WINTER 2023

28 THE DISTRIBUTOR’S

28 THE DISTRIBUTOR’S LINK Chris Donnell Chris Donnell is the National Sales Director for Scanwell Logistics International (CHI) Inc., specializing in Supply Chain Management, Inventory Control, Logistics Sales and Management. Chris excels at selling the “Solution” to advanced program analysis and implementation. A highly ambitious and effective team leader who thrives on the challenges of this industry, Chris currently oversees a National Sales and Partnership Program consisting of more than 100 Sales executives who focus primarily on SCM and Logistics development in most vertical markets. Contact Chris at 847-228-6789 or email: chrisdonnell@scanwell.com. WE LIVE IN AN INTERESTING TIME Was it just me or did this year race by? It kicked off with arguably the lowest logistics point in our lifetime, with a slew of supply chain disruptions and costs that reached into the stratosphere. In January we welcomed the new year while watching the port terminal in Los Angeles come to near stand- still with more than 100 vessels sitting idle off-shore and congestion on the West Coast reached unprecedented levels and many assumed it would never end. Fast forward to today, and things have settled way down! Companies can actually cut down on their lead times, manage their supplier chain more efficiently and with rates having returned to a more respectful prepandemic level, things are looking up. But the question remains, how long will it last? Make no mistake about it, the carriers love a war or catastrophic situation and will jump at the chance to take advantage of a particular situation but limiting services and or increasing costs. This begs the question: are we on the verge of something happening? There are multiple issues just below the surface that could quickly erase any positive momentum we have gained over the past several months and could ultimately send the logistics world back to where we were last January. But, before I get into potential new issues, I think it’s best to recap the issues we’ve all lived through and how far we’ve come. Ocean rates over the past 6 months have dropped approximately 70% compared to where they were a year CONTRIBUTOR ARTICLE ago. It’s hard to imagine that some importers had ocean container rates in excess of ,000.00 and today the average costs are just a fraction of that. In fact, the rates have remained elevated for the past few years due in large part to congestion and strong ocean import demand, as well as carrier manipulation of the market, some of what still takes place today, such as blank sailings. Recently, things have changed dramatically. For the past 4 months, rates have continued to tumble as fears of recession and the pull back on buying have taken hold. August thru October saw imports from China drop some 20 percent; a sign of more things to come. In November, we saw a modest bump in imports and ocean rates started to stabilize, but this is due in large part to inflation and costs for moving cargo increasing when compared to where they were pre-pandemic. Air Rates, much like ocean, have returned to prepandemic levels. In January, we saw air rates in excess of .00 per kilo from places like Shanghai, Beijing and others. Today those rates are less than .00 per kilo. Capacity is pretty much wide open and the airlines are anticipating a weaker than normal peak season for cargo. In contrast, passenger travel has increased with many airlines reporting record October and November months. Port congestion on the West Coast has dissipated. Gone are the endless string of vessels waiting to be unloaded. Gone are the lengthy birth and rail times, at least on the West Coast. CONTINUED ON PAGE 104