COVID-19 Latest Updates

Major Carriers Scrambling Over Shanghai Lockdown, White House Aims to Increase Funding for Trucking Regulators, Johnson & Johnson Suspends Sales in Russia

By March 31, 2022 No Comments

Ocean  

Indian ports seeing connectivity rush amid carrier expectations of trade growth. Pacific International Lines (PIL), Regional Container Lines (RCL), and Interasia Lines (IAL) have reached a new consortium agreement, just after last week’s Wan Hai Lines announcement of an independent routing between South China, Vietnam, and East India. Ningbo, Shanghai, Ho Chi Minh, Singapore, Chennai, Visakhapatnam, Port Klang (West Port), Ho Chi Minh, and Ningbo will be in the joint loop. The inaugural call is scheduled for April 22 at Ningbo, and a fleet of four vessels with a 2,000 TEU average capacity will be deployed.

Shippers and major carriers left scrambling over Shanghai lockdown. Home to the world’s busiest container port, many major carriers are worried about the Shanghai Lockdown order’s effects on worldwide shipping. 26 million residents of Shanghai are affected by the lockdown. China announced it would be locking down the eastern side of Shanghai for five days to employ mass COVID testing and screening, followed by similar protocols for five days on the western side of the city. All people must stay home, and all businesses except essential services were ordered to close. Workers were told they must work from home and all transport services were halted across Shanghai. This is the most significant restriction in China since the emergence of the COVID virus in Wuhan in 2019.

Customs

U.S. Customs and Border Protection (CBP) General Order Discretion for Expeditors International Shipments. U.S. Customs and Border Protection issued the following bulletin in regards to a recent cyberattack: CSMS #51431651 – CSMS Message: “Due to issues stemming from a cyberattack, CBP is exercising discretion in the issuance of liquidated damages and penalties for shipments, where Expeditors International is the Customs Broker, that do not move to a General Order warehouse within the regulatory timeframes. The purpose of this CSMS is to notify carriers, terminal operators and other custodians of unentered merchandise to exercise similar discretion in affected shipments and to prevent unnecessary cost of General Order. This guidance applies to both direct arrival into the U.S. and in-bond movement to subsequent ports. This discretion will expire upon Expeditor’s return to full automated operations. CBP will issue a notice advising of the end of the discretionary period.”

Ports

U.S. Supreme Court steps in to stop efforts to end NY/NJ Waterfront Commission. The U.S. Supreme Court has stepped in to decide the matter regarding the ongoing dispute between New York and New Jersey over the fate of the harbor commission. The commission was originally designed to eliminate organized crime and corruption in the operations at the ports in New York and New Jersey. The court agreed to review the case and issued a preliminary induction. In 2019, a federal judge blocked New Jersey’s efforts to disband the commission, and New York has been fighting the case through the court system ever since. According to New York, the original agreement says that it can only be ended under mutual agreement between the two states.

Ocean carriers hauling empty containers from ports along U.S. West and East coasts. Marine terminals across the country are overcrowded, and concerns are growing about another import wave. Sweeper ships are aiming to remove huge numbers of empty containers from both marine terminals and motor carriers. Truckers say they are not getting fully compensated for handling costs of empty containers, and not all carriers are timely in retrieving the empty containers.

Air

Antonov issues appeal to raise funds to replace AN-225 “Mriya” aircraft. The unique craft was reportedly recently destroyed during the conflict in Ukraine. On March 25, the Ukrainian aircraft design and manufacturing company Antonov issued a statement on Facebook outlining its plans to create an international fund to enable the building of a new version of Mriya. 

DHL Express enters long-term agreement with freighter operator Cargojet. The express firm may potentially acquire shares in the freighter company. Cargojet will provide an extra five B767 freighters in addition to the 12 freighters currently used by DHL Express. The five-year deal has an option for an extra two years. The extra aircraft will be put into action in 2022 and 2023 and will support DHL’s requirements for Asia, Europe, and North, South, Central and Latin America. CargoJet intends for DHL to be its inaugural launch customer for the B777 widebody long-range conversion cargo aircraft.

Rail

Four Class I railroads donate nearly $2.3 million to support humanitarian efforts in Ukraine. Canadian Pacific, Union Pacific, Canadian Railway, and Kansas City Southern have donated nearly $2.3 million to support humanitarian efforts in Ukraine and the surrounding region. The support by Class I railroads and other rail companies over this past month come as rail sector officials in Europe and the U.S. form a multinational Support Ukraine Rail Task Force that will coordinate technical, mechanical, and policy support for Ukrainian freight and passenger rail companies.

Trucking

High fuel costs could affect availability of truck capacity. Higher fuel prices and market volatility make it unclear how far truckload spot rates might drop, as the U.S. truckload spot market is on the edge of a turn in its pricing cycle. Increases in fuel costs and surcharges are met with declines in linehaul rates and may affect the availability of truck capacity in weeks to come. Many U.S. shippers are struggling to keep rising transportation costs within budget and agreed to substantial rate increases in annual contract renewals during the first quarter in order to secure truck capacity.

