Freight Market Updates

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

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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...

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...

India’s COVID-19 Situation Worsens, Protests Approved for Tariff Exclusion Refunds, and Colonial Pipeline Outage Restored

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Ocean  

Retailers are upping their forecast for imports for the next several months. As U.S. imports are expected to rise, this forecasting suggests that shippers will have an even more difficult time trying to find vessel space in Asia. Additionally, ports in the U.S. West and East Coasts may face increasing congestion and import surges in the peak season between summer and fall.   

Container shortages make it difficult to secure space at Asian hubs. Ports across the board in China are strained and short on containers, so it will be difficult to secure space in the next coming weeks. Additionally, the premium services are likely unavoidable, so shippers should be prepared to continue booking with the premium services.

India’s COVID-19 cases and restrictions affect supply chains, congestion, cargo slowdowns, and crewing. Restrictions in India following the surge of COVID-19 cases and deaths are resulting in labor shortages — particularly for the trucking industry in the country. Even though demand remains relatively steady still, if COVID-19 cases and deaths continue, this disruption could affect port congestion, delivery times, and the country’s export prospects. 

Additionally, the Chinese coastal city of Zhoushan is banning vessels that have passed through or changed crews in India in the last three months, citing concerns about India’s COVID-19 situation. Meanwhile, Singapore and Fujairah in the United Arab Emirates are preventing ships from changing crew members that passed through India, causing even more complications for crewing. While cargo ships are still calling at Indian ports, dock workers are also falling ill from the virus, further hampering port operations. Our Navegate team will keep you updated about the ongoing COVID-19 situation in India and how it may affect your business.

Customs  

The Food and Drug Administration (FDA) eliminates a portal where industry members can request a DUNS number. This portal will end on May 24, 2021, so importers will have to gather that information from suppliers directly to obtain a DUNS number when submitting an FDA entry. While the DUNS number isn’t a mandatory data element, it is highly recommended to still include it in entries. 

The FDA opens a portal for importers of human and animal food into the U.S. Called the FSVP Importer Portal for FSVP Records Submission (Portal), the portal allows food importers to electronically upload FSVP records directly to the FDA for program compliance if they choose. More information on the new portal can be found on the Code of Federal Regulations website

More protests are being approved for tariff exclusion refunds. After several months, our team is starting to see some movement for refunds for the Section 301 tariffs. Due to the unprecedented number of protests being filed, the protest process is taking longer than usual; it is also unclear as to how long it will take for Customs to review the outstanding protests. Therefore, your broker will notify you of any updates as they are received from Customs. 

Ports 

Port terminals at NY-NJ up capacity amid a surge of imports. As a wave of imports coming into the U.S. shows no signs of easing, marine terminals at the Port of NY-NJ plan to increase container handling and reduce the time truckers spend at port facilities. The plans include implementing new yard equipment and ship-to-shore cranes, more efficient gates for truckers, and ways for shippers to quickly retrieve more containers. 

Air

High rates and capacity constraints continue for the air freight sector. With equipment and labor shortages, import surges and record volumes for shipping, finding air space capacity will be difficult. More shippers are also turning to air for cross-border transport, which is also increasing air cargo rates, and the market is already running at peak levels five months before peak season normally starts, according to FreightWaves 

Trucking 

Cyberattack shuts down Colonial Pipeline, causing diesel outages. A major pipeline system that transports fuel across the East Coast has been breached by a cyberattack, halting pipeline operations to deal with the threat. It’s been nearly a week since the attack, and there is an increasing number of outlets with no diesel supplies, affecting routes from New Jersey to Texas and lanes from Nashville to north Florida. Our team has been also seeing reports of truckers only being able to fill up to 50 gallons at once. As of Wednesday evening, the pipeline was restored, but it will take several days for the product delivery supply chain to return to normal, so delays should be expected. If you have questions regarding the pipeline outage, don’t hesitate to reach out to one of our experts

ICYMI: Constraints on trucking capacity are expected to last through the end of the year. According to freight industry experts, the ongoing squeeze on the trucking industry isn’t going away anytime soon, so prices for shippers will continue to increase. Combined with a shortage of trucks and drivers and a strong demand in a rebounding economy, there’s more freight than the industry is able to handle. More information on the trucking industry capacity can be found in an article by the Wall Street Journal Logistics Report

