COVID-19 Latest Updates

Rio Tinto and BP Agree to Year-Long Trial of Biofuels, Environmental Groups Petition for Ban on LNG Delivery by Rail, Transatlantic Airfreight Rates Falling as Airlines Ramp Up Passenger Flights.

By May 26, 2022 No Comments

Ocean

Rio Tinto and BP agree to year-long trial of biofuels. The results of what will be one of the maritime industry’s longest sustained trials of biofuels between BP and Rio Tinto will help find ways to reduce carbon emissions from marine fleets and inform future biofuel strategy. The project plans to run a year and explore the longer-term results of using biofuel to help reduce carbon emissions from Rio Tinto’s marine fleet. Maritime Executive reports that during the trial BP will supply the marine biofuel for approximately 12 months to be used on Rio Tinto’s RTM Tasman. The 205,432 dwt bulker will maintain normal operations with a mix of Transatlantic and Atlantic-Pacific routes during the trial. 

Shippers worry about import volumes after Shanghai lockdown is lifted. The level of import volumes following the Shanghai lockdown are up for debate among shippers and forwarders in the Asia-US trade. Some are anticipating a sustained spike in imports, while others expect a slower and more gradual volume increase on trend with a normal season. Shippers and non-vessel-operating common carriers (NVOs) are facing difficulties in planning their supply chains for the rest of the year as a result of uncertainties surrounding when China will end the COVID-19 lockdown in Shanghai. Contact a Navegate expert to learn more. 

Ports

West Coast longshore union contract talks suspended until June 1. Contract talks between the West Coast waterfront employers represented by the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) have been suspended until June 1, according to JOC.com. Individual committee meetings on specific matters such as worker safety are continuing as of now. The ILWU requested a temporary break in the talks that began May 10, and asked to suspend negotiations from Friday (May 20) to June 1. As of now it is still unclear why the ILWU asked for the break. 

Trucking

California rolls out next steps for fully zero-emission drayage fleet by 2035. The state of California has announced that it plans for drayage trucks manufactured with an engine year model of 2007 to 2009 to no longer be permitted to operate in the state’s ports and rail yards by the end of the year. Engines prior to those years have already been banned. Additionally, the California Air Resources Board’s (CARB) latest proposal would set a phaseout of older trucks through both a calendar and mileage approach, according to FreightWaves. 

UPS imposes surcharges on deliveries between U.S. and Canada. UPS Inc. says that it has imposed a surcharge of 30 cents per package on its Standard ground-delivery service from the U.S. to Canada, as well as raised the surcharges on six expedited delivery products in the northbound U.S.-Canada market. According to the UPS website, the surcharge additions and adjustments took effect Sunday. The new surcharge on UPS Standard, the UPS ground-delivery product, will be applied as a per-package charge. All levies will be in effect until further notice. The levies on the expedited delivery products will be applied as a rate per-pound based on a shipment’s weight.

Rail

Environmental groups petition for ban on LNG delivery by rail. Last week, environmental groups Berks Gas Truth, Clean Water Action, Clean Air Council, Delaware Riverkeeper Network, Earthworks, and Food & Water Watch and League of Women Voters of Delaware delivered petitions to the Pipeline and Hazardous Materials Safety Administration (PHMSA) in opposition to the transportation of liquefied natural gas (LNG) by rail. The petitions ask PHMSA to adopt the new rule proposed by the Biden administration to suspend the Trump administration’s 2020 rule that lifted the ban on LNG by rail. Progressive Railroading reports that the petition also calls for special permits to allow LNG-by-rail to be denied before the ban is adopted. The petitioners claim the process of transporting LNG is a threat to public safety and the environment, though rail industry officials have said LNG can be safely transported by rail.

Federal appeals court ruling on alleged price fixes praised by rail shippers. A federal appeals court decision this week that clarified what evidence can be submitted in two cases involving alleged price fixing in the early 2000s was praised by Attorneys representing shippers involved in the litigation. Stephen Neuwirth, an attorney with Quinn Emanuel Urqhuart & Sullivan, said in a statement that the “opinion will greatly assist the shippers in making their antitrust case against the railroads.” FreightWaves reports that dozens of global companies representing chemical, automotive and energy interests, among others, have been involved in litigation for over a decade with Union Pacific (NYSE: UNP), BNSF (NYSE: BRK.B), Norfolk Southern (NYSE: NSC) and CSX (NASDAQ: CSX) over allegations that the aforementioned railroads “conspired to fix the fuel surcharges levied on customers while determining interline traffic rates.” The shippers say that the actions are said to have occurred between 2003 and 2008 and violated antitrust laws. The railroads have argued that their internal discussions about interline rates are exempt from antitrust laws, according to a provision in the U.S. Code. The existing laws enable the railroads to collaborate with one another about their shared interline traffic, according to FreightWaves.

Air

Transatlantic airfreight rates falling as airlines ramp up passenger flights. Increased passenger demand is causing transatlantic load factors and rates to fall by bringing additional capacity to routes. Dynamic load factors across the Atlantic have fallen to about 60%, according to Clive Data Services. The Load Star reports that “the TAC Index shows rates on the route have fallen below $4 per kg; Milan-US is now 5% lower than a year earlier and Frankfurt to North America has fallen 9% in a week, to $3.81. But the major declines started in mid-April. US to Europe, however, is still 27% higher than the previous year, but rates are just $2.14. Yields remained about 18% higher than last year, but had been flat, and that it would be “demand, not capacity” that would drive down rates further.”

