COVID-19 Latest Updates

Suez Canal Impacts Linger, the Port of Charleston Receives its First Imports, and Union Pacific Raises Surcharges for Shippers

By April 15, 2021 No Comments

Ocean  

Suez Canal blockage leaves lasting effects on the supply chain industry, causing container shortages, spot rate increases, and a surge in demand. Carriers are warning that the heavily used 40-foot boxes will be in short supply from mid-April to well into May — a result of the Suez Canal blockage. The congestion from the blockage has slowed the return of containers back to ports in China.  

Additionally, spot rates on the trans-Atlantic westbound trade have increased as carriers have introduced substantial rate increases at the beginning of April. These rate hikes are also due to the Suez Canal blockage; carriers are struggling to recover lost schedules from the six-day blockage, hence the rate hikes. However, initial indications show that port hubs in North Europe and Asia are managing rising inbound vessels without major delays. 

Several shipping lines are expected to implement a general rate increase (GRI) into Asia on April 15. More carriers are expected to follow on May 1.

Customs  

K-Line America, Inc. has been experiencing a system-wide global outage due to a cyber attack for nearly a month, so Customs has approved for all K-Line shipping lines to be exempt from the 24-hour rule. K-Line shipping lines have been allowed to load cargo on vessels and not be penalized for failure to comply with the 24-hour rule and Importer Security Filing requirements. This exception continues to be in effect. 

Ports 

The Port of Charleston receives its first imports, offering much needed capacity relief to congested U.S. ports. The new Hugh K. Leatherman terminal officially opened on April 9th, welcoming the Hapag-Lloyd Yorktown Express. This new port opening marked the addition of 700,000 TEU of capacity to a U.S. port system that continues to experience surging import volumes. The facility will increase overall annual handling by 30%. 

The railcar shortage at the Ports of LA-LB eases, but terminals are still far from operating normally. After winter storms disrupted rail networks in February, weekly intermodal rail service at LA-LB is gradually recovering. However, terminal operators say that a return to normal will not suffice to curb the existing rail container backlogs at facilities.

Air

Air freight delays and costs continue to increase. Due to expensive ocean freight rates and unreliable container schedules, 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 

Truck manufacturers warn the Biden Administration of inability to meet freight demand. The world’s leading heavy-duty truck and truck engine manufacturers have warned the Biden Administration that a significant shortage of semiconductors is inhibiting their ability to produce enough trucks to keep up with freight demand. The Truck and Engine Manufacturers Association (EMA) has urged the administration to prioritize “automotive-grade semiconductors for medium- and heavy-duty truck components and aftermarket parts.” 

Rail

Union Pacific Railroad (UP) is raising surcharges for shippers. Starting April 25, the surcharge will be raised from $250 to $1500 for low-volume shippers, while medium-volume shippers will have to pay a $1000 charge. It is the first time that UP has instituted a peak season fee before the summer.