LOS ANGELES – The two biggest West Coast ports saw significant volume and import gains in September, with one of the two reporting its strongest September on record.

The Port of Los Angeles handled 748,440 TEUs for the month, a 5.4% improvement over the same month last year. Loaded imports landed at 392,608 TEUs, an increase of 14% compared with the previous year. Loaded exports came in at 120,635 TEUs, a substantial increase of 55%.

Volume for the month fell from August however by around 80,000 TEUs and is down for the year in total by 18.6%.

The Port of Long Beach achieved its busiest September on record, citing stronger consumer demand for holiday-related goods and the recent ratification of a labor pact between dockworkers and management.

Dockworkers and terminal operators moved 829,429 TEUs in September, up 11.8% from the same month last year and surpassing the previous record set in September 2020 by 78,849 TEUs. September also marked the port’s first monthly year-over-year cargo increase in 14 months, as well as putting it above the Port of LA

Imports rose 19.3% to 408,926 TEUs, while exports declined 10.3% to 101,248 TEUs.

“Consumer confidence is on the rise and shippers can rely on the ‘Port of Choice’ now that we have a ratified contract in place with our waterfront workforce,” said Port of Long Beach CEO Mario Cordero. “We look forward to a moderate rebound in cargo volume through the end of the year.”

The port has moved 5,822,666 TEUs during the first nine months of 2023, down 20.7% from the same period last year. Cargo volume this year has been on pace with pre-pandemic levels.

See also:

• Port of Los Angeles sees first year-over-year increase in 13 months
• Port labor deal reached, averting crisis as imports rise

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WASHINGTON – Import cargo volume at the nation’s major container ports has already hit its expected peak for the year and should gradually slow headed into the holiday season, according to the Global Port Tracker report released today by the National Retail Federation and Hackett Associates.

“Cargo volumes will still be strong the rest of the year, but not as high as we expected a month ago,” said Jonathan Gold, NRF vice president for supply chain and customs policy. “Retailers stocked up early this year as a safeguard against supply chain labor issues and are well-situated to meet consumer demand. Shoppers are spending more than they did last year, but the rate of growth we’ve seen the past couple of years has slowed and retailers are working to strike the right balance of supply and demand.”

The NRF says consumers are continuing to worry about the impact of inflation and high interest rates, particularly for groceries, cars and mortgages. Discretionary spending growth is slowing and retail cargo imports are expected to decline. Consumer spending grew 1.8% year over year in the second quarter rather than the 2.3% originally estimated, and NRF said last month that retail sales for the year could come in at the low end of its forecast of 4%-6% year-over-year growth.

“We are already seeing this in the operational decisions carriers are making,” said Hackett Associates founder Ben Hackett. “They have slowed down their ships in an attempt to cut capacity without having to take vessels out of service as new, larger ones ordered when demand was higher are delivered. Even so, ships are not sailing fully loaded, and freight rates are declining as a result. That’s a further indication that no cargo growth from current levels is expected on the near-term horizon. Perhaps 2024 will be better.”

Inbound volume at U.S. ports covered by Global Port Tracker had been forecast to reach 2 million twenty-foot equivalent units in August and stay at that level through October. That would have been the first time the 2 million TEU mark has been reached since October 2022.

Instead, ports handled 1.96 million TEUs in August, which is the latest month for which final numbers are available. That was up 2.3% from July and was the busiest month this year so far but down 13.5% year over year. Ports have not yet reported September numbers, but Global Port Tracker projected the month at 1.94 million TEU, down 4.3% year over year. October is also forecast at 1.94 million TEU, down 3.1% year over year.

November is forecast at 1.91 million TEU, a 7.5% increase from the same time last year that would be the first year-over-year gain since June 2022. December is forecast at 1.88 million TEU, up 8.9% year over year.

Those numbers would bring 2023 to 22.1 million TEU, down 13.5% from last year. Imports during 2022 totaled 25.5 million TEU, down 1.2% from the annual record of 25.8 million TEU set in 2021.