Ethiopian Airlines adds five more Boeing 777Fs to fleet. Ethiopian Airlines has expanded it’s freighter orderbook with the addition of five more Boeing 777Fs, bringing their total to fourteen. The added aircraft will help to meet near-term demand, though the exact timeline for deliveries was not revealed. The new order comes in addition to a Memorandum of Understanding that the carrier signed with Boeing in March for five of its new generation B777-8Fs that the airframer is currently developing, AirCargo News reports.

International

China relaxes quarantine restrictions for Chinese Seafarers. Seafarers from China will no longer need to serve 14-days quarantine before heading back to China from a number of countries in Europe, Asia and Middle East, according to notices from several Chinese Embassies. The UK, Portugal, Poland, Spain, UAE, Oman, Iran, Japan, South Africa, Romania, the Netherlands, Italy, New Zealand and Singapore are among the latest places of departure for Chinese crew which will not require 14-days quarantine. Covid-testing requirements including cancelation of the covid-test or reducing covid-test times, shortening the time limits for covid-tests or cutting down the closed-loop monitoring period of the ship crew departing from countries including Russia, Egypt, USA, Australia, Vietnam, Iraq and Malaysia will also be eased. 

Other

FedEx to deliver formula to U.S. CNBC reports that the U.S. government has contracted FedEx Express to bring another shipment of infant formula to the country. The Express plane will fly Nestlé baby formula from Ramstein Air Base in Germany to Dulles International Airport near Washington, D.C., then to a Nestlé facility in Pennsylvania. It’s not immediately clear how much formula the plane will carry.

Amazon Flex testing local mall deliveries using gig drivers. Late last year, Amazon began piloting a service using Amazon Flex gig drivers to pick up and deliver packages from local malls. The service has been tested in Las Vegas, Chandler, Arizona, and Tysons Corner, Virginia. In a notice to Flex drivers in Las Vegas, Amazon said “Amazon Flex is testing a new offer type near you. Retail delivery offers will allow you to pick up and deliver prepackaged orders directly from non-Amazon retail stores in participating local shopping centers.” Amazon launched the Flex program in 2015, allowing contracted drivers to use their own vehicles to pick up and deliver from Amazon delivery stations or supermarkets, and it is now used for delivery in over 50 cities. The mall pilot aims to have flex drivers deliver directly from third-party retailers in malls, starting with a small group of “existing Amazon sellers,” Amazon spokesperson Kate Kurdna told CNBC.

Recent developments amid Russia-Ukraine crisis:

Georgia and Moldova call for faster E.U. acceptance. The prime ministers of Georgia and Moldova called for faster acceptance to the European Union, citing Russia’s invasion of Ukraine as a threat to the stability of their countries and Europe’s overall security. Prime Ministers Irakli Garibashvili of Georgia and Natalia Gavrilita of Moldova pleaded with the European Union to move faster on accepting the applications of their ex-Soviet countries during the World Economic Forum in Davos, Switzerland on Wednesday. Russia’s war in Ukraine has reportedly pushed inflation in Moldova up to 27% and resulted in the country taking in Ukrainian refugees totalling 3.5% of its population. 

Russia opens port of Mariupol. Officials say that Russia has opened the port of Mariupol following a three-month siege of destruction on the city. The port and the surrounding sea were cleared of mines before a so-called “humanitarian corridor” for foreign vessels was opened on Wednesday, Russian Foreign Ministry spokeswoman Maria Zakharova told the state news agency RIA. Five foreign ships have sailed out of the port using the two-nautical-mile wide corridor, the Wall Street Journal reports. Around 75 ships from 16 nations remain blocked in other Ukrainian ports such as Kherson and Odessa, Ms. Zakharova said.

Russia considers allowing grain out of Ukraine in exchange for lifted sanctions. Russia is ready to provide a humanitarian corridor for vessels carrying food to leave Ukraine, in return for the lifting of some sanctions, the Interfax news agency cited Russian Deputy Foreign Minister Andrei Rudenko as saying on Wednesday, Euractiv reports. Russia and Ukraine account for nearly a third of global wheat supplies. The lack of significant grain exports from Ukraine ports is contributing to a growing global food crisis, with more than 20 million tons of grain stuck in the country.

E.U., U.S., and U.K. establish Atrocity Crimes Advisory Group (ACA) for Ukraine. This week the European Union along with the United States and the United Kingdom announced the creation of the Atrocity Crimes Advisory Group (ACA), a “mechanism aimed at ensuring efficient coordination of their respective support to accountability efforts on the ground,” according to the U.S. Department of State. The purpose of the ACA is to reinforce the current EU, US and UK efforts to achieve accountability for atrocity crimes during Russia’s ongoing war of aggression against Ukraine. It advances previous commitments made in order to demonstrate international support and solidarity. “The overarching mission of the ACA is to support the War Crimes Units of the Office of the Prosecutor General of Ukraine (OPG) in its investigation and prosecution of conflict-related crimes,” says the U.S. Department of State website.