COVID-19 Latest Updates

Yantian Port Reopens, Container Rates Skyrocket, and Knight-Swift and Union Pacific Partner Up

By June 17, 2021 No Comments

Ocean  

Operations at Yantian port slowly improve after reopening. After a surge of COVID-19 cases forced the Yantian International Container Terminals (YICT) to shut down, the port is now operating at 75% of normal levels. After operating at around 45% last week, YICT reopened a fourth berth at the East Port area, which helped reduce yard density by 70%. YICT has also been able to raise the number of trucks in the terminal to 8,000 daily instead of the previous 6,000. Congestion is still continuing at the port, as well as other Chinese ports, so the lasting effects of this congestion will still ripple through supply chains for the next coming weeks. 

New feeder service along the St. Lawrence Seaway gives exporters a trucking alternative. An Ontario-based terminal operator started a new container feeder service along the St. Lawrence Seaway, offering shippers another option to transport goods besides the 377-mile truck route between Canadian ports of Hamilton and Montreal.  

Container rates and GRIs increase. For shippers, rates are continuing to intensify at an alarming rate, with both Asia-West Coast and East Coast rates increasing by around 200% over the past year. Additionally, trans-Pacific carriers are pushing GRIs more often, implementing them every two weeks as opposed to every month as they have in the past. As strong demand and capacity constraints surge at Asian ports, these rates will likely continue and are indicative of how critical supply chains are right now. 

Customs  

The Senate passes key trade provisions in the U.S. Innovation and Competition Act. To help compete with China, the Senate passed a key bill that would invest more than $200 billion over the next five years into scientific research and technology. The bill reinstates the expired Generalized System of Preferences program (GSP) and the product exclusion process for some Section 301 tariffs. Additionally, the bill is supposed to bolster efforts to prohibit goods with forced labor from reaching the U.S. through strengthened CBP efforts. The timing of approval from the House is unclear. Read more about the provisions of the bill online.  

The U.S., Canada, and the EU develop sanctions against the government of Belarus over the forced landing of a passenger jet and the arrest of a journalist last month. These sanctions will likely involve freezing assets and involving travel bans, and industry groups warn that air and rail transportation could be affected if tensions continue between Belarus and Western allies. Belarus is a key artery for East-West transport, so if sanctions extend to the closure of land routes, more supply chain disruptions may occur. 

Oral arguments are scheduled for Section 301 tariffs. On Thursday, the U.S. Court of International Trade (CIT) will hold oral arguments for the plaintiffs’ motion for a preliminary injunction, seeking to suspend the liquidation of entries involving the Section 301 duties challenged in the court cases.

Ports 

Hapag-Lloyd implements measures to improve NY-NJ truck flow. At the Port of New York and New Jersey, free time for returning empty containers will be extended by Hapag-Lloyd. The carrier will also pay truckers a congestion fee and find off terminal storage as it strives to improve truck flow and expedite the return of empty containers. These efforts come as drayage capacity at the port has become strained by record import volumes. 

Long Beach terminals clear clogging rail containers. At the Port of Long Beach, terminal operators have begun using the Pier S overflow facility to provide short-term storage for rail containers that would otherwise be stuck in marine terminals and further contributing to congestion in Southern California. This move comes as containers are dwelling at marine terminals and the Ports of LA-LB for more than 11 days — above the 3.65 day average — because of intermodal railcar shortages. 

Air

Alliance Ground International (AGI) opens up a new warehouse operation at Chicago O’Hare International Airport. The new facility is located on the western boundary of the airport and is connected to major thoroughfares that call for easy access to the facility. It will serve many of the airlines that AGI handles in the Chicago area. In close proximity to the forwarder community, the facility will hopefully improve pickup experience by avoiding congested airport roadways.

LATAM advises customers that they will be imposing a temporary embargo. In a customer advisory, airline LATAM said that they are imposing a temporary embargo — effective immediately — due to an excessive backlog of cargo to Bogota, Colombia. The embargo is anticipated to end on July 31st, 2020. 

Trucking 

Truckload freight shipments reach record levels. In May, North American freight shipments reached the second-highest monthly level recorded in 31 years of data. Driven by a strong rebound from the pandemic, shipments grew 35.3% from May 2020, indicative of a stronger-than-expected economic recovery and the unprecedented freight volumes being transported throughout the country. 

Rail

Knight-Swift Transportation will terminate its agreement with BNSF Railway to partner with Union Pacific (UP). Effective January of 2022, Knight-Swift Transportation and UP will partner up in order to handle Knight-Swift’s container business. The decision for this merger was based on UP’s intermodal network strength in key U.S. markets. Knight-Swift also sees an opportunity to provide more capacity to shippers on the Interstate 5 between Los Angeles and Seattle-Tacoma. 

Norfolk Southern (NS) and Union Pacific (UP) are tight on 53-foot chassis. As volume surges and shippers take longer to unload containers, U.S. eastern rail terminals are rationing chassis, causing NS and UP to run low on 53-foot chassis. Therefore, delays are expected, and it’s recommended that customers with 53-foot chassis should return them to the nearest DCLI or NS ramp immediately.   

Class 1 railroads address supply chain congestion. In an analysis by FreightWaves, learn how class 1 railroads are addressing supply chain congestion through increasing train speed, communicating more closely with U.S. ports, and more. However, it won’t be clear as to how successful these tactics will be until executed, so stay vigilant and don’t hesitate to reach out to one of our experts with questions.

Other

A review of supply chain vulnerabilities by the White House is now available online. Last week, the Biden Administration launched a supply chain task force to review supply chain vulnerabilities in the U.S. A full supply chain report by the White House is now available in a PDF online, so be sure to take a look and see what’s underway.