Rail

ICYMI: Union Pacific (UP) will build a transload facility in the greater Chicago area. In an effort to give exporters more capacity, UP will be opening up a transload facility in the fourth quarter. The facility will provide more capacity for agricultural shippers and their commodities as container lines add capacity in the Pacific Northwest amid rising demand. Additionally, the “facility will offer exporters greater access to ocean containers and faster turnaround of the equipment for container lines,” according to JOC.com

Other

New Southern California pollution rules will hike warehouse costs. A Southern California regulatory agency has approved new air pollution rules that will increase warehouse operations costs. These rules are expected to reduce total emissions from warehouses themselves and the millions of truck trips that generate harmful emissions. These new rules are not expected to stymie growth in the area or result in cargo diversion in Southern California.

Container Shortages and Shipping Rates Increase, Port of Montreal Workers Return to Work, and Air Cargo Supply Chain is Maxed Out

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Ocean  

The CMA CGM Group announces the order of 22 new vessels. Last week, CMA CGM signed with CSSC Group for an order for 12 LNG-powered containerships and 10 VSFO-powered containerships. The order aims to accommodate market growth for the carrier and is expected to join the group’s fleet between 2023 and 2024. 

Container shortages make it difficult to secure space at Asian hubs. Ports across the board in China are strained and short on containers, so it will be difficult to secure space in the next coming weeks. Additionally, the premium services are likely unavoidable, so shippers should be prepared to book with the premium services (with the port of Xiamen applying the premium service on a case by case basis). 

Container shipping rates increase as demand surges. The rate for a 40-foot container from Los Angeles to Shanghai reached $4,403 last week, the highest since 2011. Caused by stimulus payments and COVID-19 vaccinations increasing, the consumption of goods has inundated supply chains around the world, indicating that high seaborne freight rates and stretched capacity will continue into its second year. Therefore, shippers should expect high rates and constrained capacity for the foreseeable future.  

Customs  

India continues to experience mass COVID-19 infections and deaths. India has been experiencing very high levels of COVID-19 infections, with a seven-day average of approximately 330,000 cases. Due to these high levels of COVID-19, businesses and ports may be affected in the country. Our team is still monitoring how this will affect business out of India and keep you updated. 

ICYMI: Our team is seeing more bond insufficiencies. We’re reminding importers to actively monitor their import volumes. Bond values are based on a 12-month rolling duty and fee total, so monthly changes in import volumes could have a large impact on your bond requirements. Therefore, it’s recommended to be proactive in adjusting bond values before you receive a mandated increase from Customs. If you need help navigating these bond insufficiencies, don’t hesitate to reach out to one of our experts

Ports 

Delays and labor constraints continue at major ports on the U.S. West Coast. According to an update from Maersk, the Ports of Vancouver and Seattle are now operating at 120% of yard capacity, and the average vessel wait time for Vancouver is seven days and four days for Seattle. In Vancouver, there is limited terminal capacity, so containers are only discharged off vessels when other on-terminal containers exit the gates. 

Further south, labor constraints at the Ports of Los Angeles and Oakland continue to strain capacity. The Port of Long Beach has an average of 20-25 vessels at anchor with an 8-11 day wait time. At Oakland, there’s an average of 15-20 vessels at anchor with a 10-15 day wait time.

The Port of Montreal workers are returning to work. After Canadian lawmaker’s voted for legislation mandating the workers to come back to work, the longshore workers’ five-day strike was defeated. The port has said that it will take several days to restore normal cargo flow as the terminal operators handle 10 vessels waiting at the port. Therefore, shippers should expect delays in the next several weeks.  

South Carolina ports are expanding at inland rail terminals to accommodate growing volumes. The South Carolina Ports Authority is adding space for more containers and chassis at Inland Port Greer after the hub received more cargo in March than any other facility at South Carolina ports since 2013. The new space will accommodate longer trains carrying containers to and from the port, and construction is expected to wrap up in 2023. 

