MatchBack Systems COVID-19 Impact and Response  

We are closely monitoring supply chain challenges related to COVID-19 and their ramifications for the street-turn ecosystem.
Here we provide our updates and analysis on the COVID-19 impact and response.

 
 

Updates


 

Request follow-up or share your feedback at: mbsi_info@matchbacksystems.com

6/5/2020 - MatchBack Systems Import and Export Indexes
 
Have we hit the bottom?  The near term forecast shows imports flattening out after plummeting to yearly lows.  Exports continue to hold their position close to 2019 levels.
 
Even as volumes may come close to last year, the fluidity is not normal and all global marine container flows have been disrupted.  The economic downturn has carriers reacting to constantly changing BCO supply and demand requests, creating challenges for capacity and equipment management.  It’s also contract season with new importers, exporters, truckers and even customer nominated truckers that all impact the container network. 

 
6/2/2020 - Domestic Street-Turn Container Supply
Below is a breakdown of domestic container supply for street-turns by location and size.  This useful data is provided by one of our customers. 

(Gain access to this customer's container supply and demand by whitelisting with them on the MatchBack Systems portal. For more detail contact: mbsi_info@matchbacksystems.com )

 

 
6/1/2020 - Street-Turns are the "Last Frontier" for Reducing Costs

Amid the supply chain disruption caused by the pandemic, reducing inefficiency and costs were high on the agenda at the AgTC Annual Meeting. Several speakers called out street-turns as a means to reduce both. 
 
Ken Kellaway, CEO of RoadOne, said that as other costs have been taken out of the supply chain, street-turns are the last frontier for reducing costs. He emphasized that 40% of truckers' miles are empty. "Continued inefficiency and increased cost of street-turning international equipment" needs a solution, said Kellaway.
 
Michael Symonanis, speaking for the American Cotton Shippers Association, said that ACSA will work with other organizations to oppose carrier implementation of street-turn charges for the use of import ocean containers for export loads. He described the charges as an "export efficiency tax" on merchants and their truckers that will increase costs, despite the cost and effectiveness benefits for ocean carriers and overall export supply chain velocity. 
 
Peter Schneider of T.G.S Transportation agreed with others who highlighted the challenge of street-turn fees. He said there is an urgent need for high level "stakeholder collaboration with an IT emphasis". 
 
5/29/2020 - MatchBack Systems Export & Import Indexes
 
Our latest Indexes, tracking weekly volumes, indicate that exports continue to hold their ground.  Unfortunately, we are forecasting another drop in imports due to the cancellation of orders.  As the U.S. re-opens and inventories begin to be used, we expect this to improve somewhat but not to 2019 levels for the next few months.  (See the Indexes under the Analysis section.)
 
5/28/2020 - Takeaways from the AgTC Meeting
 
Speakers at the meeting discussed the pressing issues affecting the industry as a result of the pandemic. Here's a round-up of the major points.
 
- Exporter cancellation of bookings is ranging from 50% to 75%.
 
- The current imbalance is 2 import containers for every 1 export box, making it difficult to get containers to inland points. 
 
- Shippers and truckers are facing problems with delivery of loads to rail and port terminals due to cancelled sailings and changes in ERD.  Shippers urged for changes to be announced further in advance.  Up-to-date ERD/cut-off information not aligned or consistently communicated by ocean carriers and terminals.Detention and demurrage remains an issue.  Shippers would like the charges to be billed directly to BCO instead of truckers and included in ocean contracts.  Speakers applauded actions by FMC to address the issue in their new guidelines.
 
Chassis provisioning was a hot topic of debate.  There were calls for ocean carriers to get out of chassis, with an outsized involvement creating artificial market rates and operational inefficiencies.  BCOs and truckers want to be able to select the most efficient chassis provider and advocated for neutral pools, arguing that the current chassis provisioning model is inefficient.  Equipment owners stated that the current system provides needed supply and quality, while mandated grey chassis pools could have harmful consequences for the supply chain.    
 
5/27/2020 - Pandemic Leads to 'Complete Disruption' of Container Flows American Shipper
 
5/22/2020 - MatchBack Systems Import Index
 
Our Import Index (see under Analysis section) shows imports still lag from last year. We forecast slower than normal imports next week (week 22) before a slight improvement in week 23. Anecdotally, the opening of automotive plants, Amazon allowing non-essential deliveries and retail outlets opening around the country, we anticipate a pick up in the next 4 to 6 weeks as orders are placed.
 
5/21/2020 - Container Lines Take Tentative Steps to Restore Capacity JOC
 
5/14/2020 - MatchBack Systems Volume Forecasts
 
Based on our volume analysis, we have an encouraging forecast for the next few weeks.  Exports are on par with last year and imports will hopefully level out.   Even though imports are down YOY, there is still excess equipment to street-turn with 1.7 imports for each export booking.  We will continue to track import and export volumes closely to keep you informed.  
 



