Freight Market Updates

Times are uncertain and things change quickly. Stay up-to-date on Navegate’s latest news and resources for managing the impact on your supply chain.

Want these updates in your inbox? Sign up here!

Recent Posts / View All Posts

Supply Chain Trends to Track for the Rest of 2021

| Guides | No Comments
Supply Chain Trends for the Rest of 2021 As we approach mid-year, what remains clear is the supply chain industry has witnessed a lot of changes since last March. The...

Celebrating Women’s History Month

| Guides | No Comments
Celebrating Women's History Month For Women's History Month, Navegate is taking the opportunity to honor and celebrate women leaders who have made strides in the supply chain and logistics industry....

Black Leaders Who Revolutionized the Supply Chain & Transportation Industry

| Guides | No Comments
Black Leaders Who Revolutionized the Supply Chain & Transportation Industry In honor of Black History Month, we’re celebrating Black figures who revolutionized the supply chain and transportation industry — an...

What’s New in Our Navegate Emerald Software

| Guides | No Comments
What's New in Our Navegate Emerald Software and What It Means for You If there’s one thing 2020 has taught us, it’s that we should always expect the unexpected, especially...

Typhoons Bring Supply Chain Chaos in China, Port of Houston Experiences Hardware Failure, & Chicago Becomes New Bottleneck for International Intermodal Transportation

By | COVID-19 Latest Updates | No Comments

Ocean  

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. 

Customs  

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. 

Ports 

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. 

Air

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. 

Trucking 

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.

Rail

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. 

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

By | COVID-19 Latest Updates | 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.

Bangladeshi Port of Chittagong Congested, Biden Issues Executive Order Promoting Competition, & Slow Vaccine Rollout Causes Port Disruptions

By | COVID-19 Latest Updates | No Comments

Ocean  

The fight for vessel space continues. As consumer demand continues to surge, it’s expected that import growth through peak shipping season will continue through the fall as unprecedented shortages of ocean capacity intensify. U.S. retail importers from Asia are being warned by container lines, forwarders, and consultants that the situation will only worsen with peak season on the horizon.  

Additionally, major hubs in China and Asia have very little space available, with almost all carriers accepting only premium bookings. Across the board, space is generally full until the middle of August. If you have any questions, don’t hesitate to contact one of our experts

The Bangladeshi Port of Chittagong is clogged with containers carrying export goods. With sources saying that some containers have been waiting at the port for nearly 30 days, there are an estimated 14,000 TEU’s stuck at the port. The capacity crunch and limited space on vessels are fueling this congestion, with Chittagong shippers paying quadruple the rates before the COVID-19 pandemic to send US-bound containers. This ongoing congestion has forced some carriers to halt and slow bookings from Bangladesh. 

The Federal Maritime Commission (FMC) and the Department of Justice (DOJ) sign an interagency Memorandum of Understanding (MOU). This memorandum aims to foster increased cooperation and communication in their respective oversight responsibilities of the shipping industry, establishing a framework for the FMC and Antitrust Division to continue discussing issues affecting competition in the industry. This agreement was the first-ever MOU between the two agencies. You can read the memorandum in an official document online.

Customs  

The Federal Emergency Management Association (FEMA) lifts export restrictions on COVID-19 medical supplies. Former U.S. export restrictions imposed on certain medical supplies and equipment to combat the COVID-19 pandemic are now lifted after the temporary final rule (TFR) had an expiration date in late June. FEMA used the TFR to ensure an adequate national supply of medical supplies to help combat COVID-19. To learn more about the lift of these restrictions, view a fact sheet on FEMA’s website.  

CBP Virtual Trade Week is coming up. Virtual Trade Week will occur July 20-22 and will include discussions on 21CCF, e-commerce, forced labor, export modernization, CTPAT, and 1USG. To view more information, the agenda of the week, and pre-recorded sessions, visit CBP’s website.

Ports 

The South Atlantic Chassis Pool (SACP) will remain in existence until at least 2028. After three southeastern U.S. ports of Savannah, Jacksonville, and Wilmington agreed to stay in the pool in exchange for increased fleet size and enhanced chassis quality, the SACP will continue until at least 2028. The conditions of this agreement are meant to address these chronic problems of decreasing fleet size and low-quality chassis as imports surge at Southeastern U.S. ports.  

Air

DHL Express invests more than $360 million in the Americas to meet e-commerce demand. These millions of dollars will be invested into facilities and new air capacity for the Americas through 2022 to bolster parcel growth caused by increasing e-commerce demands. The new infrastructure will include technology to enhance operational efficiency and increase network capacity in the Americas by nearly 30%. 

American Airlines assists in distributing COVID-19 vaccines globally. As part of the White House’s initiative to share 80 million doses of COVID-19 vaccines, American Airlines donated cargo flights to deliver vaccine doses to Guatemala. More airlines will likely continue to donate flights to distribute COVID-19 vaccine doses, which will likely affect air cargo space.

