Hurricane Ian made landfall last week with winds reaching upwards of 155 miles per hour; just 2 miles per hour shy of a category 5 hurricane.
The devastation left behind in Fort Meyers and the surrounding areas will be felt for years to come. There are currently over 400k power outages along the Florida coast and early insurance claim estimates have started coming in around $50 billion. The true cost of devastation, however, not assets, but lives lost which unfortunately may continue to rise in the coming weeks.
According to SONARs 4-week capacity trend average, van capacity has tightened significantly (as expected) in the Lakeland and Miami markets as well as several other surrounding markets such as Mobile, Tallahassee, Tifton, Montgomery, and Birmingham.
This, of course, makes sense as FEMA and other disaster relief organizations need to tap into nearby capacity for the transportation of relief goods.
Jason Miller, a supply chain expert, recently created a post on LinkedIn discussing which industries would likely see an increase in demand and a need to increase lean operations in order to support recovery efforts following Hurricane Ian’s destruction.
The Top 5 mentioned: building material retailers, petroleum refineries, merchant wholesalers for durable goods, truck transportation and concrete.
We wish those with loved ones in the affected areas our best and send them our prayers.
Between September 20th and October 2nd SONARs bookings index which can measure TEU volumes destine for the US increased 46% in preparation of this year’s Golden Week.
Golden Week is an annual weeklong Chinese holiday where a significant portion of businesses in the People’s Republic of China close and many spend time traveling to their hometowns.
In preparation for Golden Week, many importers pull forward orders so that not to experience a supply chain lag.
Since reaching its highest level on October 2nd, and since the end of July, bookings have once again begun their descent and are expected to return to pre-pandemic levels by the end of next week.
The most recent release of the LMI, or the Logistics Managers Index, shows downstream warehouse capacity decreasing at a much faster clip than upstream.
Also, inventory costs remain in expansion territory despite being 9.4 pts below 2021 levels. Both metrics inducive of an abundance of pulled forward goods.
September’s report did a good job describing the current inventory buildup and its potential movement by stating: “Perhaps this inventory can be viewed as potential energy, waiting to be released during the Q4 spending rush? If this turns out to be the case and transportation markets pick up to move this inventory to storefronts or directly to consumers, it might then convert to kinetic energy actively moving through supply chains.”
One thing for certain remains, volatility is a constant factor when considering how supply chains operate and will continue to over correct and under correct in a number of different areas throughout the remainder of the year.
This has been your Bridge Logistics Weekly Market Update for the week of October 3rd, 2022.