Freight Market Updates

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Navegate Announces Acquisition by Radiant Logistics

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For Immediate Release We are excited to announce the acquisition of Navegate, Inc. by Radiant Logisitics, Inc. Navegate, Inc., a Mendota Heights, Minn.-based technology-enabled logistics and supply chain management company,...

Supply Chain Trends to Track for the Rest of 2021

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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

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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

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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...

Ports of Seattle and Tacoma Follow in Steps of LA-LB Ports With Fees, FedEx Driver Dumps Packages, and Chinese New Year Is Fast Approaching

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Ocean  

Asda charters own cargo ship to bypass bottlenecks. The U.K.-based retailer, which is owned by the Issa brothers and private equity firm TDR Capital, claimed it was shipping more than 350 containers of goods on its own ship to ensure the supply of key seasonal items such as holiday decorations, toys, apparel, and presents.

Ports

LA-LB container dwell fee delayed once more. The ports of Los Angeles and Long Beach have stated that their “Container Dwell Fee” would be postponed until Dec. 6th. The price was supposed to go into effect on Monday, November. 22nd. The ports stated in a joint statement that since the fees were approved, they have observed a combined 33% drop in the number of long-dwelling containers.

Seattle and Tacoma ports follow in the steps of LA-LB ports with late pick-up and storage fees. However, when compared to the Los Angeles and Long Beach Excess Dwell Fees, there are significant differences in the timing, structure, and administration of these fees

Seattle port operator hopes to alleviate congestion with new container storage fee. In an effort to free space so stevedores can better service boats and prevent cargo delays, SSA Marine has alerted importers at its Seattle port facilities that an extra storage charge would be implemented on Dec. 1 for containers lingering longer than five days.

Container overstays in Tacoma marine ports are subject to a fee. Two marine terminals at the Port of Tacoma in Washington are following the Los Angeles and Long Beach ports’ example by imposing hefty penalties on long-sitting containers in order to alleviate a massive overflow that is clogging operations and impeding cargo delivery. 

Are you trying to make sense of which ports charge what fees? Contact one of our Experts to keep informed and get help on how to avoid paying some of these costly fees.

The Port of Vancouver struggling to recover in the midst of heavy rain. Shippers using the Port of Vancouver may face delays far into next year as a second wave of heavy rain douses the area. In the midst of on-and-off rainfall that began almost two weeks ago, the Canadian Pacific (CP) and Canadian National (CN) railways have yet to fully resume service, and two of the three key routes connecting the largest Canadian port with inland British Columbia are blocked to trucks.

Air

Cargo is not being picked up due to airport congestion and staff shortages. According to two top handling sources, air cargo handlers’ attempts to get forwarders to pick up freight on weekends are failing. Though congestion has reduced at numerous airports, including Amsterdam and Chicago O’Hare, handlers believe that one of the main challenges is a lack of freight transfers between Friday and Monday.

Air Charter Service (ACS) had a record quarter. With 1,445 cargo charters from August to October, broker ACS had its busiest quarter ever for its cargo sector, with goods transferring from sea to air and a continuous scarcity of bellyhold space. According to ACS, Cargo’s outstanding performance, together with the company’s other divisions, resulted in the company’s highest-ever quarterly revenue of $430 million.

Trucking

State Departments of Transportation (DOTs) looking at roadside charging to help electric vehicles. In the next few years, magnetic concrete that charges electric vehicles as they drive over it might be installed on an Indiana highway. The Indiana Department of Transportation is teaming with Purdue University to research and develop charging technology that integrates German company Magment’s magnetic concrete material in a project especially geared at assisting the trucking industry’s transition to electric cars.

According to the Energy Information Administration (EIA), diesel prices dropped 0.4 cents to $3.720. After climbing for nine weeks, from Sept. 20 to Nov. 15, the price of diesel dropped for the second week in a row, totaling 1.4 cents. The cost of a gallon of trucking’s major fuel is currently $1.218 more than it was in 2020.  Diesel prices fell in six of the ten regions studied by the EIA, rose in three, and were stable in New England. The most significant drop was 1.7 cents in the Rocky Mountain area, while the most significant increase was 3.4 cents in California. The national average price of gasoline dropped 1.5 cents to $3.38 per gallon.

Rail

Port of Vancouver’s restoration of rail service delayed due to more heavy rain. Canadian National (CN) had planned to resume its primary link to the Port of Vancouver on Wednesday last week, but the route remained blocked as of late Thursday due to additional weather-related concerns. Two weeks after heavy floods damaged the two main train routes over the mountains to Alberta, the Port of Vancouver, B.C., another wave of rain started falling this week, delaying CN Rail’s efforts to restore its line from Vancouver to Kamloops.

Howard Street Tunnel expansion project in Baltimore finally underway. State and federal authorities have recently broken ground on a $466 million project to widen the Howard Street Tunnel to handle double-stacked container trains to and from the Baltimore Port. The Howard Street Tunnel and 21 other points between Baltimore and Philadelphia will have their vertical clearance raised as part of the Baltimore project, allowing double-stacked trains to pass. Three other Baltimore bridges will be upgraded or rebuilt, while the tunnel itself will be refurbished to offer an additional 18 inches of clearance.

Other

The Federal Trade Commission (FTC) launched investigation into supply chain disruptions. The FTC has issued an order requiring nine major retailers, wholesalers, and consumer goods suppliers to provide detailed information that will assist the FTC in determining the causes of ongoing supply chain disruptions, as well as how these disruptions are causing serious and ongoing hardships for consumers and harming competition in the U.S.

FedEx driver in Alabama allegedly discarded packages on six occasions. The sheriff’s office in Blount County, Alabama, announced that a FedEx Ground driver tossed parcels into a wooded ravine six times. Sheriff Mark Moon said detectives have identified the driver, but they are concealing that information for now. According to Moon, the incident may have had an impact on as many as 450 people. FedEx said it is working with investigators and that the individual implicated is no longer working for FedEx Ground.

Amazon on track to overtake UPS and FedEx as leading delivery provider in U.S. Dave Clark, CEO of Amazon’s global consumer division, said Amazon is on track to overtake UPS and FedEx as the leading package delivery service in the United States by early 2022. During this year’s Holiday shopping season, Amazon’s in-house delivery operations have become a huge advantage. In addition to using its own trucks and planes, Clark claims that Amazon has been delivering products to new ports to circumvent bottlenecks.

Biden meets with major retailers to discuss holiday supply chain. President Joe Biden said his government has made progress in resolving supply chain issues in the U.S. at a Nov. 29 meeting with executives from major retailers, including Walmart Inc. and CVS, who assured him that they have enough inventory for the holiday season.

The Chinese New Year is fast approaching. It’s never too early to start thinking about China’s most important holiday. Exceptional occurrences, such as COVID-19 restrictions, global supply chain congestion, power limitations, and other variables, are prompting our Navegate specialists to advise clients to start preparing ahead. Make sure to contact one of our Logistics Experts to learn how you can be well-equipped to minimize disruptions to your supply chain through the upcoming Chinese New Year.

Make preparations for other Chinese holidays and events. Although CNY is the longest public holiday in China, other festivities might affect your business. For instance, with the 2022 Winter Olympic Games happening in China, to be held across Beijing, Yanqing, and Zhangjiakou, the Chinese government declared that all heavy industrial factories in the north of China will suspend operations from Jan. 1 to Mar. 8, 2022.