Trucking 

ICYMI: Trucking industry sees the highest one-month gain in employment in 7 years. According to the Bureau of Labor Statistics (BLS), the overall number of drivers has returned to pre-pandemic levels. While labor shortages fueled trucking capacity issues, it is still unclear as to whether these new gains will benefit truckload carriers as seats are still struggling to be filled. 

Rail

Norfolk Southern (NS) slashes domestic containers on busy routes in Pennsylvania. To combat strong demand and a shortage of 53-foot chassis in its network, NS extended the emergency service cuts into Central Pennsylvania, effective July 8. This move comes as the recall of more than 5,000 chassis left the railroad short on wheels to move containers.

Vancouver intermodal shippers face delays. U.S. and Canadian shippers should expect rail delays as Canada’s two Class I railroads slow train speeds and share a track with the Port of Vancouver. This delay comes as a wildfire closed one of two tracks that runs through British Columbia. The Port of Vancouver is estimating delays of more than a week. 

Other

Biden issues an Executive Order promoting competition in the economy. The Order includes 72 initiatives by more than a dozen federal agencies to adequately tackle some of the most pressing issues facing economic competition in the country — including ocean shipping and unfair carrier practices (specifically detention and demurrage). You can read a fact sheet on the White House’s website summarizing what’s included in the Order or access the full Executive Order online

The slow vaccine rollout for seafarers is causing disruptions to trade and shipping. The global vaccine rollout for seafarers is going too slowly to prevent outbreaks on ships, causing more supply chain disruptions, slowing down economic recoveries, and endangering maritime workers. As the delta variant progresses and e-commerce demand keeps surging, infections may increase and more restrictions at ports may be enacted to restrict access to seafarers from countries that have not yet received COVID-19 vaccines. As this variant continues, supply chain disruptions are likely. Contact one of our experts if you have any questions. 

Container Shipping Rates Skyrocket, Congestion at Oakland Continues, & Norfolk Southern Raises Daily Domestic Container Charges

By | COVID-19 Latest Updates | No Comments

Ocean  

Ocean carriers are launching premium services to employ private chassis fleets. Intermodal equipment providers (IEPs) are saying that container carriers are employing private chassis fleets through premium services at U.S. receiving ports to meet customer expectations for chassis availability. Ensuring chassis availability requires a high level of coordination and data sharing among supply chain partners, which is why a private fleet is necessary, according to Daniel Walsh, the CEO of IEP TRAC Intermodal. 

Maersk returns to Yantian Port as congestion eases. As productivity at Yantian International Container Terminals (YICT) increases, ocean carrier Maersk is gradually reinstating the 19 mainline services it suspended from the port after its COVID-19 outbreak. Yard density at the port is down 65%, and Maersk reported an average wait time at the port is now down to hours. 

Container shipping rates skyrocket as goods from Asia surge. As ocean capacity remains tight through the rest of the year, cargo owners and importers are paying historic prices to ship containers from Asia to the U.S. and Europe. From a year ago, the average global price to ship a 40-foot container has more than quadrupled. These rates are the result of supply chain disruptions that triggered delays at ports and distribution networks as manufacturers rush to recover from the COVID-19 pandemic. To secure space, it is advised to book as far in advance as you can. 

Customs  

Customs releases two out of three U.S.-Mexico-Canada Agreement (USMCA) regulatory packages. On July 1, Customs released two USMCA regulatory packages setting forth standards for a range of issues including regulatory packages for marking, tariff-rate quotas (TRQs), origin determinations and other provisions. It is advised to review and track the final outcomes of these regulations and their applications to North American cross-border trade to ensure compliance with daily operations. You can view CBP’s interim final rule and what it includes in a document online.  

The U.S. Court of International Trade (CIT) grants preliminary injunction to halt liquidation of certain 301 tariffs. On July 6, the CIT granted this injunction for unliquidated import entries subject to Lists 3 and 4A duties subject to Section 301 litigation. It is advised that importers ensure they provide all the information the court required regarding unliquidated entries and that they are handled these entries appropriately. The CIT’s full opinion can be found in a document online.

Ports 

The Port of New Orleans issues a request for proposal for a $1.5 billion container terminal. The proposal includes requests for program management and controls services. The terminal — called the Louisiana International Terminal — is expected to be capable of handling 2 million twenty-foot equivalent units annually. The second terminal will ensure that the port is better suited to meet current and future container volumes.  

Congestion at Oakland port causes MSC to scale back calls. Due to ongoing congestion at the Port of Oakland, MSC is reducing the frequency of calls in Oakland to every two weeks instead of weekly. The congestion is caused by record-breaking import surges from Asia. 