January 2024 is forecast the same as December at 1.88 million TEU, up 4.2% year over year, while February – historically the slowest month of the year because of Lunar New Year factory shutdowns in Asia – is forecast at 1.74 million TEU, up 12.7% year over year.

See also:

• Port of LA sees first year-over-year increase in 13 months
• Port labor deal reached, averting crisis as imports rise

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TEMPE, Ariz. – Furniture manufacturing appears to be back on the decline, shrinking two months in a row now following three months of gains.

The Institute for Supply Management measured the overall manufacturing sector at 49% in September, representing the 11th straight month of contraction. September’s number is a slight improvement from August’s 47.6%, but still represents a decline.

“The U.S. manufacturing sector continued its contraction trend but at a slower rate, recording its best performance since November 2022,” said Timothy R. Fiore, ISM chairman. “Companies are still managing outputs appropriately as order softness continues, but the month-over-month improvement in September is a clear positive.

“Demand eased marginally, with new orders contracting, though at a slower rate. Panelists’ companies improved production compared to August and continued to manage head counts, primarily through attrition and hiring freezes. Manufacturing supplier lead times continue to decrease, but at a slow pace,” he continued.

Of the 18 manufacturing industries recognized by the ISM, just five reported growth. Furniture and wood products were among those to report contraction.

Furniture had been one of the only manufacturing industries to show growth from May through July, with the industry at-large sagging around it. In August, it realigned with the rest of the sector, showing a decline.

That decline has continued in September and more severely than in August. The industry reported the second-largest decline in new orders for the month, as well as the second-biggest dip in production output. Furniture was also one of eight industries to report a decline in employment.

It reported no change in supplier delivery speeds. It was one of 11 to report a contraction in inventories. It also was one of 10 to report that its customers’ inventories are too low. Only one industry reported paying more for raw materials (petroleum and coal products). Furniture reported paying less.

Finally, furniture was one of 11 to report lower backlogs.

See also:

• Furniture manufacturing levels out in August after months of gains
• July: In the weak manufacturing sector, furniture continues to shine

The post Back on the decline: Furniture manufacturing shrinks in September appeared first on Furniture Today.

LONDON – Spot container rates continue their descent, falling for the sixth week in a row this week. Spot rates fell 5.1% this week to $1,404.38 per 40-foot container. Last week, they fell 5.1%, and the week before that, 7.1%.

According to container price tracker Drewry, spot rates from Shanghai to Los Angeles fell 4% this week to $2,016 per container. Over the past three weeks now, rates on the route have fallen 11%. Shanghai to New York is falling at a steeper pace, declining 7% this week to $2,684. Shanghai to New York has now fallen 22% in three weeks. Rates on the two routes might be leveling out, with New York dropping 62% since last year and Los Angeles falling 44%.

Spot rates are now 1% below 2019’s pre-pandemic levels, the first time this has happened since before March 2020. Rates are down 65% from the same week last year and significantly below the peak of $10,377 reached in September 2021.

Drewry expects rates to remain around current levels in the coming weeks.

See also:

• Two leading East Coast ports see big volume dips in August
• Spot container rates keep dropping, signaling weak peak season

The post Spot rates fall 20% in 7 weeks, now below pre-pandemic levels appeared first on Furniture Today.

NEW YORK / SAVANNAH, Ga. – The Port of Savannah, the fourth-biggest port in the country and second largest on the East Coast, handled 413,000 twenty-foot containers in August, a 28% decline from last August.

Numbers dropped monthly as well, with 34,000 fewer containers moved than July.

At the Port of New York/New Jersey, the East Coast’s biggest port, container volume dropped 21.4% from last August to 662,740 TEUs. Year to date, import volume is down 21.7%, while exports are down 1.5%. Monthly volume also dipped, falling around 63,000 containers from July.

With the exception of July, which fell just 7.7%, the port’s imports have dropped by more than double digit percentages every month this year. Last year, nearly every month saw an increase from 2021.

