Ocean
Detention and demurrage reform gains traction in Congress. Congress is pressing forward on forcing container lines and marine ports to verify storage rates that fulfill U.S. shipping law requirements, according to legislation passed by the House on Dec. 8 and soon to be addressed by the Senate.
Ports
U.S. Department of Transportation (USDOT) commits $241 million to ports to help improve supply chain. Transportation Secretary Pete Buttigieg is awarding more than $241 million in grants to strengthen U.S. ports as part of the Biden administration’s near-term goal to repair America’s snarled supply chain through infrastructure improvements to quicken the flow of commodities. The transportation funds are being made available to 25 projects in 19 states right now. Under President Joe Biden’s new infrastructure law, the amount of money available for port upgrades would nearly double to $450 million in grants each year for five years beginning next year.
New Louisiana port aims to move freight to the Midwest. A new port under development on the Mississippi River intends to draw ships coming through the Panama Canal by shifting cargo from huge boats onto smaller, faster ships that can reach other upriver ports in the south and Midwest in less than a week. The Louisiana Gateway Project, also known as the Plaquemines Port Harbor and Terminal District, is located on 5,500 acres 20 miles south of the Port of New Orleans and 50 nautical miles from the Gulf of Mexico. The site is expected to be fully functioning on a small scale by the spring of 2024, with plans for expansion over the next seven to ten years.
Georgia port employs the pop-up model to relieve supply chain congestion. The Port of Savannah, one of the busiest in the country, is trying a new pop-up container yard concept to help reduce the backlog of cargo that has been piling up for months. Cargo ships waited 12 days to offload at the Port of Savannah in October – three times as long as in 2019. To assist, the port created four in-land pop-up ports, one of which is hundreds of miles inland near the North Carolina border. The number of cargo containers waiting is now approaching seven.
LA-LB ports postpone container dwell fee until Dec. 27. The ports of Los Angeles and Long Beach have again delayed their Container Dwell Fee, this time until Dec. 27. After many postponements, the fee was supposed to go into effect on Monday, Dec. 20. Since the penalty was announced on Oct. 25, the two ports have reported a combined 46% decrease in old cargo on the docks. Following another week of monitoring data, the executive directors of both ports are expected to reassess fee enforcement.
NY-NJ vessel backlog increasing due to increased ship calls. An increasing number of larger container ships have arrived at the Ports of New York and New Jersey, causing more vessels to remain at anchor as berth space fills up to offload the larger ships. The backlog of boats calling at the biggest U.S. East Coast port by volume is the consequence of a 20% increase in imports through October and efforts to seek ports that are not experiencing congestion. The Port Authority of New York and New Jersey (PANYNJ) reported eight container ships anchored as of Wednesday, up from five on Monday.
Air
Emirates SkyCargo reaches a vaccine milestone. Emirates SkyCargo has made a significant contribution to the global distribution of COVID-19 vaccinations. Since October 2020, almost 2800 tonnes of vaccinations have been delivered aboard Emirates aircrafts, equivalent to nearly 600 million doses. With the increased roll-out of vaccination and booster programs across worldwide markets, Emirates SkyCargo saw a steady increase in demand for COVID-19 vaccine transportation in the second half of 2021.
Shippers attempting to avoid bottlenecks are being delayed at the airport. An increase in freight planes and labor shortages at air-cargo hubs such as Chicago O’Hare International Airport has impacted operations for ground-handling businesses that unload aircrafts, resulting in cargo piling up. Airlines, handlers, and freight companies have stated that they are striving to improve loading and security procedures by using warehouse robots and trained sniffer dogs.
UPS orders more Boeing 767 freighters. UPS has placed an order with Boeing for 19 medium widebody 767-300 freighters in response to high persistent air cargo demand, particularly for e-commerce shipments. The new aircrafts will be delivered between 2023 and 2025, and according to aircraft appraiser Avitas, have a combined base value of $1.5 billion.
