Freight Market Updates

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Black Leaders Who Revolutionized the Supply Chain & Transportation Industry

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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

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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...

Navigating Into the New Year: A Customs Checklist

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Navigating Into the New Year: A Customs Checklist There’s no doubt that 2020 has been an unforgettable and difficult year. With an unprecedented pandemic disrupting every aspect of our lives...

Navigating a Changing Marketplace

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Navigating a Changing Marketplace The logistics marketplace is one that’s always changing. Advancements in technology and transportation have paved the way for progress in the logistics world, shipping goods faster...

Ocean Carriers Suspend Services to Inland Ramps, Customs Asks Importers to Review Entries, and the Port of Los Angeles Launches a Vaccination Site

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Ocean  

More ocean carriers are suspending services to certain inland ramps via Los Angeles/Long Beach. The ramps include Cincinnati/Cleveland/Columbus, Detroit, Louisville, Houston/San Antonio, Atlanta, Nashville, and New Orleans. The suspension comes as carriers prefer to accept more base port cargo to speed up the equipment utilization as there’s no rail network that connects from the West Coast to the East Coast. 

Container shortage from India poses challenges to outbound shipments. The Federation of India Export Organization (FIEO) has stated that an increase of up to 40% in ocean freight since November of 2020 and lack of containers are making deliveries difficult. The FIEO attributes this shortage to low import volumes from China, with a decrease of 19.6% last year. Additionally, poor global container circulation further fuels this problem, while shipping lines prioritize the containers they have to ship on the U.S. trade line due to record high U.S.-China market trade rates. 

General rate increases (GRIs) from ocean carriers Maersk, CMA CGM, and MSC have been repealed. As anticipated, these GRIs only stuck around for a few days after its implementation on March 1st.  

Customs  

Customs is asking importers to review entries that may be subject to third country antidumping and countervailing duty cases. Therefore, importers must file corrections within 60 days of the notice for entries made between October 5th, 2019 and October 28th, 2020 to prevent further actions by Customs. 

USDA Animal and Plant Health Inspection Service (APHIS) Core electronic messaging is mandatory starting March 15th. Commodities subject to USDA reporting will require electronic submission of permit and/or license details electronically as part of the Customs entry. The programs included in this message set are as follows: Veterinary Services (AVS) for animal products, Plant Protection & Quarantine (APQ) for plants, seeds, fruits & vegetables, Biotechnology Regulatory Services (ABS) for genetically engineered organisms, and Animal Care (AAC) for live animals. Therefore, it’s advised that importers should research the requirements for the commodities they import and ensure their broker has all of the required documentation to proceed with entry. More information can be found in the APHIS’s section of the USDA’s website. If you have any questions regarding these updates, don’t hesitate to contact one of our experts

Ports 

The Port of Los Angeles launches a vaccination site. Waterfront employers and the International Longshore Warehouse Union (ILWU) have set up a vaccination site at the Port of Los Angeles to hopefully double the number of dockworkers who receive the COVID-19 vaccine. As the number of vaccinations increases, stakeholders hope that the labor pool will increase, thus, easing the unprecedented congestion at the port. 

Air

Air freight rates stabilize after a decline as the Chinese New Year came to an end. Air cargo rates have declined to levels not seen in months on trans-Pacific and Europe trade lines. However, it’s not clear if this decline will continue for much longer, so it’s recommended to check regularly on these rates.

Trucking 

Heavy rain may cause delays in trucking this week. Parts of Tennessee and Ohio were hit with up to five inches of rain over the weekend, causing trucking delays, while heavy rainfall is expected in the deep South from eastern Texas to Florida. Any flooding should be localized, but make sure you have insurance on your shipments as we enter the spring season where more rainfall will be more common.

 

Maersk Vessel Loses Containers, Biden Issues Executive Order, and Air Rates Plunge

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Ocean  

Maersk vessel loses 260 containers. On Wednesday, February 18th, the Maersk Eindhoven lost 260 containers in rough seas off the coast of Northern Japan. This incident was the third time in the past three months in which a vessel from Asia headed to the U.S. West Coast lost containers due to rough weather. Maersk said no malfunction or maintenance issues were identified, and only minimal repairs were required to the vessel. 

Ocean carriers Maersk, CMA CGM, and MSC are implementing a general rate increase (GRI). These carriers will enact a GRI starting March 1st at around $50-150 per container, which is less than 10% of the current rates. It is likely, however, that this GRI won’t stick around for long; our team is anticipating its removal within one week of its issue date.  

With Chinese New Year over with, ocean capacity is seemingly starting to open up — slowly. While standard services are still expensive and trans-Pacific container circulation is still slow, rates aren’t increasing as much and there aren’t many issues with cargo rolling. Some carriers are also projecting that capacity will be tight until the end of March, with some capacity starting to open up and congestion slowly starting to ease.

