Ocean
Imports into the U.S. remain high, up 40% from pre-COVID 2019. As predicted, demand surges ahead of the Chinese New Year (CNY) on Feb. 1 causing rates to rise again. Capacity is full into CNY, with the space conditions to LAX being the worst due to port congestion, which caused vessel delays. Urgent shipments to LA-LB must deal with new carriers that only offer premium-high prices. Ref: HLS Transpacific Market Report Wk 52.
U.S. Government to digitize crew checks on ships bound for the U.S. After ten years of developing an automated system for screening crews embarking on commercial ships, the U.S. is now ready to go paperless. U.S. Customs and Border Protection is revising its regulations in an interim final rule to be published in the Federal Register, requiring vessel owners to submit Form I-418, known as the passenger/crew list, in electronic form rather than the present paper requirement. The new procedure is intended to streamline vessel arrivals and departures by removing unnecessary data given by vessel masters and agents and simplifying vessel inspections. The regulation will take effect 60 days after it is issued.
Evergreen prepares cranes following completion of LA port dredging. Evergreen Marine has purchased six new ship-to-shore cranes after completing a portion of a multi-year project that would allow its Port of Los Angeles marine terminal to accommodate two post-Panamax container ships at the same time and enhance terminal capacity by 30% over the next decade. The ocean carrier said in a regulatory filing with the Taiwan Stock Exchange on December 27 that its subsidiary Everport Terminal Services had entered into a $22.2 million leasing arrangement for the six container gantry cranes.
U.S. chassis supply remains weak as the new year approaches. According to U.S. chassis makers, it will take until the third quarter of 2022 for every chassis order placed in 2021 to be filled, keeping the U.S. container shipping industry in a vulnerable position during the first half, barring a dramatic slowdown in imports. As importers take longer to offload containers and transport companies struggle to return empty boxes, chassis are moving more slowly. When terminals refuse to take empty containers, the chassis beneath is therefore left in limbo. Furthermore, chassis producers in the U.S. have often been unable to retain enough workers to run production lines. Chassis makers are also experiencing difficulties in sourcing subcomponents like air tanks, axles, and suspension systems, causing the manufacturing cycle to take longer than expected.
Ports
Ports of Los Angeles and Long Beach postpone container dwell fee for the 8th time. The ports of Los Angeles and Long Beach have again delayed their “Container Dwell Fee,” this time until Jan. 3, 2022. After many delays, the fee was supposed to go into effect on Monday, Dec. 27. Since the fee was announced on Oct. 25, the two ports have reported a combined decrease of 41% in lingering cargo on the docks.
Tacoma port project aims to reduce congestion. At the Port of Tacoma, a new project to increase container storage capacity will hopefully help operations flow more smoothly. The port has received a $15.73 million grant from the Maritime Administration’s Port Infrastructure Development Program (PIDP) to help fund the building of increased container storage on a 24-acre site owned by the port. The off-dock location, which is anticipated to be finished by 2023, will free up essential on-dock space at surrounding ports.
Air
UPS to increase air and ground fuel surcharges. UPS Inc. will increase the fuel surcharges it assesses on the majority of its air and ground delivery customers. Surcharge levels on domestic air and ground services, including transborder shipments, will climb between 8% and 10% beginning Jan. 3, according to projections by consultant TransImpact LLC based on information provided on UPS’ website. According to the website notification, surcharges for international air transport will also rise.
Trucking
Price of diesel falls once again. The national average price for a gallon of diesel continues to drop as 2021 comes to an end, falling further 1.1 cents in the Energy Information Administration’s (EIA) weekly report. Trucking’s major fuel finished the year at $3.615 per gallon, marking the sixth consecutive weekly fall. The EIA recorded the national average as $2.64 per gallon in its first report of 2021. Diesel prices fell in nine of the ten locations examined. Only California witnessed a rise, with prices increasing by 0.3 cents to $4.771 a gallon. The Rocky Mountain area had the greatest decline, 2.7 cents, with a gallon currently costing $3.704.
Used class 8 vehicle prices increase. According to ACT Research, the average retail price of a used Class 8 vehicle in Nov. increased 11.8% over the previous month’s record and increased 67.8% over a year ago. The November average retail price set a new high of $80,769. The average retail price for a Class 8 was $72,204 a month ago. According to ACT, it was $48,118 a year ago.
Convicted truck driver may have prison term reduced. A court has scheduled a hearing on Jan. 13 to examine Rogel Aguilera-110-year Mederos’s sentence for his role in a 2019 accident in Colorado that killed four people. The resentencing hearing was scheduled at the request of the prosecution in the case, who stated that their office will suggest a term of 20 to 30 years. Aguilera-Mederos was sentenced to 110 years in prison after being convicted in October of four counts of vehicular murder and 23 additional offenses. The punishment has sparked widespread outrage, with almost 5 million people signing a Change.org petition urging Colorado Gov. Jared Polis to commute Aguilera-Mederos’ sentence or grant clemency. Kim Kardashian, a celebrity and criminal justice reform activist, recently tweeted about the Aguilera-Mederos case, urging Polis to intercede.
Rail
Canadian railway (CN) partnership with Google Cloud paves the way for technology innovation. CN announced a seven-year agreement with Google Cloud aimed at advancing their technology initiatives into what CN refers to as “digital scheduled railroading” (DSR), or the next level beyond precision planned railroading. According to CN (NYSE: CNI), DSR will update the railway’s technological infrastructure in the cloud and give consumers more access throughout the supply chain. According to a Dec. 14 press release, CN will collaborate with Google Cloud to create an intuitive digital platform driven by Google Cloud’s AI and machine learning technologies to provide clients with more visibility for service planning, shipping, tracking, and payment. CN will also attempt to migrate the majority of its digital infrastructure to Google Cloud to “scale with customer and industry expectations.”
Other
Despite bottlenecks and Omicron variant, holiday sales up 8.5%. According to one spending indicator, holiday sales increased at the quickest rate in 17 years, despite buyers grappling with increasing costs, product shortages, and a raging new COVID-19 variant in the final few weeks of the season. Mastercard SpendingPulse, which measures all types of payments such as cash and debit cards, said on Dec. 26 that Christmas sales were up 8.5% over the previous year. According to Mastercard SpendingPulse, an 8.8% rise was forecasted. The findings, which covered the period from Nov. 1 to Dec. 24, were driven by purchases of apparel and jewelry. Holiday sales increased 10.7% over the pre-pandemic 2019 holiday season.
McDonald’s forced to ration french fries due to supply shortage in Japan. After floods at a Vancouver port and the coronavirus pandemic cut off supplies of one of its core offerings, McDonald’s in Japan will only provide small-sized french fries to customers. While the fast-food business is working with suppliers and importers to find alternate flights, it will only sell the small size until Dec. 30. The medium and large-size options were removed from the menu in hopes that as many customers as possible will continue to have access to french fries. McDonald’s believes that supply concerns affecting its 2,900 Japanese locations will be fixed by New Year’s Eve and that the change will not affect their hash brown offerings. To reflect the smaller portion, customers will receive a 50 yen (44 cents) discount on set foods.
Is your business ready for the 2022 Winter Olympic Games and Chinese New Year? Although the Chinese New Year (CNY) is China’s most significant public holiday, another event that may have an impact on your business is the 2022 Winter Olympic Games. Set to be hosted in Beijing, Yanqing, and Zhangjiakou, China, the Chinese government has announced that all heavy industrial companies in northern China will be closed from Jan. 1 to Mar. 8, 2022. Contact one of our Logistics Experts to understand how you can be well-prepared to prevent supply chain interruptions during forthcoming Chinese holidays and festivities.
