COVID-19 Latest Updates

COVID-19 Infection in Vietnam Disrupt Supply Chains, Trucking Capacity Continues to Tighten, & BNSF Railway Meters Trains from California to Chicago

By July 22, 2021 No Comments

Ocean  

COVID-19 infections in Vietnam contribute to port congestion and factory closures. Rapidly spreading COVID-19 infections in Vietnam have contributed to increased cargo congestion at the country’s top port Cat Lai, reduced manpower to clear air and ocean cargo, and forced the closure of factories. The shipping industry is closely watching the situation in Vietnam as COVID-19 outbreaks at the Yantian Port in China caused major supply chain disruptions. It’s recommended to stay updated on the situation in Vietnam. If you have any questions, don’t hesitate to ask one of our experts.

Meanwhile, major hubs in China and other South Asian countries have little capacity available. With almost all carriers accepting only premium bookings, space is still generally full until the middle of August across the board.  

The Federal Maritime Commission (FMC) will audit container lines’ detention and demurrage billing. The FMC informed the top nine container lines operating on U.S. trade routes that the Commission will audit how these carriers have been billing customers detention and demurrage charges. This audit comes as shippers, Congress, and the White House increase pressure to crack down on unreasonable storage fees. 

Additionally, efforts are underway in Congress to overhaul the U.S. Shipping Act with the Ocean Shipping Reform Act of 2021. The bill would reverse the “deregulatory trajectory of the most recent shipping law rewrites in 1984 and 1998 in placing a heavy regulatory burden on ocean carriers and strengthening the oversight role of the Federal Maritime Commission.” 

Customs  

The Census Bureau plans to issue a notice proposing requiring the specific country of origin information for all foreign goods on Electronic Export Information (EEI) filings. This change would be quite drastic for shippers as it’s only required to report whether goods exported are foreign or domestic, and many exports do not have this information readily available. The process to gather this information could also be quite difficult. The Census anticipated publishing this proposed rule in the fall of 2021. If you have any questions about this proposed rule change, don’t hesitate to contact one of our Customs experts

Ports 

The Port of New York-New Jersey lifts COVID-19 restrictions to boost workflow. The COVID-19 guidelines such as social distancing and limiting the number of workers at the port have now been eliminated. This lift isn’t expected to have a significant impact on high turn times truckers are experiencing but will help with increasing absences due to the summer season. Additionally, the port will allow more workers to return to the busiest East Coast port.  

Pacific Northwest ports continue to be at capacity. Yard utilization at the Port of Seattle is 120%, while the utilization at Vancouver is at 97% with the lineup experiencing congestion. The situation in Vancouver is expected to worsen, however, given the rail service disruptions, and the wildfires in the area. The Port of Prince Rupert’s yard utilization is at 106% but has recently received an eighth crane that will be fully commissioned by August. 

On the West Coast, the Ports of Los Angeles and Long Beach are experiencing 10-15 vessels at anchorage waiting for a berth, with yard utilization at 88% and 80%, respectively. 

Air

ICYMI: Air freight becomes more favorable over ocean freight. With ocean shipping containers skyrocketing and sometimes exceeding $20,000, air cargo has become a relative bargain to many companies — something quite unusual in the supply chain world. Before the pandemic, shipping by air was almost 12 times more expensive than by ocean, however, with ocean supply chains stretched by high consumer demand and various disruptions, air cargo has been highly entertained by companies. If you have any questions about shipping your products by air, don’t hesitate to reach out to one of our experts.

Trucking 

Trucking capacity across the country continues to tighten. In locations across North America, trucking capacity is tight, with limited availability of chassis in the Newark area, while Dallas and Houston are also experiencing reduced truck capacity. Mobile and New Orleans are in the same boat, as well. 

The I-40 bridge closure in Tennessee continues to create capacity issues in the area as well. Drivers are either declining the load through this area or charging premiums, but the bridge is still expected to open in late July. 

New U.S. trucking firms are growing, but not new capacity. In the first six months of 2021, the number of for-hire trucking firms increased by 58,000. However, this growth isn’t creating new capacity, but rather, points to a shift of “trucking capacity to smaller motor carriers that will challenge shippers who are reliant on traditional means of procuring trucking services, especially those using a limited number of carriers, most of which are larger trucking providers.” 

U.S. truckload rates appear to flatline. While U.S. truckload rates have risen by double-digit percentage numbers in the past year, the U.S. trucking network is maxed out, signaling that rates may not reach any higher levels. However, shippers shouldn’t expect a drop in rates, but a peak and stabilization of the rates are likely.  

Rail

ICYMI: Union Pacific Railroad (UP) is halting all international intermodal service from the West Coast to Joliet, IL, for up to a week starting July 18. This emergency measure aims to clear thousands of stacked ocean containers at the Joliet terminal and send them to cargo owners. The service will be suspended from the Ports of Los Angeles, Long Beach, Oakland, and Tacoma to relieve the significant congestion at inland intermodal terminals and will apply to all UP’s ocean carriers. 

BNSF Railway meters trains from Southern California to Chicago. Beginning on Sunday, BNSF Railway began rationing space on international intermodal trains between Los Angeles/Long Beach and Chicago. This effort is to assuage the surge of volumes that have overwhelmed Chicago’s rail terminals. The railway may stop rationing space as soon as August 1.