Freight Market Updates

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Radiant Logistics Announces Record Results For The Third Fiscal Quarter Ended March 31, 2022

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For Immediate Release Radiant Logistics Announces Record Results For The Third Fiscal Quarter Ended March 31, 2022 Reports quarterly results with revenues of $460.9 million, up $224.4 million or 94.9%;...

Celebrating Women’s History Month | Women In Logistics & Supply Chain

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Celebrating Women's History Month Get To Know Some of the Inspiring Women Leaders at Navegate March is Women's History Month — a time to honor the bravery and achievements of...
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Radiant Logistics Announces Results For The Second Fiscal Quarter Ended December 31, 2021

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For Immediate Release Radiant Logistics Announces Results For The Second Fiscal Quarter Ended December 31, 2021 Continues trend with another quarter of record results for the second quarter ended December...
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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,...

CBP Announces Enhancements to O’Hare Global Entry technology, Fertilizer Shippers Want Carrier Reforms, UPS to Reduce Surcharges on Some International Services.

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Ocean

DOT data sharing partnerships aim to improve supply chain. The U.S. Department of Transportation (DOT) is developing its industry partnership, Freight Logistics Optimization Works (FLOW) as part of its efforts to enhance U.S. supply chain operations and fortify it along all its elements from the shipping companies to terminals, intermodal operators, and shippers. One of the key initiatives of the development is the sharing of data among the partners and with DOT to identify and manage problems along the supply chain, Maritime Executive reports. DOT reports that the number of companies participating in the program has doubled since its launch in March, and DOT expects membership will continue to grow in the coming months.

Ports

FMC Chairman says that lines should subsidize costs of port congestion. After a meeting last week at the Port of New York and New Jersey, US Federal Maritime Commission (FMC) chairman Daniel Maffei said: “When ocean carriers continue to bring thousands of containers per month to a port and only pick up a fraction of that number, it creates an untenable situation for terminals, importers and exporters, trucking companies, and the port itself. The commission has already been investigating reports of carriers charging per diem container charges even when the shipper or trucker cannot possibly return the container due to terminal congestion. I will ask that this investigation be broadened and intensified to cover instances where shippers and truckers are being forced to store containers or move them without proper compensation.” Read more of Maffei’s statement at Splash247

Customs

CBP intercepts large shipment of exotic reptiles and insects during inspection. It’s not every day that the U.S. Customs and Border Protection Office of Field Operations (OFO) at the Hidalgo International Bridge intercepts 95 specimens of exotic reptiles and insects during an outbound inspection.“CBP enforces laws and regulations from many state and federal organizations, exotic reptiles and insects are a rare find and we rely on our law enforcement partners to assist with such findings,” said Port Director Carlos Rodriguez, Hidalgo/Pharr/Anzalduas Port of Entry. CBP OFO arrested the individuals who attempted to import the creatures on August 3 and seized the vehicles. The insects and reptiles were turned over to U.S. Fish and Wildlife Service and the case remains under investigation by special agents with U.S. Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI), according to a CBP release.

CBP announces enhancements to O’Hare Global Entry technology. U.S. Customs and Border Protection (CBP) announced that technological enhancements to the Global Entry kiosks at Chicago O’Hare International Airport would be taking effect as of August 9. According to a media release, the upgraded facial biometric kiosks will eliminate paper receipts and leverage mobile officer technology to provide a “secure, streamlined, and touchless experience” for Global Entry members traveling internationally, while protecting the privacy of all travelers. “We are excited to begin processing Global Entry members with our new touchless and receiptless kiosks at Chicago O’Hare International Airport,” said LaFonda D. Sutton-Burke, Director, Field Operations-Chicago Field Office. “This innovative solution enhances our Global Entry program for both travelers and officers by adding an extra layer of security, reducing physical touchpoints, and expediting member processing.” You can see all of the changes at the Trusted Traveler Programs website

Trucking

Drop in Gas prices led to unchanged U.S. consumer prices in July. U.S. consumer prices were unchanged in July due to a sharp drop in the cost of gasoline. After advancing 1.3% in June, The Consumer Price Index (CPI) was flat last month. On Wednesday, the Labor Department released a closely watched report that could allow the Federal Reserve to dial down the size of interest rate hikes in September. The reading was the largest month-on-month deceleration of price increases since 1973 and follows on the heels of a roughly 20% drop in the cost of gasoline, Reuters reports

Fertilizer shippers want carrier reforms. The Biden administration is feeling pressure from fertilizer shippers who are pressing for transportation-related changes they say will “help lower their costs and make them more competitive in world markets.” Recommendations from the industry in response to an information request published earlier this year by the U.S. Department of Agriculture’s Agricultural Marketing Services (AMS) include regulatory and other changes affecting trucking, rail and maritime. In the information request the agency asked for help identifying issues affecting the ability to compete in domestic and international markets, along with potential policy solutions.

