After talking breathlessly about the possibility of a rail strike and how the world held steady under the threat thereof, the news on the logistics front dried up for a brief moment as trickles of thoughts about peak season, trans-Pacific rates, and equipment imbalances moved in separate news cyclones instead of offering a full picture of the storm on our horizon. At this point, the talk of falling rates and expected blanked sailings to match them are rising on expectations for Golden Week, occurring October 1, 2022. The traditional holiday reduces about a quarter of capacity demands during that week, almost exactly the slowdown that matches import demand reductions.
Expectations of this situation working out perfectly are misguided at best and downright dangerous in the land of logistics, considering the chaos and trouble we felt during the pandemic upheaval. Rarely does the world’s supply chain move and adjust with precision, but it’s not unheard of for some events to happen at the best time, which is what we’re seeing this peak season.
Demand falling, rates responding, and inventory levels stabilizing have slowly rippled out to the rest of the economy. The economic powers seem to be taking all necessary steps to move slowly back to homeostasis post-pandemic.
Things are improving to a point where some headlines that would have been unthinkable two years ago are now showing us the recovery is taking shape in odd ways. The equipment imbalance we have managed for the last few years is starting to see some containers destroyed for space.
While the market isn’t back to normal and likely won’t be fully balanced until the first quarter of 2023, we’re in a stronger position than last year. The slow move of logistics back to balance will continue until further disruption hits and upends the situation. It’s been difficult to navigate the supply chain during such a turbulent time, but with a strategic logistics partner on your team, you’ll have advanced warnings of changes to plan accordingly. At Edward J. Zarach, our expert team is always up to date on the current situation, making contingency plans and deploying solutions to ensure our clients stay well ahead of the storm.