LA-LB Container Dwell-Fee Postponed Again, Major Drug Ring Using Air Freight Carrier Caught, CP Reopens Vancouver Rail System

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Ocean  

In Port Everglades, the USCG unloads 26,000 pounds of cocaine. The crew of the USCG cutter Hamilton unloaded more than 26,000 pounds of cocaine worth about $500 million onto a dock in Port Everglades, Florida. It’s the ship’s largest single delivery of seized narcotics. The drugs were intercepted and recovered during eight interdictions by three American and Canadian ships – the Hamilton, the cutter Vigilant, and the Royal Canadian Navy’s HMCS Harry DeWolf – in international seas of the Eastern Pacific off the shores of Mexico, Central America, and South America.

Ship fuel price reaches a peak since 2013. The cost of marine fuel at the ports has increased in lockstep with the cost of gasoline at the local pump. The cost of crossing the oceans has grown for cargo ships, tankers, and dry bulk carriers since 2013. According to Ship & Bunker, the price of VLSFO (very low sulfur fuel oil) at the world’s top 20 ports was $619.50 per ton, up 47% from the start of the year. On Nov. 10, the top-20 VLSFO average reached a new high of $639 per ton.

Ports

In North Carolina, a new inland port has opened. Another inland port facility will help move freight along the Eastern Seaboard as the nation’s main seaports become increasingly congested. The Carolina Connector is a 330-acre facility near Rocky Mount, North Carolina, that transfers cargo containers from trucks to trains. 

LA-LB container fee postponed once again. The ports of Los Angeles and Long Beach have delayed the collection of storage fees for long-dwelling ocean containers for the second time, claiming that on-dock stocks of boxes have decreased by a third since the fines were initially announced. After meeting with Biden administration port envoy John Porcari and port customers, the two ports announced that the container dwell tax, which was set to begin on Nov. 22, will now begin on Nov. 29. This is the second postponement of the charge, which was set to go into effect on Nov. 15. If you have questions about the emergency Container Excess Dwell Fee program, contact one of our experts.

Air

Air freight between China and the United States is under pressure due to port congestion ahead of the holidays. Many businesses have turned to air freight as the United States continues to struggle with port congestion and other logistics issues ahead of the holiday shopping season. Due to strong demand, even the more expensive alternative is now experiencing a major capacity shortage, lengthy wait times, and rising pricing. Air freight fares are up 10-20% compared to August and September, due to increased demand. Even with greater costs, traders must still wait a long time to book space for their cargo.

A major narcotics ring that used an air freight carrier was caught in Gujarat. An official confirmed that Gujarat police detained four people over a week and dismantled a huge drug ring in which traffickers from Ahmedabad imported 100 kg of narcotics, including cocaine, from the U.S. and other areas of the nation by air cargo carrier in the last two years.

CMA CGM is the second company to invest in A350 freighters. CMA CGM has become the second business to order Airbus’ new A350 freighter, as they continue to expand their presence in the air cargo sector. The shipping firm, which started its CMA CGM Air Cargo division earlier this year, is expected to buy four of the aircraft. Airbus expects the agreement to be finalized in the “coming weeks,” only days after Air Lease placed the first tentative order for seven of the type at the Dubai air show.

Air Canada increases cargo capacity to help alleviate the supply chain crisis in B.C. Following the heavy flooding that shut off highway access to the city, Air Canada says expanded cargo capacity into and out of Vancouver. Between Nov. 21 and 30, the airline reports it added capacity to the city from its hubs in Toronto, Montreal, and Calgary. To boost cargo capacity, Air Canada is rescheduling 28 passenger trips to use bigger wide-body aircraft instead of narrow-body aircraft. There will also be 13 all-cargo flights added. Air Canada claims to be increasing 586 tonnes of cargo capacity in total.

Trucking

Beginning in Jan. 2022, non-U.S. truckers crossing the border must be vaccinated. President Joe Biden plans to declare on Jan. 22 that important nonresident travelers crossing U.S. land borders, such as truck drivers, government, and emergency response professionals, would be required to be completely vaccinated. According to a senior administration official, the requirement, which was first announced by the White House in October, aligns the rules for essential travelers with those that went into effect earlier this month for leisure travelers when the United States reopened its borders to fully vaccinated individuals.

For the first time since September, diesel price drops. According to Energy Information Administration (EIA) statistics issued Nov. 22, the national average price for a gallon of diesel reversed course and fell for the first time in more than two months, falling 1 cent to $3.724 per gallon. The major gasoline used by trucks currently costs $1.262 more per gallon than it did in 2020. In the EIA’s weekly survey, the average price fell in six of the ten areas; the highest drop was 1.7 cents in the East Coast and Gulf Coast.

Rail

Canadian Pacific (CP) plans to reopen the Vancouver rail system. The CP Railway announced that intermodal train service to and from the Port of Vancouver would resume on Nov.23, after the completion of repairs to lines damaged by heavy floods a little over a week ago. On its mainline, Canadian National Railway hopes to restart service late on Nov. 24. In a statement, CP said it restored 30 spots across two key sections of its British Columbia trackage, with 20 of them experiencing “severe infrastructure loss.”

Other

Despite GOP criticism, Biden issues new orders to alleviate supply chain bottlenecks. The Biden Administration took another step toward tackling supply chain issues that threaten to interrupt holiday product deliveries. The White House issued new instructions to speed up the movement of freight at critical hubs shortly after President Biden signed a $1 trillion infrastructure bill into law earlier this month.  A new executive order issued in conjunction with the implementation of the Infrastructure Investment and Jobs Act requires federal agencies to promote programs and regulations that support commercial supply chains and domestic manufacturing.

Ahead of the holidays, Gap’s sales hampered by supply-chain issues. Even as huge retailers such as Walmart Inc. claim they have adequate inventory for the holidays, Gap Inc. has joined a growing list of clothing stores fighting to keep their shelves supplied. Gap‘s net sales for the quarter ended Oct. 30 were $3.9 billion, flat with 2020 and 1% lower than 2019. As a result of the ongoing effects of the Covid-19 pandemic, the business stated its brands were unable to fulfill significant demand from customers, resulting in production closures and blocked ports. In after-hours trade, shares fell by 17%.

USPS hires hundreds and leases extra space for the holidays. USPS says it is prepared for the expected surge of Christmas parcels and cards, a year after COVID-19 employee shortages delayed mail and shipments. USPS has employed several hundred seasonal employees to process, carry, and distribute mail, according to a spokesman for the Alabama-Mississippi District. Additionally, USPS has leased a facility in the Birmingham region where extra package sorting equipment has been installed.

US Department of Transportation (USDOT) awards $1 billion in infrastructure grants. USDOT has announced that over $1 billion in federal funding will be granted to infrastructure projects around the country that are related to freight and passenger networks. The Rebuilding American Infrastructure with Sustainability and Equity (RAISE) discretionary funding, according to Secretary of Transportation Pete Buttigieg, would be used to target over 90 projects in 47 states, as well as Washington, D.C., and Guam.

Walmart now offering drone deliveries. Walmart began commercial drone delivery for online customers in northwest Arkansas this week, starting with a Walmart Neighborhood Market in Farmington, in collaboration with tech partner DroneUp. The drone delivery service will be available 7-days a week from 8 a.m. to 8 p.m., delivering things to qualifying Walmart customers in as little as 30 minutes.

Pres. Biden Signs $1T Infrastructure Deal, Heavy Rainfall Disrupts Vancouver Rail Service, Beanie Babies Airlifted for Millions from China to O’Hare

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Ocean  

Barge collides with Vancouver seawall. As high winds hit the Metro following an intense river downpour, a loose barge was swept into the seawall near Sunset Beach in Vancouver. Several witnesses captured video of the waves carrying the boat to shore.

