How high rates are affecting congestion
January is over and Lunar New Year is just around the corner, but the ocean market has still shown no signs of cooling off. Port congestion is rampant, with 40 container ships at anchor in California’s San Pedro Bay on Monday, and this congestion is keeping spot rates “stratospheric,” says FreightWaves’ Andrew Cox during the Midday Market Update.
High rates mean U.S. importers will need to negotiate annual contracts during this spot rate boom, a boom that saw rates grow 5.9% from December to January, according to Xeneta.
ArcBest is also reporting big gains. The asset-based segment, including LTL operations, reported an 8% year-over-year revenue increase in the fourth quarter, and the asset-light segment reported 27% year-over-year growth.
Workers at air and seaports will be required to wear face coverings on the job after a mandate from President Joe Biden. All freight forwarders, cargo security companies, drivers and warehouse operators must be masked while on airport or seaport property.
Cox reports in his Point of Sale newsletter how the COVID-19 vaccine rollout is impacting retail sales and how the media is shifting to more positive coverage of the pandemic. You can read the newsletter here.
Zach Strickland reports outbound tender rejections inched slightly higher over the weekend, thanks in part to the massive winter storm impacting the Midwest to Northeast.
The past few weeks have seen some major acquisitions announced and Tenney Group President Spencer Tenney breaks down his merger-and-acquisition outlook for 2021. He forecasts about a 20% uptick in M&A activity as COVID-delayed deals finally close.
Tenney comments on TFI International acquiring UPS Freight and the just-announced purchase of Fleetway, saying those deals will become more common in the next year as large companies become strategic about what acquisitions will make the most money.
Lori Ann LaRocco, CNBC editor, author and FreightWaves contributor, joins the show to discuss her recent article dissecting how China’s trade decisions will impact U.S. export issues. LaRocco believes China’s move to control the COVID spread by limiting movement between Northern and Southern ports will disrupt vessel movements and cause delays in vessels getting to the U.S. to receive and move exports.
You can find more Midday Market Update recaps and recaps for all our live podcasts here.
