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Starting June 1st, 2023 Our warehouse fee will be $0.65/cubic foot per month

In effort to lower the warehouse storage fee during inflation, we have went narrow aisle racking.This construction took us four months but the project is finally completed. With narrow aisle racking, we are able to drop storage by 24%.We as partners will go through this inflation together.

Starting June 1st, 2023 Our warehouse fee will be $0.65/cubic foot per month

In effort to lower the warehouse storage fee during inflation, we have went narrow aisle racking.This construction took us four months but the project is finally completed. With narrow aisle racking, we are able to drop storage by 24%.We as partners will go through this inflation together.

Blogs/hot-news

03/23/2023

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Inventory Glut Casts Doubt on Prospects for Freight Rebound

    Inventory Glut Casts Doubt on Prospects for Freight Rebound

    Logistics companies are paring back their expectations for a demand surge as retailers keep new orders in check

    Container ships on March 8 at the Port of Oakland, one of several U.S. ports to report double-digit declines in imports to start 2023

    As economic uncertainty increases and retailers become more hesitant to place large orders in 2023, freight companies are tempering their expectations for a robust demand recovery in the second half of the year. Paul Svindland, CEO of STG Logistics Inc. in Bensenville, Illinois, remarked that optimism has waned in recent months.

    The volume of goods moving through supply chains has decreased more than anticipated at the start of the year, according to logistics executives. Moreover, fluctuating retail sales figures have raised concerns regarding the economic outlook. During an investor meeting on March 14, Shelley Simpson, president of J.B. Hunt Transport Services Inc., a leading U.S. freight company, expressed slightly less optimism than their customers.

    An intermodal train near Emporia, Kan., earlier this month. Intermodal rail-truck volumes fell more than 15% last week

    Midway through 2022, freight demand began to decline as consumer spending shifted from goods to services and large retailers amassed excess inventory following a pandemic-driven rush to stock shelves. Transportation companies, from truckers to container shipping lines, anticipated a rebound in the second half of the year, with a return to pre-pandemic ordering patterns following the liquidation of excess inventory.

    This outlook, however, has become more uncertain as retail sales have declined and retailers and suppliers have become more cautious about maintaining inventory control. Nike Inc. announced the continuation of its supplier purchasing reduction, having reduced inventory growth to 16% in its most recent quarter, down from 40% in each of the preceding two quarters. In comparison to the previous fiscal quarter, the company reduced its merchandise inventory by roughly $400 million. Matthew Friend, CFO of Nike, emphasized that managing excess inventory strategically is a top priority for the year.

    The 0.4% decline in U.S. retail sales in February marked the third monthly decline in the past four months, adding to the uncertainty for retailers and suppliers. Thomas Kingsbury, CEO of Kohl's Corporation, stated on a March 1 earnings call that focusing on customer preferences is preferable to purchasing inventory in advance and hoping for sales. After a 48% YoY increase in inventory during the second quarter of 2022, Kohl's intends to hold less merchandise this year.

    As they adapt to shifting demand patterns, such as the transition from comfortable leisurewear during remote work to more formal attire when people return to the office, smaller businesses are also dealing with large stockpiles. Ministry of Supply Inc., a clothing manufacturer based in Boston, witnessed this shift in demand last year after ordering large quantities of dress pants with elastic waistbands, only to discover that customers were shifting to more formal attire.

    During the pandemic, Ministry of Supply experienced strong sales of comfortable pants, selling around 2,500 to 3,000 pairs per month. However, according to Aman Advani, the company's co-founder and CEO, sales have since dropped to roughly 250 pairs monthly, while a zippered version more suitable for the office has seen increased demand. Advani noted that the previous three months of demand have now stretched to 30 months.

    Shipping data reveals a downturn in demand as businesses postpone new orders and global trade volumes decline. February saw a 38% YoY drop in container imports at the nation's largest port complex, Los Angeles and Long Beach. The Association of American Railroads stated that U.S. freight rail volumes fell by 5.2% in the first 11 weeks of 2023 compared to the previous year. Additionally, the intermodal truck-rail segment, responsible for a large share of retail traffic, experienced a 9.6% decrease, including a 15.2% YoY reduction in the week ending March 18.

    DAT Solutions LLC, a company that connects trucks with available loads on the truckload spot market, reported that the number of available loads in February 2022 was roughly 70 percent lower than in February 2022. Since mid-2020, spot prices have fallen to their lowest levels, indicating that more trucks are competing for fewer loads.

    In a note dated March 17, transportation analyst Jack Atkins of investment bank Stephens Inc. compared the current situation to the aftermath of the 2007-2009 financial crisis, stating that the macro outlook has deteriorated and the likelihood of a second-half recovery has decreased. Despite this, some freight companies, led by Yellow Corp. CEO Darren Hawkins, remain cautiously optimistic about a demand rebound during the traditional fall peak shipping season.

    STG Logistics's Paul Svindland anticipates that freight volumes will recover from their current lows later this year, albeit not as robustly as some of the company's clients anticipate. He expressed skepticism regarding any evidence or justification for such expectations, attributing them primarily to hope.

     

     

    MintN

    Mint Nguyen

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