COVID-19 Latest Updates

Container Shortage Showing Signs of Easing, Congestion and Imports Surge at Port of NY-NJ, and Air Rates Drop Below Pandemic Highs

By March 25, 2021 No Comments

Ocean  

Container shortage showing signs of easing. According to China’s Container Availability Index (CAx), global container circulation is improving, with ports in China experiencing a 56% increase in the availability of containers since Chinese New Year. The ports of Shanghai, Qingdao, Dalian, and Ningbo in China are operating with more containers, with Dalian showing the highest availability of containers. Container prices are still quite high, however. 

Suez Canal blocked after ship runs aground. After strong winds ran the Ever Given aground, it became stuck, blocking the entire width of the Suez Canal, causing a backlog of more than 100 vessels as of Wednesday morning. As of Thursday morning, the ship is still stuck, so it’s expected to cause disruptions for global supply chains, as the Suez Canal carries roughly 10% of global shipping traffic. For importers who have shipments going through the Suez Canal, a delay is likely. Updates on the blockage can be found in a Bloomberg thread online

Ocean Network Express (ONE) has suspended import bookings into Myanmar. Due to the continued disruption from protests after the military staged a coup in the country in February, ONE (consisting of container lines K Line, MOL, and NYK) has suspended imports due to disruption from protests.

HMM has begun delivery of the first of a series of eight containerships from Hyundai Heavy Industries. By 2022, HMM plans to expand its fleet capacity to one million TEU with a total of 20 new vessels, including a dozen 24,000 TEU ships. The first voyage started out of Busan, South Korea on March 22. 

Customs  

The recent CIT ruling in the Meyer Corp, U.S. vs United States may increase the risk to importers for reporting first sale values on entries. Customs binding rulings and decisions have largely focused on three of the four requirements for first sale valuation, but this latest CIT decision emphasizes the requirement that the first sale must be “absent [of] any distortive non-market influences.” In this case, the ruling is only binding to the party, but importers using first sale valuation for goods shipped from non-market economies such as Vietnam and China should plan for increased scrutiny from U.S. Customs on those transactions. More information on the case can be found in its court document online

We are seeing an increase in Customs agriculture exams on import shipments, particularly those from Asia. The inspections appear to be focused on finding invasive species or plant materials in containers. It’s recommended to communicate with suppliers to ensure they are following inspection and cleaning procedures prior to loading.

Ports 

Congestion and imports surge at Port of NY-NJ. After a recent closure of a major storage yard near the Ports of New York and New Jersey, truckers have had to look for new places to store empty containers, affecting their ability to deliver imports in a timely manner. In an effort to combat the import surge and congestion, chassis providers at the port have pledged to add more than 1,100 chassis by the start of summer. 

The Port of Charleston will begin operations next month. Pending a ruling by the National Labor Relations Board (NLRB), the Port of Charleston will be the first container terminal to open in the United States since 2009 and plans to receive its first ship by mid-April. The port opens as gateways like Los Angeles and Long Beach are overwhelmed with imports.

Air

Air freight rates have dropped below pandemic highs. Almost a year since the COVID-19 pandemic began to shift the transportation industry, air freight rates have now dropped to levels below their highest numbers during the beginning of the pandemic. Importers are also continuing to explore air freight as an option for shipments. However, air carriers are not adding additional flights as more importers utilize air transportation; therefore, air freight space is likely to be constrained. If you need help navigating air freight transportation or are interested in using air transportation for shipments, don’t hesitate to contact one of our experts

Trucking 

Diesel prices have gone up again. This week was the 20th week in a row that diesel prices have increased. Since this time one year ago in 2020, the prices have risen $0.535 per gallon. 

Severe thunderstorms threaten trucking operations. There is potential for numerous severe thunderstorms and tornadoes to hit areas from Memphis, Tennessee to much of Alabama and Mississippi. Flooding and torrential rainfall are likely, so truckers may be delayed and ramps and roads are likely to be closed. 

Rail

Canadian Pacific Railway (CP) and Kansas City Southern Railway (KCS) seek to create a Mexico-United States-Canada rail network. The two railroad companies are hoping to merge through a $29 billion deal to create the only railroad that would stretch from Mexico to Canada. This railroad would offer cargo owners a single network over the largest global trade bloc. The proposed project still has to go through intense regulatory reviews.  

Other

It’s Women’s History Month. This month, we’re celebrating women figures who transformed the supply chain and transportation industry. Our Women’s History Month blog highlights women supply chain leaders who made the industry move forward, faster.