Our team is noticing discrepancies between tracking data received from shipping lines and when shipments are actually arriving at final destinations. Due to routing changes from carriers, we’re seeing delays in updates on the arrival of shipments for some importers. Because of these delays, it’s recommended to track and trace your freight as closely as possible. If you have any questions, don’t hesitate to reach out to one of our experts.

Customs  

President Biden issues an Executive Order to create more resilient and secure supply chains for essential goods. This Executive Order launches a comprehensive review of supply chains and directs federal departments and agencies to identify ways to further secure these supply chains against vulnerabilities. This order strives to avoid shortages in PPE for front-line healthcare workers, something that was seen in the beginning of the COVID-19 pandemic. More information can be found in a fact sheet on the White House’s website.

Ports 

The ports in the Pacific Northwest, Toronto, Oakland, and East Coast are majorly congested. As importers found ways to avoid congestion in Southern California and as vessels are re-routed to other ports across North America, congestion is increasing at those ports. As the congestion at these ports increase, there is some space opening up in Southern California, which is the first time that our team is seeing capacity open up. 

Dockworkers at the ports of Los Angeles and Long Beach receive COVID-19 vaccines. Since February 12th, more than 1,000 dockworkers at the Southern California ports have received the first dose of the COVID-19 vaccine. The ports hope to have all workers vaccinated by the end of April. As longshore labor shortages have been a major contributor to the congestion, these vaccinations happening at the ports will hopefully help ease the congestion as more workers will be able to work at the ports.

Air

Air freight rates decline as Chinese New Year ends. Air cargo rates have declined to levels not seen in months on trans-Pacific and Europe trade lines. However, it’s not clear if this plunge will continue for much longer, so it’s recommended to check regularly on these rates.

Rail

There’s an increase in capacity in domestic rail transportation. Our team is starting to see an ease in domestic rail transportation for the first time in months. This ease comes as domestic containers get priority over international containers. 

There was a derailment on a Norfolk Southern train this week. The train derailed in Newport, Pennsylvania, approximately 25 miles northwest of Harrisburg, Pennsylvania. Service was restored on the line on the morning of Wednesday, February 24th. Customers with traffic moving in this area should anticipate a delay of up to 48 hours.

Trucking 

Truckload rates rise strongly. After a tumultuous 2020, rates in the truckload market will continue their surge. This continuation comes as demand surges to replace depleted inventory and sharp rising costs for carriers.

Other

The Federal Maritime Commission (FMC) issues information demand orders. The FMC is issuing information demand orders to ocean carriers and marine terminal operators “to determine if legal obligations related to detention and demurrage practices are being met.” These orders come as the FMC continues to investigate practices contributing to the unprecedented congestion at the ports. More information on these orders can be found on the FMC’s website

ICYMI: It’s Black History Month. As Black History Month comes to an end, be sure to catch our Black History Month blog, which highlights prominent Black figures who technologically and culturally made the industry move forward, faster. 

Chinese New Year Shows No Signs of Slowing Demand, Air Cargo Rates Increase, and Winter Storms Disrupt Supply Chains

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Ocean  

Chinese New Year shows no signs of slowing down demand out of Asia. As the Chinese New Year continues, there seems to be no easing of bottlenecks even as Chinese factories stay open to clear backlogs. According to an update from Maersk, equipment shortages still remain an industry-wide challenge and capacity availability and schedule reliability are still strained. These challenges will continue throughout the first quarter of this year, with only slight improvements expected going into March. Additionally, as people start to migrate back to the cities after celebrating Chinese New Year, more people will have to isolate before returning to work, which will prolong output from China. 

Customs  

Forced labor and human rights abuses in the XUAR (Xinjiang Uyghur Autonomous Region) have resulted in a Withhold Release Order (WRO) for cotton and other commodities. Shipments that CBP believes originate from the XUAR can be detained, indicating there’s increased enforcement from CBP. Therefore, it’s recommended for shippers to confirm supply chains at the base level, which includes obtaining statements of origin on the yarn/fabric to prove that it’s not made in the XUAR. More information on this matter can be found on the CBP’s website

Our team is seeing continued surveillance from CBP of personal protective equipment (PPE) imports for counterfeit. Since the pandemic began last year, CBP has seized large volumes of COVID-related counterfeit materials with the potential to harm healthcare workers and others who rely on authentic PPE. Given the seriousness of this situation, CBP is continuing to monitor more imports of PPE to ensure that they’re not counterfeit products. 

