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Topic of the week:
Hurricane Milton made landfall in Florida on Wednesday evening, bringing heavy rains and damaging winds that have significantly impacted supply chain operations in the state. The Category 3 storm has caused widespread disruptions to port operations, road, rail, and air traffic, with major supply chain centres in Florida, including Miami, Jacksonville, and Savannah, Georgia, experiencing moderate to severe impacts.
Port operations have been severely affected, with Port Tampa Bay ceasing inbound and outbound vessel traffic and closing shipping channels ahead of the storm's landfall. Jacksonville Port Authority closed on Wednesday and will remain closed today, while Port Everglades has resumed landside operations but waterside operations remain suspended. Port Miami resumed cargo operations on Thursday.
The storm's impact on trucking routes has been significant, with major roadways across the storm's path, including the M25, M275, M4, M95, and M75, affected. Rail lines and intermodal hubs are also at risk of disruption. The trucking market in the state may tighten up as capacity is allocated to transporting basics like food and water and resources to rebuild, leading to increased logistics costs.
Parcel carriers have also been affected, with FedEx suspending service for its Express, Ground, and Freight offerings across multiple Tampa area postcodes. The Royal Mail has temporarily shuttered retail and delivery options in affected postcodes, while UPS will continue providing pickup and delivery services but warned of possible delays.
The length of disruptions in the hardest-hit areas is likely to be measured in weeks, and the storm's destruction could lead to a tightening of the trucking market and increased logistics costs. As the situation continues to unfold, it is essential to stay up-to-date with the latest developments in the freight market.
In addition to the immediate impacts on supply chain operations, the storm's aftermath is likely to have long-term effects on the industry. The destruction of infrastructure and property will require significant resources to rebuild, which could lead to increased costs and delays for shippers and carriers. The storm's impact on the trucking market could also lead to a shortage of drivers and equipment, further exacerbating the situation.
Shippers and carriers are advised to monitor the situation closely and prepare for potential disruptions to their supply chains. This may involve adjusting routes, modes of transportation, and inventory levels to mitigate the effects of the storm. It is also essential to stay informed about the latest developments in the storm's aftermath and to be prepared to adapt to changing circumstances.
In the coming weeks and months, it is likely that the freight market will continue to feel the effects of Hurricane Milton. As the situation evolves, it is essential to stay informed and prepared to adapt to the changing circumstances.
Sea:
- Over the last two weeks China/East Asia to North America West Coast spot rates have decreased by 15.7% from $6,836/FEU to $5,759/FEU according to Freightos data.
- China/East Asia to North America East Coast spot rates have fallen over the last two weeks, decreasing by 26% to $6,743/FEU.
- Global container spot prices have fallen over the last two weeks, and are now sitting at $3,798/FEU, a 24.7% decrease over the last two weeks and a 253% increase from spot rates this time in 2023 according to the Freightos Baltic Index (FBX)
Air:
- Global Air Freight spot rates currently sit at $2.27, as rates continue to fluctuate according to the Freightos Air Freight Index (FAX)
- Europe to Northern America spot rates currently sit at $1.79 (100-3000kg), says FAX, increasing by 7.8%
- Europe to Asia, Greater China spot rates currently sit at $1.23(100-3000kg), says FAX, decreasing by 0%
That’s all for this week’s update…
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