The growth spurt in consumer spending that began last summer carried over into 2021, with knock-on effects to supply chains. Freight demand led to hikes in transportation prices and warehouse rents, alongside dips in capacity.
And near the end of the quarter, a global disruption occurred: The Ever Given became lodged in the Suez Canal.
The charts below illustrate the story of supply chains in Q1 2021.
Online orders continued their upward trajectory, as consumers kept the focus on goods instead of services, and federal stimulus incentivized buying.
As a result, inventories compared to sales dropped, due to high demand. And demand — along with prices — for corrugated materials reached new highs as supply chains sought packaging for e-commerce orders.
Sales spike after early pandemic dip
Cardboard prices reach record highs
Inventories drop as supply chains struggle to keep up
- The omnichannel age is here — and it's expensive
- Warehouse operators seek nimble forklifts in the e-commerce era
- 6 charts show how a pandemic upended retail supply chains
Freight demand and prices soared
Continued spending rippled to freight markets. Demand for container shipping led to strained capacity and rising spot rates.
Trucking was already grappling with tight capacity, as drivers sought more home time during the pandemic and licensing schools were constrained by COVID-19 restrictions. The combination of a short supply of drivers and elevated demand squeezed capacity and drove up rates.
Spot rates from China/East Asia to US
Trucking spot rates keep their momentum
Rates rise on Los Angeles outbound lanes
- A tumultuous year of ocean shipping prompts a rethink of contracts
- Congested West Coast ports bring the heat to TL spot rates
- Cascading effects of Texas winter storm bump up spot rates
Demand squeezes the warehousing market
The growth of e-commerce created more demand for warehouse space, reflected in dropping vacancies and rising rental rates across the U.S.
Warehouse vacancies dip
Warehouse rents rise
- How the pandemic drove retailers to on-demand warehousing
- COVID-19 changed the stakes for e-commerce. Do fulfillment networks need to change too?
A ship blocked the Suez Canal
Ever Given was lodged in the canal for nearly a week, blocking other vessels from passing through the major trade artery en route to Asia, Europe and other destinations.
It is still too early to know all the effects on capacity and cargo that the blockage will have on ocean freight markets. Some European ports have prepared for an influx of container ships and possible congestion.
Container ships impacted by Suez Canal blockage on March 26