The Port of Los Angeles, the biggest port in the country, seems to be on a more positive trajectory. August numbers climbed to 828,000 TEUs, a 3% climb from last year. Still, the outlook is on the bleaker side, with Port Director Gene Seroka predicting global trade to continue to ease.

“Overall, as we navigate through what’s expected to be a muted peak season, global trade is slower overall,” he said. “Export numbers out of Asia are declining. China’s had three consecutive months of weak exports. South Korea and Vietnam have also seen drops in volume. That’s three of our top five trading partners. Warehouse inventories across the U.S. also remain elevated.”

Why Los Angeles is seeing more success than its East Coast counterparts isn’t totally clear. One reason likely is the recent ratification of the six-year contract between the International Longshore and Warehouse Union and the Pacific Maritime Assn., which restored some of the port’s stability and confidence. Last year, amid West Coast delays and the uncertainty caused by the lagging negotiations, East Coast ports saw their market share boom.

Spot container rates remain higher at East Coast ports. Average spot rates from Shanghai to New York are $3,398 according to Drewry, while Shanghai to Los Angeles sits at $2,254. They may be leveling out, with the New York route dropping 62% since last year and Los Angeles falling 44%.

See also:

• Spot container rates keep dropping, signaling weak peak season
• Port of Los Angeles sees first year-over-year increase in 13 months

The post Two leading East Coast ports see big volume dips in August appeared first on Furniture Today.

LONDON – Spot container rates have now fallen five weeks in a row after six consecutive weeks of significant increases. Spot rates fell 5.2% this week to $1,479 per 40-foot container. Last week, rates fell 7%.

According to Drewry’s tracking indicator, spot rates from Shanghai to Los Angeles fell 3% to $2,104, while Shanghai to New York declined 4%. Last week, Shanghai to LA saw a 4% dip, while Shanghai to New York saw a sizable 11% decrease.

Rates are now just 4% higher than pre-pandemic average rates of $1,420.

“Container freight rates are dropping at a faster rate than expected,” wrote Linerlytica in its blog, which tracks container fleets. “Weak peak season volumes coupled with oversupply across the main markets have weighed down heavily on rates with little chance of a reversal until November at the earliest. Carriers inability to curtail supply remains the biggest challenge, as capacity utilization have weakened particularly on the U.S. East Coast and the Mediterranean, with rates on both of these routes falling sharply over the past week.”

See also:

• Spot container rates near pre-pandemic levels, but will they actually get there?
• Spot container rates see sizable drops this week

The post Spot container rates keep dropping, signaling weak peak season appeared first on Furniture Today.

FORT COLLINS, Colo. – The health of the logistics industry may finally be improving according to the Logistics Managers Index, with August putting an end to the five consecutive previous all-time monthly lows. The index came in at 51.2, nearly six points ahead of July’s, 45.4. Any reading above 50 indicates expansion.

Transportation prices, a key metric in the index, fell again, but at a slower pace than July. Transportation prices for retailers are higher than they are for suppliers but are declining for both. “If the current trends continue, it is possible that we will see price growth on the downstream side (retailers) soon, which would be the first such instance in over a year,” the report said.

Warehousing prices are growing but slowly. They’re still down significantly from a year ago. Larger firms are reporting greater increases.

Inventory levels are still contracting for both suppliers and retailers. Larger firms, though, are restocking much faster than smaller ones (55.5 vs. 42.9, respectively).

When asked to predict inventory conditions will be like 12 months from now, the average value was 54.3, up (+6.4) from July’s future prediction of 47.9. Upstream respondents predicted an increase of 57.6, while downstream respondents predicted a slight increase of 48.9.

This suggests that while retailers are expecting inventory to stay close to a steady state, their suppliers are expecting them to pick up.

Inventory costs were way up for the month (+8.6), which the index attributed to a lack of storage capacity and a restocking of inventories from large firms.

“While it is likely we will see inventories begin to grow again ahead of Q4, it is unlikely they will get anywhere close to what we saw in the buildup to the holiday season in 2020 and 2021,” the report read.

