COVID-19 Latest Updates

Suez Canal Blockage Leaves Mark on Supply Chains, Vaccinations Ramp up at Port of NY-NJ, and Congestion Increases on the East Coast

By April 8, 2021 No Comments

Ocean  

Ocean freight rates increase and delays continue. Imports from Asia arriving in both the U.S. East and West Coasts are still experiencing very high volumes and port congestion, pushing factory-to-door delivery times to an average of nine weeks compared to four to five. Likely, there won’t be any significant easing of demand from Asia to the U.S. before the peak season starts in July as retailers hustle to restock inventory and keep up with strong sales. Some importers are placing peak season orders early to avoid being caught without back-to-school and other seasonal inventories as congestion and delays continue. 

The Suez Canal is now cleared, but container shortages and lasting effects on global supply chains continue. Container ships that were delayed by the blockage at the Suez Canal are now making their way to the U.S. East Coast. It is expected that these vessels will add pressure and congestion to the region’s marine terminals. There are also fears as to how the blockage will affect container availability with delays in containers getting back to Asian hubs, further exacerbating the global container shortage problem. 

In Europe, there already is a severe equipment shortage due to the Suez Canal blockage. The average European outbound schedule reliability is below 35%, which decreases the capacity supply, so the demand for containers is exceeding the supply of space and equipment. 

Maersk halts spot bookings and short-term contracts from the export market. While the Suez Canal congestion is now cleared after six-day-long traffic, the impact on global supply chains remains, with a reduced capacity and shortage of equipment. After looking at the significant loss in volume over a couple of weeks and watching the market dynamics, Maersk has decided to cease the short-term bookings placed via Spot, along with the short-term contracts effective immediately.

Customs  

The FDA extends the deadline for food facilities to submit a DUNS number. After the FDA required facilities to obtain a DUNS number for the 2020 Biennial Registration Renewal for Food Facilities, many facilities were experiencing difficulty obtaining one. In response to those concerns, the FDA  extended the deadline to obtain a DUNS number to the end of the next registration cycle, until December 31, 2022. 

Ports 

The Port of NY-NJ vaccinates the longshore workforce to catch up with demand. To bring back more workers to the ports, a two-day event to vaccinate workers took place this week. The event provided 500 vaccines to longshore employees. This event comes as the marine terminals are busier than ever due to the high numbers of import containers. 

Air

Air freight delays and costs are increasing. Due to expensive ocean freight rates and strained ocean capacity, shippers are turning to air cargo for their shipments. This healthy demand has pushed global air cargo volumes back to pre-COVID levels but combined with limited capacity from passenger jets, these volumes are likely to keep rates elevated for a while. If you have questions about air freight capacity or rates, don’t hesitate to reach out to one of our experts. 

Trucking 

Trucking recruiters make progress in the hunt for drivers, but strides are yet to be made. In March, trucking firms added 7,800 jobs before seasonal adjustment — which were more jobs than expected — but are still 19,200 jobs short of the pre-pandemic employment peak in February of 2020. To meet current freight demand as imports continue to surge, the trucking industry is still looking to find thousands of new drivers after a massive drop in employment in 2020. 

Rail

Norfolk Southern’s Chicago backlog is congesting freight on the East Coast. Ocean containers coming into Norfolk Southern’s Landers intermodal yard in Chicago are leaving the U.S. East Coast congested, causing delays for shippers using the railroad. The railroad says the backlog is due to weather-related delays that hit the East Coast in February, as well as a surge of containers from the West Coast coming into Chicago.