Ocean Shipping Reform bill passed by the House. The Ocean Shipping Reform Act of 2021 (OSRA) was approved by the U.S. House of Representatives by a vote of 364 to 60. The bill now advances to the U.S. Senate, where legislators are working on a counterpart bill that they hope to propose soon. The bill grants the Federal Maritime Commission (FMC) the authority to set minimum conditions on ocean carrier service contracts and moves the burden of evidence in regulatory proceedings from shippers to container lines. It also makes reciprocal commerce a part of the FMC’s purpose.
96 cargo ships waiting to berth at SoCal ports. On Friday, there were 40 cargo ships waiting for berths within 40 miles of the ports of Los Angeles and Long Beach. However, there were 56 container ships waiting further out at sea, bringing the total to an all-time high of 96, according to the Marine Exchange of Southern California. In addition to the 96 ships waiting offshore on Friday, there were 31 container ships at terminal berths, bringing the total to 127, which is at or near an all-time high. The overall number of container ships at ports or waiting offshore continues to rise: it is up 25% from the beginning of November, 41% from the beginning of October, and 79% from the beginning of September.
Abandoned exporters scramble for space prompting more ad hoc charters. Asian exporters who have been “abandoned” by Maersk are seeking arrangements with competing carriers, sparking a new round of ad hoc charters to North European ports for next month. Maersk’s “strategic change” of its ocean business, announced earlier this year, has resulted in many smaller forwarders and NVOCCs discovering that the carrier will no longer accept their reservations – other than through the Maersk Spot platform – after 1 January. However, with short-term freight rates still high and demand strong ahead of the Chinese New Year (CNY) in the first week of February, operators are scrambling to locate more loaders. Yet, there are no open containerships available.
Amazon makes its own shipping containers and only waits two days outside of ports. Since 2018, Amazon has begun manufacturing its own shipping containers and chartering its own private ships to bypass supply chain bottlenecks. Amazon now uses its own transportation network for 72% of its shipments. Amazon’s technique allows it to avoid port delays of up to two months. While the majority of merchants have been forced to wait months for items that have become stranded at sea, Amazon has been able to transport goods into ports in as little as two days.
Update on Rep. Blumenauer’s Effort to Reduce De Minimis Amount. On December 2, the House Ways and Means Trade Subcommittee conducted a hearing on China trade policy, during which Trade Subcommittee Chair Earl Blumenauer (D-OR) recommended that Chinese corporations utilize de minimis to avoid U.S. trade regulations. Visit the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) website for more info.
12.1 million containers left U.S. ports empty. MarketWatch analyzed data from the country’s nine main ports and found that from January to October, the equivalent of 12.1 million containers had left the country’s largest ports empty, up 46.2% from 2020 and 37.8% from 2019. The number of empty export containers contrasts sharply with the 20.6 million full container TEUs that have arrived at the nine busiest U.S. ports this year, an increase of 22% over last year.
Port of Charleston sets a new all-time cargo record. South Carolina Ports, including the Port of Charleston, has released its monthly cargo data for November, revealing that the port established a new all-time high for the number of containers handled in a single month. SC Ports handled 250,711 TEUs in November at Wando Welch Terminal, North Charleston Terminal, and Hugh K. Leatherman Terminal, a 21% increase year over year. This puts the company’s fiscal year-to-date total to 1.17 million TEUs since July 1, up roughly 17% from the same period last year.
Ports of LA-LB Congestion excess dwell fee delayed again. The ports of Los Angeles and Long Beach have announced a suspension of their “Container Dwell Fee” until Dec. 6. The charge was initially scheduled to go into effect on Monday, Nov. 29. Since the price was announced on Oct. 25, the two ports have reported a combined 37% decrease in aged cargo on the docks. Following another week of monitoring data, the executive directors of both ports are expected to review fee implementation. Not sure when or how the excess dwell fee will impact your business? Contact one of our experts for help and guidance.
No relief in sight from rising air freight charges. According to experts and analysts, shippers anticipating a reduction in air freight prices early next year could be disappointed. A variety of issues, including the Omicron variant and its anticipated influence on belly capacity and lockdowns, increased spending on commodities rather than services, and labor scarcity, might all contribute to prices remaining high.
CMA CGM’s air freight network continues to grow. CMA CGM Air Cargo, which was recently launched, has expanded its cargo network with the inclusion of three additional destinations. The airline has added Dubai, Beirut, and Istanbul to its current routes from Liège to Chicago, New York, and Atlanta. The service between Liege and Dubai will start on May 19, and the A330F capacity supplier intends to transport freight from Africa and Asia to and from Europe. Flights between Liege and Istanbul and Beirut will start in the coming weeks.
