COVID-19 Latest Updates

Evergreen Vessel Still Stuck in Chesapeake Bay, Trucks From Mexico Facing Hours-Long Delays at Texas Border Crossings, Air Freight Operations in Shanghai Continue to Face Constraints.

By April 14, 2022 No Comments

Ocean

Hapag-Lloyd to launch direct service linking Mediterranean and Latin America. The service will take effect in the next month and will connect Mediterranean ports with Latin America. According to Container News, the new service “aims to deliver a direct service between the Mediterranean and the West Coast of South America with connections from and to Ecuador, Peru, Chile, as well as other destinations in the Caribbean and Central America.” Hapag-Lloyd will have six new container vessels deployed on the service route. 

Evergreen vessel still stuck in Chesapeake Bay. Evergreen’s Ever Forward vessel that’s been stuck for three weeks in the Chesapeake Bay has now become somewhat of a tourist attraction. The Wall Street Journal’s Julie Bykowicz reports that “Ever Forward’s plight is a testament to both global supply-chain clogs and Covid-19 pandemic boredom. It’s a sequel to last year’s drama in the Suez Canal with another Evergreen vessel, the Ever Given, with decidedly lower stakes since it isn’t blocking ship traffic.”  But with nearly 5,000 containers full of goods on board, shippers are becoming increasingly frustrated with the lack of progress in getting the ship unstuck. Dozens of the containers have been unloaded onto barges in an attempt to lighten the ship, and 210,000 cubic yards have been dredged from around the ship, but to no avail as of yet.

Maersk joined companies committed to purchasing steel with zero carbon emissions by 2040. Maersk has decided to join Climate Group SteelZero, an international effort aimed at accelerating the transition to a net-zero steel industry, in collaboration with Responsible Steel, the steel industry’s first global, multi-stakeholder standard and certification program. By having joined SteelZero, Maersk teams up with like-minded industry groups dedicated to climate-aligned steel procurement and progress in building a regulatory framework for responsible steel production and sourcing.

Customs

NCBFAA Monitors OSRA 2022 Making Its Way Through Congress. According to the NCBFAA’s newsletter, “the NCBFAA’s Transportation Committee, along with Transportation Counsel Ashley Craig of Venable and Legislative Counsel Nicole Bivens Collinson of Sandler, Travis & Rosenberg, are tracking the Ocean Shipping Reform Act of 2022 as it makes its way through the final stages of approval in Congress and eventually to the President’s desk for signature. The Senate version of the legislation (S.3580) passed the chamber on March 31 and now both the House and Senate are working to reconcile their bills. Congress is currently considering the first substantial amendments to the Nation’s shipping laws in over 20 years. This significant undertaking to alter the Shipping Act of 1984 is a result of the pandemic, as well as concerns raised by the shipper community as to ocean carrier activities and services. NCBFAA responded in mid-February with a position paper regarding this legislative effort in Congress, specifically requesting the separation of NVOCCs from the prohibited acts for common carriers and marine terminal operators.”

Forwarders Should Be Prepared as U.S. Piles on Russian Sanctions. The Commerce Department’s Bureau of Industry and Security (BIS) added 120 Russian and Belarussian entities to the Entity List on April 1, effective immediately. These additions to the Entity List are part of the continued response to Russia’s invasion of Ukraine with the intention to hinder specific Russian and Belarusian sectors including defense, aerospace, and maritime. You can read more here.

U.S. Customs and Border Protection Suspending Normal Trade Relations with Russia and Belarus. CSMS #51575437 – GUIDANCE: “On April 8, 2022, President Biden signed into law H.R. 7108, the “Suspending Normal Trade Relations with Russia and Belarus Act.”  Effective for shipments entered or withdrawn for consumption on or after April 9, 2022, the rates of duty set forth in Column 2 of the Harmonized Tariff Schedule of the United States (HTSUS) shall apply to all products of the Russian Federation and of the Republic of Belarus. Pursuant to H.R. 7108, should the President increase the rates of duty applicable to products of the Russian Federation and of the Republic of Belarus above the Column 2 rates of duty, CBP will issue a follow-up CSMS message. For questions, please contact CBP’s Office of Trade, Commercial Operations, Revenue, and Entry (CORE) Division at [email protected]

