Crypto News: Supply Lines: Turning the corner

Truckers across North America have struggled mightily as freight demand slowed over the past 12 months but some signs are emerging that the worst may soon be over.

According to the latest Bloomberg Intelligence/Truckstop survey, we may be sitting at the lows for spot truckload demand and rates. Demand expectations for the next three to six months have improved and the rate outlook is inching up. (On the Bloomberg Terminal, click here to read the full report.)

"While we don't believe we're out of the woods yet, the shift in sentiment is encouraging," BI senior logistics analyst Lee Klaskow writes in the report. "Conditions should improve due to seasonal trends, coupled with higher-cost capacity being forced out of the market. Rates may get additional support as inventory levels return to more normal levels."

Some highlights from the survey:

60% expect volumes to rise over the next three to six months — about 20 percentage points higher than the fourth-quarter 2022 poll
Soft demand was cited by 42% of respondents as the main reason for not buying equipment, followed by 32% citing higher costs
79% of respondents said the US is already in a recession or that one is just around the corner

Klaskow says there little consensus on when spot rates will bottom, with 29% of respondents expecting that to happen in the fourth quarter and another 28% thinking it already occurred last quarter.

"We believe spot rates will start showing improvement as early as the second quarter as the market rebalances, supporting firmer contract rates in" the second half of 2023, he says.

A separate report recently showed freight shipments fell 4% in March from a year earlier, based on the Cass Freight Shipment Index. Demand continues to be weighed down by elevated inventory levels and a global economic slowdown, it showed.

Additional Reading:

—Brendan Murray in London

Cheaper energy bills | US producer prices fell in March by the most since the start of the pandemic, driven by a decline in gasoline costs. The producer price index for final demand decreased 0.5% from a month earlier, according to data out Thursday from the Bureau of Labor Statistics. The figure was below all estimates in a Bloomberg survey of economists. The PPI slowed on an annual basis, rising 2.7% from a year ago, the smallest gain in more than two years.

Building resilience | Global finance chiefs meeting in Washington drew sharply different conclusions about the biggest risks to the outlook, showcasing the rising role of the world's geopolitical struggles. The key takeaway: the need for more "resilience" in supply chains,
Trading threats | The US sanctions on Chinese companies will adversely affect the stability of the global supply chain, China's Ministry of Commerce said in response to Washington's decision to add 12 businesses from the Asian Nation to its export-control list.
Friend shoring | Secretary of State Antony Blinken said the US wants to formally upgrade its relationship with Vietnam, in part to reinforce the "rules-based" order in the Indo-Pacific. Meanwhile, South Korea and France said they will work together in the Indo-Pacific region and vowed to enhance supply chain initiatives.
Electric company | Chinese battery maker SVolt Energy Technology is set to expand its footprint in Europe to as many as five factories, with talks to supply the region's carmakers well underway.
Optimistic outlook | The Australian government is optimistic that punitive trade sanctions imposed by the Chinese government on Australia's exports could be lifted by the end of this year.
Leasing deal | Brookfield Infrastructure Partners agreed to buy Triton International, the world's largest owner of intermodal shipping containers, for $4.7 billion to expand in transportation logistics supporting the global supply chain.

Port problems | The timely flow of cargo through the ports of Los Angeles and Long Beach remains hampered by ongoing labor disruptions this week, said the Pacific Maritime Association, which represents shipping companies and terminal operators.
Applying for funds | The Biden administration has received more than 200 applications from companies for funds from a $39 billion US program to promote semiconductor production, Commerce Secretary Gina Raimondo said.
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Click HERE for automated stories about supply chains.
On the Bloomberg Terminal, type NH FWV for FreightWaves content.
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