Ocean
Federal Maritime Commission wants more oversight for container shipping industry. The U.S. Federal Maritime Commission’s top official says more oversight is needed, even though the agency has had unprecedented support from Congress and the White House for holding the container shipping industry accountable to its customers. FMC Chairman Daniel Maffei acknowledged he may have been too optimistic about the ocean carriers’ ability to self-regulate, particularly as it relates to late fees associated with container demurrage and detention while speaking at the National Industrial Transportation League’s Transportation Summit. “I will admit to being a bit naïve,” Maffei said. “I thought our [interpretive rule on demurrage and detention, issued in April 2020] was pretty simple to understand: If the fee incentivizes cargo movement, it’s appropriate. If it doesn’t, it isn’t.” The FMC is considering a new rule on demurrage and detention billing practices that could apply to marine terminal operators and non-vessel-operating common carriers as well as the vessel operators, FreightWaves reports.
Hyundai cargo ship completes first autonomous long-haul journey. a Hyundai cargo ship completed the first trip across the Pacific controlled by autonomous shipping technology this month. The Prism Courage, an “ultra-large” liquid natural gas tanker operated by SK Shipping built by HD Hyundai subsidiary Avikus made the trip. The tanker was equipped with the company’s HiNAS 2.0 technology, a Level 2 oceanic shipping automation suite broadly analogous to the same tier of SAE autonomy in cars, according to thedrive.com. HD Hyundai claimed a 5 percent reduction in greenhouse gasses and a 7 percent increase in fuel efficiency on Prism Courage’s journey, while reportedly avoiding approximately 100 potential collisions.
Ports
U.S. port queue numbers remain down from highs. U.S. Ports are getting recovery time as container ship traffic slows. “This appears to be a much needed respite for some ports that have seen significant delays over the course of the year to date,” said S&P Global Commodity Insights. “Congestion is easing in [some] areas,” said Flexport. It advised importers to “take advantage of currently available space.” According to data from the Marine Exchange of Southern California, there were only 25 container ships waiting to berth in the ports of Los Angeles and Long Beach last Friday. That’s the lowest tally since July 28, 2021, FreightWaves reports.
Global efficiency index sees Southern California’s ports ranked least efficient in 2021. The second edition of the Container Port Performance Index, a collaboration between the World Bank and S&P Global Market Intelligence, ranked the ports of Long Beach and Los Angeles in the last two spots of the 370-port global index. Rankings were determined by the amount of time vessels spend in port making a cargo exchange. Averages were weighted by call size and vessel size, according to FreightWaves.
Customs
New Aluminum Import Monitoring Requirements Start June 29. From the NCBFAA Monday Morning eBriefing: “The U.S. Commerce Department Aluminum Import licensing applications will require both fields of “country of largest smelt” and “country of second largest smelt,” starting June 29. Commerce defines the field for the country of smelt for the largest (and second largest) volume of primary aluminum as the country where the largest volume of new aluminum metal is produced from alumina (refined aluminum oxide) by the electrolytic Hall-Héroult process. “Based on public comments in response to the preliminary rule, in the final rule, it was determined that importers/[customs] brokers would need time to gather the required information for the countries of smelt and a grace period was granted for these fields; importers were permitted to indicate ‘unknown’ for one year upon implementation of the regulations,” Commerce said in a trade message. Commerce extended the temporary period to allow for license applicants to state “unknown” in the fields for countr(ies) of smelt for the largest and second largest volume of primary aluminum until June 28. The department will begin requiring the requested information for these fields for license applications on or after June 29, meaning that filers may no longer state “unknown” for these fields after that date.” For more information, visit the Aluminum Import Monitoring (AIM) website.
Trucking
Why are gas prices at record high? Russia’s invasion of Ukraine, China lockdowns ending, less oil and gas from other sources, and a strong demand for gas are all contributing factors to the continued rise in gasoline prices across the U.S. and the world. Regular gasoline hit a record $4.87 a gallon in the U.S. Monday according to AAA’s survey — up 25 cents a gallon in just the last week. Tom Kloza, global head of energy analysis for the OPIS, said the national average is expected to hit $5 a gallon within the next two weeks. More than one out of every five gas stations nationwide is now charging more than $5 a gallon for regular, and just more than half are charging $4.75, according to CNN.