Ever Given returns to service after repairs. The Ever Given, a ship that gained international fame after crashing in the Suez Canal in March 2021, quietly resumed operation over the weekend. The ship was in Qingdao Beihai shipyard for six weeks, which was twice as long as initially planned, and now has a new bulbous bow as it travels south through China, stopping in Malaysia before making it to Europe.

Ports

Container fees being delayed in the LA-LB ports. Los Angeles and Long Beach, the country’s two major ports, have decided to postpone the introduction of a fee on ocean carriers who fail to transfer containers from docks, which was slated to begin Nov. 15. The idea to tax carriers $100 per day for each container that has been sitting on the docks for more than three days has been postponed until Nov. 22. This is because, in recent weeks, the hubs have experienced a “substantial improvement in clearing import containers.” If you have questions about the emergency Container Excess Dwell Fee program, contact one of our experts.

Air

Air freight shipments delayed by congestion. Air cargo volumes appear to be hindered by severe congestion at key airports. According to Clive Data Services’ newest analysis, dynamic week-on-week global load factors declined 1.5% in the week ending November 10. Global capacity declined 5% in the same week, which should signal greater load factors — yet demand fell. While forwarders indicate robust demand for air freight as the peak season has started, data suggests that congestion on the ground is restricting volumes.

Air cargo becoming less expensive than ocean freight. The cost of shipping goods around the world by air is around 2.5 times what it was before the pandemic. Rates are five to six times higher than average for the peak shipping season on significant trade channels where demand is very high, such as China and Southeast Asia to the United States.

Boeing seeks partners to transform passenger planes for cargo use. To keep up with the rising demand for passenger planes, Boeing Co. may partner with firms such as Israel Aerospace Industries Ltd. and Mammoth Freighters to convert its passenger airplanes to cargo planes.

Trucking

California raises truck weight limits to 88,000 pounds to alleviate port congestion. To relieve supply chain bottlenecks and get containers off of the docks of Los Angeles and Long Beach, California will boost the weight limitations for trucks transporting products in and out of its ports. Gov. Gavin Newsom told reporters at the Port of Long Beach that starting Nov. 17, the state would issue temporary licenses that will increase truck weight limitations to 88,000 pounds, up from 80,000 pounds. The extension will be in effect until June 30.

Trucking fleets projected to have a robust market “far beyond 2022.” According to the supply chain analysis firm FTR, business conditions for trucking fleets are anticipated to remain strong beyond 2022 after an economic index of freight markets rose slightly in September. FTR’s Trucking Conditions Index (TCI) increased marginally to 11.79 in September from 11.63 in August, as freight rates continued to rise, even though freight volume and capacity utilization were not as favorable to carriers as they were in July and August.

​​Fleets turn to eBay and Craiglist in a scramble to find parts. A scarcity in supplies has wreaked havoc on fleets, to the point where fleet managers are resorting to unusual means to locate parts. It’s been stated that certain fleets with bigger budgets are snatching up what they can as soon as they can, if and when parts become available. Some are resorting to their own trucks for materials. Others are looking for new or used parts on eBay or Craig’s List that they can’t get from their normal vendors. Others are traveling to the outskirts of town to remote supply stores.

Diesel continues to increase, rising 0.4¢. According to Energy Information Administration statistics posted on Nov. 15, the national average price for diesel continues to rise at a slower pace, increasing by 0.4¢ to $3.734 per gallon. The major gasoline for trucks currently costs $1.293 more than it did in 2020.

Rail

Heavy rainfall disrupts rail service at Port of Vancouver. Due to floods and landslides in British Columbia, the Port of Vancouver has been closed off from all train services. Major stretches of the Canadian National and Canadian Pacific railway lines feeding Canada’s largest port were shut down after heavy rain poured in the province and the Pacific Northwest. The impact will undoubtedly be felt across the Canadian supply chain, with authorities warning of impending vessel delays and terminal operations disruptions.

Other

Ty Inc. uses air freight to alleviate supply chain stress for Beanie Babies and Beanie Boos. Ty Inc., located in Illinois, is using air freight to transport its stuffed toys from overseas for the holidays, bypassing the bottlenecks at U.S. ports. Ty Warner, the company’s founder and CEO, claims that he has personally funded more than 150 freight trips at $1.5-2 million each since last month. The flights depart from several locations in China and land at O’Hare International Airport in Chicago, where the Beanie Babies and Beanie Boos are unloaded and transported to Ty’s corporate headquarters for distribution.

Georgia targeted by USDOT for supply chain assistance. The Biden administration’s supply chain task force recently made it possible for the Georgia Ports Authority to reallocate more than $8 million for inland operations in Georgia and North Carolina. The funds would be used to convert existing facilities into five pop-up container yards to help reduce congestion at the Port of Savannah.

Despite inflation, retail sales increase by 1.7% in October. The Commerce Department revealed that American consumers increased their spending in October, even though consumer prices rose at their quickest rate since the 1990s. Retail sales grew 1.7%, compared to 0.8 percent the previous month, as customers spent more on commodities ranging from automobiles to recreational equipment, as well as food and petrol.

Biden signs $1 trillion infrastructure bill into law. President Biden signed a $1 trillion infrastructure package into law on Monday, completing a crucial component of his domestic spending program by allocating billions to states and local governments to upgrade aging roads, bridges, transit systems, and other infrastructure.

Weekly Supply Chain Disruption Summary from NCBFAA. The Logistics Subcommittee of the NCBFAA Transportation Committee collects data on rail delays and port bottlenecks that affect the supply chain and your company operations regularly. For your convenience, the Logistics Subcommittee has compiled the most recent attached data in the form of an Excel file.

U.S. Congress Approves $1 Trillion Infrastructure Bill, Texas Builds Border Wall Out of Shipping Containers, PS5 Christmas Stock Saved by Korean Air

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Ocean  

Evergreen invests profits on box ships and containers. Evergreen has placed an order for two 24,000 teu ships from China’s Jiangnan shipyard, as well as 55,500 containers from three different manufacturers, to expand its fleet and equipment capacity. The newbuildings will cost between $140 and $160 million each, with completion scheduled for 2024-2025. Evergreen will spend $338.5 million on the new containers. They will be delivered in mid-2022 and consist of 20ft and 40ft units.

Customs

U.S. lifts tariffs on steel and aluminum from the EU. The U.S. stated on Oct. 31 that it will end Section 232 tariffs on a specific volume of steel and aluminum imports from the European Union, while the EU has decided not to impose retaliatory tariffs on certain U.S. commodities that were planned to go into effect on Dec. 1. Access this document from the Commerce Department for more information.

Ports

Ports experiencing communication breakdown with U.S. Customs affecting port planning. According to American Shipper, a communication gap between US Customs and Border Protection and the ports has left the ports unaware of the arrival of nonscheduled charters. Approximately five unscheduled vessels are waiting in the Port of Long Beach, while the number of unscheduled vessels in the Port of Los Angeles has been constantly high. The lack of data sharing is affecting the ports’ ability to plan for container processing as well as adding to the significant bottleneck in San Pedro Bay.

Air

DHL Express confirms the addition of a new Austrian airline. To stabilize their air freight network, DHL Express has launched a new airline located in Austria, with a roster of 18 B757 freighters. DHL Air Austria, the new airline, will be based at Vienna Airport, which is said to be geographically in the center of Europe.

Korean Air saves PS5 Christmas stock. Worldwide demand for Sony’s Playstation 5 (PS5) is booming. In the U.K., for example, finding this console for sale has become nearly impossible, especially ahead of Christmas. Sony hired four Korean Air cargo planes powered by the iconic Boeing 747F to deliver a supply of PS5’s to the U.K. According to local media, each plane was supplied with 50 special plates to transport the PS5. As a result, 12 trucks were assigned to the cargo so that it could be unloaded and distributed across retailers in a timely manner.

