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Biden Seeks Changes to the Shipping Act, Supply Chains Threatened by Spread of Airspace Restrictions, U.S. Tightens Sanctions by Freezing Russian Central Bank Assets

By March 3, 2022 No Comments


Biden seeks changes to the Shipping Act. Under legislation proposed in the House of Representatives, President Joe Biden and several members of Congress are calling for ocean carriers to lose their limited antitrust protection. The move comes as many foreign shipping businesses have seen their income and earnings quadruple or triple as the cost of transporting products from overseas to American ports has surged, fueling inflation, according to economists.

Maersk, MSC, CMA CGM have joined the Russian cargo suspension. Maersk, its 2M Alliance partner Mediterranean Shipping Co., and CMA CGM have joined Hapag-Lloyd, Ocean Network Express (ONE), and Yang Ming in suspending Russian cargo bookings in reaction to increasing global sanctions following Ukraine’s invasion.


China demands U.S. take measures to strengthen relations. China’s top ambassador has urged the U.S. to make efforts to repair relations as tensions rise over Taiwan, trade, and other concerns. Foreign Minister Wang Yi’s remarks on Monday were delivered virtually at a forum commemorating the 50th anniversary of the Shanghai Communique, which was signed during President Richard Nixon’s historic visit to China in 1972 that resulted in the U.S. and China establishing diplomatic relations seven years later, after which the U.S. severed official connections with Taiwan. China claims Taiwan as its own territory and is demanding the U.S. recognize it as such or it will be brought under its control by force if necessary.


Biden expected to ban Russian ships from entering U.S. ports. According to officials close to the matter, the Biden administration is planning to prohibit Russian-flagged ships from accessing U.S. ports, extending sanctions imposed during Russia’s invasion of Ukraine. The proposal, which follows a similar prohibition in the U.K., would be mostly symbolic. According to maritime and port officials, Russian commercial ships account for less than 1% of cargo shipments to the U.S.

Southeast ports, carriers sign agreement to modernize chassis pool. Five partners have signed an agreement to build the South Atlantic Chassis Pool 3.0, which will begin serving the area in October 2023. SACP 3.0 will be built on a single provider pool structure, with the present pool being upgraded and expanded. Truckers, beneficial cargo owners, ocean carriers, and port users will have access to 60,000 chassis. The group hopes that refurbishing and replacing chassis through the pool would increase fluidity while addressing the region’s container capacity demands. SACP 3.0 will be available in over 75 sites in Alabama, Florida, Georgia, North Carolina, and South Carolina.


Supply chains threatened by spread of airspace restrictions. The European Union (EU) has blocked its airspace to Russian planes as sanctions against Russia continue to be implemented in response to the Ukraine war. Ursula von der Leyen, the president of the European Commission, declared that all aircraft owned, operated, or controlled by Russian organizations will be barred from entering EU airspace. Several EU member nations, as well as the U.K., Norway, Iceland, North Macedonia, and Canada, had already declared restrictions, and Ukrainian airspace was blocked last week.

 Air freight rates likely to rise globally as Russia’s AirBridgeCargo leaves Europe. Air cargo shippers on Asia-Europe routes could expect a price increase now that a significant quantity of capacity has been removed from the market. Because of the EU and UK ban on Russian aircraft flying in their airspace, Volga-Dnepr Group’s AirBridgeCargo has removed all of its aircraft from Europe in the last three days.

Vietnam reopens international flight routes. According to a transport official, Vietnam has restored air lines to 20 nations and places as part of measures to revive socio-economic activity, compared to 28 in the 2019 winter flight schedule prior to the Covid-19 pandemic. Australia, China, Japan, South Korea, Singapore, France, Germany, Russia, and the U.S. were among the reopened routes.


