COVID-19 Latest Updates

Asian Container Availability Tightens, Hong Kong-North America Air Rates Soar, and Kansas City Rail Terminals Overwhelmed With Containers

By April 22, 2021 No Comments

Ocean  

Asian container availability tightens and is expected to intensify. As demand builds through May, container lines warn that equipment will become even scarcer, with purchase and rental costs continuing to soar. This increased demand for containerized shipping is expected to deteriorate the current equipment imbalance. Shippers should expect container shortages to intensify over the next few weeks. If you need help navigating these congestion issues, don’t hesitate to reach out to one of our experts

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 

Atlantic and Pacific ports set TEU records. In March, the nation’s ports continued their record pace for container volumes, fostering supply chain kinks and more warehouse space shortages. The Port of Los Angeles saw a 113% increase in 20-foot-equivalent units moved, which was the busiest March in the port’s 114-year history. The Port of Long Beach saw a 62.3% increase, while the Port of Oakland saw a 27% year-over-year increase. More information on how the nation’s ports became busier since the pandemic started can be found in an article from Transport Topics online

The longshore labor availability for the Ports of LA-LB significantly improves. In recent months, the West Coast longshore employers’ association and union have hired and trained hundreds of dockworkers to ease the burden of growing cargo volumes. However, officials say that more hiring is required to handle the growing congestion at the ports.  

The Port of Oakland surpasses LA-LB’s congestion problem as vessels pile up in the San Francisco Bay Area. While the Ports of LA-LB have seen improvements in their congestion, the Port of Oakland had around 25 vessels waiting to enter the port as of last week Friday. There is talk of congestion lasting until the summer.  

U.S. Gulf ports will implement a new all-water service coming in the second quarter. Amid an ongoing boom in regional import distribution capacity, the new service will start, while ports also look for opportunities to capture cargo headed to inland areas by increasing intermodal reach. More information can be found in the article by JOC online.  

Air

Hong Kong-North America air rates soar as capacity continues to tighten. The average air freight rates on services from Hong Kong to North America have increased as stronger demand and stricter quarantine rules hit the market. This increase in rates comes as Hong Kong aircrew members on most international journeys were required to isolate upon returning to Hong Kong due to strong quarantine measures. While these measures have reduced capacity, demand coming into the U.S. remains strong. 

The rising price of jet fuel further burdens companies with air freight shipments. The average price for jet fuel has increased this month, which may reduce limited capacity if passenger airlines decide to eliminate cargo-only flights that were temporarily started since the beginning of the pandemic. 

Trucking 

U.S. truck freight tonnage rises. According to data released by the American Trucking Association, actual truck tonnage hauled by for-hire U.S. motor carriers increase by 8.9% from February to March. This increase reinforces how strong consumer and industrial demand are this spring, indicating that there could be an early peak season for shippers, brokers, and carriers.

Rail

Kansas City Rail terminals are overwhelmed with containers. Railroads serving Kansas City are struggling with the pressure of high import volumes into the U.S., creating chassis shortages and shippers spending more on rail storage fees. These difficulties are a result of the severe winter weather that disrupted intermodal rail networks in mid-February. 

Canadian National Railway (CN) seeks to break up the Kansas City Southern (KCS) and Canadian Pacific Railway (CP) merger. In an effort to break up the KCS-CP merger with a larger bid, CN offered to acquire KCS with a $33.7 billion bid, which could indicate a bidding war for a US-Mexico railroad. While CN’s bid is larger, their proposal is massively complex and may likely fail, according to CP officials.