Trans-Pacific air cargo rates are at all-time highs. Trans-Pacific air freight has been in peak season for more than a year, but as demand surges in the fourth quarter, air charter rates for freighters have skyrocketed ahead of November’s holiday-themed online shopping campaigns. With U.S. importers filling all available capacity, there are no indications of demand easing from shippers forced out of congested ocean trades. IAG Cargo expects demand to return to 2019 levels. IAG Cargo’s cargo revenues and volumes increased in the third quarter of the year, surpassing those of the previous year. The third quarter’s total cargo revenues were €405 million, up 34.1 percent from the previous quarter. Meanwhile, the number of sold cargo tonnes climbed to 134,000, up from 94,000 in 2020. IAG Cargo also noticed an increase in conversions from ocean freight as shippers switched to airfreight to mitigate the impact of supply chain disruptions.

Trucking

Diesel increases by just 0.3 cents to $3.730. According to Energy Information Administration (EIA) data posted on Nov. 8, the national average for diesel barely moved, rising three-tenths of a cent to $3.730 per gallon. After a 1.4-cent increase on November 1, the new price is the second consecutive slight increase. Diesel now costs $1.347 more per gallon than it did in 2020 at this time.

Rail

BNSF’s net income increased by 14% in the third quarter. BNSF’s third-quarter net profit increased by 14% to $1.5 billion, the western U.S. railroad reports. In the third quarter, total revenues were $5.8 billion, up 12% year over year from roughly $5.2 billion. The average revenue per car/unit increased by 5%, reaching $2,128 from $2,021 the previous year.

Other

Texas is recycling shipping containers to close gaps in its border security plan with Mexico. According to officials, the shipping containers began being installed as barriers along areas of the US-Mexico border near Eagle Pass, Texas, in late October, at low-level water crossings to physically block entry from Mexico.

Out-of-stock goods a growing problem for online shoppers. Online buyers in the U.S. are discovering that virtual store shelves are becoming increasingly bare as the holidays approach. In a study released Nov. 9, Adobe Analytics found that consumers received 2 billion out-of-stock alerts last month. The number of out-of-stock messages increased by a third from a year ago, based on total page visits that include available goods. The rise demonstrates how port bottlenecks and a shortage of trucking capacity are affecting consumers.

Weekly supply chain disruption roundup from NCBFAA. The Logistics Subcommittee of the NCBFAA Transportation Committee collects data on rail delays and port bottlenecks that affect the supply chain and your business operations regularly. For your convenience, the Logistics Subcommittee has compiled the most recent statistics in the form of an Excel spreadsheet. The spreadsheet for this week contains critical information about actions at the ports of Los Angeles and Long Beach, as well as the ports of New York and New Jersey.

$1.2 trillion infrastructure bill approved by U.S. Congress. President Joe Biden is about to sign a record $1.2 trillion infrastructure measure that includes a five-year extension of the highway bill, as well as a program to attract younger drivers and other provisions affecting truckers. The Infrastructure Investment and Jobs Act (IIJA) was enacted by a vote of 228-206 in the Democrat-controlled House chamber on Nov. 5.

Maersk Invests in Air Freight Expansion, White House to Launch Supply Chain Dashboard, Multi-billion Loan Program Approved for CA’s Ports

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Ocean  

Crews clean up debris from Zim Kingston cargo ship as the search continues for more missing containers. Of the 109 shipping containers that fell off the Zim Kingston near the Strait of Juan de Fuca last week — up from the 40 originally reported — four of the containers washed up on Vancouver Island, British Columbia’s northwest coast. The Zim Kingston has hired crews to clean up the debris on the beach. The search for the remaining 105 shipping containers is ongoing.

Rates for container shipping are likely to remain volatile for some time. According to consultancy Vespucci Maritime CEO Lars Jensen, the global container shipping sector is entering a period of volatility that will last far beyond the present peak shipping season. Bottlenecks causing severe congestion throughout North America’s supply chain will eventually be eliminated, but Jensen predicts this will most likely happen in the second half of 2022. ​​

Bottlenecks possibly lasting until 2022 is good news for investors. Slow capacity improvement, a shortage of containers and truckers, and the ongoing semiconductor chip crisis, which has constrained new truck manufacturing for last-mile deliveries, are all likely to keep shipping bottlenecks in place until at least 2022. For shipping and logistics industries, these disruptions have caused countless issues. But, this may be good news for investors who have seen container line stock prices soar in the 18 months since the pandemic began.

Ports

Harbor Commission approves program to speed up cargo flow at LA-LB ports. The Long Beach Board of Harbor Commissioners approved the adoption of a new fee on ocean carriers, with the aim of speeding cargo movement from the Port of Long Beach’s marine facilities during a record increase in shipments. The emergency Container Excess Dwell Fee program goes into effect on Nov.1. The price won’t be charged until Nov. 15. The board of the Port of Los Angeles passed a similar measure. The cost applies to every container that has been in storage for nine days or longer and is planned to be moved by truck. If a container is traveling by rail, the price is charged if it has been sitting for six days or more. Until the container departs the terminal, the price increases by $100 per container each day. 

Gov. Newsom and U.S. Department of Transportation (USDOT) announce multi-billion loan to help California’s congested ports. Gov. Gavin Newsom and U.S. Transporation Secretary Pete Buttigieg announced a strategic partnership to support $5 billion infrastructure improvements in California. The funds most likely won’t help alleviate the severe congestion that is currently causing chaos on seaports, but the two say that updating the ports, as well as the truck and rail infrastructure that serves them, will help prevent future logistical disasters. ​​

Air

Maersk purchases Senator International to further air cargo capabilities and global footprint. With the acquisition of freight forwarder Senator International and the addition of five planes to its Star Air cargo fleet, the top ocean freight carrier, AP Moller Maersk is expanding into the air cargo sector. According to DVZ, a sister publication of Air Cargo News, the acquisition is worth eight times the adjusted operating profit (EBITDA) predicted for 2021, equivalent to a $644 million enterprise value. The merger is expected to be approved in the first half of 2022.

Top 20 air cargo hubs taking on a difficult market. According to Airports Council International (ACI) World data, global passenger traffic at the world’s top 10 busiest airports fell 45.7 % in 2020, but volumes in the top 10 cargo hubs increased 3% to 30.6 million tonnes last year, accounting for 28% of global throughput. The overall 2020 freight volumes for the top 20 cargo hubs were down 3.6% to 47.7 million tonnes. In 2021, airfreight received a modal shift bonus due to congestion in ocean freight ports, scattered empty containers, and inconsistent sailing schedules 

Air cargo increased by about 8% over pre-pandemic levels. According to the International Air Transport Association (IATA), air cargo operators are benefiting from growing consumer demand, with cargo volumes up 7.7% in August compared to the same month last year. This is a somewhat lower rate of increase than the 8.8% reported in July, but it is still a very good result.  In terms of commercial flight passenger volume, the Transportation Security Administration (TSA) reports that daily traffic is recovering after the Delta-affected summer months. Still losing half a million daily passengers compared to last year, the 50-day moving average indicates an upswing. 

As passengers return, transatlantic air freight capacity is set to grow. Forwarders foresee increased cargo volumes in the transatlantic air freight sector when U.S. authorities lift the travel restriction on Europeans and airlines add extra bellyhold space to passenger planes. This capacity growth could also help to lower rates, which were already high during the pandemic’s peak. Meanwhile, American Airlines Cargo has stated that capacity will be increased following the announcement of new services between Heathrow and nine U.S. destinations beginning next month.