Rail

Toronto/Montreal shuttle fee notice for MPT customers. On Tuesday, Maersk released a notice regarding shuttle fees for MPT customers. “​​​As the situation both in Prince Rupert and Vancouver continues to deteriorate with import container dwell times reaching record levels, CN rail will be taking several steps to restore fluidity in the network with the establishment of multiple relief container yards where freight can be diverted to. CN rail will as such assess a fee to shuttle containers over to the nominated relief yards. The fee will go into effect commencing Tuesday, August 9th, 2022 and will be applied on all store door cargo where Maersk’s nominated trucker is responsible for providing the dray to the door, also known as MPT (Maersk Preferred Trucker) and the container was also subject to a reroute over to one of the relief container yards. The pass-through charge will be represented as Additional Import Service as part of the billing process. Rail storage free time for [certain] locations has also been reduced from 2 free days to 1 free day.” You can see the specific charges and locations here.

Bill introduced to ban railroad rate hikes during service emergencies. Under a new legislative package introduced last week, railroads would be prohibited from raising prices during service emergencies. The measure, introduced by House leaders in agriculture and transportation, would expand the power of the Surface Transportation Board to regulate railroads when the agency declares a service emergency and requires rail contracts to include service delivery standards. The bill would also allow shippers who own or lease their own railcars to assess fines on railroads when there are service delays. “This bill will level the playing field and provide railroad customers—many of which are transporting key food and energy products—the service they deserve,” said co-sponsor Rep. Peter DeFazio in a statement.

Air

UPS to reduce surcharges on some international services. On Monday, UPS Inc. announced that it will lower its surcharges on heavier-weighted shipments moving from Asian and South Pacific points to the U.S., effective Sunday, August 14. The reductions will affect shipments moving under UPS Worldwide Express Freight service. UPS will reduce surcharges to $1.70 per pound from $2.04 per pound on shipments that move from mainland China, Hong Kong and Macau. Surcharges on shipments moving from Australia and New Zealand, Vietnam, Malaysia, Japan, Korea, Thailand, Indonesia, Singapore, the Philippines and Taiwan, will be cut by more than half to 66 cents per pound from $1.34 per pound, UPS said. See more from FreightWaves here.

International

Cuba’s worst fire in history contained after 5 days. The worst fire in Cuba’s history was finally contained on Tuesday after destroying 40% of the Caribbean island’s main fuel storage facility and caused massive blackouts over the course of 5 days. Witnesses reported the “raging flames that ravaged a four-tank segment of the Matanzas super tanker port had died down and the towering plumes of thick black smoke streaming from the area were diminished and now mostly gray,” according to reports. Matanzas is Cuba’s largest port for receiving crude oil and fuel imports. The crude oil, fuel oil and diesel stored in Matanzas in 10 huge tanks, are mainly used to generate electricity on the island.

Massive Chilean sinkhole has authorities puzzled. Officials are working to determine what caused a massive 656 foot top-to-bottom sinkhole near the mining town of Tierra Amarilla. NPR estimates that the sinkhole that opened up in Chile over the weekend could fit the Washington Monument inside — with about 100 feet to spare. In a statement to Reuters, agency director David Montenegro said “we haven’t detected any material down there, but we have seen the presence of a lot of water.” 

Other

Elon Musk challenges Twitter CEO to public debate over lawsuit. Elon Musk has challenged Twitter CEO Parag Agrawal to a public debate instead of facing the ongoing court case over his attempt to break a $44 billion merger contract. Musk tweeted Saturday: “I hereby challenge @paraga to a public debate about the Twitter bot percentage. Let him prove to the public that Twitter has <5% fake or spam daily users!” A “source close to the company says a debate is not going to happen outside of a pending trial,” CNBC reported. In May, when Agrawal posted a thread explaining Twitter’s spam-estimate process, Musk responded with a poop emoji. Musk tried to delay the trial until February 2023, however Judge Kathaleen McCormick rejected the request, instead granting Twitter’s motion to expedite the trial, now scheduled to begin on October 17.

The Port of New York and New Jersey to Implement Container Fee and Mandatory Export Levels, Tariff Increases on Russian Imports Go Into Effect, Oakland Judge Seeks More Time to Review AB5 Granting Truckers Small Victory.

