Safety Stock podcast starring Dan and Will

New York, New York! Busiest Port in the US

How did NY/NJ become the busiest port in the US in August? What does this mean heading into Q4 and how the ports could be softened due to weaker demand coming from Asia?

Will:
Hello ladies and gentlemen, we are back. Safety stock. Dan Magida is with me. I am Will Davis. Are you ready for some supply chain topics? We’ve got a good one for you, Dan. Are you doing well?

Dan:
I’m doing great. Doing really well. How are you doing?

Will:
You look good. You look good. You got some good color. You look nice and healthy. Cheeks of rosy. Oh, thanks. If this was the 17 hundreds, people would be like this guy. He’s living a long time.

Dan:
Didn’t Ben Franklin live like over 80?

Will:
I think so. Ben Franklin had some good jeans. How did they live? Also shout out Ben Franklin. Thank you for electricity.

Dan:
There

Will:
You go Dan. You wanna know something that’s also a pretty good topic outside of electricity And Ben Franklin.

Dan:
Did Ben Franklin help with any of this?

Will:
No, he did not. Because we are talking about New York City is New York. New Jersey, to be fair, is the number one location for shipping in the US today. Congratulations. New York, New Jersey. I’m I’m…

Dan:
That’s a, it’s a great, great honor. You know, anytime we throw New York and New Jersey together, when it’s not football related, it’s a, it’s a great thing. Also, debatable topic of Ben Franklin actually invented electricity’s. Gonna throw that out there from the start. You don’t wanna get down to history, but there are other sides, you know, he just took a cut out in the rain. But there are other people who would dispute that. But we’re not here to talk about MythBusters here. We’re here to talk about the ports and how New York is the most congested port as of August in the 2022 in the United States, which is shocking.

Will:
Yeah, and, and Dan, I think the interesting thing that is coming out of this is that you, we saw people move the need to bring goods in from west coast to East Coast because we saw West coast congestion. Yep. Now we effectively are having,

Dan:
Isn’t it funny how like people notice the congestion in one area is like, let’s shift east. What’s gonna happen when you shift

Will:
East? Everything will be fine, but actually you, you get, and so places where your anchorage to birth, meaning how long a ship is waiting before it goes in to unload New Jersey, New York, most congested, you’re also seeing Houston, you’re seeing it in Savannah additionally once though they’re in, where they’re actually in the port and turning around the vessel is actually, that part’s fine. And so what they’re starting to see Dan, is they’re starting to see the numbers ease. And the reason why those numbers are easing at the ports is not because we have better infrastructure or because we’re adding more capacity there. It’s because people are ordering less things to be unloaded there.

Dan:
Back to New York, New Jersey, they had over 840,000 TEUs that’s imports and exports at 20 foot equivalent in August, making it the busiest month ever. And according to the Port Authority manager in in New York, he said that they, these are exceeding pre covid numbers. So that leads to people shifting. And we’ve talked about this in other articles, or sorry, other episodes where it’s not like trucking is, has been fixed overnight or the infrastructure is there. Sure. We’ve gotten better at leaving ports open longer in LA and Long Beach have been, have gotten better there. But to your point, demand is softening. And what’s interesting is that Golden Week, which is a Chinese national holiday, which starts October 1st and runs through like October 7th, normally it’s about a week long is peak season for sea trade. That’s because also it heads into q4. It’s one of the last rows before the holiday start. And that demand has really shrunk, which means there should be some alleviation of ports heading into, heading into Q4 this year.

Will:
Right. And on top of that, I think it’s important for what the data’s showing is that you’re not actually seeing retail like in terms of sales like gaining or losing like this, that part’s actually flat. It truly is a congestion like a moving from the west coast to the east coast. So as you see rates drop, it’s specifically related to demand and the need for goods to go to the West coast. When you see those pricings drop, those prices drop. So that’s, I think number one is interesting there. Dan, The other part I think is interesting is that, you know, when we talk about the wait time and congestion, you know, average being 9.9 days, right? Yep. Or in New York and New Jersey, you know, an average nine days when we were at the, when we were at the peak issue point at the Port Authority or of LA and like things coming into Long Beach, I mean at that point we were talking around multiple weeks. We were talking like 20 to 28 days. So overall, you know, if we’re looking, we are improving, things are improving, things are getting better, we’re seeing pricing coming down. You know, in a way it’s almost like we’re trying to, as much as possible revert back to pre pandemic levels when it comes into the shipping side of things.

Dan:
Which hope is that? Well, I mean, well it’s hard to tell is that can be the steady state. Like was it just a, was everything just pulled forward? Well I guess we’ll we’ll see, but I think it still shouldn’t mitigate the efforts that we need to do to modernize these ports or just, just enhance them as well. I think a lot of money and we’ll see, I guess the infrastructure bill, if it goes into it enhancing these ports to make them move in the turn quicker, I still think that’s a valuable investment that needs to happen at these, at these ports.

Will:
Yeah, and I think you’re seeing that today. I know there’s work being done at Charleston. I think work continues to be done in Savannah on that side and you know, they’re getting the volume from it so they’re seeing the need to do it. I think the other part of it is, Dan, is that if you’re a brand, I think we’ve said it in previous episodes, talk to your freight forwarder. Mm-Hmm. , understand what you’re paying for your pricing question it make sure that it makes sense because right now you have is your best opportunity to negotiate what in the past, over the past year or so has been a tough position to do. So.

Dan:
A and what’s crazy on top of that too is the air cargo space right now, as of q3, and this is from Freightos metrics here, 41% air cargo space available for real time booking as of Q3 2022. So, which is shocking cuz you’ve looked at that. It’s crazy. Looking at two years, it was 11%. So there is tons of space, which means pricing is very negotiable at this point.

Will:
That is true. And you know, we’re at, we’re at holiday time like right, Like this is the point in time where it goes for the most part. This

Dan:
Is,

Will:
This is peak air ship, this is peak air shipment time. So take that with that is a very interesting point, Dan. Just be

Dan:
Careful what you’re airing. Just be careful what you’re airing. That’s all. Don’t air, don’t air heavy stuff. Remember, just keep it, keep it light. It’s

Will:
Right. Remember when you ship something via air, you pay by weight. Yeah. When you ship something via ocean, you pay by volume. Yep.

Dan:
Big distinction. Big distinction there.

Will:
Ship feathers,

Dan:
A pound of feathers is the same as a pound of rocks. They’re the same.

Will:
That’s right.

Dan:
They may fall, they may fall at different, they may fall at different speeds even though the gravity’s the same, but it may want, may hit the ground sooner than the other, but it’s a pound of each. Just keep that in mind.

Will:
Yeah, that’s right. All right, well, hey Dan, I think we enjoy talking about this and if anybody listening has some perspective on some of the rates they’re seeing, share it with us. We’ll be happy to share that with some of the other listeners as well. Additionally to that, you know, in the Anvyl software, you know, we’ve talked about this before, but you can track your shipments, You can track it in live points in time simply by putting in a bill of lading, simply by putting in an airway bill or by a container number. And you can track and see where those shipments are in real time.

Dan:
And if anyone wants to, you know, make the voids to New York, we can take a little field trip to go see the ports very easy. Or you can just look at them or you can just look at them depending on your lookout pointing they’re having or Brooklyn. But hey, they’re there, ships are there. And I’ll be there.

Will:
There we go. All right guys, well we look forward to talking to you the next episode and until then, see you later.