October 2022 will see almost the same number of blank sailings as October 2021 as trans-Pacific carriers react to the region’s overcapacity. Carriers plan on blanking approximately 23.8% of the total trans-Pacific capacity to the USA’s East and West coasts, or 698,505 TEU. October 2021 saw a similar figure of 23.6% or 669,460 TEU. 

The trans-Pacific’s current capacity is consistently decreasing, pushing ocean spot rates, and US retailers predict that imports into the USA will continue to fall each month for the rest of the year. The last week of September saw vessel utilization rates of 80%, compared with 90% or higher in April. 

The average ocean spot rate from Shanghai to Los Angeles at the end of September dipped to $3,779/FEU, a 70% year-over-year decrease, and an 11% decrease compared with the previous week. The $6,027/FEU spot rate from Shanghai to New York fell 51% year-over-year and 9% from the week before. 

Some carriers have also decided to terminate vessel strings to balance capacity with demand. Matson Navigation Co. canceled the expedited China to California (CCX) service earlier in the month, although the carrier will continue its CLX and CLX+ services. 

Despite ongoing components shortages necessary for chassis production, domestic chassis manufacturers reported that new chassis production will fix current shortages next year. 

Stoughton Trailers produce approximately 425 units of 53-foot chassis weekly, up to 22,000 a year. Although this rate sits below their original goal of making 500 units weekly, the current production rate indicates that severe material and component shortages are no longer holding up the entire production process. 

Chassis lessor DCLI, which has Stoughton Trailers as one of its suppliers, expects to add 40,000 new chassis to its fleet by Summer 2023. DCLI expects this quantity will be sufficient to satisfy domestic intermodal supply chain demand. 

Additionally, Union Pacific Railroad (UP) has received 5,100 units of their order of 5,600, which will be completed in October this Year. Disruptions to domestic supply chains due to chassis shortages will likely not continue once lessors receive these orders, as intermodal demand will drop due to economic slowdown and changes in consumer spending. 

The reduction in intermodal demand will allow older chassis that have been utilized past their normal life expectancies to be cycled out and replaced by new units without disruptions. 

Daniel Maffei, head of the Federal Maritime Commission (FMC), warned chassis providers and railroads that congress will pay closer attention to complaints from shippers and truckers regarding inland freight movements. 

During the Inland Distribution Conference in Chicago on September 27, Maffei said that “the Federal Maritime Commission authority does not stop at the water’s edge” after the FMC received additional regulatory power thanks to the Ocean Shipping Reform Act of 2022 (OSRA-22). 

While the FMC can regulate chassis to some extent, railroads receive an intermodal exemption under current US rail regulators. This exemption limits the US Surface Transportation Board’s scope and prevents the board from covering railroads. However, according to Maffei, shippers can bring complaints about landside services directly to the FMC when ocean carriers contract their landside movements.