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Ocean

World’s largest container ship being delivered to ABS class. The Ever Alot, Evergreen’s giant container vessel, has received classification from the American Bureau of Shipping (ABS). It’s currently the largest container ship in the world, with a capacity of over 24,000 TEU. “We are proud to support the design, construction and successful delivery of such a remarkable vessel through the challenges of the pandemic,” said John McDonald, ABS executive vice president and COO. The vessel is the latest in a series of five being built by Hudong-Zhonghua Shipbuilding in China to ABS class, according to Container News.

Seafarers’ happiness levels rising according to report. The Mission to Seafarers “Seafarers Happiness Index report” indicates that seafarers’ happiness levels are recovering, following a record low last quarter. “It is great to see seafarer happiness increase after such low satisfaction in the last Seafarers Happiness Index report. As always, there is much to be learned from hearing directly from seafarers on how they feel about life at sea – the positives and negatives. By listening, we can better understand, empathize and make the necessary changes to improve seafarers’ lives and experiences,” said Revd Canon Andrew Wright, secretary general of The Mission to Seafarers. Overall happiness has increased from 5.85 to 7.21/10, with levels rising in all categories, Container News reports

Ports

Port of Long Beach to remove free-time weekend exemption. Last week, Port of Long Beach Executive Director Mario Cordero announced that the Southern California port authority will take steps to end the weekend exemption for free time “to incentivize the use of weekend gates by our marine terminal operators and to incentivize our shippers to take advantage of these expanded weekend gate hours.” The removal of the weekend exemption for free time will become effective Sept. 1, according to NCBFAA. 

The Port of New York and New Jersey to implement container fee and mandatory export levels. The Port of New York and New Jersey will implement a container fee on any long-dwelling import or export containers in anticipation of a busy peak season. The tariff is expected to free up space for container pickup and reduce excesses of empty containers dwelling at the port. The quarterly container imbalance fee will be effective as of September, pending a mandatory 30-day federal notice. The port is also setting mandatory container export levels. Ocean carriers’ total outgoing container volume must equal or exceed 110% of their incoming container volume during the same period under the new rules. 

Customs

Tariff increases on Russian imports go into effect. Following the removal of permanent normal trade relations status for Russian imports, which increased tariffs on Russian imports, the U.S. has now increased import tariffs on more than 570 types of Russian goods to 35%. The tariff increases went into effect on July 27. Click here for a  list of the impacted items.

FMC establishes a new enforcement structure. The U.S. Federal Maritime Commission (FMC) announced on July 29 the formation of the Bureau of Enforcement, Investigations, and Compliance (BEIC), which would take effect immediately. The new Bureau is a combination of the FMC’s investigation and prosecution activities, and it is intended to enhance the FMC’s implementation of the Ocean Shipping Reform Act of 2022.

Trucking

BP’s Q2 profit skyrockets to highest in 14 years. BP garnered $8.45 billion profit in the second quarter, its highest in 14 years. Strong refining margins and trading prompted it to “boost its dividend and spending on new oil and gas production,” Reuters reports. BP shares were up by the highest levels since June: 4.3% by 1315 GMT. This was leagues above the European energy index, which was only up 0.7%. BP shares have gained 23% this year but still remain 10% below pre-pandemic levels.

Oakland judge seeks more time to review AB5 granting truckers small victory. Alameda County Superior Court Judge Delbert Gee didn’t immediately grant the temporary restraining order port officials were seeking on Monday, granting truckers being sued by the city of Oakland and port commissioners following a protest over AB5 a small victory. “The court needed more time to review before they made their final decision,” Robert Bernardo, director of communications for the Port of Oakland, confirmed to FreightWaves. “Instead of ruling in favor of the city and the port, which have unlimited resources and power, the judge is taking a closer look, which is a small victory for the owner-operators who don’t have any money to hire a legal team,” said Miguel Silva, who owns an intermodal company in Oakland.  

Rail

U.S. Class I rail headcount remains flat amidst attempted hiring boosts. Data submitted by the Class I railroads to the Surface Transportation Board suggests that the six-month average accounting for all categories of employees has barely moved from the first six months of 2021, despite headcount gains over the first six months of 2022 for train and engine employees working for the U.S. operations of the Class I railroads. See a detailed report from FreightWaves here. 