Tropical storm Elsa approaches Southeastern ports. It is projected that the storm will move northeastward across the southeastern U.S. through Thursday, causing ports in Florida to be under port condition and amp up restrictions for vessels. The storm will likely cause supply chain disruptions and delays. 

Air

Global air cargo demand reaches its highest level. Since the International Air Transport Association (IATA) began gathering data in 1990, global air cargo demand has reached its highest level in March of 2020. This increase in demand is due to the COVID-19 pandemic, airlines embracing innovation, and favorable economic conditions for the airlines. Read more about why global air freight demand is on the rise in an article by Global Trade Magazine.  

Trucking 

Trucking industry sees the highest one-month gain in employment in 7 years. According to the Bureau of Labor Statistics (BLS), the overall number of drivers has returned to pre-pandemic levels. While labor shortages fueled trucking capacity issues, it is still unclear as to whether these new gains will benefit truckload carriers as seats are still struggling to be filled. 

Rail

Norfolk Southern (NS) raises daily domestic container charges. For 53-foot EMP and TMX domestic intermodal containers, NS is raising the daily fees starting July 14 in an effort to encourage customers to return boxes quickly amid the ongoing capacity constraints. 

Union Pacific (UP) is capping storage fees charges for inaccessible containers. At UP’s Global IV terminal in Joliet, IL, UP is putting a cap on fees for containers that are stacked on inaccessible. This move comes after shippers and non-vessel-operating common carriers (NVOs) protested exceedingly high bills. This cap went into effect on July 1 and will cap fees at $2,450 per container. 

Other

How COVID-19 variants are expected to affect supply chains. As the Delta variant surges across the world, learn more about how new COVID-19 strains will likely affect global supply chains

Yantian Port Still Recovering, U.S. Blocks Solar Materials from Xinjiang Region, & Global Air Cargo Demand Reaches Highest Level

By | COVID-19 Latest Updates | No Comments

Ocean  

Yantian Port is operating at full capacity but will still take weeks to recover. After a multi-week shutdown of the largest port in China due to COVID-19, the Yantian is back in full swing and the backlog of vessels is gone. However, shippers shouldn’t expect things to clear up so quickly as the shipments piled up in warehouses and factories in the Shenzhen region will take at least a month to clear.   

A new container shuttle service aids the South India trade strained by capacity issues. At the Chennai and Cochin ports in southern India, the terminals have added a regional weekly shuttle service, allowing shippers to expand export opportunities amid elevated consumer demands.  

Ocean carrier Hapag-Lloyd warns of tight capacity for shippers through 2022. Officials at Hapag-Lloyd have said the carrier will not be able to add more containerships to the trans-Pacific trade routes for the rest of the year even though Asian imports will stay strong. That said, capacity will likely remain tight through 2022, with elevated rates. 

Equipment shortages push US-Latin trade shippers toward contracts. An intense shortage of 40-foot refrigerated containers on the north-south trade routes from North America to Latin America is forcing shippers to make the somewhat unusual move to sign contracts with carriers. In some cases, carriers are canceling spot cargo bookings because they cannot provide equipment since refrigerated carriers have become so scarce.  

Customs  

The USDA’s Animal and Plant Health Inspection Service (APHIS) Lacey Act will be implemented on August 1, not July 1. Starting August 1, this implementation of the Lacey Act deployment includes products in headings 33, 42, 44, 92, and 96. Regulated products in heading 4415 will only include wood pallets or containers that are imported as a new commodity. Read more about the provisions of the Lacey Act on the Federal Register’s website

The U.S. The International Trade Commission Committee has made changes to the Harmonized Tariff Schedule (HTS). Effective July 1, changes to HTS numbers from the ITC will be made. These changes will especially affect textiles. View the full changes to the schedule online

The U.S. blocks solar products made from China’s Xinjiang region. In an effort to support human rights and bar forced labor from supply chains, the Biden Administration has blocked solar materials made from China’s Xinjiang region — the area where the country’s Uyghur Muslim minority have been subjected to mass arbitrary detention and forced to work against their will. While this won’t impact a majority of imports, this could force U.S. solar companies to find materials elsewhere. 

Ports 

U.S. PNW ports reopen after the heatwave. After several container terminals were closed earlier this week due to heatwaves, the ports of Seattle and Tacoma resumed operations. According to the National Weather Service, temperatures in Seattle hit 106 degrees Fahrenheit. The port shutdown was implemented to protect the workers, and it had no serious consequences to cargo handling.  

The Port of Charleston expands truck hours amid import surges. The port of Charleston will open its Saturday gates to pre-pandemic hours and open two hours earlier each weekday to meet import volume demands and to work around labor uncertainty at the Leatherman terminal. 

Air

Global air cargo demand reaches its highest level. Since the International Air Transport Association (IATA) began gathering data in 1990, global air cargo demand has reached its highest level in March of 2020. This increase in demand is due to the COVID-19 pandemic, airlines embracing innovation, and favorable economic conditions for the airlines. Read more about why global air freight demand is on the rise in an article by Global Trade Magazine.  