New battle sparks between CN, CP over KCS. A roadblock has surfaced in the year-long, multibillion-dollar battle between railroad giants Canadian National Railway (CN) and Canadian Pacific Railway Ltd. (CP) over ownership and operation of the smaller, but strategically vital, freight carrier Kansas City Southern (KCS). Canadian National filed a “responsive action petition” with the U.S. Surface Transportation Board, the ultimate decision-making government agency on the merger, on Feb. 28. The sale and operation agreement, according to CN, should be subject to “certain restrictions connected to the approval of the imminent CP-KCS merger.”

Canadian rail workers threaten strike, latest disruption to fertilizer supply. A labor dispute at one of Canada’s major railways is threatening to interrupt global fertilizer supply just as farmers are preparing to grow spring crops. According to their union, around 3,000 Canadian Pacific Railway Ltd. (CP) employees voted in favor of a strike on March 16, if necessary. Canada, along with Russia and Belarus, is one of the world’s primary producers of potash, a potassium-containing fertilizer. A potential work stoppage comes amid fears about supply shortages as a result of Russia’s invasion of Ukraine and sanctions on Belarus.


DCLI expanding fleet with 40,000 domestic chassis. DCLI, a U.S. chassis provider, is investing heavily in its domestic intermodal business, purchasing 40,000 domestic chassis to be delivered over the next 12 to 18 months, the firm said Wednesday at JOC’s TPM22 conference in Long Beach. The decision comes as DCLI observes an increasing number of merchants and U.S. transportation businesses adopting more private containers for rail transport.


Recent developments amid Russia-Ukraine crisis:

War on Ukraine will have effect on China-Europe rail freight and raise rates. The Ukraine conflict and Russian sanctions might have far-reaching ramifications for China-Europe rail freight. Ukrainian Railways has stated that, despite switching to emergency operations, it will continue to operate for both passengers and freight. The nation is a secondary gateway into Europe for China-Europe rail freight, with the majority of trade traveling through Russia and Belarus.

Ukraine’s air freight masterpiece destroyed. According to the Ukrainian government’s official Twitter account, Russian military damaged the largest commercial cargo aircraft during fighting at an airport near Kyiv. The Antonov AN-225, called Mriya, or “Dream,” had six engines, a cargo capacity of 225 tons, and a fuel consumption of around 20 tons per hour of flight. According to the Ukrainian government, Russia burned the plane during its attack on the Antonov airstrip in Gostomel, on the outskirts of Kiev.

Airbus suspends support services to Russian airlines. Airbus has stopped providing support services to its clients in Russia in response to international sanctions imposed by the European Union(EU), further impeding Russian airlines’ capacity to operate flights. In accordance with the new restrictions, the planemaker has also banned the delivery of replacement parts for its aircraft to Russian carriers, according to a statement. Three of Russia’s largest Airbus operators include the national flag airline Aeroflot, S7 Airlines, and Rossiya Airlines.

U.S. tightens sanctions by freezing Russian central bank assets. The Treasury Department said on Monday that it will suspend Russian central bank assets held in the U.S. and apply penalties on the Russian Direct Investment Fund, a sovereign wealth fund managed by a close confidant of President Vladimir V. Putin. The actions are intended to limit Russia’s ability to use its war chest of international reserves to mitigate the impact of sanctions imposed by the U.S. and its European allies in response to Russia’s invasion of Ukraine.

Trucking, logistics companies band together to aid Ukrainians. A coalition of carriers and logistics companies has teamed together to raise funds to assist Ukrainian people who have remained in the country throughout Russia’s armed incursion. In fewer than three days, the Trucking & Logistics Professionals for Ukraine (TLPU) network of 16 firms provided more than $300,000 in humanitarian supplies.

Ukraine shut down ports, grain facilities. Due to Russia’s military invasion, the Ukrainian government banned commercial shipments from its ports, and several privately held grain storage and processing facilities in Ukraine elected to cease operations for the safety of their staff. Meanwhile, Russia, the world’s top wheat exporter, allegedly kept its Black Sea ports open, but it closed all commercial activity at the Port of Azov on the Azov Sea. The Black Sea ports handle the majority of Russia’s wheat exports.