Ports

Rhode Island Trucking Association backs governor’s request for Port of Galilee investment. The Rhode Island General Assembly is considering Governor Dan McKee’s budget request of $46 million for the 2023 fiscal year. The proposed investment will revamp the infrastructure of an important East Coast commercial fishing hub in the Port of Galilee, and will improve freight movements. The port, which has two port terminals, 40 docks and piers, and 240 commercial fishing boats, occupies 38 acres in the town of Narragansett. The Department of Environmental Management is currently overseeing a project at the port to replace asphalt, heavy piers and 1,000 feet of bulkhead. The proposed funds would go towards replacing docks, improvements to roads, raising bulkhead caps throughout the port by 18 inches to protect against sea-level rise, parking, electrical upgrades, new fire hydrants, and installing security cameras.

ILA wins chance to represent Florida port workers. Workers for Caribbean specialist carrier Tropical Shipping USA will be able to vote for union representation from the International Longshoremen’s Association (ILA). In a decision made last week, the National Labor Relations Board (NLRB) said that “a petition from 63 stevedores at Tropical’s terminal at the Port of Palm Beach to vote for ILA representation was the appropriate size for a collective bargaining agreement,” according to the Journal of Commerce (JOC). It was also reported that tropical management had argued that a larger unit of 132 workers, including repair and maintenance personnel, at the port should be allowed to vote in the election. According to JOC, the NLRB said that “the 63-person unit and 19 other terminal employees were the most appropriate to vote for a union because all those workers share the common, specialized task of moving cargo through the port.”

European Commission bans Russian vessels from accessing European Union (EU) ports. The ban affects both Russian vessels and Russian operated ships. The European Commission (EC) said there will be some exemptions to the ban, including essentials like agricultural and food products, as well as humanitarian aid. The EC says that it will also propose a ban on transport operators from Russia and Belarus. According to the EC,”This ban will drastically limit the options for the Russian industry to obtain key goods.”

Trucking

Trucks from Mexico facing hours-long delays at Texas border crossings. Extreme backups at Texas ports of entry have caused delays of commercial vehicles trying to enter the U.S. to deliver products from Mexico. Texas Governor Greg Abbott directed that state troopers increase inspections last week, causing the backup. The order is part of the governor’s push to heighten security at the border as the Biden administration plans to end an emergency health order that had allowed federal officials to turn away migrants, even those seeking asylum. 

Tesla semi in works to be unveiled next year. At the opening of Tesla’s newest factory, Elon Musk said that “We’ll be in production with Cybertruck next year, we’ll be in production with the Roadster, and with Semi.” Production is scheduled to begin next year. 

Truck Driver coercion complaints could reach record high. According to the latest data compiled by the federal government, it has been revealed that complaints of coercion filed by truck drivers could reach record highs in 2022. As of last week, nearly 500 complaints have been filed with the Federal Motor Carrier Safety Administration’s National Consumer Complaint Database against employers, shippers and other truck drivers.

Rail

BNSF facing rail backlog. BNSF Railway is struggling to deliver containers amid a Southern California rail meltdown. According to terminal operators, non-vessel operating common carriers (NVOs), and trucking companies, BNSF’s international intermodal network has been disrupted between Los Angeles and Chicago. BNSF says that conditions are improving and they are working to hire more people to address the problems. In a statement to the Journal of Commerce, BNSF said “we have seen increases in intermodal volume and improvements in our network fluidity over the past several weeks [and] we have an aggressive plan to hire approximately 1,000 additional train personnel this year to address crew availability needs.”

Union Pacific Railroad to reduce container surcharge. Union Pacific Railroad has said it will reduce the surcharge assessed on domestic intermodal loads out of Oakland and Seattle. The reason for the reduction is that more containers are available for shippers than there were previously. Last month,  shippers were paying up to $3,000 per container in Oakland-Lathrop and $2,500 in Seattle-Tacoma. Fees will drop to $500 for small shippers and $250 for large shippers effective April 10. 

Air

Maersk announces plan to launch cargo airline. The announcement comes on the heels of the company’s 2021 acquisition of Senator International, a shipping and air freight forwarder, and its plans to buy two 777Fs from Boeing. Maersk Air Cargo will be based out of Billund, Denmark and is taking over operations from Star Air. Maersk Air Cargo intends to add two new 777Fs (due by 2024) and three lease 767-300Fs from launch until 2024.  