Trucking

Trucking jobs in Florida in high demand. Thousands of trucking jobs in Florida remain unfilled, according to the Florida Trucking Association (FTA), and a nationwide driver shortage is adding to supply chain issues that are driving up prices and increasing delivery times ahead of the holidays. To entice applicants with commercial driver’s licenses (CDL), trucking companies are paying up to $15,000 in sign-on bonuses. All types of drivers are in high demand, but long-haul trucking has the greatest need. Some tax collectors and state agencies are offering extended hours, weekend hours, prioritizing CDL appointments, and scheduling tests directly with third-party testing providers to meet the increased demand for testing. The FTA is hoping to attract more women to fill the void left by men accounting for almost 90% of all truck drivers.

The price of trucking’s major fuel continues to climb. According to data released Nov. 1 by the Energy Information Administration (EIA), the national average price for diesel increased 1.4 cents to $3.727 per gallon. Although the price of diesel continues to rise, the increase is minor in comparison to other hikes, such as the 10.9-cent increase on Oct. 11. The cost of a gallon of trucking’s major fuel is now $1.355 higher than it was in 2020. In the EIA’s weekly survey, diesel prices rose in all ten regions, with the biggest increase of 5.1 cents in California and the smallest increase of three-tenths of a cent in the Gulf Coast.

Majority of $127 million SuperTruck 3 funding goes to Paccar, Daimler, Volvo. Paccar Inc., Daimler Trucks North America, and Volvo Group North America were awarded the majority of the $127 million in government SuperTruck 3 funding to develop innovative battery-electric and fuel-cell electric truck projects. General Motors Co. and Ford Motor Co. also received funding to develop Class 4-6 medium-duty projects. The Department of Energy (DOE) has allocated $199 million to 25 initiatives aimed at reducing pollution from vehicles and trucks on the road.

Supply chain recovery is hampered by a lack of drivers. The trucking industry is trying to get drivers into seats at a time when the supply chain most needs them, but many reasons, according to the American Trucking Association (ATA), are preventing the industry from gaining traction as the gap between the number of drivers available on the market and the number needed to meet freight demand will reach a new high of just over 80,000 in 2021. That figure has risen from the ATA’s forecast of 60,000 drivers at the start of 2020.

Rail

Norfolk Southern Railway (NS) is reducing free time to make room for international boxes. Because ocean ships are staying too long and clogging the facilities, NS will cut free time for importers in almost 30 smaller-market terminals by half next month. In addition, starting December 15, NS will increase demurrage rates in 27 locations. The price for the first two days of demurrage is $200 per day, after which it increases to $215 per day. For the first five days of demurrage, the price is $100 per day, then $200 per day after that. The bump after two days, rather than five, is intended to encourage speedier runs, according to the railroad. 

Canadian Pacific (CP) receives a CA$15 million grant for hydrogen locomotive conversions. Emissions Reduction Alberta (ERA) has awarded Canadian Pacific a CA$15 million (US$12.1 million) grant to develop its hydrogen locomotive program. The funding would double the number of hydrogen locomotive conversions from one to three, as well as expand hydrogen production and fueling facilities. The funding from ERA’s Shovel Ready Challenge program is a 50/50 match, with CP (NYSE: CP) contributing half of the funds.

Other

Dashboard to be launched by White House to track supply chain crises. The White House website is launching a new Supply Chain Dashboard that will monitor progress in reducing the import backlog that has accompanied the economy’s recovery from the coronavirus shutdowns. The dashboard will be updated every two weeks.

UPS shippers should prepare for increased surcharges in 2022. According to a source close to the situation, UPS will increase its fuel surcharges by 1% on all of its U.S. air and ground services starting Nov. 15. The updated fuel surcharges, which were included in UPS’ 2022 price tables recently announced, will be added to the company’s base cost as well as any of the 12 different delivery surcharges applicable to a specific shipment. In 2022, almost all of UPS’ surcharge levels will increase, which means that normal UPS shippers’ overall expenses might increase by double digits. 

Train or Truck? Ship or Plane? Which method of transportation should you choose? Inbound Logistics offers some solid advice on how to transport goods in both normal and unusual circumstances. Do you need some guidance or have questions regarding which mode of transportation is ideal for your freight? We’ve got you covered! Get help from a Navegate expert to help move your supply chain forward, faster.

SoCal Ports to Charge for Lingering Containers, Amazon Attempts to Help Relieve Supply Chain Issues, Bon Jovi Performs for Trucking Execs

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Ocean  

Shippers should brace for higher fuel surcharges. As carriers attempt to pull back rising fuel costs, shippers are being advised to expect increased bunker adjustment factors on top of already high freight prices. Since the initial impact of the pandemic, fuel prices have risen to levels not seen in previous years. With the rise affecting both IFO380 and VLSFO, IFO380 bunker fuel is now trading above $530 per tonne, and the cost of VLSFO has climbed to $630 per tonne for boats without scrubbers

Coast Guard issues warning due to 40 adrift containers in the Pacific Ocean. Several cargo containers drifting at the entrance of the Juan de Fuca Strait have prompted the Canadian Coast Guard to issue a caution to mariners. When the Zim Kingston, heading to Canada, came across rough weather just west of the entrance of the Juan de Fuca Strait, 40 containers fell overboard. The Canadian Coast Guard said it is monitoring the situation with the U.S. Coat Guard (USCG) and determining whether the containers pose a risk of pollution or other concerns. 

Shipping issues are expected to persist well into 2022. According to economists and some industry leaders who have lately commented, shipping backlogs at major U.S. ports, as well as the consequent goods shortages and price increases, are unlikely to be resolved until well into 2022. According to Goldman Sachs, 77 ships are waiting outside of the ports in Los Angeles and Long Beach, carrying $24 billion worth of products. The challenges are spreading throughout the economy, placing pressure on everything from grocery stores to large industries.

Ports

SoCal ports to charge carriers for lingering containers. As terminal congestion at the ports of Los Angeles and Long Beach reach historic levels, the Biden Administration announced on Oct. 25 that the SoCal ports will begin imposing an “emergency fee” on all long-dwelling cargo beginning Nov. 1. The new measure is the latest effort to speed up cargo movement in the ports, where huge increases in stay periods are making it harder to clear cargo off terminals and bring in ships at anchor. When cargo lags at the terminals after November 1, the ports will charge ocean carriers $100 per container, increasing in $100 increments per container each day. The extra will apply to containers scheduled to transport by truck that linger in the port for more than nine days. Additionally, surcharges will apply to containers going by rail if they have been in transit for three days or more.

Two services from Hapag-Lloyd and CMA CGM plan to temporarily bypass Savannah, GA. Due to continuous delays at Savannah’s port, two of the country’s leading container shipping lines have announced plans to stop calling at the country’s fourth busiest port. CMA CGM announced that its Amerigo service will temporarily bypass Savannah due to significant congestion in this port (8 – 10 days). Instead, the service will route into the Port of Charleston in South Carolina, beginning on Nov. 27 with the arrival of the CMA CGM La Traviata. At the same time, Hapag-Lloyd announced that its Atlantic Loop 3 service will temporarily remove Savannah from its rotation and instead route to Jacksonville, Florida. The Hudson Express sailing from Antwerp, Belgium on Oct. 31 will be the first to perform Hapag-Lloyd’s port call change.

Equipment shortage delays new chassis pool in Charleston. Because not enough chassis can be manufactured or leased before the intended launch date of May 2022, the start of a new chassis pool for the Port of Charleston has been postponed by six months. According to the JOC, this news further demonstrates how a lack of equipment and an aging fleet are delaying the movement of containers between terminals and cargo owners, which is among the many reasons why many ships are anchored outside of major U.S. ports.

