Plunging shipping rates beginning to slow. Following months of steep declines, drops in ocean shipping spot rate indexes are significantly slowing down. Container shipping stocks are not falling to the extent they were in prior months. “It’s still very early days, but freight rate declines are less aggressive and people are wondering if this is in response to the blank [canceled] sailings we’re seeing and other counter-maneuvers liners are doing to support pricing,” said Jefferies shipping analyst Omar Nokta. Read a full analysis from FreightWaves here.
Alaska and California ports receive DOT grants for upgrades. The U.S. Department of Transportation has been awarding grants designed to “support the modernization and transformation of America’s ports under the Biden administration’s infrastructure initiatives,” according to Maritime Executive. Four Alaska coastal communities will receive a total of $112 million in investments this year for critical port-related infrastructure and ferry terminal projects. Over the past three years, roughly $120 million in federal grants have been made for the Port of Alaska, located in Anchorage. In addition to Alaskan ports, The ports of Oakland and Los Angeles are receiving more than $30 million each to fund new projects and upgrades.
Container volumes continue to rise on the East Coast and decline in the West. Container volumes at ports on the East Coast and Gulf of Mexico in September increased, while ports on the West Coast saw significant year-over-year declines. High levels of inventories at warehouses and stores are the reason for the decline, officials at the Pacific Ocean ports said. “Consumers and retailers are concerned about inflation, leading to warehouses filled with inventory and fewer product orders from Asia,” Port of Long Beach Executive Director Mario Cordero said. The busiest facility in the U.S. is the Port of New York and New Jersey for the second month in a row, and is handling 35% more cargo than compared to September 2019.
CBP issues ruling on CROSS database. U.S. Customs and Border Protection issued a ruling on the CROSS database. The ruling states that unlicensed individuals or companies cannot provide HTSUS numbers at the 10 digit level to their customers or other outside parties. They have also determined that the use of an HTSUS number provided by an unlicensed party to the importer at the time of entry does not constitute reasonable care. Read the full statement from CBP here. If you have questions, don’t hesitate to reach out to a Navegate expert.
CTA and other trucking groups call for end to U.S. border vaccination requirements. U.S. Representative Rick Crawford called on President Biden to end the U.S. border vaccination requirements impacting cross-border truck drivers on behalf of the Canadian Trucking Alliance (CTA), the American Trucking Associations (ATA), numerous Canadian and U.S. industry groups, and 55 other members of Congress. The letter sent by Rep. Crawford’s office says that the vaccination mandate “continues to strain the supply chain and hinder the trucking industry’s ability to move these essential goods quickly.” The Canadian Trucking Alliance says that it will update members as soon as possible if any changes are announced. The press release from Rep. Crawford’s office can be found here.
Diesel prices surge and supply diminishes. Diesel prices are surging as a result of dwindling reserves, a drought on the Mississippi River pushing more product to rail and truck, and a possible rail strike leading to a surge in prices that is expected to continue, according to CNBC. Diesel prices have increased for November deliveries by 33% . “The national average price for diesel today is $5.30 per gallon and is expected to go up 15 to 20 cents in the next few weeks,” said Andy Lipow, president of Lipow Oil Associates, LLC.
Trade groups ask for White House to take action to avoid rail strike. U.S. President Joe Biden is being pressed by over 300 national- and state-level trade associations to assist railroad unions and their employers in ratifying all outstanding tentative labor agreements. The trade groups sent a letter to Biden last week asking for the White House’s involvement in order to prevent “a rail shutdown [that] would have a significant impact on the U.S. economy and lead to further inflationary pressure.” So far, the members of six unions have voted to ratify their labor contracts, but the Brotherhood of Maintenance of Way Employees Division (BMWED) and the Brotherhood of Railroad Signalmen (BRS), recently voted against approving their agreements. Those two unions are renegotiating their proposed deals with the railroads, according to FreightWaves.
Delta pilots vote to authorize strike. Delta Air Lines pilots voted to authorize a strike after negotiations for a new contract were paused due to the coronavirus pandemic back in 2020. Almost 15,000 pilots voted to strike. Contracts for Delta pilots were last negotiated in 2016, NPR reports. Renegotiation began in April 2019 and the employees and airline had entered the mediation stage in February 2020, but everything was put on hold due to the pandemic. “Today, Delta’s nearly 15,000 pilots sent a clear message to management that we are willing to go the distance to secure a contract that reflects the value we bring to Delta Air Lines as frontline leaders and long-term stakeholders,” Capt. Jason Ambrosi, chairperson of the Delta Master Executive Council, said in a release.
United Airlines pilots vote against tentative agreement. The Air line Pilots Association says that United Airlines pilots “overwhelmingly” rejected a tentative agreement that would have given them raises of about 15% over 18 months. The tentative agreement “fell short of the industry-leading contract United pilots have earned and deserve after leading the airline through the pandemic and back to profitability,” the Air Line Pilots Association said. According to CNBC, close to 10,000 of United’s roughly 14,000 pilots participated, with 94% voting against the agreement.
Wheat prices surge following Russia’s withdrawal from grain export deal. Global wheat prices rose drastically after Russia announced its withdrawal from the Black Sea grain export deal over the weekend. The December wheat contract on the Chicago Board of Trade jumped 5.9% to $8.78 a bushel, and corn and soybean prices have also risen with corn futures up 1.2% and soybean futures climbing 1.3%. Russia announced Saturday that it was suspending involvement in the Black Sea Grain Initiative, which allowed vital agricultural products to be exported from several Ukrainian ports. The announcement came after Russia accused Ukraine of a “massive” drone attack on the Black Sea Fleet in Sevastopol in Crimea.
Eurozone inflation rate jumps to 10.7%. The annual rate of consumer-price inflation in the eurozone reached a record high as it increased to double digits in October. This emphasizes the challenges facing the European Central Bank after it signaled a coming slowdown in the pace of its rate increases, the Wall Street Journal reports. Consumer prices have risen sharply as a result of Russia’s invasion of Ukraine and its decision to withhold natural gas supplies from Europe.
CBSA signs Mutual Recognition Agreement with European Union. In a release last week, the Canada Border Services Agency (CBSA) announced the signing of a Mutual Recognition Agreement with the European Union’s (EU) Taxation and Customs Union (TAXUD) to “honor each other’s Trusted Trader programs.” The signing took place during a Canada-EU Joint Customs Cooperation Committee meeting in Brussels, Belgium. The agreement will “contribute to increasing security of the international supply chain, facilitating trade at the border, and strengthening the economic competitiveness of Canadians doing business with the EU,” according to the release. Read the full release here.
Pending home sales dropped 10% in September. According to the National Association of Realtors, pending home sales in the U.S. dropped 10.2% in September from August, which was a much worse drop than the 4% decline that economists had predicted. CNBC reports that overall sales were down 31% year over year. Higher mortgage rates are to blame, with the average rate on the popular 30-year fixed mortgage now above 7%.
Mississippi river water levels remain low, disrupting shipping traffic. Water levels of the Mississippi river have dropped to near-record lows as a result of a drought covering 60% of the Midwest and northern Great Plain states. According to the Associated Press, ship and barge traffic is critical for moving recently harvested agricultural goods such as soybeans and corn downriver for export, but the traffic is being disrupted by the low water levels of the river. Weather experts say that this latest drought affecting the central United States is more likely a short-term weather phenomenon than a result of climate change at this time.