Air Freight operations in Shanghai continue to face constraints. As Shanghai remains under lockdown, operations at Shanghai Pudong International Airport (PVG) continue to face pressure as supply chain operations are limited. The airport remains open and operational, but workers are mainly working to clear out freight that arrived pre-lockdown. Port congestion, equipment turnaround and schedule disruption are all affecting rate levels in addition to COVID in the city. 

International

Highway closures in central China causing severe trucking delays. Amid heightened COVID lockdowns, Chinese provinces are shutting down more highways, limiting import/export capacity through the region and restricting truck drivers. Provinces impacted by the closures and delays include Hangzhou, Shanxi, and Zhejiang. These closures are causing significant impacts on international trade and are exacerbating congestion levels. To minimize the impact of this situation and safeguard your supply chain against unprecedented disruptions, importers should work with a Navegate expert to plan alternative solutions. 

Covid-19 lockdowns slow onshore operations at Chinese ports. More than 470 bulk cargo ships carrying raw materials are queued up outside Chinese ports as lockdowns continue in Shanghai and other cities. Congestion has expanded to nearby Ningbo-Zhoushan as ships are attempting to divert to other ports in order to avoid the trucker shortage and warehouse closures in Shanghai. According to Bloomberg shipping data, there were 222 bulkers waiting off Shanghai as of April 11, 15% higher than the previous month.

Panama Canal exploring imposing tolls for empty containers. The Panama Canal Authority (ACP) is pushing a new tolling proposal for container ships that will levy a fee on empty containers returned to Asia for the first time. Tolls for other sorts of ships transporting loaded and empty containers would also be raised under the idea. The ACP presented a proposal on Friday that would cut the existing system of 430 separate fees based on ship and cargo type to less than 60. The plan would also phase out an incentive scheme put in place by the authority to entice ships to utilize Panama’s post-Panamax locks, which opened in 2016.

Other

White House to allow more ethanol in gas this summer. In an attempt to curb rising fuel prices, The Biden administration plans to temporarily allow high-ethanol content gasoline to be sold during the summer months, say senior administration officials. According to the Wall Street Journal, The decision will allow gasoline with 15% ethanol to be sold between June 1 and Sept. 15. Usually, only a 10% ethanol blend can be sold during that time period to reduce smog caused by the 15% blend’s higher volatility.

Dandelions could be used to make tire rubber. A fast-growing, durable species of dandelion that might serve as a domestic source of natural rubber for tires is the subject of an expedited commercialization effort led by the Department of Defense and involving tiremaker Goodyear, BioMADE, and Farmed Materials. The effort will build on previous research that examined over 2,500 plant species but discovered only a few with qualities appropriate for use in tires.

Drone crashes delay Amazon pilot program. Bloomberg News says that “a Bloomberg investigation based on internal documents, government reports and interviews with 13 current and former employees reveals a program beset by technical challenges, high turnover and safety concerns.” After a serious crash in June caused a brush fire, federal regulators questioned the drone’s abilities because of the failure of multiple safety features. Amazon plans to ramp up testing in the coming months, however they had completed less than 200 of their 12,000 test flight goal for 2022 as of February. 

Recent developments amid Russia-Ukraine crisis:

Russia defaults on foreign debt. According to credit rating agency S&P, Russia has defaulted on its foreign debt because it offered bondholders payments in rubles, not dollars. CNN says that “S&P said this was a “selective default” because investors are unlikely to be able to convert the rubles into “dollars equivalent to the original due amounts.” According to S&P, a selective default is declared when an entity has defaulted on a specific obligation but not its entire debt.” Russia now has a grace period of 30 days from April 4 to make the payments of capital and interest. S&P does not expect it will convert the rubles into dollars given Western sanctions.

Volvo sales take hit as Russian business halted. Volvo’s sales, production and services in Russia have been suspended since the war started and sanctions were imposed. About 3% of Volvo’s net sales came from Russia last year, causing negative impacts on operating income for this year. Volvo says that it has total assets worth about 9 billion kronor related to Russia, of which 6 billion kronor are classified as cash items.