Hapag-Lloyd identifies a new yard to store NY-NJ containers. As part of the ocean carrier’s two-month plan to relieve a backlog of empty containers piling up due to record import surges, Hapag-Lloyd has stated that a new container yard will start accepting these empty containers. Experts say that finding storage for containers has been difficult and only contributed to bottlenecks in port trucking. 

Air

Air cargo supply chain is “maxed out.” As demand for personal protective equipment (PPE) and e-commerce increases, port delays forcing urgent cargo into the air, and manufacturers building buffer stocks, the air cargo industry is overstretched. It’s likely that this capacity strain won’t slow down anytime soon and will continue through the rest of the year and perhaps 2022. If you have any questions about air freight capacity, don’t hesitate to reach out to one of our experts

Trucking 

Constraints on trucking capacity are expected to last through the end of the year. According to freight industry experts, the ongoing squeeze on the trucking industry isn’t going away anytime soon, so prices for shippers will continue to increase. Combined with a shortage of trucks and drivers and a strong demand in a rebounding economy, there’s more freight than the industry is able to handle. More information on the trucking industry capacity can be found in an article by the Wall Street Journal Logistics Report

Rail

Union Pacific (UP) will build a transload facility in the greater Chicago area. In an effort to give exporters more capacity, UP will be opening up a transload facility in the fourth quarter. The facility will provide more capacity for agricultural shippers and their commodities as container lines add capacity in the Pacific Northwest amid rising demand. Additionally, the “facility will offer exporters greater access to ocean containers and faster turnaround of the equipment for container lines,” according to JOC.com

Carriers Suspend Services to Inland Points Including Minneapolis, Bond Insufficiencies for Importers, and Port of Montreal Workers Go On Strike

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Ocean  

Some ocean carriers are suspending services to inland points including Minneapolis. While not all carriers are suspending services to Minneapolis, some are, and so this suspension comes on a case-by-case basis. Our Navegate team will attempt to do a booking on behalf of our customers where we will then find out if carriers will accept the booking, and we will relay the information to our customers. Whether this suspension applies to your company, we will work with you to find the best way to receive your shipments. 

Congestion and delays will continue through the month of May. Due to ongoing congestion and strained capacity, shippers will have to consider booking via premium services again in May rather than on standard services. High ocean rates and a lot of rolled shipments are continuing, and importers should book shipments 6-8 weeks in advance. 

South American exporters to North America face delays and cargo rolling. Due to trucker shortages and congestion at U.S. ports, exporters from South America have been encountering delays and cargo rolling. This congestion and delays have led Hapag-Lloyd to temporarily halt bookings for all cargo due to ports on the West Coast from Latin America. 

Customs  

Our team is seeing more bond insufficiencies. This notice is a friendly reminder for importers to actively monitor import volumes. Bond values are based on a 12-month rolling duty and fee total, so monthly changes in import volumes could have a large impact on your bond requirements. Therefore, it’s recommended to be proactive in adjusting bond values before you receive a mandated increase from Customs. If you need help navigating these bond insufficiencies, don’t hesitate to reach out to one of our experts. 

As India experiences a mass COVID-19 surge, goods coming out of the country may be affected. India has been experiencing very high levels of COVID-19 infections, with a seven-day average of approximately 330,000 cases. Due to these high levels of COVID-19, businesses and ports may be affected in the country. Our team will monitor how this will affect business out of India and keep you updated. 

Ports 

Dockworkers at the Port of Montreal go on strike. This week, Montreal longshore workers began an indefinite strike to protest a schedule change that the maritime employers imposed on the workers. This strike undoubtedly will disrupt supply chains, and the Canadian government has already introduced legislation to force the workers to go back to work. On the other hand, workers at the port have said that federal intervention would disrupt their collective bargaining process, and they would go back to work if the maritime employers agreed to withdraw the schedule change that prompted the strike. Canada’s parliament is expected to debate a bill as early as this weekend that would require the 1,150 dockworkers back to work

Delays at Oakland and Pacific Northwest ports continue, but the gateways remain fluid. Cargo owners who have chosen to divert goods from the congested LA-LB ports to Oakland and Seattle-Tacoma have been experiencing delays, with vessel bunching as the major issue at Oakland. However, the gateways remain fluid, indicating that diverting vessels from LA-LB to Oakland and Seattle-Tacoma haven’t overwhelmed these ports.

