Flatbed spot rates continue to fall and are likely to reach pre-COVID-19 levels this year if the trend continues. Year-over-year, spot rates show a marked rate reduction of 11.3%. Despite this decline, year-over-year contracted rates are currently showing a marked incline of 24.4%1
Less than truckload (LTL) rates are steadily increasing overall, even with lower demand and volume reductions. These increases appear to be driven by the need for carriers to offset the rising costs of real estate and technology, as well as to provide competitive wages and benefits for their employees.2
There have been drastic improvements in container rates after peaking in 2021 at $20,6003 (from Asia to the U.S. West coast). Rates have been steadily dropping since this peak and have finally reached pre-COVID-19 levels. The January 2023 rate of $1,400 represents an astounding 93% decrease in cost since September 2021.4 Global schedule reliability has also been steadily improving, having hit its highest levels since the start of COVID-19. The current rate of 56.6% is a 20% improvement from the lows reached throughout 2021 and the start of 2022. There is still room for progress, however, before reaching pre-COVID-19 levels of the upper 60s to lower 80s.5
Global average days delay for late vessel arrivals have also reached pre-COVID-19 levels, dropping to 5.05 days in November 2022, down from the 7+ day peaks of 2021. Even with port delays improving and shortening on average, major U.S. East and Gulf Coast ports still have extended wait times as compared to major U.S. West Coast ports.6 Improvements can be attributed in part to trending decreases in demand, which opens additional capacity for ocean carriers.
Jet fuel pricing remains elevated compared to pre-COVID-19, even with decreases from peak fuel rates in May 20227. With few exceptions, demand and capacity for export markets are recovering to near normal levels. Capacity is tight from Latin America to all to all destinations, from Europe, Middle East and Africa (EMEA) to Asia and from Northern Asia to the Americas and EMEA8.
Major contract negotiations between the National Carriers Conference Committee (NCCC) and all 12 key rail unions concluded on December 2, 2022, with legislation signed by U.S. President Joe Biden. The agreement avoided a costly nationwide strike that would have paralyzed the U.S. supply chain and passenger rail service just before the December holiday season.