 
 
5/11/2020 - Street-turns Improve Container Supply
as Imports Drop

 
One of the bigger challenges we see for exporters right now is container supply.  The coronavirus pandemic has challenged the fluidity of the container network.  Importers have cancelled orders, others have shuttered DCs, temporary labor has been hesitant to work in DCs that are open and carriers have implemented blank sailings.  This has led to a 30% decrease in imports YoY.
 
45% of export bookings have excess distance that can be eliminated if the booking is street-turned.  Even with a 30% decrease in imports, the U.S. still has 1.77 imports for each export, leaving lots of opportunities to reuse containers inland for exports and thereby improve fluidity.
 
In addition to improving container supply, street-turns deliver economic and environmental benefits.  Each street-turn saves between $150-$400 in direct transportation costs, another $200 in indirect costs and eliminates 400 pounds of emissions.

5/7/2020 - Growing Concern over Box Shortages:
Exporters in Europe and the US are struggling
to get their hands on empy containers 
World Cargo News
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4/29/2020 - Market Feedback

Export volumes holding on, but ... - a forwarder mentioned that exports have been holding to pre-COVID volumes (confirmed by our forecast) but container availability and vessel space are challenging.
 
When will my container be unloaded? - as DCs and manufacturing facilities are closed, equipment continues to sit loaded, many without an unload time noted a carrier.
 
Drayage capacity "plentiful" - we are hearing from several players in the supply chain that there is a plenty of capacity and the truckers are willing to work on their rates ... for now. They anticipate come this fall, those rates won't include a truck. 
 

4/28/2020 - Imports Plummet in Week 19

Absolute volume forecast - The forecasts we have published to date (see under Analysis section) have been indexed to January 2019; this forecast is volume based. Naturally, it follows much of the same trends as the Index forecast.
 
Here are a few insights.
 
Imports bottoming out? Week 19 forecast to be 50% of peak and 2019 volumes. Imports have been tracking below 2019 volumes for most of the year, but we forecast week 19 is a dramatic drop off a mini peak in week 17. 
 

 
 
Exports fare better. We forecast a peak in week 18 that exceeds not only 2020, but also all of 2019! Some of that volume may push into week 19 as equipment availability and fluidity is an issue due to slow/no container unloading at warehouses and significant drop in import deliveries for container supply.
 
 

4/27/2020 - MatchBack Systems Import and Export Index

Forecast falling. After realizing the Import surge we forecast in week 17, we are seeing the significant volume downturn in weeks 18 and 19 versus last year. Although Exports continue to maintain ahead of 2019, they are coming back toward par with 2019 in week 19.
 

4/22/2020 - 'Not Enough Freight to Go Around': Trucking Carriers Report Dirt Cheap Rates as Freight Fallout Worsens CCJ

4/17/2020 - MatchBack Systems Import Index

We predict strong import volumes for Weeks 16-18. This will be the highest volume for the year and approaching pre Lunar New Year volumes. This is good news for carriers, truckers and freight handlers, and will create future supply for continuted strong exports.
 
4/15/2020 - Street-turn Best Practices
 
With the marine container networks in flux, standing street-turns have likely been impacted. This affects the container availability, drayage rates and driver productivity. Truckers have shared that traditional street-turns have morphed into 1-way rates are being revisited because of the lack of fluidity.
 
With imports and exports down and forecast to remain below historical levels, cost savings for carriers, 3PLs, truckers and shippers are front and center. So are street-turns. There is no silver bullet, but there are some best practices:
 
- Pre-orchestrate container matches systematically, if possible
 
- Involve ocean carriers early to understand IF they allow your containers to be street-turned
 
- Since this is not a normal scenario, be open to unconventional options to keep containers, trucks and freight flowing
 
- Ask us about customized reporting and actionable insights to help mitigate the impact on your operations
 


Updates - 3/28/2020 through 4/14/2020

Updates - 3/19/2020 through 3/27/2020

Updates - 3/11/2020 through 3/18/2020

 

 

Analysis


6/5/2020 - MatchBack Systems Gateway Analysis

 Our heat map illustrates the import impact on U.S. gateways.  The yellow areas show fewer import containers YoY.  The green areas note markets that have gained.  The larger the dot, the bigger the absolute impact.
 

 
 

6/5/2020 - MatchBack Systems Import Index

Weekly import volume indexed on January 2019 across a common basket of MatchBack Systems' ocean carrier, 3PL and port trucking customers.  



6/5/2020 - MatchBack Systems Export Index

Weekly export volume indexed on January 2019 across a basket of MatchBack Systems' customers in the ocean carrier, trucker and 3PL arena.