November 28

11/28 – Logistics costs have improved dramatically in 2022 – but, unfortunately, for all the wrong reasons: the high potential for a global recession, Covid lockdowns in China (that are curbing oil and shipping demand), and faltering U.S. retail demand. WTI crude oil futures, which peaked in March at $123.70 per barrel, and averaged $104 for 6 months this year (Mar-Aug), closed at $76.28 on Friday (11/25). The Shanghai Containerized Freight Index (shipping prices out of China) has dropped below $1,500 vs. pre-summer levels above $4,000. The Drewry Worldwide Container Index (price to ship a 40-ft container) is at a 2-year low. The average container rate from Shanghai to Los Angeles will average below $2,300 in Nov. vs $11,000 in Jan. 2022. Looking at contracting for 2023, domestic trucking/freight rates aren’t quite down to 2019 levels yet - but appear to be headed in that direction.