Ports 

There are significant wait times at major North American ports. According to Maersk, the ports of Los Angeles and Long Beach are experiencing long wait times due to strong demand and labor ganging restrictions on vessels (due to labor shortages). At Los Angeles and Long Beach, daily vessels waiting to be birthed are between 30-35. Other ports like Vancouver and Prince Rupert are experiencing similar pressures. These wait times at the ports continue to fuel the vessel shortage in Asia as vessels are unable to return on schedule. If you have questions regarding congestion at the ports, don’t hesitate to reach out to one of our experts

Port of Savannah improves despite record Asia import surge while other ports close due to weather. Cargo flow at the Port of Savannah has been improving over the last two weeks. This improvement comes as retailers restock inventories and shift goods away from the congested ports in Southern California. The port of Newark, however, will be closed today (February 18th) due to the weather, while the Houston port is also closed with the terminal struggling with electricity and water availability. 

Air

Air cargo rates continue to increase. The air freight rates are surging upward as the seven-day Chinese New Year and heavy demand continue. This demand is keeping aircraft operating at full capacity 17 hours a day and slowly pushing air cargo rates up on both trans-Pacific and Asia-Europe trade lines. 

CMA CGM launches air cargo service. The new service will operate four Airbus freighters out of Europe. According to the carrier’s CEO, this newly launched service comes as a response to the growing demand for more logistics solutions. Called CMA CGM Air Cargo, the division will leverage partnerships with airlines to deliver global coverage. This new service by a major carrier indicates that ocean congestion and slowdowns in China may continue well into 2021.

Trucking 

Truckload rates rise strongly. After a tumultuous 2020, rates in the truckload market will continue their surge. This continuation comes as demand surges to replace depleted inventory and sharp rising costs for carriers.

The Federal Motor Carrier Safety Association (FMCSA) extends pandemic-related exemptions. Previously set to expire February 28th, the FMCSA extends COVID-19 relief exemptions through May 31st. The relief cover18-s supplies related to COVID-19 and food, paper, and other grocery products to restock distribution centers and stores.

Other

Unprecedented winter storms across the country will cause delays across the board. As the Midwest and Texas experience below-freezing weather and a winter storm expected to hit the East Coast, shipments are likely to be delayed as trains and trucks will most likely not start due to the cold and snowy conditions. 

Union Pacific Railroad shuts down due to inclement weather. U.P. has closed most of its intermodal network for 72 hours because of the snowy and icy weather in the Pacific Northwest, Midwest, and southern plain regions. This closure will halt supply chains while the railroad prioritizes the safety of its workers, crews, and trains. 

It’s Black History Month. This month, we’re celebrating Black revolutionaries who transformed the supply chain and transportation industry. Our Black History Month blog highlights prominent Black figures who technologically and culturally made the industry move forward, faster.

China Celebrates Chinese New Year, Section 232 Tariffs Upheld, and Biden Announces Sanctions Against Myanmar’s Military

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Ocean  

Trans-Pacific carriers may curb free time in annual contracts. Ocean carriers are indicating that they will reduce contracted free time for 2021-2022 contracts, which if successful, will force shippers to accept higher per diem charges. Additionally, this move could make shippers take more difficult steps to adjust warehouse operations so that containers could be unloaded more quickly, and this move could also impact drayage by “resulting in fewer opportunities for two-way moves by drayage drivers.” This move comes as the last year saw widespread equipment shortages.   

Chinese New Year is this week. Many workers in China are already off for the holiday, and depending on what demand is like after the holiday, ocean rates may increase. Typically, rates may only increase for a couple of weeks to a month after the holiday. When the events of the holiday settle down, it’ll be more clear what impacts there are on the industry during this unique year. 

Maersk projects that the dynamics driving freight rates to be higher should start “easing” in the second quarter of this year. While it is quite difficult to predict patterns for 2021 based on the unprecedented year for the logistics industry, Maersk expects rates to normalize based on the rates it has seen so far.

Customs  

Section 232 tariffs on steel were upheld by the Court of International Trade (CIT). The CIT upheld former President Trump’s imposition of Section 232 tariffs on imports of steel products. This decision could make it more difficult for President Biden to reduce or remove the tariffs after his administration reviews the matter. This decision might also serve as a precedent to uphold the Section 301 tariffs on China, but it won’t be clear until that decision happens. 

Our team is seeing continued surveillance from CBP of personal protective equipment (PPE) imports for counterfeit. Recently, CBP seized counterfeit PPE that the state of Washington received and was used by health workers in the state. Given the seriousness of this situation, CBP is monitoring more imports of PPE to ensure that they’re not counterfeit products. 

Biden announces sanctions against the military regime in Myanmar. The President announced these sanctions in response to the coup Myanmar experienced earlier this month. The sanctions prohibit Myanmar from accessing $1 billion in assets from the U.S. that would benefit the country’s military leaders. 

Ports 

Terminal operators at the ports of Los Angeles and Long Beach project that congestion will clear by late spring. It is estimated that the port will continue experiencing record container volumes until the spring, but the backlogs of vessels in the harbor should dissipate sometime between April and June. The congestion will likely decrease as more workers at the port continue to receive the COVID-19 vaccines. 

