TRANSPORTATION
TRANSPORTATION 2022 FORECASTS Continued from page 25 day re-working shipments due to date shifts. It’s a challenge to do this day in and day out, but that is what helps to make a valuable partner. In 2022, I do not expect to see many, if any, rate increases. There may be a few markets that take slight increases throughout the course of the year, but as a whole, I expect freight rates to China and Southeast Asia to remain stagnant and in some cases potentially to be reduced. I see this happening with China prior to Southeast Asia due to Southeast Asia’s reliance on transshipments and feeder vessels. Rates to Europe, the Indian subcontinent, the Mediterranean and the Middle East should remain stagnant or be reduced throughout the course of the year. Of course, this is all based on the fact that we have seen record demand throughout 2021, and at some point, it will be unlikely this level of demand remains. In regards to Q4 2021, we saw a slight uptick in volume versus Q4 of 2020. The only difference is that in Q4 2021, AGL, like many shippers had the opportunity to blow the previous year out of the water but are unable to do so due to the various supply chain related issues. Many steamship lines effectively capped how much lumber they would take since it’s a cheaper freight rate and a heavy commodity. This put us in a position in which we were doing double or triple the work for next to the same result. I expect Q1 2022 to remain strong and I fully expect all of the supply chain related issues to remain. We are an e-commerce driven country with most of the manufacturing housed in other countries. Until this changes, we will always have an abundance of challenges when in a strong market, like we’ve been in. I believe that we will continue to remain in a strong market through 2022. At some point the market should cool down, but, given that we’ve dealt with a pandemic and are still navigating the back log of the pandemic, I do not see the U.S. economy or the shipping market slowing down anytime soon. We are fortunate to have the relationships that we do across the supply chain from our trucking partners, to our customers that have made operating over the last 18 months more palatable than it could have otherwise been. I expect another strong year for the U.S. economy, the lumber market, the shipping market and AGL in 2022. York Legacy Mill Inc. 225 NEEDHAM ROAD • PO BOX 117 MARROWBONE, KY 42759 Specializing in Appalachian Hardwood Poplar • Red Oak • Soft Maple • Ash • Cherry • Hickory • White Oak • Hard Maple • Walnut Matthew York Owner Cell (270) 459-0294 Erika York Sales Associate Cell (270) 459-2569 3 3 3 3 3 3 Manufacturing quality Appalachian Hardwood lumber, cants & railroad ties Cutting 4/4 through 8/4 thicknesses of lumber that are sold green Specializing in producing high grade White Oak lumber 2 Mill Locations Grade & Cedar In House Transportation We Purchase Standing Timber & Land Tracts Located in South Central Kentucky PH: (270) 864-3134 yorklegacymill@gmail.com 40 FEBRUARY 2022 n NATIONAL HARDWOOD MAGAZINE
Lloyd Lovett King City/Northway Forwarding Ltd. Montreal, QC I read an article on transportation with the headline “Drowning in Disruptions.” Whether it be COVID, labor or natural disaster related, the transportation industry is never catching up. There was a definite shortage of truck drivers in 2021 and it’s not looking good for 2022. With terminal congestions, waiting time to deliver or pick up containers at the port, some transportation companies are simply opting out of the containers business and focus on domestic freight. To characterize the transportation trend for the lumber industry, domestic freight shipments are stable while container/export moves struggled in 2021. The rule of thumb is, if there is a weak link in the supply chain you change, but in this case the chain is broken. When you have, on average, 50 container vessels per day at the Port of Los Angles waiting to get unloaded and, then, the top person in charge of the Department of Transportation takes a three-month paternity leave, it certainly does not help the supply chain issue. I really want to be optimistic for 2022 but I see more of the same for at least the first two quarters. The import rates have more than quadrupled in the last year for containers coming from China to North America. I really don’t think they can sustain those rates, so I see them reducing. Even though export ocean freight rates have gone up steadily in the last two years, they are lower than they were in 2010. The shipping volumes have been steady in the 4Q, maybe slightly less due to the shipping interruption caused by the Chinese New Year. The first quarter of 2022 should remain consistent since the demand for North American Hardwood is still strong. I’m hoping that inflation stabilizes without interest rates increasing. Now with this new strain of Omicron that we all must deal with, it leaves a lot of companies in limbo for the future. This will only have a negative effect on the economy. Please turn the page W11143 Cty Hwy G • P.O. Box 160 • Antigo, WI 54409 • EMAIL kretz@kretzlumber.com TOLL-FREE (800) 352-1438 • FAX (715) 627-4399 • www.kretzlumber.com INTERNATIONAL PHONE 00 + 1 + 715 + 6235410 • INTERNATIONAL FAX 00 + 1 + 715 + 6274399 FEBRUARY 2022 n NATIONAL HARDWOOD MAGAZINE 41
