Ocean shipping is still in chaos, with container ships and containers hung up in various parts of the world. Finding containers to ship merchandise from the West Coast to Asia can be a nightmare. Portions of China, particularly Shanghai, that are critical for supplying the US with goods and components have been locked down, and shipments from there to the US have been seriously impacted. And pricing chaos reigns everywhere.
There are capacity constraints at US trucking companies and railroads. Inefficiencies due to the chaos have slowed everything down further.
Orders for Class 8 trucks in April, at 15,400 orders, were down 56% year-over-year, according to data from FTR. The drop in orders reflects “a market that is trying to minimize its exposure to the headwinds it could potentially face in 2023,” FTR said.
The situation that heavy truck makers face is symptomatic for what is going on in this economy. There is still a lot of demand and limited capacity to fill that demand as these manufacturers are having trouble getting their parts and components, and they’re hampered by labor shortages. And chaos on the cost-side makes it risky to lock in prices for orders that cannot be produced for a while.Signs of a Downshift in the Freight Cycle, Trucking, and Demand | Wolf Street