COVID-19 Latest Updates

Port Congestion in China Increases, LA-LB Implements Measures to Combat Congestion, & UP Meters Containers out of Chicago, Memphis, & Kansas City

By September 30, 2021 No Comments

Ocean  

Port congestion in China increases, further affecting capacity. At major Chinese ports, there is major congestion of container ships awaiting anchor. There are more than 100 ships waiting at Shanghai, with about 75 ships waiting at Ningbo. Due to heavy import volumes, Typhoon Chanthu, and rising congestion, the vessels are increasing nationwide in China. This rising congestion threatens yet another supply chain shock that may cause structural blanks where carriers skip calls to try and get back on a regular service schedule.

To add more shocks to the supply chain world, there have been power cuts to Chinese factories. In order to curb carbon emissions, at least 10 Chinese provinces have cut output or temporarily closed factories this month. Some of the affected provinces are mainly Jiangsu, Guangdong, and Zheijiang, which have factories that produce steel products, appliances, and chemicals. The Port of Ningbo and Yantian also fall into one of the affected provinces, where container exports are frequently processed.

Vietnam factory closure delays inventory replenishments. More COVID-19 lockdowns have shut down factories in South Vietnam where much of the production for exports take place. This closure will affect inventory replenishment and is adding fears of another bullwhip effect on trans-Pacific supply chains. If you have any questions about the issues happening in China and Vietnam, don’t hesitate to contact one of our experts.

Ports 

The Ports of LA-LB quickly implement changes to combat congestion measures. These ports are moving aggressively on “operational initiatives” meant to free up space at the marine terminals and reduce container dwell times. These moves consist of loosening restrictions on night gate moves and adding early morning shifts from 3-7 a.m. during the week. Recently, the ports have implemented expanded night and weekend truck gate hours.

The number of ships piling up at the Ports of NY-NJ reaches a new high. As marine terminals struggle to keep up with a flood of import volumes and continued berthing delays, NY-NJ is seeing more ships pile up. However, the ports say that the ships will not see extended berthing delays that other major U.S. ports are experiencing and that this expanded lineup of ships does not mean more severe congestion plaguing the region.

Trucking

Ongoing supply chain disruptions will leave capacity scarce for the trucking industry into 2022. While U.S. truck and trailer orders are increasing, shippers should expect continued capacity constraints well into 2022. With new orders for 2022 delivery, tight capacity and pressure on freight rates will continue into the following year as capacity slowly becomes more available.

U.S. truck spot rates are increasing. The rates are estimated to climb even higher due to strong manufacturing demand and import volumes. The rates are rising in key long-haul lanes as freight flows from coastal warehouses to inland hubs like Chicago and Memphis.

Rail

Union Pacific Railroad (UP) meters domestic intermodal containers out of Chicago, Memphis, and Kansas City. UP is limiting the number of 53-foot containers it will move in a dozen lanes out of these three cities to “balance equipment across the country.” Limiting appointments is necessary to efficiently move containers through networks without shocks, according to UP.

Amtrak train derails on BNSF railway. Last weekend, a train derailed on a BNSF railway in rural Montana. Trains have been backed up on both sides of the railway and won’t be able to get through until all repairs are complete. If you have goods traveling through the area, delays should be expected.

Other

Shipping alliance ONE backs efforts to decarbonize shipping. Ocean Network Express (ONE) joins other ocean carriers in a call to action alliance of more than 150 companies to decarbonize shipping by 2050.  

See the supply chain shocks around the world. The supply chain shocks are happening all over the globe, from Nairobi to Ningbo. Check out this article from Bloomberg that highlights the global supply chain disruptions.