Omicron will limit freight capacity while keeping rates high. The Omicron variant is expected to keep air cargo capacity tight, resulting in higher air freight rates. According to investment bank Stifel senior analyst Bruce Chan in the most recent Baltic Exchange market report, the new variation would limit network capacity owing to safety controls, episodic infection, and national reaction.
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Knight-Swift Transportation expands with $150 million acquisition. Knight-Swift Transportation, located in Phoenix, is one of the largest trucking businesses in the U.S., and has announced the acquisition of Midwest Motor Express. This is the company’s second major less-than-truckload (LTL) acquisition in 2021.
CBP and CBSA updated joint emergency protocols in response to flood situation in Canada. Due to severe weather conditions in British Columbia, Canada, which have caused flooding, landslides, road closures, and other supply chain disruptions, Canadian domestic truck carriers may need to travel through the U.S. to reach destinations in Canada. Any Canadian carriers that now operate between the U.S. and Canada, as well as domestically, are recommended to implement standard transit practices. This will expedite crossing and reduce border delays caused by these temporary procedures.
Rail freight rising due to HGV driver shortage. Due to a lack of HGV drivers, more firms are turning to rail freight, while current customers are increasing their needs. Railfreight operators have increased their resources in response. GB Railfreight, which launched a new training facility in Peterborough in April, claimed it runs 400 trains every day and has taught 70 new drivers in the last year.
Can rail transportation put an end to consumers’ long freight waits? While the COVID-19 outbreak has exacerbated supply chain challenges for international shipping and increased the cost of air cargo, rail freight has remained relatively trouble-free. The majority of rail cargo from Asia to Europe are car components, fashion items, healthcare supplies, and technology. The trade channels from Asia have been dubbed The New Silk Road, and a gathering of industry executives is being held in Amsterdam to discuss them.
Landslides in British Columbia Have an Impact on 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.
Senate rejects mandatory vaccination for private employers. The Senate narrowly approved a resolution Dec. 8 to overturn the Biden administration’s rule that companies with 100 or more employees get their staff vaccinated against the coronavirus or submit to weekly testing. The result was 52-48 in favor.
China establishes China Logistics Group. China formally formed a new state-owned logistics enterprise, according to state broadcaster CCTV, in order to reinforce domestic and global supply networks in the wake of the pandemic’s severe disruptions. CCTV said that the new business was founded by the combination of China Railway Materials 000927.SZ, China National Materials Storage and Transportation Group, Huamao International Freight Limited Company Shenzhen Branch, China Logistics, and China National Packaging Corporation.
T.J. Maxx and Off-Price Retailers are set to dominate in 2022. According to Census Bureau data, clothes and accessory retailers in the United States made over 11% more money through October than in 2019. That is a significant increase for an industry that grew by less than 1% in 2019. Retailers were also able to increase profits since a shortage of inventory allowed them to avoid discounts. Year to date, the S&P 500 subindex of clothing businesses has outperformed two of the three off-price retail heavyweights.
Apple’s nightmare before Christmas. It’s being reported that iPhone and iPad assembly was suspended for several days for the first time in more than a decade due to supply chain difficulties and limits on power consumption in China. Apple is falling millions of units short of its manufacturing targets after unveiling the iPhone 13 and new iPads in September, costing the company billions of dollars in sales. It is now too late for consumers in many countries to purchase some Apple items in time to present as holiday gifts.
Amazon fined $1.3 billion in an antitrust case in Italy. Amazon.com Inc. was fined $1.3 billion by Italy’s antitrust authority for undermining competitors by favoring third-party sellers that use the company’s logistics services. According to the regulator, Amazon rewarded sellers in Italy who paid it to utilize its warehousing and distribution services, including making them more likely to show as the default choice, or “Buy Box,” when consumers clicked to buy a product.
Nordstrom pack and holds inventory to reduce supply chain risk. Nordstrom is boosting its usage of pack and hold inventory at its Rack subsidiary “by a factor of two to three times” since it expects global supply chain problems to continue until 2022, according to CEO Erik Nordstrom during the company’s third-quarter earnings call. Nordstrom Rack will acquire higher quantities of relevant products while they are available and reserve a part of them for deployment “in moments of strong demand, restricted supply, or system bottlenecks,” according to Nordstrom.