JFK Airport will have a new cargo facility. This facility will be the airport’s newest cargo facility in more than 20 years and will help streamline efficiencies for cargo airlines, freight forwarders, delivery companies, and shippers. This facility will help balance out the cramped warehouses that haven’t been able to keep up with growing cargo volumes. This project is expected to be completed by the end of 2023.   

U.S. and E.U. importers leverage air freight to restock inventories. U.S. and European manufacturers are using air freight to transport goods that would typically travel by ocean to meet demand due to ocean transportation delays. It’s expected that this trend will continue as countries recover from COVID-19 and consumer confidence increases.

FedEx will invest in 20 more 767 freighters from Boeing. As e-commerce continues to drive global growth for the parcel sector, FedEx plans to buy 20 more cargo jets. This purchase will modernize its fleet and improve its service amid strong shipping demand.   

Trucking 

U.S. truck volumes go down, but rates remain high. While truck tonnage dropped in May, it wasn’t due to demand. A lack of capacity and supply chain disruptions were most likely the reason for this slight 0.2% drop, but truckload rates still remain high.

Rail

Norfolk Southern Railway (NS) restricts and shuts down service amid chassis recalls. Because of a lack of available chassis, NS is significantly limiting the number of 53-foot containers on two dozen lanes and denying service altogether for some customers. This move went into effect on Monday. This disruption is the first significant inhibitor to supply chains since NS recalled 5,100 domestic chassis earlier this month. This service disruption may last two to three weeks.   

Other

The U.S. Department of Transportation met with groups representing major container lines and retail importers to address U.S. port congestion. After meeting with the said groups, the federal government is looking at possible solutions to mitigate the capacity crunch as record-breaking cargo volumes flow into the country. 

Why you should do your Christmas shopping early. An analysis showing the world’s biggest ports from Bloomberg explains why Christmas shopping should be done early this year. From container shortages and congestion to gridlock at major ports, your company should be prepared for the holiday season. 

Yantian Port Backlogs Will Take Weeks to Clear, Air Cargo Faces New TSA Screening Requirements, & Chassis Shortage Worsens

By | COVID-19 Latest Updates | No Comments

Ocean  

Yantian port will 100% reopen on June 24, but backlogs are still rampant. Due to the COVID-19 outbreak causing hundreds of missed vessel calls through the first half of June at Yantian International Container Terminals (YICT), a growing number of backlogged containers is left, which will take weeks to clear. When the port fully reopens, shippers should still expect serious delays — even for the holiday shipping season — as the effects of this port closure are anticipated to have ripple effects greater than the Suez Canal blockage. 

As port congestion grows, carriers cut North Europe hubs out of rotation. Unreliable scheduling is fueling port congestion at hub ports in North Europe, causing carriers to temporarily cut certain key points out of their Europe rotations. Sources say the main cause of this port handling difficulty is the poor on-time performance by container ships. Due to the high workload on the terminals, it is still unclear when this congestion is expected to ease.    

Hapag-Lloyd adds six ships to its orderbook to build out the capacity of large container ships. The carrier has ordered six 23,500 TEU ships, in addition to six other ships ordered last year, which will be delivered through 2023 and 2024. These ships will be deployed on the Asia-Europe trade to serve routes covered by THE Alliance of Hapag-Lloyd, Yang Ming, HMM, and Ocean Network Express.

Customs  

Former Secretary of the U.S. Department of Homeland Security (DHS) Kevin McAleenan discusses the importance of customs brokers in a Senate hearing on June 16. The former DHS Secretary Kevin McAleenan testified in a Senate hearing stating how important the role of customs brokers is in reinforcing trade — a move that bolsters brokers’ participation in transferring trade data. You can watch the hearing in a video on the Department of Homeland Security’s website.  

ICYMI: 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 bill is pending approval in the House, so more updates to come. Read more about the provisions of the bill online.  

Ports 

New cranes and cross decks will be implemented at ports in the Pacific Northwest to handle growing cargo volumes and maxed out capacity. Four super-post-Panamax cranes were recently delivered to the Port of Seattle, which will be among the largest in service along the West Coast and enable the largest ships in the trans-Pacific trade to call. The cranes will start moving cargo in 2022, after the completion of construction of Terminal 5 at the port. 

Additionally, on September 1, a 117,000-square-foot, 103-door cross deck facility will open at the Port of Vancouver. Both of these expansions will help aid in the growing cargo volumes the ports have been receiving over the past year. As of this week, the Port of Seattle is at 120% capacity, with Vancouver remaining at an elevated 90+%. 