Air

Hong Kong relaxes COVID restrictions for cargo pilots. On Friday, April 16, the Hong Kong government relaxed COVID restrictions for fully vaccinated cargo pilots, eliminating the measure that mandated Hong Kong-based aircrews to quarantine after returning home from duty. This measure removes the operational burden for all-cargo airlines. 

Trucking 

Trucking load volumes increase by more than double, straining trucking capacity. In the past week, 1.63 million loads were processed in one 24-hour period. According to Brent Hutto, chief relationship officer at Truckstop.com, the load volumes averaged around 1.4 million all week, contrary to the used-to-be normal amounts of 400,000 to 500,000 daily load volumes. “Historic low inventories combined with high retail demand and a manufacturing recovery are straining capacity across all modes of freight transportation,” according to JOC.com

Rail

Canadian National Railway (CN) discusses merger with Kansas City Southern (KCS). CN will soon be meeting with the board of directors of KCS over its acquisition proposal to construct a rail network that would extend from Canada through the United States and to Mexico. More information about the proposal, as well as the competition between CN and Canadian Pacific (CP) can be found in an article from FreightWaves 

Delays, rail storage fees, and congestion increase as imports move inland via intermodal terminals. Due to a nine-month supply of imports moving from busy U.S. ports to inland terminals, shippers are experiencing more delays and rail storage fees. In major inland hubs such as Dallas, Chicago, Memphis, and Kansas City, record volumes have overwhelmed the chassis supply, further exacerbating the already congested networks.

Asian Container Availability Tightens, Hong Kong-North America Air Rates Soar, and Kansas City Rail Terminals Overwhelmed With Containers

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Ocean  

Asian container availability tightens and is expected to intensify. As demand builds through May, container lines warn that equipment will become even scarcer, with purchase and rental costs continuing to soar. This increased demand for containerized shipping is expected to deteriorate the current equipment imbalance. Shippers should expect container shortages to intensify over the next few weeks. If you need help navigating these congestion issues, don’t hesitate to reach out to one of our experts

Customs  

K-Line America, Inc. has been experiencing a system-wide global outage due to a cyber attack for nearly a month, so Customs has approved for all K-Line shipping lines to be exempt from the 24-hour rule. K-Line shipping lines have been allowed to load cargo on vessels and not be penalized for failure to comply with the 24-hour rule and Importer Security Filing requirements. This exception continues to be in effect. 

Ports 

Atlantic and Pacific ports set TEU records. In March, the nation’s ports continued their record pace for container volumes, fostering supply chain kinks and more warehouse space shortages. The Port of Los Angeles saw a 113% increase in 20-foot-equivalent units moved, which was the busiest March in the port’s 114-year history. The Port of Long Beach saw a 62.3% increase, while the Port of Oakland saw a 27% year-over-year increase. More information on how the nation’s ports became busier since the pandemic started can be found in an article from Transport Topics online

The longshore labor availability for the Ports of LA-LB significantly improves. In recent months, the West Coast longshore employers’ association and union have hired and trained hundreds of dockworkers to ease the burden of growing cargo volumes. However, officials say that more hiring is required to handle the growing congestion at the ports.  

The Port of Oakland surpasses LA-LB’s congestion problem as vessels pile up in the San Francisco Bay Area. While the Ports of LA-LB have seen improvements in their congestion, the Port of Oakland had around 25 vessels waiting to enter the port as of last week Friday. There is talk of congestion lasting until the summer.  

U.S. Gulf ports will implement a new all-water service coming in the second quarter. Amid an ongoing boom in regional import distribution capacity, the new service will start, while ports also look for opportunities to capture cargo headed to inland areas by increasing intermodal reach. More information can be found in the article by JOC online.  

Air

Hong Kong-North America air rates soar as capacity continues to tighten. The average air freight rates on services from Hong Kong to North America have increased as stronger demand and stricter quarantine rules hit the market. This increase in rates comes as Hong Kong aircrew members on most international journeys were required to isolate upon returning to Hong Kong due to strong quarantine measures. While these measures have reduced capacity, demand coming into the U.S. remains strong. 