Customs

As part of their consideration of reinstating Section 301 exclusions, the United States Trade Representative (USTR) is seeking public input from Oct. 12 to Dec. 1. By excluding certain products from the additional duties imposed in multiple tranches, the USTR is considering whether to reinstate previously extended exclusions granted under the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. Most Section 301 goods exclusion extensions were set to expire on December 31, 2020, or earlier this year. The US Trade Representative’s Office is currently soliciting input on whether or not specific product restrictions should be reintroduced.

Air

Some airlines are implementing breakout surcharges as a result of rising aviation fuel costs. The rising cost of jet fuel is putting further strain on air freight carriers. As a result, rather than continuing to provide an all-inclusive fare, per recent correspondence received by our Navegate team, several airlines are separating the fuel surcharge (FSC), which will be reflected as the price of a barrel varies. Contact one of our air experts if you have any questions concerning air freight or for additional information about FSC breakouts.

2022 should be a year of growth for European airlines with losses narrowing in 2021 and 2022. In 2022, European carriers may benefit from the two fastest rebounding international passenger markets, while only North America is expected to be profitable, according to IATA’s airline industry financial prediction for Oct. 2021. Intra-Europe RPKs are expected to account for 75% of 2019 volumes next year, while North Atlantic RPKs will account for 65%, both of which are ahead of all other major international regions. The reopening of the North Atlantic to European travelers should boost IAG, Lufthansa Group, and Air France-KLM (in that order). Strong global cargo revenue isn’t enough to compensate for declining passenger revenue, which is still well below 2019 levels.The global operating loss margin is expected to fall to -2.7 percent by 2022, according to IATA. To put this in perspective, following 2020 and 2021, this would still be the third lowest margin.

Trucking

Cost of diesel fuel is still on the rise. Per the data issued by the Energy Information Administration on Oct. 25, the national average price for diesel increased 4.2 cents to $3.713 per gallon. The cost of trucking’s primary fuel has increased by 30.7 cents a gallon over the last four weeks, though the increase this week is less than half of what it was on Oct. 18. (8.5 cents).  A gallon of diesel now costs $1.328 more than it did at this time in 2020.

Rail

Union Pacific (UP) and BNSF Railway (BNSF) offer rebates to customers who bring containers to their terminals on the weekends. UP and BNSF are taking additional action to improve the flow of goods and products inland from the LA and Long Beach ports, including offering ocean carrier customers incentives to transport containers out of the ports on weekends. For each container in-gated on Saturdays and Sundays at the Intermodal Container Transfer Facility (ICTF) in Long Beach, California, UP announced a pilot program that will run until Dec. 31 providing a $60 per-container refund to ocean carrier customers. The program. Similarly, BNSF is offering a $50 in-gate bonus for maritime containers that in-gate above a certain threshold on Saturday or Sunday in either Los Angeles or Long Beach. This program aims to promote a coordinated 24/7 supply chain operation as well as continuous joint efforts to minimize the present cargo backlog in the Los Angeles and Long Beach port complexes.

Other

Will the next electric battery revolution be in cargo ships? The number of diesel-powered cargo ships anchored off the California coastlines of Los Angeles and Long Beach isn’t just symbolic of the congested supply chain. They also contribute to marine shipping’s annual carbon emissions of one billion metric tons. Fleetzero is a company hoping to provide solutions to both of these issues by developing battery-electric cargo ships to help reduce carbon emissions while also alleviating supply chain bottlenecks by leveraging more of the world’s available ports.

Amazon attempts to help relieve supply chain concerns. Amazon.com, Inc. is touting the size of its shipping operation in an attempt to calm public fears that a supply chain problem could stifle holiday shopping. The world’s largest online retailer said in a corporate blog post on Oct. 25 that it had increased its fleet of drivers, warehouses, and planes to manage a projected surge in orders in the coming weeks, potentially giving Amazon a competitive edge. The blog post also put a spotlight on the company’s efforts to deliver goods to customers without relying on the US Postal Service or UPS Inc.

Bon Jovi performs for trucking executives. Bon Jovi gave a surprise performance at the Freightliner and Western Star 2021 customer appreciation event for an invitation-only crowd of around 1,000 at the open-air Ascend Amphitheater in downtown Nashville. The New Jersey-based rock band performed signature ’80s classics including “You Give Love a Bad Name” and “Livin’ on a Prayer,” as well as more recent hits such as “Lost Highway.” The exclusive concert for trucking industry leaders was hosted by Daimler Vehicles North America, the manufacturer of Freightliner and Western Star trucks, on Oct. 25 during the American Trucking Associations’ Manafest.

Retailers are encouraging shoppers to start holiday shopping early. The holiday shopping spree usually begins on Black Friday, but this year businesses want you to start more than a month ahead. Major retailers are encouraging customers to shop for the holidays sooner than ever before to take advantage of deals and avoid disappointments. Because of shipping and supply chain challenges affecting practically everyone, the holiday shopping season is projected to be chaotic. To ease concerns and make sure customers get what they want before the holidays, retailers such as Best Buy, Amazon, Walmart, Sam’s Club, and Target have declared the holiday shopping season to already be underway by rolling out sales events and Black Friday-worthy deals more than two months before Christmas.

COVID-19 Outbreak at Hong Kong Terminal, Demand and Cost for Air Freight Soar Even Higher, Union Pacific Extends Operating Hours

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Ocean  

Ship capacity forecasted to remain tight through 2022. As bottlenecks persist, global ports may not be able to handle as many containers as previously predicted. The COVID-19 pandemic and challenges with trucking, rail, terminal, and warehouse capacity are contributing to the worsening forecast of the container market. Furthermore, many of the container ships on order will not arrive until 2023.

Ports

Trans-Atlantic carriers redirect from clogged Savannah ports to Charleston. CMA CGM has followed Hapag-Lloyd and OOCL in temporarily bypassing the crowded U.S. East Coast port of Savannah in favor of a Charleston call on its trans-Atlantic routes. Customers were informed that “severe congestion” at Savannah was causing delays of eight to ten days. CMA CGM will begin operating its AMERIGO service connecting the West Mediterranean to the U.S. East Coast from Charleston, with its first sailing on Nov. 27.

J.B. Hunt predicts high freight demand to extend beyond the holiday season and into 2022. J.B. Hunt Transportation Services Inc. forecasts bottlenecks at the West Coast ports to worsen as the holidays approach, with labor shortages and high shipping demand continuing industry-wide. The issues are exacerbated by a backlog of vessels waiting for berths at the West Coast ports.

Air

COVID-19 outbreak at Hong Kong terminal may cause air cargo delays. Due to quarantine restrictions resulting from a positive COVID-19 case, transit times at a Hong Kong International Airport cargo terminal are projected to increase by an average of two to three days. Further stressing the challenges, according to Everstream Analytics, 25% of Hong Kong Air Cargo Terminal’s (HACTL) staff will decrease by roughly 25% as they quarantine until the end of October.

Long-term shift in the importance of air cargo among airlines. Following the industry’s role in moving PPE in the early months of the pandemic and later transporting Covid-19 vaccinations, the importance of air cargo has grown. Additionally, over the last 18 months, the air cargo sector has become increasingly important to the airline industry as many carriers have become reliant on cargo income to stay afloat. Cargo revenues presently account for nearly a third of total revenues, although this is likely to decrease when the passenger market recovers. 