Newark yard reopens, giving importers an off-storage port option. The Port Container Yard (PCY) in Newark at the Port of NY-NJ that once stored empty containers has now reopened due to strong demand from shippers looking to move their freight out of the port as soon as possible. The PCY is a 55-acre site, and its reopening underscores the need for additional space as the port welcomed record import volumes. 

Air

Reminder: all outbound air cargo traveling on air freighters from the U.S. will face TSA screening requirements starting July 1, 2021. This TSA screening is meant to detect and identify concealed explosive devices and prevent the introduction of these devices. However, the Transportation Security Administration has finalized plans providing businesses with the option to opt out of the screening requirements if their facilities have approved security controls. To view the full TSA screening requirements, visit the TSA’s website

Trucking 

FedEx Freight reverses its abrupt suspensions of truck pickups due to backlash. Last week, FedEx Freight stopped many truck pickup locations across the country for overwhelmed terminals to restore productivity levels. However, after some backlash from key stakeholders, FedEx Freight has decided to reverse its suspensions to a portion of its customer base. Instead of implementing a broad action that would affect the entire geographic freight network, the forwarder is now working with direct customers to address capacity concerns. The entire scope of the reversal is still unclear, but sources say that it is “widespread.” If you have any questions about this, don’t hesitate to request a quote with our LTL team or contact our experts

The Interstate-40 Bridge’s continued closure in Memphis, Tennessee is bringing more stress to U.S. supply chains. After a crack was found in the bridge that deemed it unsafe, the bridge has since been closed, jamming traffic for over a month, costing money for businesses, and stalling the region’s economic recovery from the pandemic, while congesting national supply chains. Completion of the repairs is expected to last until July, so if you have goods moving through the area, delays are likely to last until then. 

Rail

The Midwest marine chassis shortage is worse now than months ago. At U.S. Midwest rail hubs, the supply of marine chassis has gotten worse than two months ago, where supply was already running thin. This shortage is causing container stacks to pile up and storage bills to accumulate at extremely high levels. The main culprit of this shortage is the sheer volume of containerized cargo that has been flooding into the U.S. over the past year.  

Norfolk Southern Railway (NS) has recalled 5,100 chassis because of safety issues, worsening shortage crisis. Due to a safety issue that can lead to the wheels separating from the chassis on the railway, NS has recalled 5,100 chassis, exacerbating shortage as the railroad has already rationed equipment in nearly a dozen U.S. ramps. Out of an abundance of caution, NS is inspecting and repairing all chassis in the series. There is currently no timeline on when work would be completed on the affected chassis, so stay tuned for updates. 

 

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

By | COVID-19 Latest Updates | 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.

Yantian Port Worse Than Suez Canal Blockage, Carriers Reroute Cargo From Oakland, & Biden Launches Supply Chain Task Force

By | COVID-19 Latest Updates | No Comments

Ocean  

The COVID-19 outbreak at the Yantian Port continues, causing congestion issues to spread across Southern China. COVID-19 outbreaks are getting worse at Yantian, further disrupting port operations, with delays expected to stretch into two weeks. This congestion at the port is spreading throughout Southern China as well, creating a scale of disruption greater than the Suez Canal blockage that lasted for six days. Paired with eastbound Trans-Pacific demand outpacing vessel capacity and low ocean reliability, supply chain experts are warning of serious ripple effects to come. 

Due to this increased delay, container lines are adding more alternatives to the congested Yantian port by increasing the number of load ports. Shippers are also looking to ship via Hong Kong, Shanghai, and Ningbo, and other ports like Nansha and Da Chan Bay. If you have any questions regarding congestion at the Yantian port or are looking for other ways to go around this port, contact one of our experts

A crane collapsed at the Port of Kaohsiung in Taiwan, damaging containers. An empty vessel struck a laden cargo ship, causing the collapse of a crane that damaged between an estimated 30 to 50 containers and injured one worker. The cause of the incident is under investigation. If you had containers at this port, they may be affected. 

Customs  

The University of Houston published an assessment of the Customs-Trade Partnership Against Terrorism (CTPAT) Program. The CTPAT Program was established in November 2001 to enhance border security via strengthening international supply chains. This assessment addresses tangible and perceived member benefits, return on investment for the participants, and cost savings for the U.S. government and trade partners. You can read the full report online at the University’s website

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) implemented sanctions on Myanmar (Burma). In response to the military coup in Myanmar (Burma), sanctions have been implemented on the country. OFAC will supplement the sanctions in the future, but to view the existing sanctions and see what’s already in effect, check out the Federal Register’s website.  

Ports 

Carriers reroute cargo and suspend trans-Pacific calls in Oakland. Zim Integrated Shipping Services will reroute its premium service from China to Oakland to call only in Los Angeles, citing backlogs and congestion at the Oakland port. With vessel delays of 10 to 12 days at Oakland, this service can no longer maintain its original standards of guaranteeing vessel space in Asia.  

