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THE COLD CHAIN SOLUTIONS NEWSLETTER

 


THE COLD FRONT, ISSUE 13

Download and Print The Cold Front, ISS 13


FROZEN AND REFRIGERATED COLD CHAIN INSIGHTS

Welcome to The Cold Front, presented by RLS Logistics, the Cold Chain Experts!
We proudly offer nationwide cold storage warehousing, ltl shipping, truckload
freight brokerage and eCommerce fulfillment cold chain solutions. As cold chain
experts in frozen and refrigerated logistics, we are focusing on these topics
for our April 2022 issue: diesel fuel, container imports, and cold storage
warehouse inventories. The Cold Front is a monthly summary highlighting
pertinent cold chain market data in one concise location. These insights ensure
that you have the data to make better decisions to fuel your growth. We hope you
find this information useful! If you would like data on your specific market,
click the button below.

Click Here to Request Market Data for Your Area


DIESEL FUEL

On May 9, the Department of Energy reported that national average diesel fuel
prices hit an all time high at $5.623 per gallon. Diesel has risen
disproportionately compared to other benchmark oil prices, such as retail
gasoline and crude oil. Diesel prices are up 55% from the start of the year; a
gallon of diesel fuel costs $2.00 more per gallon than in January.

California, followed by New England, tops the regions with the highest average
price per gallon, and things could get worse. California’s annual increase in
the state’s gasoline tax is scheduled to take effect on July 1. Legislatures in
California refused to suspend the annual increase this year, further
exasperating the already high fuel price. California’s annual increase is set to
take place on July 1 and represents an additional 5.6% increase.

In a recent Freightwaves article titled “Why the Northeast is Quietly Running
out of Diesel,” the outlook for fuel prices here in the northeast does not show
any signs of subsiding. The article details the reduced amount of diesel in
inventory in the northeast. Historically, the northeast stores approximately 62
million barrels of diesel in May. However, this May, that number reduced to 51
million barrels of diesel for the area. Some predict that the northeast may need
to ration diesel this summer, something the industry has never experienced
before.

The outlook for diesel does not show any signs of subsiding. On the contrary,
some predict that we could see the price of both gasoline and diesel will
continue to increase throughout 2022.




CONTAINER IMPORTS

Global shipping volume remained strong in April despite shutdowns in China, the
Russia-Ukraine conflict, and record high inflation. Although container import
volumes were down 4% compared to March, April set another monthly record
compared to 2021. April 2022 volumes were up 28% from pre-pandemic April 2019.
With the recent announcement to end China’s Shanghai Covid lockdowns by June
1st, we anticipate container import volumes to remain strong, even given
inflationary pressure.

Import volumes continue to shift from west coast ports to east coast ports. East
coast ports increased volumes.



Import volumes continue to shift from west coast ports to east coast ports due
to the ongoing backlog at the Southern California ports. East Coast ports
handled 45% of all imported volumes from April.  Additionally, inbound
containers shift from the top larger ports to alternative ports.

The chart below shows the volume shift by port.  Again, supply chain
predictability is trumping total transit times and costs, as seen in the
movement of goods to the less congested port of calls.  




COLD STORAGE WAREHOUSE INVENTORIES

Inventory levels are high and cold storage warehousing capacity remains tight in
most markets.

Manufacturers continue to shift from a just in time inventory strategy to a just
in case strategy, resulting in higher holdings of inventories.  Additionally, a
growing direct to consumer shopping experience has elevated SKU counts resulting
in additional stocks.  We continue to field daily requests seeking inventory
availability on both coasts. California inventories remain strong with little
temperature controlled capacity available in the market.  Most likely tied to
imports shifting from the west coast to the east coast, we see minimal capacity
available in the market.  Cold storage warehousing is a hot commodity for the
foreseeable future. 

The below graphic shows that although inventories have declined from their peak
index level earlier this year, they remain higher than pre pandemic levels of
2018.  We predict inventories to stay high as manufacturers begin to build for
the 4th quarter.


Click Here to Request Market Data for Your Area

READ PAST ISSUES OF THE COLD FRONT: 

 * February 2022 Issue
 * September 2021 Issue
 * July 2021 Issue
 * June 2021 Issue
 * May 2021 Issue 
 * April 2021 Issue

MISSION

We provide professional supply chain solutions to the frozen & refrigerated food
industry by offering safe and reliable warehousing, transportation and
packaging services.

 

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info@rlslogistics.com*protected email*

 

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