Air

Air freight rates are increasing, again, despite the recent decline. Air rates are going back up again, even though there the rates slightly decreased a few weeks ago. Because shippers now have to book on premium services for new bookings and standard services are being rejected entirely, importers are looking to switch from ocean freight to air freight. Therefore, the demand for air freight is increasing, which is increasing the air rates, again. Because of this demand, delays are expected in the coming weeks. If you’re considering air freight, don’t hesitate to reach out to one of our experts

FEMA is launching an investigation to prioritize PPE on air freights. The National Customs Brokers and Freighters Association of America (NCBFAA) Leadership and Airfreight Sub-Committee Chair had a call with FEMA this week to discuss delays at airports in recovering PPE cargo. FEMA is reviewing data related to delays in PPE cargo so that the agency can prioritize distributing PPE on air freights to effectively respond to the COVID-19 pandemic. 

Trucking 

Winter weather will continue to affect trucking. As the winter season continues and an ice storm is anticipated to hit nearly a dozen states in the next few days, trucks may not start due to frigid cold weather or may get stuck in the snow, which will drive up trucking costs. Due to this weather, delays should also be expected. 

Trucking capacity to remain tight as jobs decline. The trucking industry lost more jobs in January and as imports continue to surge at U.S. ports and U.S. business activity expands, these job losses signal a tight trucking market for the months ahead. If trucking capacity is tightened due to a lack of drivers, spot rates could begin to move upward.

Other

It’s Black History Month. This month, we’re celebrating Black revolutionaries who transformed the supply chain and transportation industry. Our Black History Month blog highlights prominent Black figures who technologically and culturally made the industry move forward, faster. Take look. 

Ocean Carriers Offer New Services to Oakland, Myanmar Coup Raises Uncertainty, and Winter Weather Affects Freight Movement

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Ocean  

Ocean space and empty containers are still limited. Capacity is difficult to find as the logistics industry continues to experience record import volumes and unprecedented congestion. For the best chance of any movement of shipments, bookings will need to be done on the premium services ocean carriers recently began offering. 

Ocean rates for main shipping lines extended. Shipping carrier Maersk is extending its freight rates to February 14th, while MSC and Yang Ming are extending their rates to the end of February. These rate extensions indicate that rates could be plateauing and that the industry is approaching the “ceiling” of record rate increases. However, with the Chinese New Year coming up, rates could increase even more. 

Customs  

The Biden Administration is still reviewing some pending rule changes. The Biden Administration is still getting assembled, so the administration is currently reviewing some pending rule changes, and our team at Navegate will keep an eye out for any changes that will affect our shippers and importers. 

Ports 

Ocean carriers CMA CGM and MSC offer services to Oakland instead of Southern California. Ocean carrier CMA CGM has a newly restructured Asian service that makes Oakland, California its first U.S. port call rather than the ports of Los Angeles and Long Beach. The new service, called the Golden Gate Bridge Service, offers a 12-day transit from Yantian, China, and a 17-day transit from Shanghai. Additionally, MSC will start offering a similar service, one that reroutes to the Midwest, which will likely start in late February. Historically, Oakland is a final destination, not an entry port for another region in the U.S., and may not have the infrastructure to handle such import volumes. Therefore, it’s expected that congestion may quickly accumulate at the port of Oakland.

The Federal Maritime Commission (FMC) is urging shippers to re-route vessels to the ports of Seattle and Tacoma instead of Southern California. Due to the unprecedented congestion at the ports of Los Angeles and Long Beach, the FMC is urging ships to divert to the less congested Seattle and Tacoma ports. There is very little operational capacity at the ports of Los Angeles and Long Beach, but ports at the Pacific Northwest could serve as a “temporary safety valve” until congestion is relieved, according to FMC Commissioner Carl Bentzel. 

Air

Air freight rates are increasing, again, despite the recent decline. Air rates are going back up again, even though there was a dip in the rates a few weeks ago. Because shippers now have to book on premium services for new bookings and standard services are being rejected entirely, importers are looking to switch from ocean freight to air freight. Therefore, the demand for air freight is increasing, which is increasing the air rates, again. Because of this demand, delays are expected in the coming weeks. If you’re considering air freight, don’t hesitate to reach out to one of our experts

Trucking 

Truckers in China are continuing to break for Chinese New Year. With the Lunar New Year coming up, truckers are already starting to take off to travel back to their hometowns to visit family for the holiday, one to two weeks earlier than usual. They are traveling earlier to decrease the chance of contracting COVID-19 by avoiding the anticipated congestion leading up to Chinese New Year and to isolate for a sufficient period in their homes to follow health safety protocols. The same scenario is expected after the Chinese New Year; drivers may be reluctant to return or may have to isolate themselves again before returning to work. 

Other

Myanmar is experiencing a coup, with democratically elected leaders detained as the military seizes control. While the country is experiencing a serious political issue at the moment, freight movement does not seem to be impacted. Our team is watching the situation closely and will keep you updated.

