Chinese New Year shows no signs of slowing down demand out of Asia. As the Chinese New Year continues, there seems to be no easing of bottlenecks even as Chinese factories stay open to clear backlogs. According to an update from Maersk, equipment shortages still remain an industry-wide challenge and capacity availability and schedule reliability are still strained. These challenges will continue throughout the first quarter of this year, with only slight improvements expected going into March. Additionally, as people start to migrate back to the cities after celebrating Chinese New Year, more people will have to isolate before returning to work, which will prolong output from China.
Forced labor and human rights abuses in the XUAR (Xinjiang Uyghur Autonomous Region) have resulted in a Withhold Release Order (WRO) for cotton and other commodities. Shipments that CBP believes originate from the XUAR can be detained, indicating there’s increased enforcement from CBP. Therefore, it’s recommended for shippers to confirm supply chains at the base level, which includes obtaining statements of origin on the yarn/fabric to prove that it’s not made in the XUAR. More information on this matter can be found on the CBP’s website.
Our team is seeing continued surveillance from CBP of personal protective equipment (PPE) imports for counterfeit. Since the pandemic began last year, CBP has seized large volumes of COVID-related counterfeit materials with the potential to harm healthcare workers and others who rely on authentic PPE. Given the seriousness of this situation, CBP is continuing to monitor more imports of PPE to ensure that they’re not counterfeit products.
There are significant wait times at major North American ports. According to Maersk, the ports of Los Angeles and Long Beach are experiencing long wait times due to strong demand and labor ganging restrictions on vessels (due to labor shortages). At Los Angeles and Long Beach, daily vessels waiting to be birthed are between 30-35. Other ports like Vancouver and Prince Rupert are experiencing similar pressures. These wait times at the ports continue to fuel the vessel shortage in Asia as vessels are unable to return on schedule. If you have questions regarding congestion at the ports, don’t hesitate to reach out to one of our experts.
Port of Savannah improves despite record Asia import surge while other ports close due to weather. Cargo flow at the Port of Savannah has been improving over the last two weeks. This improvement comes as retailers restock inventories and shift goods away from the congested ports in Southern California. The port of Newark, however, will be closed today (February 18th) due to the weather, while the Houston port is also closed with the terminal struggling with electricity and water availability.
Air cargo rates continue to increase. The air freight rates are surging upward as the seven-day Chinese New Year and heavy demand continue. This demand is keeping aircraft operating at full capacity 17 hours a day and slowly pushing air cargo rates up on both trans-Pacific and Asia-Europe trade lines.
CMA CGM launches air cargo service. The new service will operate four Airbus freighters out of Europe. According to the carrier’s CEO, this newly launched service comes as a response to the growing demand for more logistics solutions. Called CMA CGM Air Cargo, the division will leverage partnerships with airlines to deliver global coverage. This new service by a major carrier indicates that ocean congestion and slowdowns in China may continue well into 2021.
Truckload rates rise strongly. After a tumultuous 2020, rates in the truckload market will continue their surge. This continuation comes as demand surges to replace depleted inventory and sharp rising costs for carriers.
The Federal Motor Carrier Safety Association (FMCSA) extends pandemic-related exemptions. Previously set to expire February 28th, the FMCSA extends COVID-19 relief exemptions through May 31st. The relief cover18-s supplies related to COVID-19 and food, paper, and other grocery products to restock distribution centers and stores.
Unprecedented winter storms across the country will cause delays across the board. As the Midwest and Texas experience below-freezing weather and a winter storm expected to hit the East Coast, shipments are likely to be delayed as trains and trucks will most likely not start due to the cold and snowy conditions.
Union Pacific Railroad shuts down due to inclement weather. U.P. has closed most of its intermodal network for 72 hours because of the snowy and icy weather in the Pacific Northwest, Midwest, and southern plain regions. This closure will halt supply chains while the railroad prioritizes the safety of its workers, crews, and trains.
It’s Black History Month. This month, we’re celebrating Black revolutionaries who transformed the supply chain and transportation industry. Our Black History Month blog highlights prominent Black figures who technologically and culturally made the industry move forward, faster.