Ocean
The National Industrial Transportation League (NITL) urges Congress to make changes to U.S. shipping laws. Because of the unprecedented and ongoing congestion, NITL is calling on Congress to take action by shifting the burden of proof onto carriers to show that their practices are reasonable and in compliance. Other demands include carriers providing more clarity on detention and demurrage fees, abiding by booking agreements, and allowing aggrieved customers to file complaints. These urges come as the Shipping Act of 1984 doesn’t address the challenges shippers are facing today in the supply chain industry.
COVID-19 cases confirmed at the west port of Shenzhen Yantian terminal in China cause the terminal to close and halt all cargo operations. The Yantian terminal has stopped accepting containers at the gate from May 25-27, and will continue accepting containers on May 28, but only for containers planned for sailing within four days before an estimated arrival time at the Yantian terminal. Because of this restriction, some shipments will be affected and may be loaded onto the next sailing.
A cyclone in India forced ports to suspend operations last week. Already suffering from COVID-19 lockdowns and capacity shortages, a cyclone in India forced the Jawaharlal Nehru Port Trust and Mundra Port, the busiest cargo gateways in the country, to halt operations. Ocean carriers have been working to revive affected shipping schedules, and the ports have been working to restore power that was lost from the storm. If you have goods traveling from this area, they will most likely be affected.
Customs
Aluminum import licenses will be required for entry for covered aluminum products starting June 28, 2021. On May 21, 2021, the U.S. Department of Commerce published a notice in the Federal Register confirming this regulation. The application system is available at https://www.trade.gov/aluminum, and for a list of the aluminum products required for the license, view the list on the International Trade Administration’s website.
Ports
Congestion and import surges continue at Port of NY-NJ. As cargo volumes show no signs of slowing down and drivers leave the industry due to increasing hassles, drayage operators expect limited trucking capacity to tighten even further. This driver turnover is causing rate increases to attract and keep new drivers, as well.
Terminals at LA-LB are concerned about increasing rail container dwell times. Operators at the port are concerned that these rising times will hinder their ability to handle import volumes during an early peak season. While the Port of Los Angeles has made a dent in the backlogs, this ongoing congestion shouldn’t be ignored.
The largest container ship to arrive on a North American East Coast in Elizabeth, New Jersey highlights growing Southeast Asian volumes. The vessel discharged nearly 3,000 containers out of the 7,000 that it was carrying and underscores the growing volumes of imports from Southeast Asia through New York and New Jersey, which have been growing 10.3% each year on average.
Air
LATAM Airlines Group expands its fleet with Boeing 767 converted freighters. The South American carrier will nearly double the size of its fleet by 2023, bolstering air cargo capacity in the Americas. These new aircraft will increase capacity from Colombia, Ecuador, and Chile to North America and Europe to support the flower industry and meet the demand for salmon exports and other goods.
Air cargo capacity is expected to be strained until mid-2022, according to DHL. Shipping bottlenecks and increased consumer spending will help drive increased demand for air cargo until mid-2022, with capacity constraints continuing to push up prices, according to DHL Global Forwarding. Capacity in 2022 will be scarce as well due to slow vaccine rollouts, dissuading people from traveling in the meantime.
Trucking
U.S. drayage drivers are quitting as congestion decreases pay. In the Midwest and South Central U.S., an alarming number of drivers who dray ocean containers are quitting this year because rail terminal congestion has lowered daily productivity, and thus, decreased their pay. While trucking companies have increased rates for drivers, it hasn’t been enough to compensate drivers for completing fewer jobs each day, and the average local drayage driver pay has fallen about 20%. Because of this labor shortage, delays and disruptions to supply chains are expected.
Forwarders should keep California Law AB-5 on their radar. A recently adopted California law known as AB-5 would make it illegal for most industries, including the trucking industry, to hire independent contractors to perform tasks that the company does in the normal course of business. While the law was signed in September of 2019, it has been tied up in the courts from various industry groups, but it appears that the law will likely take effect soon. It is warned that the impact of this law may be severe as it will affect standard business model structures for trucking firms. More information on how this law will affect the trucking industry can be found in a document by Ex Works, Inc. online.
Rail
Kansas City Southern (KCS) makes a deal with Canadian National Railway (CN), abandoning a deal with Canadian Pacific. KCS has chosen the deal proposed by CN, which was nearly $8 billion more than the CP proposal. However, the final deal will be decided on which proposal will maintain and increase competition, particularly in the intermodal market. It is also unclear as to whether the U.S. Surface Transportation Board will allow the transaction to proceed; if it doesn’t, CP would try to strike a new agreement with KCS.
Other
ICYMI: Stay updated on logistics and supply chain trends for the rest of 2021. As mid-year approaches, our Navegate experts identified key supply chain trends to watch for the rest of 2021. From continued capacity constraints to ongoing industry disruptions, learn how to manage and respond in our latest blog and how we can help.