Air freight capacity increases while prices remain high. Air cargo capacity returned to 2019 levels at the end of November, but strong demand and congestion have pushed up transpacific rates. According to data from Accenture’s Seabury Consulting, air cargo capacity in the last two weeks of November was 5% lower compared with the same period in 2019, but 2% higher than at the beginning of the month. This contrasts with a 9% year-on-year decrease in capacity six months ago and a 20% decrease a year ago.
Sun Country pilots approve four-year labor agreement with Amazon. Sun Country Airlines pilots have accepted a new four-year contract with Amazon, per the organization that represents them. According to the Air Line Pilots Association, 93% of eligible pilots voted to approve the deal, which aligns their pay rates, retirement contributions, commuter policies, and work restrictions with those of industry peers.
Flights grounded due to omicron surge. Major airlines have canceled flights around the world as an increase of omicron cases disrupt Christmas travel. On Christmas Eve, United Airlines canceled nearly 150 flights, citing staffing issues for flight crews and ground workers. Delta Airlines canceled roughly 90 flights, citing a variety of concerns, while Flight Aware reported that over 1,900 flights had been canceled internationally. The cancellations come at one of the busiest seasons for travel
Trucking
Kardashian expresses support for truck driver convicted to 110 years for Colorado tragedy. Kim Kardashian, a celebrity and criminal justice reform activist, has joined the public uproar over a 110-year sentence handed down to a truck driver convicted in a fatal Colorado incident in 2019. This comes four days after a prosecutor who assisted in the conviction requested that the judge review the sentence. Alexis King, a deputy district attorney in Jefferson County, Colorado, submitted a request for a hearing on Friday. More than 4.5 million people have signed a Change.org petition demanding Polis to award Aguilera-Mederos clemency.
Diesel falls for the fifth time in a row. According to the Energy Information Administration (EIA), the national average price of diesel fell 2.3 cents to $3.626 a gallon for the fifth time in a row. Since hitting a 2021 high of $3.734 on Nov. 15, the price of a gallon of fuel has dropped 10.8 cents. The major fuel used by trucks now costs $1.007 more than it did this time last year.
Rail
Landslides in British Columbia impact rail service. Maersk’s most recent customer advisory gives an update on the situation in Western Canada in light of the substantial rainfall that has resulted in landslides. Rail services into and out of the Port of Vancouver have been restored, although gradually.
Other
Supreme Court will hold a special session to discuss vaccine mandates. On Jan. 7, the Supreme Court will hear arguments in the cases of two Biden administration measures pertaining to vaccine mandates for millions of workers. Workers at larger organizations must get vaccinated or wear face masks and be checked weekly under the plan. The regulation might affect 84 million American employees.
Churchill borough council approves development of Amazon distribution facility. After months of hearings and hours of public debate, Churchill’s seven-member borough council approved Texas-based Hillwood Development Co.’s plan to develop a 2.6-million-square-foot Amazon distribution and logistics facility at the abandoned Westinghouse Research and Technology Park in Churchill.
Target sales jump during the holiday season. According to Bloomberg Second Measure, which analyzes anonymized U.S. consumer transactions to calculate revenue, Target improved sales by around 10% in November. The big-box retailer’s gains more than doubled those of leading competitors Walmart and Amazon.
Nike‘s supply shortage suppresses growth once more. Nike Inc.’s sales continue to suffer as a result of global supply-chain constraints. For the second quarter in a row, the sneaker giant said that its growth was stifled by a halt in manufacturing and distribution of its merchandise throughout the world. Nike reported revenue of $11.4 billion in the fiscal quarter ending Nov. 30, up 1% from the same time last year. Analysts predicted $11.2 billion in sales.
What can you do as we head into 2022? The last year has demonstrated that supply chains must be responsive and adaptable in order to deal with market volatility and unforeseen outside impacts. Contact one of our experts to learn how we can help you get ahead and prepare for the unexpected.
