Typhoons in China bring more chaos to supply chains. After a typhoon forced the closure of Shanghai’s container port and airport, more freight delays are expected. In China’s central Henan province, devastating floods disrupted operations at major cargo hubs. Hundreds of flights have been cancelled, large containerships had to be evacuated over the weekend, many factories were badly damaged, and production was halted, so delays should be expected until the effects of the typhoons subside.
COVID-19 in Vietnam continues to choke global supply chains. Since the pandemic began, Vietnam is now experiencing its worst outbreak of COVID-19 infections, forcing strict lockdown measures and curtailing factory production. The situation is likely to get worse, with the hot spot for rising infections being in Ho Chi Minh City. If you’re shipping out of Vietnam, it is likely that there will be delays.
The Federal Maritime Commission (FMC) establishes a new audit program to assess carrier compliance with the FMC’s rule on detention and demurrage. Called the Vessel-Operating Common Carrier Audit Program, the FMC launched the program on July 19 and will analyze the top nine carriers by market share for how they’ve been complying with detention and demurrage practices. Other focuses of the audit may include billing practices, appeals procedures, penalties assessed by the lines, and other restrictive practices.
Container ship schedule reliability plummets to an all-time low. The schedule reliability deteriorated to a new low in June, 21.4%, after a couple of months of gains. This decline indicates that shippers should be even more prepared as peak season looms with no end in sight to the record imports from Asia. As carriers add new services and deploy extra-loader vessels to meet peak season demand, it’s expected that container ship schedule reliability will likely fall further.
U.S. tariffs on Vietnam averted. The U.S. Treasury Department and State Bank of Vietnam reached an agreement on July 19 to address the concerns about Vietnam’s currency practices related to the import and use of timber that is illegally harvested or traded and the undervaluation of its currency. This matter will likely eliminate the chance of the Biden administration imposing tariffs on Vietnamese goods. The USTR and Treasury Department will monitor Vietnam’s implementation of these commitments and work with Vietnam to ensure it addresses the currency valuation raised in the Section 301 investigation.
The Port of Houston experiences hardware failure, closing some terminals. At the Bayport and Barbours Cut Container Terminals, a major failure of the storage devices that support the applications used to operate the terminals occurred, forcing the port to close. This is not because of a cyber-attack, and the ships that were already in progress have been able to continue working, but new vessel starts aren’t possible. The port is working around the clock to remedy the situation. Read more about the incident in a notice online from the Port of Houston.
The Port of Savannah adds more capacity as record volumes continue. The Georgia Ports Authority is working to open more than 600,000 TEU of new capacity in the Garden City Terminal as more record import volumes are expected. A 60-acre lot will be opened near berths 7, 8, and 9 at the port this fall to accommodate the growing imports.
Lufthansa Cargo reduces freighter schedule. The airline will reduce its freighter schedule by 5% as an agreement with pilots over extended flying to meet COVID-19 restrictions expires. A spokeswoman for the airline had said that the continuation of the freighter schedule in its entirety is not possible as strict entry regulations continue to apply in a large number of countries.
As wildfires continue on the West Coast, truckers will likely face delays. Truckers heading through the West should be ready for potential road closures, low visibility, hazy skies, and poor air quality due to the wildfires that are raging through the area. If you have goods traveling through these areas, delays may be likely.
Canadian National Railway is waiving demurrage fees for shippers during off-peak container pickups. At its Chicago and Memphis terminals, CN is waiving up to $1,050 per container in storage fees for shippers that plan to have boxes picked up at these locations during “off-peak” traffic periods. This move aims to increase cargo flow through congested hubs.
Union Pacific (UP) increases West Coast service to Chicago. UP has resumed international intermodal train service between the West Coast and Chicago-area terminals at reduced levels after halting service for a week. The reduced-level service still aims to avoid overwhelming the Chicago hub with cargo as Chicago has emerged as a new bottleneck due to the rush of retailers and manufacturers restocking inventories.
According to UP, these supply chain disruptions within the international intermodal sector will likely continue through the end of the year. This continuation is because the capacity to move boxes from our ramp to the final destination falls short of demand.