Navistar Inc. recalling 2,804 of its flagship International LT tractors across five model years. Improper battery cable wiring in specially upfit trucks can lead to a fire in the suspect population. Affected vehicles include those upfitted by Navistar Truck Specialty Center (TSC) between February 2017 and February 2022 with a 1500W Purkeys inverter system. Similar vehicles are reportedly unaffected. According to the National Highway Traffic Safety Administration, the inverter cables were not routed according to Navistar’s routing and clipping standards. The condition can only be detected by removing the driver-side skirt.

White House budget proposal aims to increase funding for federal trucking regulators. Revealed March 28, the Federal Motor Carrier Safety Administration’s (FMCSA) main accounts would see a slight increase over the most recently enacted budget in President Biden’s latest budget request. The White House is requesting $367.5 million for 2023 for FMCSA’s safety operations and programs. The budget proposal for the agency’s safety grants division is $506.1 million. The budget request responds to supply chain disruptions, and includes allocating $1 billion for a Department of Energy program that would assist in facilitating supply chains.

International

European importers face growing shortage of available storage in container yards and warehouses. Lead time delays, disruption and unreliable supply chains are forcing European importers to increase orders and build inventory buffers. Schedule reliability continues to reflect record lows, and growth in demand and congestion is persistent across Northern Europe. According to Sea-Intelligence Maritime Analysis, the on-time performance of vessels on the Asia-North Europe trade lane dropped to 15 percent in February. That’s down 2.6 percentage points compared with the previous month and a 12-percentage-point decline year over year.

Other

California Governor proposes new plan to ease burden of gas prices on state drivers. California Gov. Gavin Newsom proposed a new plan including reduced fuel taxes, cash for car owners, and temporarily providing free public transportation in order to ease worries caused by higher gasoline prices. The package, unveiled Wednesday, is worth $11 billion and would include $400 direct payments to Californians per vehicle they own, up to two vehicles, and does not have an income cap. 

50th anniversary of Boeing delivering first widebody freighter aircraft. March 2022 marks the 50th anniversary of Boeing delivering its first widebody freighter aircraft. The Boeing 747 marked a new era in cargo shipping with its extended cargo capacity and nose door that allowed for large objects. It allowed goods that had to be transported by sea for years to finally be shipped by air. 

Hot wings to fly over Texas in time for NCAA Final Four. Just in time for the NCAA Final Four, hot wings will be flying in Texas via drones. Brinker International, the owner of Chili’s Grill & Bar, Maggiano’s Little Italy, and virtual brands It’s Just Wings and Maggiano’s Italian Classics, has taken to Granbury, Texas, to operate a new drone powered food delivery pilot program. Brinker has partnered with drone provider Flytrex and its longtime partner Causey Aviation Unmanned, and the new pilot is an expansion of their already existing relationship. Newly granted Federal Aviation Administration approval to fly a delivery radius of one nautical mile allowed the delivery service to operate. Eligible customers that have opted into the service can use the Flytrex app to order food.

Recent developments amid Russia-Ukraine crisis:

President Biden says Russia should be removed from Group of 20 over actions in Ukraine. President Biden’s comments come after Russia confirmed that Putin plans to attend the G-20 summit later this year. He requests that Ukraine be allowed to attend if Russia will be there. China has said the bloc needs to work together on issues from global economic growth to the recovery from the pandemic and signaled it stands by Russia’s continued G-20 membership. Expulsion from the group requires a unanimous vote among members.

Russia and Ukraine prepared to hold ceasefire talks in Turkey. The cease-fire would mark an end to more than a month of war. Russian forces have continued to fire missiles at several Ukrainian cities, and Ukrainian forces are continuing their advance to retake territory north of Kyiv. Ukrainian President Volodymyr Zelensky has outlined the conditions under which Ukraine might accept neutral status as part of a peace settlement with Russia over the weekend and has said that his country could only hold a referendum on neutrality after Russian occupation forces leave Ukraine.

$63 billion worth of damages to Ukraine’s infrastructure caused by war. According to an estimate by the Kyiv School of Economics, Russia’s war has caused $63 billion worth of damages to Ukraine’s infrastructure so far. As one of Europe’s poorest countries, the damage will be a huge challenge for Ukraine. The amount is equivalent to more than a third of its gross domestic product of $155 billion in 2020.

Johnson & Johnson suspends sales of personal-care products in Russia. Johnson & Johnson suspended sales of its personal-care products in Russia, though the company says it will continue to sell medicine and medical devices there. In a statement posted online Tuesday, the company outlined new steps it is taking as a result of the Russia-Ukraine crisis. J&J cited the “increasing scale of the humanitarian crisis” for its decision to suspend the supply of personal-care products to Russia. They did not specify which products would be affected, and also specified that they would be doubling their donation to support humanitarian assistance from $5million to $10million.