The rising price of jet fuel further burdens companies with air freight shipments. The average price for jet fuel has increased this month, which may reduce limited capacity if passenger airlines decide to eliminate cargo-only flights that were temporarily started since the beginning of the pandemic. 

Trucking 

U.S. truck freight tonnage rises. According to data released by the American Trucking Association, actual truck tonnage hauled by for-hire U.S. motor carriers increase by 8.9% from February to March. This increase reinforces how strong consumer and industrial demand are this spring, indicating that there could be an early peak season for shippers, brokers, and carriers.

Rail

Kansas City Rail terminals are overwhelmed with containers. Railroads serving Kansas City are struggling with the pressure of high import volumes into the U.S., creating chassis shortages and shippers spending more on rail storage fees. These difficulties are a result of the severe winter weather that disrupted intermodal rail networks in mid-February. 

Canadian National Railway (CN) seeks to break up the Kansas City Southern (KCS) and Canadian Pacific Railway (CP) merger. In an effort to break up the KCS-CP merger with a larger bid, CN offered to acquire KCS with a $33.7 billion bid, which could indicate a bidding war for a US-Mexico railroad. While CN’s bid is larger, their proposal is massively complex and may likely fail, according to CP officials.

Suez Canal Impacts Linger, the Port of Charleston Receives its First Imports, and Union Pacific Raises Surcharges for Shippers

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Ocean  

Suez Canal blockage leaves lasting effects on the supply chain industry, causing container shortages, spot rate increases, and a surge in demand. Carriers are warning that the heavily used 40-foot boxes will be in short supply from mid-April to well into May — a result of the Suez Canal blockage. The congestion from the blockage has slowed the return of containers back to ports in China.  

Additionally, spot rates on the trans-Atlantic westbound trade have increased as carriers have introduced substantial rate increases at the beginning of April. These rate hikes are also due to the Suez Canal blockage; carriers are struggling to recover lost schedules from the six-day blockage, hence the rate hikes. However, initial indications show that port hubs in North Europe and Asia are managing rising inbound vessels without major delays. 

Several shipping lines are expected to implement a general rate increase (GRI) into Asia on April 15. More carriers are expected to follow on May 1.

Customs  

K-Line America, Inc. has been experiencing a system-wide global outage due to a cyber attack for nearly a month, so Customs has approved for all K-Line shipping lines to be exempt from the 24-hour rule. K-Line shipping lines have been allowed to load cargo on vessels and not be penalized for failure to comply with the 24-hour rule and Importer Security Filing requirements. This exception continues to be in effect. 

Ports 

The Port of Charleston receives its first imports, offering much needed capacity relief to congested U.S. ports. The new Hugh K. Leatherman terminal officially opened on April 9th, welcoming the Hapag-Lloyd Yorktown Express. This new port opening marked the addition of 700,000 TEU of capacity to a U.S. port system that continues to experience surging import volumes. The facility will increase overall annual handling by 30%. 

The railcar shortage at the Ports of LA-LB eases, but terminals are still far from operating normally. After winter storms disrupted rail networks in February, weekly intermodal rail service at LA-LB is gradually recovering. However, terminal operators say that a return to normal will not suffice to curb the existing rail container backlogs at facilities.

Air

Air freight delays and costs continue to increase. Due to expensive ocean freight rates and unreliable container schedules, shippers are turning to air cargo for their shipments. This healthy demand has pushed global air cargo volumes back to pre-COVID levels but combined with limited capacity from passenger jets, these volumes are likely to keep rates elevated for a while. If you have questions about air freight capacity or rates, don’t hesitate to reach out to one of our experts

Trucking 

Truck manufacturers warn the Biden Administration of inability to meet freight demand. The world’s leading heavy-duty truck and truck engine manufacturers have warned the Biden Administration that a significant shortage of semiconductors is inhibiting their ability to produce enough trucks to keep up with freight demand. The Truck and Engine Manufacturers Association (EMA) has urged the administration to prioritize “automotive-grade semiconductors for medium- and heavy-duty truck components and aftermarket parts.” 

Rail

Union Pacific Railroad (UP) is raising surcharges for shippers. Starting April 25, the surcharge will be raised from $250 to $1500 for low-volume shippers, while medium-volume shippers will have to pay a $1000 charge. It is the first time that UP has instituted a peak season fee before the summer.  

