COVID-19 Latest Updates

PPE Export Ban, Trucking Cutbacks, and Blank Sailings

By April 9, 2020 No Comments

U.S. Customs

A ban on the exports of specific types of personal protective equipment (PPE) is expected to go into effect this week. While the actual enforcement of the ban is a little unclear, Customs and Border Protection (CBP) is poised to detain shipments of PPE containing N95 filtering facepiece respirators; other filtering facepiece respirators; elastomeric, air-purifying respirators and appropriate particulate filters/cartridges; PPE surgical masks; and PPE gloves or surgical gloves. FEMA will determine whether detained shipments should be kept for use within the United States; to purchase the PPE on behalf of the United States; or, allow it to be exported.

Trucking

While other parts of supply chains currently face numerous challenges, it seems that the biggest hurdle for the trucking industry is uncertainty. Many carriers are shying away from committing to long hauls, citing uncertainty around closures and customer cancellations.

In response to shifts in demand, major trucking companies have begun reducing pay, cutting hours, and freezing benefits to reduce costs. Arkansas-based ArcBest and Georgia-based Saia Inc. are some of the biggest to make these moves, announcing pay cuts for executives, hiring freezes, hourly worker pay cuts, and suspensions of company 401(k) matches. Saia even went as far as offering grants for early retirement to eligible employees to reduce its payroll. Other carriers, namely in LTL, have taken similar actions, furloughing employees and reducing wages.

 

Global Ports

A group of 80 American agricultural and food shippers have urged Trump administration officials to engage with the Federal Maritime Commission (FMC) and quickly adopt an Interpretive Rule regarding detention and demurrage charges. A letter cosigned by the shippers states that COVID-19 and subsequent economic impacts has resulted in the imposition of “millions of dollars of unfair detention and demurrage penalties”.   

The Port of Los Angeles reported a 31% drop in March’s year-over-year cargo volumes. March also marks the lowest cargo volume in the port since February 2009. 

Chittagong port in Bangladesh has instituted 100% waivers for storage rent in response to a pile-up of containers that has threatened to max out storage space at the portThe port is currently housing 2,900 reefer containers, about half of which are on temporary plugs, and carriers are responding by diverting Chittagong-bound cargo or adding surcharges for reefer containers. 

 

Ocean 

The number of blanked sailings grows as global demand remains volatile. More than 160 sailings have been canceled over the past week, and more are expected to be added, maintaining this trend through at least June and well into the typical peak shipping season. CMA CGM announced plans for 15 ships to be idled entirely, and anticipates May to reach an extreme slow-down for container shipping.

Container lines have begun to offer “Suspension of Transit” (SOT) programs at hubs across the globe. These programs are aimed at giving beneficial cargo owners and cargo consolidators in need of immediate storage a way to avoid costly detention or demurrage fees at ports by storing containers on the container line’s property instead.