Warehousing capacity continues to grow rapidly. This growing capacity is being spurred by U.S. chip and battery production demand according to the report, as well as a growing push for e-commerce retailers to accommodate same- and next-day delivery.

See the full report here.

See also:

• Supply chain health continues to worsen; falls again to lowest point on record
• Supply chain activity falls to lowest on record

The post The state of logistics: 5 key findings in August appeared first on Furniture Today.

SAN PEDRO, Calif. – The Port of Los Angeles moved 828,016 twenty-foot equivalent units in August, a 3% increase compared with the same period last year. It was the port’s first monthly year-over-year increase in 13 months.

August was also up month-over-month, with a 21% gain from July.

“August was a very solid month with increases both on the import and export sides of our business,” Port director Gene Seroka told journalists at a media briefing. “Overall, global trade has eased this year, and we expect that trend to continue in the coming months. Operationally, Los Angeles stands ready with capacity we’re prepared to scale on demand.”

Seroka also noted the recent ratification of the six-year contract between the International Longshore and Warehouse Union and the Pacific Maritime Assn., saying it’s restoring stability and confidence in the port.

“With this contract in effect through 2028, you can continue to count on our longshore workers and terminal operators to keep cargo moving through the nation’s busiest port,” Seroka said.

Still, Seroka’s outlook remains on the bleak side. Demand for containers remains relatively light, he said, which is reflected in the 270,000 empty TEUs handled in August, a 10% decline from last year. Year to date, the port is down 20% in volume from last year.

“Overall, as we navigate through what’s expected to be a muted peak season, global trade is slower overall,” he said. “Export numbers out of Asia are declining. China’s had three consecutive months of weak exports. South Korea and Vietnam have also seen drops in volume. That’s three of our top five trading partners. Warehouse inventories across the U.S. also remain elevated.”

Seroka says American consumers remain resilient and continue to spend but not at the historic levels seen during the pandemic.

See also:

• All 3 biggest ports see gains for second month in a row
• Port labor deal reached, averting crisis as imports rise

The post Port of Los Angeles sees first year-over-year increase in 13 months appeared first on Furniture Today.

By Marc Barnes, Special to Furniture Today

HIGH POINT — Today, somewhere, a Kenworth W990 towing a 53-foot trailer loaded down with case goods will accelerate down an entrance ramp onto an interstate highway, bound for a furniture warehouse.

In a lane going in the opposite direction, a box truck with a furniture retailer’s logo in a vinyl wrap is headed to a customer’s home.

Maybe in a city down on the coast, rolls of fabric or furniture components are being offloaded in containers from ships onto trucks, bound for furniture factories in North Carolina or Mississippi or California or Texas.

It’s logistics, and it’s in motion in more ways than one. Consolidations and bankruptcies are going on throughout the industry, including the notable loss a month ago of Yellow Corp., a 99-year-old company which specialized in “less-than-truckload” shipping. In all, 30,000 employees were let go in a move that sent reverberations throughout the industry.

Combine that with the continuing effects of unprecedented demand during the pandemic, followed by an almost complete stop in business as lockdowns ended; to the continuing economic uncertainties of inflation, high unemployment and high mortgage rates; to shortages in available employees.

A spot check with several veterans within the furniture logistics segment provides some insight on how the segment is faring and the outlook for this year and beyond.

Investing in future

At Massood Logistics, CEO Edward Massood said he is not worried about the long-term future, but rather he is concerned about what’s just around the corner.

“Home furnishings live on putting down deposits, and I am concerned for the retailers,” said Massood. “Whether they are over inventoried and not moving as quickly, it doesn’t generate cash. and they have already spent the money. Short term, it is going to be a little tight.”

Similarly, transport companies built operations based on a certain volume level, and now that it has slowed, panic is starting to set in.

“What affects one affects all,” said Massood.

What’s needed, right now, is the ability and willingness to make wholesale changes.

“You do not make changes when you are at full throttle, like most of us have since 2020. In 2021 and 2022, we were going full throttle at 100 mph,” said Massood. “Now is when you stop and reflect on what you did well and what could have gone better.”