Suez Canal Blockage Leaves Mark on Supply Chains, Vaccinations Ramp up at Port of NY-NJ, and Congestion Increases on the East Coast

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Ocean  

Ocean freight rates increase and delays continue. Imports from Asia arriving in both the U.S. East and West Coasts are still experiencing very high volumes and port congestion, pushing factory-to-door delivery times to an average of nine weeks compared to four to five. Likely, there won’t be any significant easing of demand from Asia to the U.S. before the peak season starts in July as retailers hustle to restock inventory and keep up with strong sales. Some importers are placing peak season orders early to avoid being caught without back-to-school and other seasonal inventories as congestion and delays continue. 

The Suez Canal is now cleared, but container shortages and lasting effects on global supply chains continue. Container ships that were delayed by the blockage at the Suez Canal are now making their way to the U.S. East Coast. It is expected that these vessels will add pressure and congestion to the region’s marine terminals. There are also fears as to how the blockage will affect container availability with delays in containers getting back to Asian hubs, further exacerbating the global container shortage problem. 

In Europe, there already is a severe equipment shortage due to the Suez Canal blockage. The average European outbound schedule reliability is below 35%, which decreases the capacity supply, so the demand for containers is exceeding the supply of space and equipment. 

Maersk halts spot bookings and short-term contracts from the export market. While the Suez Canal congestion is now cleared after six-day-long traffic, the impact on global supply chains remains, with a reduced capacity and shortage of equipment. After looking at the significant loss in volume over a couple of weeks and watching the market dynamics, Maersk has decided to cease the short-term bookings placed via Spot, along with the short-term contracts effective immediately.

Customs  

The FDA extends the deadline for food facilities to submit a DUNS number. After the FDA required facilities to obtain a DUNS number for the 2020 Biennial Registration Renewal for Food Facilities, many facilities were experiencing difficulty obtaining one. In response to those concerns, the FDA  extended the deadline to obtain a DUNS number to the end of the next registration cycle, until December 31, 2022. 

Ports 

The Port of NY-NJ vaccinates the longshore workforce to catch up with demand. To bring back more workers to the ports, a two-day event to vaccinate workers took place this week. The event provided 500 vaccines to longshore employees. This event comes as the marine terminals are busier than ever due to the high numbers of import containers. 

Air

Air freight delays and costs are increasing. Due to expensive ocean freight rates and strained ocean capacity, shippers are turning to air cargo for their shipments. This healthy demand has pushed global air cargo volumes back to pre-COVID levels but combined with limited capacity from passenger jets, these volumes are likely to keep rates elevated for a while. If you have questions about air freight capacity or rates, don’t hesitate to reach out to one of our experts. 

Trucking 

Trucking recruiters make progress in the hunt for drivers, but strides are yet to be made. In March, trucking firms added 7,800 jobs before seasonal adjustment — which were more jobs than expected — but are still 19,200 jobs short of the pre-pandemic employment peak in February of 2020. To meet current freight demand as imports continue to surge, the trucking industry is still looking to find thousands of new drivers after a massive drop in employment in 2020. 

Rail

Norfolk Southern’s Chicago backlog is congesting freight on the East Coast. Ocean containers coming into Norfolk Southern’s Landers intermodal yard in Chicago are leaving the U.S. East Coast congested, causing delays for shippers using the railroad. The railroad says the backlog is due to weather-related delays that hit the East Coast in February, as well as a surge of containers from the West Coast coming into Chicago.  

Ocean Capacity Decreases Again, Aluminum Import License Deadline is Extended, and a Railcar Shortage Causes Delays at LA-LB

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Ocean  

The Ever Given ship stuck at the Suez Canal has been refloated. After nearly a week of blocking the canal, canal authorities and a salvage firm were able to successfully refloat the ship. It is currently anchored at the Great Bitter Lake for damage inspection. The Suez Canal has now reopened for passage, however, there is a backlog of vessels that is expected to take approximately 10 days to clear and schedule reliability is expected to be disorganized for the next coming weeks. 

