As you all know, we are getting closer to the end of this impressive year. The holidays are around the corner and we want to be the first ones to thank you for the support you have given CBX Global.
We value the commitment and devotion of all of you to our company, our communities and to each other. Thank you all!
Enjoy the reading!
We have reached the fourth quarter of 2022, an exciting year full of challenges and achievements. Once again, the great family of CBX Global demonstrates its resilience and passion for what we do.
In less than 15 days, three hurricanes hit multiple CBX stations located at Puerto Rico, the Dominican Republic, USA, and Central America. At the same time, our CBX team members in many parts of the world still suffer from pandemic closures, geopolitical situations, and a global recession.
Regardless of these events, thanks to you all, the amazing team of CBX Global, we provide one of the best-personalized services to our customers. We feel proud of your commitment, strength and loyalty.
We have great news! CBX Global now has a branch in Bangladesh to support global Apparel Industry growth efforts. We are also in the final steps to inaugurate our new Costa Rica station, and we are expanding our services to vendors with great partnerships and new customers.
Our leadership team is working hard to deliver a strong close to the year and to develop strategies for 2023. We are excited about the future and the new plans for CBX Global.
Thanks to our One Team, customers, and suppliers for their love for what we do.
Thank you Team.
Joselin Ramos | Chief Executive Office
This year peak season for Freight Companies
Ocean Trend
The peak season in the freight industry might change depending mostly on the role in the supply chain that a freight provider plays in ensuring that cargo arrives on time for the holidays. With the peak season already completed in ocean freight, we can say with certainty that this year’s peak season will be slower.
To begin with, we saw container rates collapse. Back in June, Freight Waves reported the cost to ship a 40FCL from China to the U.S. West Coast was $9,630.00USD. By the month of October, the same container would be transported for $2,470.00USD: 74% lower than just a few months ago. This happened in a backdrop of a significant number of empty sailings by container ship lines. The container lines will cancel voyages to pull capacity out of the market.
By September, the slowdown in container import volumes was becoming too significant to ignore. The Port of Los Angeles is the largest port in the United States, and reported that it handled the fewest number of loaded import containers for the month of September since 2009.
With an estimated 75% of U.S. container imports related to consumer activity, a sharp drop in volume provides a warning for any mode of transportation that is further downstream and closer to the point of consumption.
Air Freight Trend
Air freight is a smaller part of the overall cargo market, but supply chain problems, travel restrictions and consumer spending pushed the niche to the forefront during the pandemic.
Air freight’s recent cost declines are a departure from a year ago when frantic companies around the world drove air freight rates to record highs ahead of the year-end holidays as they paid up to fly cargo and avoid chaos in ocean shipping like clogged ports. Now concerns about the economy, shifts in consumer spending habits and an increase in capacity are pushing air freight rates downward.
Anyways, the cost of shipping air freight around the world is slumping, but some companies say the shift to flying goods around the world will keep the market attractive for years.
Trucking Trend
The SONAR Outbound Tender Volume Index (OTVI) measures truckload load requests from shippers to carriers, moving under contract rates. From the start of February to the end of May, it registered a continuous drop between 12% - 14.5%. In conjunction with the summer construction, beverage, and produce shipping seasons, it stabilized in June, when the OTVI index registered an increase of 1%.
The OTVI index dropped by 8% in the third quarter, with the majority of this drop occurring in the last two weeks of September. The decline has continued into October, with OTVI dropping an additional 3%.
Regarding the customer expectations, Landstar President and CEO, Jim Gattoni, stated: “Everybody’s [indicating a] flat to a soft, muted peak season. Since our July call, I would say things have clearly softened up compared to the anticipation of a better peak season.”
Retailers command trucking by the fourth quarter
In the context of understanding the trucking calendar and sharp decline in container volumes, the slowdown makes sense. Retail has an outsized impact on the fourth quarter trucking market. Even in a good year, construction, agriculture, and beverage volumes slowdown in the fourth quarter significantly.
Retailers have nearly all of the products they need in their distribution networks for the holidays (and then some), which means that there won’t be a lot of freight demand as we head into the last two months of the year.