Along those lines, Massood said he is investing in automation inside the warehouse. Buying more lifts, clamp trucks, order pickers and forklifts effectively lightens the load, while at the same time, both offsetting the labor shortage and helping convince people to come to work for the company.

In a similar way, retailers can look at their own operations.

“A lot of smart ones are figuring it out that they don’t have to have as many collections, they are figuring out having the right producers and having the right flow of product,” said Massood. “They have the right goods and suppliers, and they are able to get back to a normal production cycle of from six or eight weeks.”

Wait and see

Anthony Brooks, president and CEO of Brooks Furniture Express, which owns Shelba D. Johnson Trucking and MFX, said his company is taking a wait-and-see approach, given that his customers are telling him that although sales are down, they’re still better than 2019.

“Until interest rates for mortgages drop back to the 3% to 5% range, we project the economy will stay status quo overall,” said Brooks. “While some companies may exceed their projections, others may see flat or declining revenues.”

Despite the uncertainty in the marketplace, Brooks Furniture Express has a plan.
“Our model is to continue to do what we do and do it well,” said Brooks. “If we stay the course and offer industry best delivery times, exceptional customer service and continue to operate at a level above the rest, we anticipate stable growth.

“But at the end of the day, it all depends on the consumers. If they continue to buy furniture, then we will all have product to deliver. If consumer spending slows down, then it could be trouble for companies that had not prepared for the downturn.”

The company has capitalized on the slowdown by adding 10 more states to its delivery area over the past two months.

“We are working daily to increase business to those new states and have already seen exponential growth over our projections,” said Brooks. “That will continue to be our focus now and into early 2024. We’ve been approached many times to add those states to our delivery area. With the downturn in the economy, the abundance of drivers and capacity it was the perfect time to increase our delivery area to help offset the slowdowns we saw last quarter.”

Challenging position

Julian Ludlow, president of FragilePak, said that the multitude of challenges, from high demand to slow-moving supply and high cost of ocean-bound freight, coupled with a soft economy have put companies in a challenging position.

“Companies will need to adjust their inventory and rebalance to the current demand during this uncertain economic time,” said Ludlow. “There is still consumer spending today, but some merchandise is softer than what we experienced during the past two years. There is a correction in spending in furniture and other consumables.”

One continuing area of concern is the driver shortage, which Ludlow says logistics companies need to continue to focus on to find long-term solutions. Right now, he said, the shortage seems to have eased up somewhat because of the softness in the marketplace, the current capacity that is available and the unfortunate issues with Yellow Corp.
Otherwise, the economy seems to be getting back into the seasonal rhythms it had in 2019 and the years before COVID. Ludlow says that he is hoping for a strong holiday season in advance of a better 2024.

In the meantime, FragilePak will streamline its operations and costs; further develop its client base and focus on the driver shortage, to meet the needs of customers who have less volume.

“In the short term, we need to be cost conscious and manage to the business levels we have today,” said Ludlow. “Our customers need business partners who can be nimble during these economic times that we find ourselves in. We are focused on being a brand extension of our customers ensuring we execute on the service expectations while dazzling the buying customer with legendary service.”

See also:

• California takes on the labyrinthine task of making zero emissions a reality
• Painful transition? Advance Clean Fleets rule to impact shippers for years to come

The post 3 logistics vets evaluate state of industry appeared first on Furniture Today.

LONDON – Spot container rates have now fallen four weeks in a row after six consecutive weeks of big increases. Spot rates overall fell 7.1% this week to $1,561 per 40-foot container.

According to Drewry’s World Container Index tracking indicator, spot rates from Shanghai to Los Angeles fell 4% to $2,162, while Shanghai to New York saw a sizable 11% dip to $3,032.

Over the past four weeks, spot rates have fallen about 12%.

Overall, spot rates are down 68.4% from the same week last year. Rates are 85% below the peak of $10,377 reached in Sept. 2021, but still 10% higher than the average 2019 pre-pandemic rates of $1,420.

See also:

• Container rates drop after 6 weeks of gains
• Spot container rates keep rising

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