After temporary relief, congestion and container availability in China has worsened again.  Due to this increase in congestion and shortage of containers, ocean carriers are canceling services and increasing blank sailings. This congestion will decrease capacity in the U.S. West Coast, East Coast and the Pacific Northwest. Additionally, prices are increasing with the need to pay for a premium service for shipments. It seems to be a challenging year thus far, so this tough environment may continue until Chinese New Year of 2022. If you have any questions, please don’t hesitate to contact one of our experts

Customs  

The aluminum import license deadline has been updated by the U.S. Department of Commerce. The licenses will be required for covered aluminum import products starting June 28, 2021, instead of March 29, 2021. This date change comes as the U.S. Department of Commerce has submitted a notice to the Federal Register announcing the delay. 

Ports 

International Cargo Terminal aims to help ease congestion at Ports of NY-NJ. The International Cargo Terminal in Elizabeth, New Jersey has extended its warehouse hours for pickup of import containers on Saturday, April 3 to mitigate the congestion at the ports. 

The Georgia Ports Authority (GPA) will increase capacity at Savannah Port. In an effort to handle volume surges with fewer slowdowns, the GPA will increase capacity at the Port of Savannah by 650,000 TEU, a 20% increase, before the end of 2021. 

A railcar shortage at the Ports of LA-LB causes delays. Terminal authorities at the Port of LA-LB have said that the shortage of railcars has become the “top driver of congestion” for the ports. This railcar shortage began last month due to severe winter weather that disrupted rail operations in the middle of the country. Railcar dwell times have doubled to about 10 days. Western railroads are working on pushing more railcars to Southern California to address the ongoing problem. 

Air

CMA CGM’s new air cargo service adds U.S. cargo destinations. Ocean line CMA CGM’s new air cargo service will begin operating two new routes — New York’s JFK Airport and Atlanta — from its base in Liege, Belgium. The airfreight division will operate with five flights a week between Liege and Chicago O’Hare International Airport, once per week between Liege and JFK, and four times per week between Liege to Atlanta via JFK.

Trucking 

Trucking companies are taking steps to vaccinate truckers. In a bid to minimize workplace disruptions, trucking companies are ensuring their drivers and support staff can receive the COVID-19 vaccine. Paid time off, on-site clinics, special websites, and other media platforms have helped with the effort.

Other

ICYMI: Last month was Women’s History Month. Our Women’s History Month blog highlights women supply chain leaders who made the industry move forward, faster.

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

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Ocean  

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

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

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

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

Customs  

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

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

Ports 

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

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

Air

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

Trucking 

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

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

Rail

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

Other

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

Ocean Carriers Implement GRI, USTR Suspends Duties on EU and UK Products, Congestion Continues at Ports of LA-LB

By | COVID-19 Latest Updates | No Comments

Ocean  

Ocean carrier MSC will launch a new China-East Coast service this spring. The shipping line will launch “Palmetto,” a weekly service that will provide direct connections to the Ports of Savannah, from Vietnam and Yantian, China to Charleston, and New York. Launch dates, port rotations, and transit times will be released later. This new service comes as the Ports of Los Angeles and Long Beach remain overwhelmed by record imports from Asia. 

Ocean carriers will implement a general rate increase (GRI). Starting in April, ocean lines will implement a GRI from Asia, and there will also be a possibility of a peak season surcharge, with ocean rates expected to remain high for the foreseeable future. Hapag-Lloyd, for example, will implement a $1200 GRI per 40-foot container, while other carriers are expected to follow a similar increase. In order to restore rates to make more equipment available for cargo shipments, carriers have also been focusing on the traditionally low-revenue backhaul routes instead of defaulting to deadheading empty containers back to Asia. 

Customs  

The United States Trade Representative (USTR) suspends duties on EU and UK products under Section 301 Large Civil Aircraft Dispute. This suspension is effective for products from the EU that enter into the U.S. for consumption after March 11, 2021 and before July 11, 2021. For products from the UK, however, the suspension went into effect on March 4, 2021 and will continue until midnight on July 4, 2021. 

Ports 

Congestion may continue at the Ports of LA-LB at least until summer. Due to record imports that have strained supply chains — as well as other metrics like trucker wait times, container dwell times, the number of ships in the harbor, and chassis availability — the Ports of LA-LB will most likely remain in a pattern of congestion until at least the summer, port executives say.