U.K. air freight bookings increase as companies try to avoid port congestion. According to one cargo group, bookings for air freight services in the U.K. increased by 70% in October, as businesses sought methods to avoid port backlogs. Air Charter Service, which allows stores and other companies to rent entire planes to deliver goods, said demand had increased since September when bookings at its U.K. headquarters were already 20% more than the previous year, and 150% higher than pre-pandemic figures. 

Shipping crisis driving some companies to pay steep costs to charter air cargo planes. Demand for air freight is soaring with anxious retailers inflating the cost of an air freight charter to new heights. A trans-Pacific charter on a Boeing 777 currently costs approximately $2milion, according to Air Charter Service. Prior to the pandemic, the peak price for such a charter was $750,000 according to a U.K.-based charter firm. Companies trying to ship goods out of Vietnam may face even higher costs, with prices in the area of $2.5 million to $3 million. If you have any questions about air travel, contact one of our air experts.

Trucking

Ex-Seattle trucking rates skyrocket due to congestion and container shortages. As a result of the increased import activity, spot truckload rates from the Pacific Northwest to inland markets like Chicago and Memphis are rapidly increasing as cargo intended for congested Southern California ports is rerouted north and a lack of intermodal containers forces more transloaded freight into over-the-road trucks.

Cost of trucking’s main fuel spikes. According to Energy Information Administration data released Oct. 18, the national average price of diesel continues to jump, rising 8.5 cents to $3.671 a gallon. Diesel prices have risen 19.4 cents a gallon in the last two weeks and 26.5 cents in the last three with Monday’s increase. A gallon of gas now costs $1.283 more than it did in 2020.

Rail

Union Pacific extends operating hours to support the port of LA. Union Pacific has lengthened operating hours at a near-dock rail facility by the Port of Los Angeles in an effort to match the port’s goal of 24/7 operations.

Other

The reality of the 24/7 commitment at the ports, expressed by Lori Ann LaRocco of Freightwaves. Biden’s claim of ports operating 24/7, according to LaRocco, is not accurate. Furthermore, LaRocco expresses that congestion will not be relieved in the next 90 days unless the ports and all stakeholders, including truckers and warehouse workers, operate at the same time.

What can consumers do as we head into the holiday season? Everything from holiday shopping to everyday goods and services has been impacted by the strained supply chain and global shipping crisis. Good Morning America put together a panel of experts to discuss what’s going on and offer shopping tips for the holiday season.

Container Inflows Expected to Remain High, USTR Requests Comments, Biden Calls for 24/7 Port Operation

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Ocean  

Container inflows are expected to remain high through 2022, with congestion restricting greater advances. Imports to the nation’s top retail container ports are expected to remain high until at least February, according to the National Retail Federation (NRF). The group recently reported that their estimates would have been even higher if it hadn’t been for congestion, capacity constraints, and labor shortages. Additionally, the NRF expects the current trend to continue at least into the first quarter of 2022 due to increased consumer spending and retailers still catching up on and pulling inventory forward. In comparison to a very strong comp from 2020, October is expected to drop 0.3 percent. That would be the first drop in a month since July of 2020.

Customs

The U.S. Trade Representative (USTR) requests comments Oct. 12-Dec. 1, 2021 as they consider reinstating Section 301 exclusions. USTR is considering whether to reinstate previously extended exclusions granted under the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation by excluding certain products from the additional duties imposed in multiple tranches. The majority of Section 301 goods exclusion extensions were set to expire on December 31, 2020, or earlier this year. The Office of the United States Trade Representative is now seeking comments on whether certain product restrictions should be reinstated.

The U.S. Customs and Border Protection (CBP) agency is considering continuing education requirements for customs brokers. CBP published a notice of proposed rulemaking on September 10 to amend its regulations to mandate continuing education for individual customs broker license holders and to establish a framework for enforcing this requirement. Individual brokers would be required to complete at least 36 continuing education credits per triennial term, with some exceptions, according to the NPRM. Individual brokers who fail to record and certify their compliance with the continuing broker education requirement in a triennial report may face disciplinary action.

Air

Typhoons and COVID-19 cause air delays in China. A typhoon has caused heavy rainfall in Guangdong this week, potentially delaying flights. At the Hong Kong Airport, a COVID case has been confirmed, so air freight from HKG will be raised and possibly delayed as well, but the Hong Kong government is working to make sure it’s under control. 

As capacity continues to be an issue, air cargo rates surge. To avoid congestion at the ports and ocean shipping delays, shippers are scrambling to find capacity through air freight, which has caused skyrocketing rates—so much that they have climbed ten times in a single week.

The International Air Transport Association (IATA) urges the air cargo industry to work together to overcome current challenges. IATA wants the air cargo industry to work at the same pace and cooperation first seen in the beginning of the COVID-19 pandemic due to increasing demand and complications with congestion and crossing international borders.

Ports

Biden calls for a 24-hour-a-day port operation ahead of the predicted holiday supply shortage at a meeting with ports and labor. The president met with the leaders of the Los Angeles and Long Beach ports, as well as the International Longshore and Warehouse Union, and big-box retailers, to discuss supply chain challenges and solutions. Following Biden announced that the port of Los Angeles would start operating 24 hours a day, seven days a week to help alleviate bottlenecks, while several private-sector organizations will also expand their use of evening hours and 24-7 operations. A few weeks ago, the Port of Long Beach began working 24 hours a day, seven days a week.

U.S. ports urge Biden to promote and incentivize extended gates. Top U.S. port officials lobbied the Biden administration to encourage importers and their carriers to use extended gates, with the possibility of using national defense funds to assist in paying for the changes. Directors of the seven major U.S. ports said the funding would be merited under the National Defense Authorization Act of 2021 if the government deemed port congestion an economic threat. The port directors also urged Biden to ease importer limitations on cargo anti-dumping and countervailing charges of over 200 percent imposed on China Intermodal Marine Containers (CIMC), the world’s largest maker of chassis. Furthermore, port leaders encouraged Biden to support data-sharing platforms that give stakeholders access to predicted cargo flows so that landside operations can be better controlled. Schedule a demo to learn how Navegate’s collaborative, digital software can help you gain control of your supply chain.

Rail

Terminal fluidity improves at BNSF Railway’s Chicago terminal, but truckers still struggle with long turn times and no chassis. With containers clearing up in one of the terminals’ lots (Lot W), turn times continue to be a problem at the terminal, nearly doubling from a year ago. Truckers have pointed out that when drivers are stuck in a rail terminal, fewer loads can be delivered and it becomes difficult to retrieve containers before free time, causing more demurrage fees.

Other

Retailers expand warehousing to the East Coast to escape West Coast congestion. In an effort to help relieve West Coast warehousing congestion, retailers are now expanding to the East Coast, particularly in the New York/New Jersey area. Port congestion on the West Coast and the need to quickly fill e-commerce orders will likely increase the demand for warehousing on the East Coast. 

A severe shortage of labor has driven capacity constraints, not warehouse woes. Peak season always has warehouses and distribution centers filled with holiday merchandise, but this year, labor shortages are causing the constraints. COVID-19 has certainly caused woes for the industry, but more so exposed the problems warehouse operators face in terms of a lack of labor.

How did supply chains get so wrecked? A recap from FreightWaves tracks how supply chains and transportation congestion became the unprecedented cluster it is today from COVID-19 to a lack of equipment. 

Pipeline Spill May Impact Vessels at Port of LA, Norfolk Southern Reopens Terminal, & Port Congestion & Container Shortages Continue

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Ocean  

Pipeline spill could impact containerships waiting to enter the Port of LA. Thought to be one of the largest oil spills in California’s recent history, Amplify Energy’s pipeline breach about five miles offshore Newport and Huntington Beaches spilled approximately 3,000 barrels of oil, resulting in more than five miles of an oil slick along the coastline.