Winter storms in the Northeast cause backlogs. Earlier this week, there was a winter storm that occurred in the Northeast, which has caused backlogs of up to three days. Additionally, below zero temperatures are approaching the Midwest and Northeast, so it’s expected that some truck and train travel will be delayed as these services may not be able to withstand the cold temperatures.

There are calls for port workers, trade groups, and maritime regulators to receive the COVID-19 vaccine. After alarming breakouts at the ports of Los Angeles and Long Beach, port officials are calling for transport-related workers to receive priority for the COVID-19 vaccination to avoid even more disruption and congestion at the ports. Two members of the Federal Maritime Commission (FMC), Carl Bentzel and Daniel Maffei, have urged the Biden Administration to prioritize the vaccine for these workers in a letter to the National Governors Association, which was also supported by the American Association of Port Authorities (AAPA). 

Maersk Ship Loses Containers, US Department of Commerce Delays Aluminum License Deadline, and Air Freight Rates Increase Again

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Ocean  

Maersk ship loses containers, becoming the second trans-Pacific incident in two months. The Maersk Essen ship recently lost approximately 750 containers after it encountered rough seas while en route from Xiamen, China to Los Angeles, California. The incident occurred on January 16th, approximately 450 miles north of Hawaii. A detailed cargo assessment is in progress, and the ship is scheduled to arrive at the port of Los Angeles on January 28th. All crew members are safe, and the U.S. Coast Guard and other relevant authorities were notified of the incident. Because of this incident, it is recommended to make sure you have insurance on your shipments in case an incident like this happens again. 

Ocean space and empty containers are still difficult to find. Capacity is quite limited as the logistics industry continues to handle record import volumes and unprecedented congestion. For the best chance of any movement of shipments, booking will need to be done on the premium services ocean carriers recently began offering. 

Ocean rates for main shipping lines extended. Shipping carrier Maersk is extending its freight rates to February 14th, while MSC and Yang Ming are extending their rates to the end of February. These rate extensions indicate that rates could be plateauing and that the industry is approaching the “ceiling” of record rate increases. However, with the Chinese New Year coming up, it’s possible that rates could increase even more. 

Customs  

Aluminum license requirements delayed to March 29, 2021. The U.S. Department of Commerce delayed the deadline for having an aluminum license for importers of aluminum products from January 25, 2021, to March 29, 2021. The delay was implemented to give the new Biden administration time to review the rule and consider any comments before full implementation. More information can be found on the Federal Register’s website or the AIM System website.  

The Biden administration plans to take a multilateral approach on tariffs imposed on Chinese goods and takes steps to fulfill the “Buy American” campaign pledge. The Biden administration plans to evaluate the tariffs in place that the Trump administration imposed and work with partners and allies to develop a plan of action, according to Press Secretary Jen Psaki. Additionally, President Biden signed an executive order that imposed tougher rules on government procurement practices to increase the purchase of goods made in the United States. This executive order includes making it harder for federal agencies to purchase imported goods, revising the definition of “American-made” products, and raising local content requirements.

Ports 

COVID-19 surges at the ports of Los Angeles and Long Beach. Dockworkers at the ports of Los Angeles and Long Beach have been testing positive for COVID-19, with nearly 700 union members at the ports recently testing positive. This increase in infection rates has been hurting productivity at the ports, but officials say that cargo-handling will not be interrupted. Officials are also saying that they’ll do their best to avoid shutting down the terminals. On top of these recent infections, congestion is growing, with as many as 45 vessels waiting to be berthed, with even more vessels coming to the port. With the combination of COVID-19 surging and record import volumes, congestion at the port is likely to get worse, so delays should be expected. 

Air

Air freight rates are increasing, again, despite the recent decline. Air rates are going back up again, even though there was a dip in the rates a few weeks ago. Because shippers now have to book on premium ocean services for new bookings and standard services are being rejected entirely, importers are looking to switch from ocean freight to air freight. Therefore, the demand for air freight is increasing, which is increasing the air rates, again. Because of this demand, delays are expected in the coming weeks. If you’re considering air freight, don’t hesitate to reach out to one of our experts

Trucking 

Truckers in China are starting to break for Chinese New Year. With the Lunar New Year coming up, truckers are already starting to take off to travel back to their hometowns to visit family for the holiday, one to two weeks earlier than usual. They are traveling earlier to decrease the chance of contracting COVID-19 by avoiding the anticipated congestion leading up to Chinese New Year and to isolate for a sufficient period in their homes to follow health safety protocols. The same scenario is expected after Chinese New Year; drivers may be reluctant to return or may have to isolate again prior to returning to work. 