Despite congestion continuing at Southern California ports, ships and containers have been reduced. The ports have been able to reduce the number of vessels and containers on the water, as well as those sitting at the ports, with some containers at the port averaging a waiting time of just under eight days. Additionally, some ocean carriers have declined inland transportation of containers, reducing some congestion and freeing up more containers to hopefully improve the global container circulation and shortage at Asian hubs.

Air

Air rates start to increase again. Despite the recent decline in air rates, they are now increasing again, although, not at as high as they once were. Additionally, congestion is getting worse at main airway hubs across the country to the point where terminals can no longer operate efficiently. This congestion is in part due to COVID-19 affecting workers, a shortage of truckers available at the airports, and freight not moving on a first-in-first-out basis. If you have any questions, don’t hesitate to reach out to one of our experts

Trucking 

Major storage yard closure near the Port of NY-NJ interferes with trucking operations. A recent closure of a major storage yard near the Ports of New York and New Jersey has forced truckers to look for new places to store empty containers. This limited availability has left truckers to make unproductive decisions, affecting their ability to deliver imports in a timely manner. 

Tornadoes and thunderstorms in the South may cause disruptions for truckers. From the Plains all the way to the Carolinas, severe thunderstorms and tornadoes are expected for the next two days, so delays are likely to be expected.  

Other

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

 

USTR Extends Section 301 Tariffs, Container Backlog at Port of NY-NJ, and Air Rates Increase Again

By | COVID-19 Latest Updates | No Comments

Ocean  

Ocean capacity is still tight, but rates are plateauing. Capacity with ocean container availability is still strained, but space is easier to find than what it was before Chinese New Year. Ocean freight rates have also been stabilizing. 

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 no rail network 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 in ocean freight and lack of containers are making deliveries difficult. The FIEO attributes this shortage to low import volumes from China. 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.

Customs  

U.S. Trade Representative (USTR) extends Section 301 tariff exclusions to combat COVID-19 until September 30th. Section 301 tariffs on certain imports from China will be extended to support the country’s ongoing efforts to mitigate the COVID-19 pandemic. More details on the extension can be found in a document from the USTR online

The Biden Administration reviews current trade policies. As part of the Biden-Harris trade plan, the Biden Administration will be performing a comprehensive review of various trade policies to analyze their impacts on “and unintended consequences” for workers. More information on the trade plan can be found on a fact sheet online

Ports 

Container backlog at Port of New York-New Jersey increases dray rates for shippers. The demand from shippers looking to clear the container backlog at the Port of New York-New Jersey is straining drayage capacity, which is also increasing spot rates for hauling containers to regional distribution centers. 

Air

Air rates start to increase again. Despite the recent decline in air rates, they are now increasing again, although, not at as high as they once were. Additionally, congestion is getting worse at main airway hubs across the country to the point where terminals can no longer operate efficiently. This congestion is in part due to COVID-19 affecting workers, a shortage of truckers available at the airports, and freight not moving on a first-in-first-out basis. If you have any questions, don’t hesitate to reach out to one of our experts

Trucking 

High impact snowstorms expected to hit the Rockies and Plains. A strong winter storm is expected to move from the Rockies to the Plains later this week with an anticipated 6-15 inches of snow in some areas. Besides poor visibility, strong winds, and bad road conditions, power outages are also expected. This winter storm will impact both air freight and truckers, so delays in shipments are likely.

Rail

Union Pacific assesses a container surcharge in California. UP has signaled that it’s experiencing capacity constraints in Southern California, implementing a $250 container surcharge on excess loads for low-volume shippers. The railroad will raise the threshold for what categorizes as a high-volume shipper as well. The surcharge will be implemented starting March 21st and will cover all of California.  

Other

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

Intermodal congestion in Dallas could last weeks longer due to the February winter storm. Chassis equipment providers are warning importers that it could take several more weeks to receive their containers and before cargo flow returns to normal at Dallas-Fort Worth rail ramps, citing the February winter storm as the cause. The storm, complete with ice, snow, freezing temperatures, and power outages, closed rail terminals and distribution centers in the Midwest and the South. This weather caused containers to pile up in Southern California, which is the top origin of marine cargo in Texas.  

 

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