While operations and arrivals at the Port of Los Angeles have not been affected, the location of the oil spill is just south of the 60 plus containerships and 20 vessels waiting to enter the Ports of LA and Long Beach. The spill could affect a number of vessels queued in San Pedro Bay on berths as they may need to be cleaned, potentially causing more delays. 

Ports 

A surge of imports and large cargo volumes lead to more congestion and shortages. An unexpected development of landside congestion in the Pacific Northwest has resulted in vessel bunching, increased container dwell times at marine terminals, and an extreme chassis shortage at the Northwest Seaport Alliance (NWSA). As peak season continues and imports flood the Seattle-Tacoma port complex, problems may remain and worsen. Additionally, the large cargo volumes are also reducing the capacity of the truck and driver fleet needed to dray inbound containers to the warehouses and outbound loads from the warehouse to the U.S. interior.

Truckers who miss appointments for import retrievals at container ports in the Port of New York and New Jersey will be assessed a new fee. According to the latest tariff from the New York Terminal Conference, truckers who fail to show up for an appointment in the NY-NJ port will be charged a $62.49 administrative fee starting Oct. 1. The fee is part of a three-month pilot program and is intended to increase efficiency and speed up freight delivery. Additionally, the aim is to prompt more truckers to make their appointments.

Transload activity has increased in Vancouver in recent weeks, putting significant strain on domestic container supply. Due to increased transloading activity in Vancouver, demand for 53-foot domestic containers has soared, resulting in shippers having to wait days for boxes, regardless if they can pay for access to Canadian Pacific’s guaranteed equipment pool. It’s the newest example of what trucking companies and freight forwarders claim is a worsening bottleneck at Vancouver’s ports and warehouses.

Norfolk Southern Railway (NS) reopens intermodel terminal to help reduce excessive dwell times. As shippers at the Port of Virginia experience prolonged dwell times and Norfolk Southern Railway’s single facility in Louisville, Kentucky, remains overburdened with containers, their decision to reopen an intermodal terminal will hopefully bring much-needed relief. Norfolk International Facilities (NIF) and Virginia International Gateway reopened their Buechel intermodal facility for ocean containers (VIG). In September, dwell periods for inland point intermodal containers at both terminals increased. Reopening of Buechel should hopefully mean shippers get their freight faster on the rail.

Air

Ocean delays and port congestion continue to turn retailers to air freight, increasing emissions. Desperate to transport goods in time for the holiday season and avoid the bottlenecks at Asian hubs and U.S. ports, retailers are leveraging air freight to ship goods. This switch is having environmental effects, emitting more carbon into the air—up to 22 times more than ocean vessels. These modal shifts are more likely as the costs between different types of transportation are narrowing due to unreliable ocean scheduling and growing port congestion.

Trucking

A surge in imports at the Port of Vancouver has caused trucking conditions to deteriorate in the past two weeks. A surge of imports has caused local warehouses to be beyond capacity, causing a severe chassis shortage. As a result, trans-Pacific shipping lines have restricted how many containers will be accepted at marine terminals. Therefore, truckers have been left with “empties” sitting on chassis with nowhere to take them. 

Rail

Norfolk Southern Railway (NS) reopens Louisville intermodal terminal. This intermodal terminal will specifically handle ocean freight from the Port of Virginia. The terminal opened on October 4th and will be open only for containers coming from Virginia’s two largest container terminals. The Louisville terminal will give shippers one additional free day for containers after the notification day of release. 

Other

Analysis: Supply chain workers around the globe are at a breaking point. It’s no secret that supply chain stress has taken a toll on workers in the maritime, trucking, air, and cargo sectors. With added pressure of growing congestion, import surges, holiday peak seasons, and a whole pandemic to worry about, shipping and freight associations are urging world leaders and the U.S. government to take action to remedy these issues.

FYI: Improving supply chain resilience will offer a competitive advantage. Learn about the benefits of making your supply chain even more resilient in a volatile market and how your business can withstand industry shocks. If you have any questions about what our software can unlock for your business, don’t hesitate to reach out to one of our experts.

Port Congestion in China Increases, LA-LB Implements Measures to Combat Congestion, & UP Meters Containers out of Chicago, Memphis, & Kansas City

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Ocean  

Port congestion in China increases, further affecting capacity. At major Chinese ports, there is major congestion of container ships awaiting anchor. There are more than 100 ships waiting at Shanghai, with about 75 ships waiting at Ningbo. Due to heavy import volumes, Typhoon Chanthu, and rising congestion, the vessels are increasing nationwide in China. This rising congestion threatens yet another supply chain shock that may cause structural blanks where carriers skip calls to try and get back on a regular service schedule.

To add more shocks to the supply chain world, there have been power cuts to Chinese factories. In order to curb carbon emissions, at least 10 Chinese provinces have cut output or temporarily closed factories this month. Some of the affected provinces are mainly Jiangsu, Guangdong, and Zheijiang, which have factories that produce steel products, appliances, and chemicals. The Port of Ningbo and Yantian also fall into one of the affected provinces, where container exports are frequently processed.

Vietnam factory closure delays inventory replenishments. More COVID-19 lockdowns have shut down factories in South Vietnam where much of the production for exports take place. This closure will affect inventory replenishment and is adding fears of another bullwhip effect on trans-Pacific supply chains. If you have any questions about the issues happening in China and Vietnam, don’t hesitate to contact one of our experts.

Ports 

The Ports of LA-LB quickly implement changes to combat congestion measures. These ports are moving aggressively on “operational initiatives” meant to free up space at the marine terminals and reduce container dwell times. These moves consist of loosening restrictions on night gate moves and adding early morning shifts from 3-7 a.m. during the week. Recently, the ports have implemented expanded night and weekend truck gate hours.

The number of ships piling up at the Ports of NY-NJ reaches a new high. As marine terminals struggle to keep up with a flood of import volumes and continued berthing delays, NY-NJ is seeing more ships pile up. However, the ports say that the ships will not see extended berthing delays that other major U.S. ports are experiencing and that this expanded lineup of ships does not mean more severe congestion plaguing the region.

Trucking

Ongoing supply chain disruptions will leave capacity scarce for the trucking industry into 2022. While U.S. truck and trailer orders are increasing, shippers should expect continued capacity constraints well into 2022. With new orders for 2022 delivery, tight capacity and pressure on freight rates will continue into the following year as capacity slowly becomes more available.

U.S. truck spot rates are increasing. The rates are estimated to climb even higher due to strong manufacturing demand and import volumes. The rates are rising in key long-haul lanes as freight flows from coastal warehouses to inland hubs like Chicago and Memphis.

Rail

Union Pacific Railroad (UP) meters domestic intermodal containers out of Chicago, Memphis, and Kansas City. UP is limiting the number of 53-foot containers it will move in a dozen lanes out of these three cities to “balance equipment across the country.” Limiting appointments is necessary to efficiently move containers through networks without shocks, according to UP.

Amtrak train derails on BNSF railway. Last weekend, a train derailed on a BNSF railway in rural Montana. Trains have been backed up on both sides of the railway and won’t be able to get through until all repairs are complete. If you have goods traveling through the area, delays should be expected.

Other

Shipping alliance ONE backs efforts to decarbonize shipping. Ocean Network Express (ONE) joins other ocean carriers in a call to action alliance of more than 150 companies to decarbonize shipping by 2050.  

See the supply chain shocks around the world. The supply chain shocks are happening all over the globe, from Nairobi to Ningbo. Check out this article from Bloomberg that highlights the global supply chain disruptions.

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