Trucking capacity remains tight as the industry recovers volumes lost. As the trucking industry begins to recover from the 2020 recession, shippers should expect pressure on pricing to continue. Unless consumer demand suddenly drops or swings from retail goods to services, trucking capacity is on track to remain tight in 2021 so far.

Other

More Chinese factories will be working during the Lunar New Year. Rather than shutting down for the Chinese New Year, more factories will be producing exports for European and North American consumers, indicating little reprieve as record volumes continue. Government agencies are also giving bonuses to workers to not return home to catch up on back-orders and to not travel due to COVID-19.

Chinese New Year is Around the Corner, Increase in Cargo Rolling at Asian Ports, and Shipping Costs Likely to Increase

By | COVID-19 Latest Updates | No Comments

Ocean  

Limited ocean carrier space continues. There are few to no empty containers available to load in China unless bookings are completed through the recently-offered premium services. These constraints on vessel space are due to U.S. imports from Asia increasing. If customers have new shipments that need to depart China before Chinese New Year (February 12th), premium services will need to be used for those shipments. However, standard services will most likely not sail until the end of February. The rates on these standard services will most likely extend through the end of January, but there’s a chance that the rates may change if shipping lines choose to raise them. 

Customs  

With the Generalized System of Preferences (GSP) expired, importers should prepare for potential retroactive approval. The GSP provides duty-free treatment for thousands of imports from hundreds of countries and expired on December 31st, 2020. Should the GSP be renewed retroactively later in 2021, importers should still claim GSP on their entries for eligible refunds. 

Chinese New Year is coming up, so it’s a good time for importers to do some housekeeping duties. The Chinese New Year results in the largest annual migration of people on Earth (though with the COVID-19 pandemic, this year is likely to have fewer people traveling), and because China is one of the most significant manufacturers in the world, the holiday disrupts global supply chains. Now is a good time for importers to ensure their classifications, duty rates, and policies are updated. If you need help navigating the Chinese New Year, don’t hesitate to reach out to one of our Customs Experts or read our blog on how importers can minimize the holiday’s impact on supply chains

Ports 

Port of Oakland experiences disruptions in agricultural exports due to late vessel arrivals. These late vessel arrivals have been becoming more frequent than they were last fall, disrupting agricultural shipper’s schedules to deliver export containers to terminals. These vessel delays add to the already unprecedented congestion that U.S. West Coasts are experiencing.  

Cargo rolling at Asian ports has been increasing due to demand pressures. As the demand for containers from the U.S. and Europe increased, carrier and terminal capacity became overwhelmed. In some of the world’s busiest ports like Shanghai, 37% of all containers were rolled, which is a 7% increase from November to December. At Port Klang, 55% of containers were rolled, while Singapore rolled 42% of all containers, an increase of 9% and 2%, respectively. It was also found that of the 20 global ports that Ocean Insights collects data for, 75% saw an increase in cargo rollovers. This time of year, volumes are usually lower, so these increases in cargo rolling and demand underscore how unprecedented this situation is for the logistics industry. 

Congestion worsens at ports of Los Angeles and Long Beach due to import surges and labor shortages. According to terminal operators, the congestion is worsening due to six months of near-record cargo volumes arriving at the port, pushing the Southern California supply chain beyond its capacity. There are longer container dwell times and rising truck turn times, and terminal operators can’t vacate laden import containers fast enough to make room for new shipments.  There seems to be no end in sight for this unprecedented congestion for quite some time, at least through June or July. 

Air

Air freight rates have returned to pre-COVID rates, becoming the lowest rates seen in the past year. This decline in rates indicates that there’s little to no demand for air freights at the moment, so customers looking for alternate means of shipping goods may find some use in air freight as opposed to ocean freight. It’s recommended to check regularly on these rates as it is unclear as to how long this decline in rates is going to last.

Trucking 

Trucking capacity remains tight as the industry recovers volumes lost. As the trucking industry begins to recover from the 2020 recession, shippers should expect pressure on pricing to continue. Unless consumer demand suddenly drops or swings from retail goods to services, trucking capacity is on track to remain tight in 2021 so far.

Other

Union Pacific Railroad (UP) rescinded surcharges for containers on January 17th. The record-breaking surcharges went up to $5,000 per container, but UP rescinded the surcharges telling customers that the availability of equipment and containers in Los Angeles/Oakland/Lathrop and Seattle/Tacoma is no longer constrained. Moving forward, UP should be able to better supply customers with containers and cars.

J.B. Hunt Transport Services says a rise in shipper costs is necessary to address congestion. According to J.B. Hunt, certain U.S. markets will see a rise in shipper costs by more than 10% to fund more containers, drivers, and other equipment intended to ease congestion woes. Areas like Los Angeles are likely to see rises in costs by more than 10% due to the unprecedented congestion at the city’s port, but other areas in the eastern network may be different. Therefore, it’s recommended to keep an eye on these shipping costs. 