In recent quarters, retailers have talked about how much inventory they are carrying. This holiday season, they will be focused on burning that inventory down – potentially through aggressive discounting and promotions.
As firms get more anxious about the broader economy heading into 2023, there is little incentive to replenish bloated inventories. This could be a threat news for most freight offer as they will find far fewer load opportunities.
What to expect
While the timing of when the freight recession started will be hotly debated, carriers from the weakest spot participants to the best run are starting to realize that peak will be very weak.
The pandemic effect may be winding down, but importers and supply chain planners looking to 2023 are cursed with enormous uncertainties and threats, as well as costs rising on multiple fronts.
U.S. importers remain heavily reliant on Chinese producers and the relationship between the two countries. The outlook for future fuel costs is uncertain and, since most managers are now living in the greatest period of uncertainty in their entire careers, there is a requirement for them to deal with inflation as an ongoing factor.
Write Up made from the following articles:
Fuller, C. (2022, October 24) For freight companies, This year’s peak will be weak. Freight Waves
Tomas (Vale) Cedeño Núñez, Warehouse Attendant at AILA.
Vale, as everybody knows him, has been working at CBX for 30+ years. He's a hard worker responsible for the ramp handling of the DR-PR aircraft. He makes sure everything is on time and safe, and manages the security and customs process for our crew. Vale is a faithful peer and we are grateful for his dedication. Thank you, Vale!
Luis (Pucho) Bordoy, Warehouse Manager at Aguadilla.
Pucho started at CBX Global as a loader 17 years ago. Thanks to his good work and dedication, he rose to Warehouse Supervisor and now as a Warehouse Manager. He's a good example of discipline and overcoming. What an amazing success, Pucho!
Rosa Iris Sanchez, Administrative Supervisor at Nigua.
Rosa Iris started working at CBX Global in 2013. Since then she has proven to be a dedicated professional. Her colleagues describe her as a skillful woman, open to changes and always looking for ways to improve. You're doing this right, Rosa Iris!
Left: Icy Chan, Operations Clerk at Hong Kong.
With over 15 years of experience in the Industry, Icy started at CBX on 2021. She's bringing to our company her knowledge and dedication handling Ocean Freight documentation and operation. We are lucky to have you in our team, Icy.
Right: Catherine Wang, Documentation Clerk at Hong Kong.
Catherine also joined CBX Global in 2021. Her teammates describe her as a clever kind girl. She knows how to work hard and learn fast. Your contributions are noticed, Cathy!
Gustavo Adolfo Velasquez Acevedo, Warehouse Manager at Guatemala.
Gustavo has dedicated 16 years of service to CBX Global. He's characterized for been a loyal and committed professional to the company. He's also well respected by all due to his gift serving internal and external customers. We are very proud to have people like Gustavo on our team. Nice work!
Left: Kevin Feng, Customer Service Agent at Chongqing.
Kevin joined CBX Global in 2020. With 7 years of industry experience, he's impressively good at maintaining great relationships with clients, and resolving client issues. Strong skills, Kevin!
Middle: Manny Tao, Operation Clerk at Chongqing.
Manny has been working at CBX since 2021. He has demonstrated good performance through his hard work. He's coworkers describe him as cooperative and helpful in times of need to each others. Manny is a good example of teamwork. That's awesome, Manny!
Right: John Jiang, Sales Manager at Chongqing
John has 10 years of experience and great performance in Sales and Marketing fields at diverse industries. He started at CBX in 2019 and makes a substantial contribution to the continued operation and growth of our company. Good job, John!
The Association of Producers and Exporters of Nicaragua (APEN, for its acronym in Spanish) is a business organization founded in 1991 to represent and provide services to its associates: Exporters, Importers and service providers to international trade.
In October, during its XIII Edition of their Exporter of the Year Award event, CBX Global, as an active member of APEN, had the opportunity to participate and network with producers and exporters, all working together to continue to keep driving Nicaragua into the globalized market.
In the picture, Roberto Dubon, Commercial Development at Managua, Nicaragua.
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