Fewer port calls and increased charges put a strain on North Asian exporters. Cargo owners in Japan and South Korea are paying more to transport their goods to the U.S. than those in China, due to a fall in the frequency of direct trans-Pacific calls as carriers struggle to restore schedule consistency. Because of the declining degree of connection, shippers have turned to short-sea services from Japan and South Korea to China, where cargo is transshipped to mainline lines. Spot prices to carry a 40-foot container from Japan to the U.S. West Coast were almost 64% more than equivalent rates from China, according to data given by ocean freight rate benchmarking platform Xeneta. South Korean rates were around 32% higher.
Dependability of container line schedule falls to 35.8%. According to analysts Sea-Intelligence, container line schedule dependability fell to 35.8% in 2021, with all three major alliances performing below this level. According to Sea-Intel data, the number of 35.8% schedule dependability compared to 63.9% and 78% in 2019. None of the top 14 major container lines achieved schedule dependability greater than 50% in 2021, with the two highest performers being Maersk (46.4% reliability) and subsidiary Hamburg Sud (40.9%). Evergreen ranked lowest among the top 14 carriers, with a schedule dependability of 19.6% last year.
U.S. decides to lift Trump-era tariffs on Japanese steel. The Biden administration is set to present its first major economic plan for the Asia-Pacific region, a move eagerly anticipated by U.S. allies and business organizations concerned about China’s growing influence in the region. With the new Indo-Pacific Economic Framework, the U.S. hopes to collaborate more closely with allied nations on problems such as digital trade, supply chains, and green technologies. The framework is intended to replace the gap created in the U.S. Asia strategy by its 2017 withdrawal from the Trans-Pacific Partnership, a powerful trade pact that the U.S. helped develop as a counterbalance to China.
Slower import growth provides little respite for overloaded U.S. ports. Imports into the U.S. are expected to increase at a slower pace in the first half of the year, compared to the blistering pace in 2021, but even that slower growth on top of already high quantities means ports are unlikely to receive any relief in clearing cargo backlogs. Imports into the U.S. are expected to rise 1.5% in the first half of the year compared to the first half of 2021. In contrast, import growth increased 35.7% in the first half of the year compared to the same time in 2020. Last year’s increase was exceptionally high because imports fell in the first six months of 2020 due to COVID-19-related industrial closures in Asia and subsequent lockdowns in the United States at the start of the pandemic.
Shanghai port container volume reaches new high. In January, container volume at the world’s busiest container port, Shanghai, topped 4.35 million teu, setting a monthly record. The container capacity at Yangshan’s third phase and Waigaoqiao’s fourth phase was 760,000 teu and 401,000 teu, respectively, setting new monthly highs for both terminal projects.
Staff Covid-19 cases and Chinese New Year (CNY) holiday result in stranded cargo at Changi Airport. Covid-19 infections among airport employees, a rush in shipments, and the Chinese New Year holiday have all resulted in significant delays in cargo processing at Changi Airport’s normally efficient terminals. For the past two weeks, freight forwarders have reported that containers that normally take hours to process have taken days. A spokesman for Sats, Changi Airport’s principal ground handler for airfreight, acknowledged the cargo build-up.
Frontier Airlines to acquire Spirit Airlines in a cash-and-stock transaction. Frontier Group Holdings Inc. has agreed to purchase Spirit Airlines Inc. for $2.9 billion in cash and shares, creating a discount-airline goliath. The agreement would combine two of such major airlines, creating the fifth-largest airline in the U.S. and allowing them to compete more aggressively against key competitors.
Trucker anti-vaccine protests disrupt largest border crossing for U.S.-Canada trade. Protesters opposing Covid-19 vaccine mandates unexpectedly halted two-way traffic on North America’s biggest international land border crossing, the Ambassador Bridge. This demonstration led by the so-called Freedom Truck Convoy is just one of many, as their nearly two-week-long protests in Ottawa threaten to spread and seriously interrupt U.S.-Canada trade.
Senators call for suspension of gas tax in order to reduce rising prices. On Feb. 9, some Democratic senators proposed suspending the federal gas tax for the rest of the year to assist consumers grappling with high fuel prices. The legislation was proposed by Senators Mark Kelly (D-Ariz.) and Maggie Hassan (D-NH) with four other Democratic senators quickly signing on as co-sponsors.
Due to temporary operational constraints within the Montreal Port Authority, Canadian Pacific Railway (CP) will enforce the following gate control: Effective 00:01 on Thursday, Feb 10, 2022, until 23:59 on Tuesday, Feb 15, 2022, local time, Minneapolis Terminal will not accept any export loaded or pregate billed empties destined to the Port of Montreal (Racine / Cast / Termont / Viau).
Owner of a U.S. fuel company pleads guilty to defrauding investors out of $6.3 million. In federal court, the owner of a Wisconsin fuel firm pled guilty to three charges of wire fraud, confessing he cheated investors out of over $6.3 million and used the money to charter private aircraft, frequent nightclubs, and rent villas. According to his plea agreement filed in U.S. District Court for the Eastern District of Wisconsin, Blessing K. Egbon, 35, of Milwaukee, the CEO of Exit 7c, admitted to devising a scheme to provide current and potential investors with fictitious revenue and profit figures and forged bank statements for his fuel services business.
Ottawa declares a state of emergency. The Freedom Convoy protests in Canada’s capital have prompted Ottawa Mayor Jim Watson to proclaim a state of emergency in the city. Watson made the statement on Sunday, as the week-long protests in Ottawa’s downtown continued. As the protest continues, Ottawa police stated that they have made several arrests and impounded vehicles. Over 60 criminal investigations have been launched to look into charges of mischief, theft, hate crimes, and property destruction.
For the first time, China becomes top importer of Japanese food. Mainland China surpassed Hong Kong as the leading importer of Japanese food items last year for the first time. Food, farm, forestry, and marine product exports to mainland China increased 35.2% to 222.4 billion yen ($1.93 billion) in 2021, according to Nikkei’s report. Among the most popular items were Japanese sake, whiskey, and snack foods. Despite a 6% increase in food-related imports to 219 billion yen, Hong Kong was the second-largest importer of Japanese products, with the U.S. ranking third.