USTR Suspends France’s Digital Service Tax, Congestion Continues at U.S. Coastal Ports, and Air Freight Rates Decline

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Ocean  

Ocean carrier space is still hard to come by. There are few to none empty containers available to load in China unless bookings are completed through the recently-offered premium services. These constraints on vessel space are due to U.S. imports from Asia increasing. If customers have new shipments that need to depart China before Chinese New Year (February 12th), premium services will need to be used for those shipments. However, standard services will most likely not sail until the end of February. The rates on these standard services will most likely extend through the end of January, but there’s a chance that the rates may change if shipping lines choose to raise them. 

Customs  

United States Trade Representative (USTR) suspends France’s digital service tax. The USTR has decided to suspend these digital service tariffs that were scheduled to go into effect on January 6, 2021. According to the USTR’s office, these tariffs were suspended “in light of the ongoing investigation of similar tariffs adopted or under consideration in ten other jurisdictions.” The civil aircraft Section 301 tariffs still took effect on January 12, 2021. 

ICYMI: Section 301 tariff exclusions extended. Due to the ongoing pandemic, 80 medical supplies will be excluded from the Section 301 tariffs until March 31, 2021. The full list of products can be found on a PDF online from the Office of the U.S. Trade Representative

Ports 

Congestion continues at U.S. coastal ports, causing delays. On the east coast, the port of New York is experiencing delays of up to two days, while Savannah is experiencing delays of up to 60 hours and Miami is heavily congested due to a surge in import volumes. There is a chance that the East Coast ports, however, may be alleviating soon, but it’s unclear as to when. On the Gulf, Houston is experiencing delays of up to 12 hours after holiday closures, while New Orleans is experiencing berthing delays of up to 24 hours. The West Coast is even more congested, with vessel wait times reaching 14 days at Los Angeles and Long Beach, and three days at Oakland due to a labor shortage. And in Seattle, vessel wait times are up to 36 hours due to high import volumes. 

Congestion worsens at ports of Los Angeles and Long Beach due to import surges and labor shortages. According to terminal operators, the congestion is worsening due to six months of near-record cargo volumes arriving at the port, pushing the Southern California supply chain beyond its capacity. There are longer container dwell times and rising truck turn times, and terminal operators can’t vacate laden import containers fast enough to make room for new shipments.  There seems to be no end in sight for this unprecedented congestion for quite some time, at least through June or July. If you need any help navigating this congestion, don’t hesitate to reach out to one of our experts

Air

Air freight rates have returned to pre-COVID-19 rates. These rates have been the lowest rates seen in the past year, returning to the same rates as the pre-COVID era. This decline in rates indicates that there’s little to no demand for air freights at the moment, so customers looking for alternate means of shipping goods may find some use in air freight as opposed to ocean freight. It is unclear as to how long this decline in rates is going to last, so it’s recommended to check regularly on these rates. 

Trucking 

Delays continue due to COVID-19 constraints and freight demand surging. The ongoing surge in U.S. imports and the COVID-19 pandemic is creating shortages all across the board, especially in the trucking industry. Trucks are being filled at a prior stop, pick-up dates are being pushed out as deliveries are missed, and drivers are delayed by other shippers. These problems are all causing long delays in the arrival of goods and even penalties imposed on shippers by retail customers for missed deliveries.  

Other

Chassis shortages in Chicago worsen due to record volumes. Beneficial cargo owners have been unable to get their containers out of Union Pacific’s largest Chicago terminal due to a chassis shortage. The railroad stated that this shortage is a temporary issue, and it’s working on moving piled up containers onto chassis and trucks.

Ocean Space Hard to Come By, New Exclusions from Section 301 Tariffs, CMA CGM Launches Premium Service

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Ocean  

Ocean carrier space is still hard to come by. There are few to none empty containers available to load in China unless bookings are completed through the recently-offered premium services. These constraints on vessel space are due to U.S. imports from Asia increasing. Because of this scarce space, shipping lines suggest checking back for space through standard services after the Chinese New Year. If customers have new shipments that need to depart China before Chinese New Year (February 12th), premium services will need to be used for those shipments.

Customs  

U.S. Customs and Border Protection will now require an aluminum import license for most imports of aluminum products. Starting January 25, 2021, brokers and importers will need an aluminum import license for each entry of an aluminum product and will have to register for an account online to receive a license. Pre-registration will open up on January 4, 2021, and can be completed at https://www.trade.gov/aluminum. The list of aluminum products subject to the license can be found on the International Trade Administration’s website. This new license system will use the same platform as the steel licensing system, so importers with an existing steel license do not need to register for an aluminum license. 