Additionally, Hapag-Lloyd will join Zim in dropping its trans-Pacific westbound calls in Oakland for the same reasons. There is a plan to return to those services in Oakland around mid-August if congestion clears. According to the CMA CGM website, trans-Pacific Oakland calls were dropped and others scheduled through August will be left out. 

Air

The International Air Transport Association (IATA) released data for global air cargo markets for April 2021. From this data that IATA released, it was found that air cargo demand continued to surpass pre-pandemic levels with demand up by 12%. Read more about the statistics of how the COVID-19 pandemic impacted air cargo levels in a report by the IATA online

European air cargo carriers open up more flights, creating more capacity for ocean-shy shippers. Emirates SkyCargo and Qatar Airways will resume flights from Birmingham, UK, pleasing forwarders. Opening up more space at the Birmingham Airport will allow forwarders to avoid congested routes and gateway airports, and work around the unprecedented ocean capacity and congested ports in China. 

Trucking 

Trucking companies run out of capacity as imports and drayage demand surge. In the U.S. Southeast, trucking companies are warning that they are low on capacity as a year of imports from Asia creates record-breaking drayage demand. National and regional drayage providers in the Southeast are all booked and are unable to serve new clients, which leaves importers and ocean carriers to find smaller trucking companies and paying extra to move import containers from Charleston, Savannah, and Norfolk. 

Truckers raise fees on excessive dwells for containers and trailers. J.B. Hunt Transportation Services and Schneider National are raising fees for shippers who hold onto trailers beyond their allotted free time. Trucking executives say that this problem has worsened over the year and is part of the reason for congestion at rail ramps. 

J.B. Hunt is raising fees from $50 to $100 each day for the first three days that equipment is held after the three free days, and then $150 after four days, and $200 per day for nine days. Schneider is taking a similar approach, raising fees from $50 to $125 per day once the two-day free clock expires. 

Rail

BNSF Railway and Union Pacific Railroad (UP) combat congestion issues in Chicago. Amid another import surge over the last eight weeks, the two railroads are struggling to find space in Chicago, and in turn, frustration amongst truckers, importers, exporters, and port officials is growing. To combat congestion, BNSF announced it would eliminate track to create more storage space in Low W within its Logistics Park Chicago facility. UP will continue its “no ‘cherry picking’ policy, but has also begun ‘grooming’ stacks with the longest dwelling containers on top to speed the mounting and pickup of import boxes once chassis becomes more available.” 

Other

Biden will launch a task force to address supply chain bottlenecks. After a 100-day review of supply chains, the Biden Administration will form a supply chain task force to address the bottlenecks in the semiconductor, construction, transportation, and agriculture sectors. With this task force, the goal is to increase domestic manufacturing, decrease shortages of vital goods, and try not to rely on geopolitical competitors like China. 

Port of Yantian Disrupted by COVID-19 Cases, Withdrawal of Troops from Afghanistan Creates Air Transport Shortages, and U.S. Railroads Tighten Free Time at Inland Ramps

By | COVID-19 Latest Updates | No Comments

Ocean  

Ocean capacity continues to be tight. Ports across the board in China continue to be extremely tight on space, with no space guaranteed even if booked through premium services. Additionally, equipment shortages continue with ocean carriers, further contributing to the congested network. 

With rising COVID-19 cases, the Port of Yantian in China will take at least a week to clear. The terminal remains heavy with disinfection and quarantine measures continuously being implemented by local authorities to curb the spread of the coronavirus. Maersk expects continued terminal congestion and vessel delays of up to eight days. As of Monday, there were around 40 ships waiting to berth at the Yantian International Container Terminal, with the terminal carrying out operations as much as possible with 30% of full capacity. Yantian will only accept export-laden containers via an appointment app and within three days of a vessel’s scheduled arrival until June 6. 

ICYMI: The National Industrial Transportation League (NITL) urges Congress to make changes to U.S. shipping laws. Because of the unprecedented and ongoing congestion, NITL is calling on Congress to take action by shifting the burden of proof onto carriers to show that their practices are reasonable and in compliance. Other demands include carriers providing more clarity on detention and demurrage fees, abiding by booking agreements, and allowing aggrieved customers to file complaints. These urges come as the Shipping Act of 1984 doesn’t address the challenges shippers are facing today in the supply chain industry. 

Customs  

The Regional Comprehensive Economic Partnership (RCEP) Agreement may impact negotiations on China-U.S. tariffs. The RCEP Agreement is a massive trade agreement between 15 countries in Southeast Asia and Oceania, designed to eliminate as much as 90% of the tariffs on goods between its signatories over the next 20 years. The agreement is currently being ratified, and with ratification from three-fifths of the deal’s 15 signatories, the agreement will enter into force in 60 days. If ratified, this agreement may impact negotiations on trade between the U.S. and China, and our Navegate team will keep you updated on how this may affect importing.  

