G4 Logistics News

Cross-border logistics are a crucial part of doing business in today's global economy, as they allow companies to take advantage of different supply chains and pricing structures. For example, a company might avoid paying customs duties on international shipments if they can find a cheaper supplier in another country. They might also ship products from multiple locations to increase their coverage area or reduce shipping costs per shipment.

Container imports to US ports have dropped. West coast imports were down 26% in October. As labor issues out west push containers to more stable labor pools in gulf and east coast ports, the average price per container from Asia to the US settles around $3,200 per FEU (forty-foot equivalent unit). Just three months prior we were seeing $8,500 per container. Things are different this year with this 62% drop in container price from August to November (Peak Season). We find a few interesting points when digging deeper to see what this can mean for our clients. 

As of this point in 2022, there are over 20,000 private warehouses in the US according to the Bureau of Labor Statistics. The average annual growth in the number of warehouses in the US has been 3.2% per year over the last 5 years. This means the US has added over 3,000 warehouses in that period. Over the same 5-year period, e-commerce growth has significantly outpaced warehouse growth with an average annual growth rate of 16.5%. Today, only 14.5% of sales are made via e-commerce so that leaves a solid runway for continued warehouse demand. Normalizing for tangible goods vs virtual goods, it appears warehousing construction will continue to grow year over year.   

A year into using a 4-day workweek schedule we have learned a lot...and it is worth it.  The discussions leading up to January 1st, 2022, were around making a 4-day work week a company benefit. In a high-touch service and operations organization, we understand customer service and response time can't slip. Our operating KPIs were set.  If we were not able to at least maintain performance, we would have to roll back to the 5-day schedule. 

The US - Mexico border is open for business. With the transition from NAFTA to the USMCA (United States-Mexico-Canada-Agreement) in 2018, cross-border commerce, and logistics activities were improved and reinsured for years to come. The main points of the agreement center around IP protection, digital trade, tax thresholds, labor, and environmental obligations. With the structure for trade here in North America reinvigorated and the global political environment less stable, businesses are shortening their supply chains and choosing Mexico for manufacturing.