Arca Intl
09 May 22
No comments

Transportation, whether by the ocean, rail, or road, continues to be a challenge. When Shanghai opens, the challenges are expected to increase. Subsequently, HHG shipments will continue to experience long lead times. The challenges of HHG transportation availability are magnified by consistently high fuel prices and supply chain delays that affect products involved in HHG moves, such as corrugate. All of this comes at peak moving season. For people looking to move in early Summer, they may need to adjust their plans to later in the season. As demand decreases after the peak moving season, HHG customers could benefit from a drop in overall move costs.



Trucking rates are declining, despite diesel prices remaining high, and a “freight recession”, consecutive quarters of declining freight volumes, is possible. One indicator of this is a declining OTRI (Outbound Tender Reject Index). Spring of 2021, truckers were rejecting 25.76% of contracted loads, indicating they were able to find better loads through the spot market. Currently, spot market rates have decreased and more drivers are moving their contracted loads, lowering the rejection rate to 9.92%.


The Shanghai shutdown has caused a decrease in Asian imports and ocean carriers have adjusted their schedules accordingly. This has temporarily eased the pressure on US ports, but when Shanghai opens again, the volume and urgency of imports into the US will increase dramatically. Another byproduct of the Shanghai closure is a lack of empty containers available for US export.


Concerns over rail capacity in Southern California are still high. Inbound shipments moving inland via rail continue to increase, magnified by continued high eastbound truckload rates. While the railroads have diverted railcars and engines to address this, there remains concerned that these efforts will not be enough to keep up.