February 2023 Market Update
A train derailment in Ohio on Feb 3 caused disruptions to cargo transiting between the East Coast and Midwest. The latest update, cars have been cleared from the site with service restored. Delays persist of 24hrs between Cleveland and the Northeast via Pittsburgh, PA. due to residual congestion.
Overall, capacity can be found on both air and ocean modes with minimal backlogs mostly due to poor weather or holiday break. Rates continue to trend downward. This is quite the reversal of 2022 trends.
Meanwhile, on the warehouse front, space continues to be tricky to source in high-demand areas, with rates trending sky-high.
Airfreight to Brazil
When it comes to US-BR airfreight trends, January often “sets the tone” for how Q1-Q2 will manifest. Particularly during the first and last 2 weeks as many US shippers/suppliers are pushing orders for project inceptions (or previous year’s project completions). Taking that into consideration, 2023 is off to a good start.
COVID-19 certainly brought with it reductions to flight options, which in turn, resulted in limited capacity and peak demand for space. There has been a gradual increase during post-COVID years which has helped reduce the demand and mitigate the extremely high spike in costs (which were realized during the pandemic).
New flight options have also allowed for allocating space amongst several airlines, rather than depending on 1 or 2 incumbent carriers. Though many airlines are pushing “Promotional Rates” to lure new business to fill the space, we remain steadfast to the carriers who proved to be most dependable throughout the strenuous times.
It is a well-known fact that exports to Brazil can prove to be a challenging task due to the strict Brazilian Customs regulations and Airline/Ground Handling Agent requirements. Just to name a few;
- Bills of Lading (MAWB/HAWB) DOT Matrix printing paper requirements have eased to the point where Inkjet/Laser Jet printing paper is now acceptable (as long as the proper Header/Footer is used).
- Airline/Ground Handling Agents are still requiring CASH payment of terminal fees and storage in some cases.
- Airline Consolidations being split (by the airline) resulting in partial arrivals can cause delays and/or accrue storage costs. Being that storage costs based on commercial value (rather than weight or measure), the amounts are often exorbitant.
- Brazil’s Ministry of Agriculture continues to maintain strict regulations for IPPC Seal (Heat Treatment Stamp) on wooden pallets and lumber used for dunnage. Even in situations where the IPPC Seal is present but faded or not 100% identifiable, there are fines assessed along with the cost for pallet exchange and condemned pallets returned to the US.
Despite many of the above-mentioned ongoing challenges, we remain optimistic that 2023 will continue to bring further process improvements and mutual growth to the US-BR trade lanes. Holding a strong mentality of learning from previous “aberrations” and pushing towards positive future “residuals.”
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