ICYMI: Aluminum import licenses will be required for entry for covered aluminum products starting June 28, 2021. On May 21, 2021, the U.S. Department of Commerce published a notice in the Federal Register confirming this regulation. The application system is available at https://www.trade.gov/aluminum, and for a list of the aluminum products required for the license, view the list on the International Trade Administration’s website

Ports 

Shippers are turning to the U.S. East Coast for port transloading options due to congestion on the West Coast. Because the congestion issues are significantly worse on the West Coast than on the East Coast, shippers are transloading on the East Coast to better get their freight inland and into stores. Ports like NY-NJ and Savannah have more transloading options, however, NY-NJ continues to experience capacity constraints. 

Massive congestion continues at the Port of Oakland, with Seattle-Tacoma lacking railcars. According to Maersk, Oakland has surpassed the ports of Los Angeles and Long Beach in terms of vessel traffic. Wait times at Oakland are up to three weeks, while LA-LB is averaging between one to two weeks. Imports from Asia at Seattle-Tacoma are up 40.3% from January through April compared to one year ago. The ports are working with terminal operators and the International Longshore and Warehouse Union (ILWU) to address these congestion issues.  

Air

Forwarders shift volumes to secondary airports due to overwhelming demand at major U.S. air hubs. Big air gateways like Chicago and Los Angeles are overwhelmed with air cargo, so forwarders are diverting their cargo to smaller airports not traditionally used as the main entry points for the U.S. Industry experts are saying that these smaller airports are good alternatives to transport goods as they do not face the same challenges as traditional gateways. 

NATO and U.S. Military withdrawal of troops and equipment from Afghanistan may create temporary air transport shortages. Large commercial jets are being used to assist with the withdrawal of troops and equipment which could cause even more capacity issues for companies seeking airfreight space. Airlift support from the Air Force and commercial cargo carriers have already helped the drawdown be one-quarter complete. If you’re using air freight to transport shipments, delays are likely and space is limited due to this withdrawal. 

UPS Air Cargo will be required to comply with TSA screening regulations for U.S. exports starting July 1, 2021. This requirement means that UPS Air Cargo will need to ensure that all U.S. exports bound for international destinations are screened before departing the U.S. If you have any questions regarding the details of this requirement, please contact one of our air experts

Trucking 

Truckload rates may extend to 2022. As the U.S. economy recovers and COVID-19 vaccinations continue, so too are volatility and difficulties for supply chains. With a shortage of materials and sufficient staff and high freight demand, the current truck pricing cycle will likely extend into late 2021 and even 2022, so shippers should expect high rates to continue for the foreseeable future. 

Rail

Union Pacific (UP) will raise intermodal surcharges again. For all domestic intermodal customers in California who ship more than their contractual limits from June 13, UP will raise surcharges on these customers, the second time the railroad has increased its fees. The charge will be $3,000 per container on low volume shippers and $1,500 on all other shippers. This hike in surcharges indicates UP is concerned about having enough containers to service its core contract customers through this peak season.  

U.S. railroads on both coasts tighten free time at inland terminals. To expedite the pickup of record import volumes flowing through busy terminals, U.S. Class I railroads tighten free time, narrowing the window for many domestic and international shippers. This move is intended to encourage quicker turns of containers and chassis to relieve inland ramp congestion. As of June 7, BNSF Railway will eliminate the industry standard 5 p.m. cutoff for calculating free time at all its facilities. Learn more about how railroads are tightening free time in an article by JOC.com

Dallas intermodal ramp recovers after February winter storm. After the unprecedented February snowstorm in Texas disrupted supply chains in the area, shippers are now experiencing quicker delivery times because there are sufficient chassis that are available. Importers and chassis providers also say this turnaround is due to slowing container volumes from Southern California, allowing chassis providers to turn equipment faster. 

Other

Biden Administration reviews that may affect freight markets: a power index by FreightWaves. Take a look at the top 10 Biden regulatory reviews and their effects on freight markets, their statuses (whether they are in effect, proposed, or under review), and why it matters to shippers and supply chains. 

ICYMI: Stay updated on logistics and supply chain trends for the rest of 2021. As mid-year approaches, our Navegate experts identified key supply chain trends to watch for the rest of 2021. From continued capacity constraints to ongoing industry disruptions, learn how to manage and respond in our latest blog and how we can help. 

NITL Urges Congress to Change U.S. Shipping Laws, Shenzhen Yantian Terminal Operations Halted, & Aluminum Import Licenses Required in Late June

By | COVID-19 Latest Updates | No Comments

Ocean  

The National Industrial Transportation League (NITL) urges Congress to make changes to U.S. shipping laws. Because of the unprecedented and ongoing congestion, NITL is calling on Congress to take action by shifting the burden of proof onto carriers to show that their practices are reasonable and in compliance. Other demands include carriers providing more clarity on detention and demurrage fees, abiding by booking agreements, and allowing aggrieved customers to file complaints. These urges come as the Shipping Act of 1984 doesn’t address the challenges shippers are facing today in the supply chain industry. 

