Thread by @mercoglianos

1/If you are not paying attention, there are three stories that are converging as a tsunami for ocean shipping and you need to be aware of them.

2/First, freight rates are at an all time low. We have come off the Mt Everest of rates &3 now seeing trans-Pacific rates at lower than pre-COVID.

This translates into more opportunity for shippers but the ocean carriers are set to lose their profits.

gcaptain.com/container-ship…

3/Second, Panama Canal is seeing record level lows on Gatun Lake. This is the water source for the canal since it is above sea level. This has not been a major issue but with neo-Panamax ships sailing from Asia to East Coast of US, they need more water.

gcaptain.com/the-feds-infla…

4/Third, as a result of the #supplychain crisis of 2021-22, the majority of containers coming into the US have shifted from the West Coast to the East, falling below 50%. A trend that began in 2017 with neo-Panamax vessels.

gcaptain.com/west-coast-por…

5/Four, the year long negotiation between the @ilwulongshore and @WestCoastPorts (which is composed of the large ocean carriers) is breaking down over a proposed wage freeze for 3 years.

This has resulted in the firing of some work gangs & slowdowns.

gcaptain.com/tensions-boil-…

6/Fifth, if the US West Coast ports shutdown, that will have a ripple impact across the industry.

The reduction in draft through Panama Canal will force cargo to head east from China through the Suez Canal which has raised rates.

gcaptain.com/suez-canal-inc…

7/Finally, there is little motivation by the large ocean carriers to prevent a walkout, strike, lockout or shutdown on the West Coast.

Due to all of these, this will drive up freight rates and thereby restore profit margins for the large ocean carriers.

This is NOT GOOD!

Sorry...as I wrote the thread it turned out to be 5 stories.

Supplychain Crisis 2.0

1️⃣West Coast Labor - @ilwulongshore vs @WestCoastPorts
2️⃣Ocean Freight Rates Slump
3️⃣Dry Panama Canal @AMP_Panama
4️⃣Shift to East/Gulf Coast
5️⃣Suez Canal Rate Hike @SuezAuthorityEG

#supplychain #labor #inflation