New exclusions will be granted from Section 301 tariffs to address the COVID-19 pandemic. Certain product exclusions that were set to expire at the end of 2020 will now be extended through March 31st, 2021. These products include medical-care equipment to address the ongoing COVID-19 pandemic; the United States Trade Representative (USTR) had deemed the expirations of these exclusions inappropriate given the ongoing pandemic. The products that are eligible for exclusions can be found in an online PDF from the U.S. Customs and Border Protection. If you need help understanding these changes, feel free to reach out to one of our experts

Ports 

Ports continue to handle surge of import volumes. Ports across the United States are still handling record-breaking import volumes from Asia, with some U.S. Gulf ports implementing capacity expansions for 2021. Though the ports are still handling major import volumes, the congestion is improving slightly, hopefully easing fully after the Chinese New Year. 

CMA CGM to launch premium service from Yantian, China to Oakland and Seattle. To avoid unprecedented congestion at the ports of Los Angeles and Long Beach in California, shipping line CMA CGM will offer a premium service from Yantian to Oakland and Seattle to give U.S. importers another West Coast port option. According to CMA CGM, Seapriority Express (SEA-X) will provide vessel space and equipment release in Yantian, with the fastest transit time available of 12 days to Oakland.

Air

Air freights experience slight delays due to space constraints. Due to the slim capacity on air freights, air carriers are experiencing delays of up to three days, while inland movements are delayed due to constraints on domestic truckers. The rates for air space remain quite high. 

Trucking 

Delays continue due to COVID-19 constraints and freight demand surging. The ongoing surge in U.S. imports and the COVID-19 pandemic is creating shortages all across the board, especially in the trucking industry. Trucks are being filled at a prior stop, pick-up dates are being pushed out as deliveries are missed, and drivers are delayed by other shippers. These problems are all causing long delays in the arrival of goods and even penalties imposed on shippers by retail customers for missed deliveries.  

Ocean Carriers Take Action to Mitigate Congestion, GPS Expires at the End of the Year, and New Aluminum Import License for Aluminum Products

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Ocean  

The World Shipping Council (WSC) takes action to address the Federal Maritime Commission’s concerns about ocean carriers contributing to port congestion. The WSC is taking action like “employing all available vessel capacity, repositioning vessels to those trades with the highest demand, speeding the return of excess empty containers and increasing cargo fluidity,” and more. Other major carriers like Maersk Line and APM Terminals 400 are working with ports and trucking organizations to develop more creative solutions to address congestion problems and foster more dual transactions. 

Ocean carrier space continues to be at capacity. Space is completely booked well into January. To work around these capacity issues, customers can book a premium service offered by some carriers, which will cost approximately $2-3,000 more than usual. However, there are still delays with these premium services. Due to the tight capacity, some areas in China are refusing shipments, which is also increasing delays. These refusals are expected to continue into February, hopefully stopping after the Chinese New Year. 

As the holiday season wraps up, delays are still present. Some ocean carriers are seeing 5-15 day dwell time at the ports, causing arrival delays. In some cases, it’s even more than 30 days. It is also anticipated that these delays will continue and possibly worsen as the year comes to a close. To increase the possibility of receiving shipments at a reasonable time, it is recommended to book at least four weeks in advance.

Customs  

Generalized System of Preferences is still set to expire at the end of the year. The GSP provides duty-free treatment for thousands of imports from hundreds of countries and will expire by December 31st, 2020. Certain goods may be subject to tariffs starting at the beginning of the new year because of this expiration. However, should the GSP be renewed retroactively, importers should still claim GSP on their entries for eligible refunds. 

U.S. Customs and Border Protection will now require an aluminum import license for most imports of aluminum products. Starting January 25, 2021, brokers and importers will need an aluminum import license for each entry of an aluminum product and will have to register for an account online to receive a license. Pre-registration will open up on January 4, 2021, and can be completed at https://www.trade.gov/aluminum. The list of aluminum products subject to the license can be found on the International Trade Administration’s website. This new license system will use the same platform as the steel licensing system, so importers with an existing steel license do not need to register for an aluminum license. 

Ports 

The port of Miami is experiencing a cargo surge, causing backlogs of up to two weeks. As 2020 comes to an end, there has been a surge in volume and vessels arriving late to the Miami port due to delays at other ports. These late arrivals to the port are straining the drayage network, and draymen in the area are saying that this strain is resulting in cargo owners needing to provide at least a week’s notice to pick up import containers. 

Air

Peak season causes some delays, but air rates remain stable. The holiday peak season is causing some delays with air freights, which is typical around this time. Air freight rates are still high but are around the same as when the COVID-19 pandemic first started in March and April.

Trucking 

Less-than-truckload service issues multiply as COVID-19 pandemic and freight demand surge. The ongoing surge in U.S. imports and the COVID-19 pandemic is creating shortages all across the board, especially in the trucking industry. Trucks are being filled at a prior stop, pick-up dates are being pushed out as deliveries are missed, and drivers are delayed by other shippers. These problems are all causing long delays in the arrival of goods and even penalties imposed on shippers by retail customers for missed deliveries.  

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