COVID-19 cases confirmed at the west port of Shenzhen Yantian terminal in China cause the terminal to close and halt all cargo operations. The Yantian terminal has stopped accepting containers at the gate from May 25-27, and will continue accepting containers on May 28, but only for containers planned for sailing within four days before an estimated arrival time at the Yantian terminal. Because of this restriction, some shipments will be affected and may be loaded onto the next sailing. 

A cyclone in India forced ports to suspend operations last week. Already suffering from COVID-19 lockdowns and capacity shortages, a cyclone in India forced the Jawaharlal Nehru Port Trust and Mundra Port, the busiest cargo gateways in the country, to halt operations. Ocean carriers have been working to revive affected shipping schedules, and the ports have been working to restore power that was lost from the storm. If you have goods traveling from this area, they will most likely be affected. 

Customs  

Aluminum import licenses will be required for entry for covered aluminum products starting June 28, 2021. On May 21, 2021, the U.S. Department of Commerce published a notice in the Federal Register confirming this regulation. The application system is available at https://www.trade.gov/aluminum, and for a list of the aluminum products required for the license, view the list on the International Trade Administration’s website

Ports 

Congestion and import surges continue at Port of NY-NJ. As cargo volumes show no signs of slowing down and drivers leave the industry due to increasing hassles, drayage operators expect limited trucking capacity to tighten even further. This driver turnover is causing rate increases to attract and keep new drivers, as well. 

Terminals at LA-LB are concerned about increasing rail container dwell times. Operators at the port are concerned that these rising times will hinder their ability to handle import volumes during an early peak season. While the Port of Los Angeles has made a dent in the backlogs, this ongoing congestion shouldn’t be ignored.  

The largest container ship to arrive on a North American East Coast in Elizabeth, New Jersey highlights growing Southeast Asian volumes. The vessel discharged nearly 3,000 containers out of the 7,000 that it was carrying and underscores the growing volumes of imports from Southeast Asia through New York and New Jersey, which have been growing 10.3% each year on average. 

Air

LATAM Airlines Group expands its fleet with Boeing 767 converted freighters. The South American carrier will nearly double the size of its fleet by 2023, bolstering air cargo capacity in the Americas. These new aircraft will increase capacity from Colombia, Ecuador, and Chile to North America and Europe to support the flower industry and meet the demand for salmon exports and other goods.  

Air cargo capacity is expected to be strained until mid-2022, according to DHL. Shipping bottlenecks and increased consumer spending will help drive increased demand for air cargo until mid-2022, with capacity constraints continuing to push up prices, according to DHL Global Forwarding. Capacity in 2022 will be scarce as well due to slow vaccine rollouts, dissuading people from traveling in the meantime. 

Trucking 

U.S. drayage drivers are quitting as congestion decreases pay. In the Midwest and South Central U.S., an alarming number of drivers who dray ocean containers are quitting this year because rail terminal congestion has lowered daily productivity, and thus, decreased their pay. While trucking companies have increased rates for drivers, it hasn’t been enough to compensate drivers for completing fewer jobs each day, and the average local drayage driver pay has fallen about 20%. Because of this labor shortage, delays and disruptions to supply chains are expected. 

Forwarders should keep California Law AB-5 on their radar. A recently adopted California law known as AB-5 would make it illegal for most industries, including the trucking industry, to hire independent contractors to perform tasks that the company does in the normal course of business. While the law was signed in September of 2019, it has been tied up in the courts from various industry groups, but it appears that the law will likely take effect soon. It is warned that the impact of this law may be severe as it will affect standard business model structures for trucking firms. More information on how this law will affect the trucking industry can be found in a document by Ex Works, Inc. online

Rail

Kansas City Southern (KCS) makes a deal with Canadian National Railway (CN), abandoning a deal with Canadian Pacific. KCS has chosen the deal proposed by CN, which was nearly $8 billion more than the CP proposal. However, the final deal will be decided on which proposal will maintain and increase competition, particularly in the intermodal market. It is also unclear as to whether the U.S. Surface Transportation Board will allow the transaction to proceed; if it doesn’t, CP would try to strike a new agreement with KCS.

Other

ICYMI: Stay updated on logistics and supply chain trends for the rest of 2021. As mid-year approaches, our Navegate experts identified key supply chain trends to watch for the rest of 2021. From continued capacity constraints to ongoing industry disruptions, learn how to manage and respond in our latest blog and how we can help. 

Get Moving. Forward. Faster.

Thousands of people use Navegate to see deeper into their supply chains and improve their logistics management.
Join them today.