Bernstein: Supply Chain Pulse Check - 50 Days On, Disruption Still Here
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Bernstein reports that the ongoing Iran conflict has sustained significant global supply chain disruptions for over fifty days. Air freight spot rates have surged approximately 30% due to tightened capacity and rising surcharges. Ocean freight rates have also climbed notably, with the SCFI and WCI increasing 42% and 18% respectively compared to mid-February. Oil prices have risen by $25 to $30 per barrel, elevating transportation and energy costs and presenting macroeconomic headwinds that could exacerbate inflation and dampen broader demand.
Qatar, Emirates, and Etihad have cut approximately 13% of global air freight capacity, pushing airfares and cargo rates higher on certain routes. Meanwhile, the Strait of Hormuz only directly impacts about 2% of global container shipping volumes, but container lines are avoiding the Mandeb Strait route due to persistent proxy risks. In the United States, tight capacity from regulatory pressures and soaring fuel costs has driven an approximately 20-25% year-over-year increase in spot trucking rates, confirming a cyclical inflection point. March PMI figures showed divergence across major economies, with the US at 52.7, China at 50.8, and Europe at 51.6.
Despite the macroeconomic challenges, several logistics subsectors are benefiting from the ongoing disruption. Freight forwarders are capitalizing on increasing logistical complexity, while integrated logistics providers are leveraging the air cargo capacity crunch. Prolonged route diversions continue to delay the restoration of normal Red Sea-Suez transit, favoring liner companies. Bernstein maintains Outperform ratings on DSV, FedEx, UPS, Norfolk Southern, and Union Pacific, while assigning Market-Perform ratings to DHL, Kuehne+Nagel, CSX, JB Hunt, and CH Robinson. Maerska holds an Underperform rating.