Ocean space and empty containers are still limited. Capacity is difficult to find as the logistics industry continues to experience record import volumes and unprecedented congestion. For the best chance of any movement of shipments, bookings will need to be done on the premium services ocean carriers recently began offering.
Ocean rates for main shipping lines extended. Shipping carrier Maersk is extending its freight rates to February 14th, while MSC and Yang Ming are extending their rates to the end of February. These rate extensions indicate that rates could be plateauing and that the industry is approaching the “ceiling” of record rate increases. However, with the Chinese New Year coming up, rates could increase even more.
The Biden Administration is still reviewing some pending rule changes. The Biden Administration is still getting assembled, so the administration is currently reviewing some pending rule changes, and our team at Navegate will keep an eye out for any changes that will affect our shippers and importers.
Ocean carriers CMA CGM and MSC offer services to Oakland instead of Southern California. Ocean carrier CMA CGM has a newly restructured Asian service that makes Oakland, California its first U.S. port call rather than the ports of Los Angeles and Long Beach. The new service, called the Golden Gate Bridge Service, offers a 12-day transit from Yantian, China, and a 17-day transit from Shanghai. Additionally, MSC will start offering a similar service, one that reroutes to the Midwest, which will likely start in late February. Historically, Oakland is a final destination, not an entry port for another region in the U.S., and may not have the infrastructure to handle such import volumes. Therefore, it’s expected that congestion may quickly accumulate at the port of Oakland.
The Federal Maritime Commission (FMC) is urging shippers to re-route vessels to the ports of Seattle and Tacoma instead of Southern California. Due to the unprecedented congestion at the ports of Los Angeles and Long Beach, the FMC is urging ships to divert to the less congested Seattle and Tacoma ports. There is very little operational capacity at the ports of Los Angeles and Long Beach, but ports at the Pacific Northwest could serve as a “temporary safety valve” until congestion is relieved, according to FMC Commissioner Carl Bentzel.
Air freight rates are increasing, again, despite the recent decline. Air rates are going back up again, even though there was a dip in the rates a few weeks ago. Because shippers now have to book on premium services for new bookings and standard services are being rejected entirely, importers are looking to switch from ocean freight to air freight. Therefore, the demand for air freight is increasing, which is increasing the air rates, again. Because of this demand, delays are expected in the coming weeks. If you’re considering air freight, don’t hesitate to reach out to one of our experts.
Truckers in China are continuing to break for Chinese New Year. With the Lunar New Year coming up, truckers are already starting to take off to travel back to their hometowns to visit family for the holiday, one to two weeks earlier than usual. They are traveling earlier to decrease the chance of contracting COVID-19 by avoiding the anticipated congestion leading up to Chinese New Year and to isolate for a sufficient period in their homes to follow health safety protocols. The same scenario is expected after the Chinese New Year; drivers may be reluctant to return or may have to isolate themselves again before returning to work.
Myanmar is experiencing a coup, with democratically elected leaders detained as the military seizes control. While the country is experiencing a serious political issue at the moment, freight movement does not seem to be impacted. Our team is watching the situation closely and will keep you updated.
Winter storms in the Northeast cause backlogs. Earlier this week, there was a winter storm that occurred in the Northeast, which has caused backlogs of up to three days. Additionally, below zero temperatures are approaching the Midwest and Northeast, so it’s expected that some truck and train travel will be delayed as these services may not be able to withstand the cold temperatures.
There are calls for port workers, trade groups, and maritime regulators to receive the COVID-19 vaccine. After alarming breakouts at the ports of Los Angeles and Long Beach, port officials are calling for transport-related workers to receive priority for the COVID-19 vaccination to avoid even more disruption and congestion at the ports. Two members of the Federal Maritime Commission (FMC), Carl Bentzel and Daniel Maffei, have urged the Biden Administration to prioritize the vaccine for these workers in a letter to the National Governors Association, which was also supported by the American Association of Port Authorities (AAPA).