U.S. supply chain disturbances easing. Transport Topics reports that a “gauge of supply chain pressure in the U.S. economy fell to the lowest level since December 2020, as activity such as trucking cools from elevated levels with few signs yet of a worrying collapse.” The Logistics Managers Index dropped to 67.1 in May, the second straight decline from a record of 76.2 reached in March. Faster gains in warehouse and inventory costs offset slower moves in transport prices. According to the survey-based report released June 7, “the logistics industry continues to expand, driven primarily by strong growth in the inventory and warehousing metrics.”
Rail
Bill introduced to give tax credit for scrapping old railcars. A bipartisan group of congressional leaders has introduced legislation that would provide a tax credit for companies seeking to replace or modernize “inefficient, outdated” freight railcars. The Freight Railcar Act, introduced last Friday has 29 co-sponsors. An iteration of this bill was first introduced in the House in August 2020. A similar bill was introduced in March 2021. The Railway Supply Institute (RSI), a trade group representing railcar and rail equipment manufacturers, praised the reintroduction of the bill.
Air
China airfreight rates expected to rise over coming months. There is expected to be a surge in volumes as production levels continue to ramp up and companies look to meet a backlog of demand that has built up as a result of Shanghai emerging from a months-long lockdown. Rates out of Hong Kong and China remained high over the last couple of months despite an easing of demand. “As China takes some of its biggest steps toward reopening major cities, we expect rates to climb again over the next month,” wrote Bruce Chan, senior analyst at investment bank Stifel. “With Covid-19 cases declining in Shanghai, for example, the city is entering its final stages of reopening, which is expected to carry through mid-July, and we anticipate that the significant backlog will be cleared through origin port and airport facilities.”
Two of the world’s largest maritime carriers expanding in air freight. CMA CGM announced this week that CMA CGM Air Cargo is officially a French airline, having received its air carrier accreditation from the French Civil Aviation Authority. CMA CGM’s air cargo business is relocating its headquarters from Belgium’s Liège Airport to Paris-Charles de Gaulle International Airport (CDG). Additionally, Maersk completed its $644 million acquisition of Senator International, a freight forwarder located in Hamburg, Germany that specializes in managing commercial airfreight shipments. Maersk says it hopes to transport around one-third of its annual air volumes within its own controlled freight network, which includes Maersk freighters as well as completely leased freighter services from other cargo carriers.
International
First international multimodal transportation container departs from Xiamen to Europe. Last week, a China-Europe freight train loaded with automobile lamps and other goods departed on Saturday from Xiamen, Fujian province, bound for Moscow, Russia, marking the first international multimodal transportation container from Xiamen to Europe. The shipping-rail intermodal transportation channel from Taiwan to Russia has provided a faster solution for sending goods from Taiwan and Southeast Asia to Russia, cutting the transportation time by nearly half that of the traditional shipping service and with lower logistics costs for exporters.
Forwarders warn to expect continued delays after Shanghai lockdown is lifted. As Shanghai recovers from lockdown, continuing restrictions indicate that it may take weeks or months to recover to standard production levels and shipper container volumes. Ocean carrier schedules, according to Loadstar, will most likely return to normal in late June.
Other
Apple shifting iPad production from China to Vietnam. Apple is moving some iPad production out of China and shifting it to Vietnam after strict COVID lockdowns in and around Shanghai led to months of supply chain disruptions. This is a first for the tech giant, and they have also asked multiple component suppliers to build up their inventories to guard against future shortages and supply snags.
Trade between the U.S. and Pakistan continues to increase. Pak-USA trade of goods and services witnessed a surplus of 55 percent during the first ten months of FY2022 as compared to FY2021, according to the latest report. The U.S. Embassy in Islamabad shared the news on its official Twitter account last week. “The United States has long been Pakistan’s #1 export destination, and our trade continues to grow. U.S.-Pakistan trade in the first ten months of Pakistan’s FY 2022 increased by 34 percent compared to the same period in FY 2021,” said US Embassy in its tweet.