BNSF and NWSA to develop Tacoma South rail hub. Rail carrier BNSF and the Northwest Seaport Alliance (NWSA) are working together to develop a rail hub at the Port of Tacoma that will be known as Tacoma South. According to a new release, the rail hub will serve the greater Seattle region’s domestic intermodal needs and “unlock capacity” through accommodating more than 50,000 annual container lifts. Tom Williams, BNSF group vice president for consumer products, said in the release: “our collaboration with the NWSA will help support greater warehousing and distribution needs in the fast-growing greater Seattle area.” The new rail hub will “reduce truck emissions associated with moving cargo to inland markets,” Don Meyer, NWSA co-chair and Port of Tacoma Commission president, said. 

Air

Airline passenger fined over undeclared McMuffins. A passenger traveling from Bali, Indonesia to Australia was awarded a hefty fine over a McDonald’s breakfast. The passenger was fined 2,664 Australian dollars ($1,874) after two undeclared egg and beef sausage McMuffins and a ham croissant were found in their luggage on arriving at Darwin Airport last week. The incident came after Australian authorities announced new biosecurity rules after a Foot and Mouth disease (FMD) outbreak in Indonesia spread to Bali, a popular destination for Australian tourists.

Pelosi may have been on most tracked plane in the world this week. The most-tracked aircraft in the world this week was a U.S. Air Force jet that took off from Kuala Lumpur. It seems as though many internet users believed that U.S. House Speaker Nancy Pelosi was on the jet, headed on a trip to Taiwan. On Tuesday, almost 300,000 users followed every move of “SPAR19,” a US Air Force-operated Boeing C-40C, according to FlightRadar24. There is no official confirmation that Pelosi was on the plane. Her trip to Taiwan angered the Chinese government, which views the island as its territory and warned of consequences if the trip went ahead.

International

New Zealand reopens cruises. New Zealand has become one of the last countries to drop its restrictions on travelers and reopen ports for cruise ships and recreational yachts. New Zealand closed its borders in 2020 to stop the spread of covid, and maintained restrictions for 28 months or nearly 900 days, long after other destinations relaxed restrictions.

First grain-carrying ship sails out of Ukraine. Under an internationally brokered deal to unblock Ukraine’s agricultural exports and ease the global food crisis, the first ship carrying Ukrainian grain set out Monday from the port of Odesa. The cargo ship Razoni departed the port with over 26,000 tons of corn destined for Lebanon. More ships are expected to leave from Ukraine’s ports through the safe corridors in the coming weeks.

Other

Severe temperatures cause droughts across North America and Europe. Sweltering temperatures have been recorded across Europe and North America over the last few weeks, resulting in major droughts across the continents. The declining water level of major rivers, lakes and inland seas across the globe has become a major issue– these water bodies are a link to transportation, power, shipping and recreational activities for millions of people. The Maritime Executive goes into more specifics about the decline of major rivers here.

PFAS found in rainwater exceed safe levels. Rainwater in most locations on Earth contains levels of chemicals that “greatly exceed” safety levels, according to new research. These synthetic substances, called poly- and perfluoroalkyl substances (PFAS), are used in things like non-stick pans, fire-fighting foam and water-repellent clothes. They stay in the environment for years and have been duly called “forever chemicals.” Researchers from Stockholm University say it is “vitally important” that the use of these substances is “rapidly restricted.”Research suggests that PFAS may pose health risks including cancer, though results have so far been inconclusive. 

Texas Ports Report Record-Breaking Increases in Container Volumes, Shortages of Chassis Cause Inland Delays Around the U.S., International Flights Resume in Beijing.

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Ocean

Rates fall as demand weakens. According to The Loadstar, as supply chain disruptions ease and consumer demand drop, freight and charter prices are going downwards but staying elevated by historical standards, leading liners to conduct blank sailings to reduce capacity while keeping rates high.

FMC facing potential staffing shortage for proper OSRA enforcement. An official at the Federal Maritime Commission says the agency may not have enough staff to enforce ocean shipping reforms enacted in June. FMC Commissioner Carl Bentzel said Monday during a webinar on the Ocean Shipping Reform Act of 2022 (OSRA), “we are resource-strained right now.” Bentzel said the FMC has six investigators to oversee $6 trillion in containerized cargo value and affiliated intermodal services and economic activity — one investigator for every trillion dollars of commerce.

Ports

Coast Guard and CBP bust khat shipment at Port of Seattle. 20,000 pounds of the Middle Eastern stimulant drug khat were seized in a joint effort by the U.S. Coast Guard and Customs and Border Protection. An investigation led to the seizure of more than $3.6 million of dried khat at the Puget Sound seaport. It was the largest seizure of its kind ever recorded in the region.  

Texas ports report record-breaking increases in container volumes. Ports in Houston and Corpus Christi, Texas, achieved record-breaking results in June from increased crude oil and refined products exports, and shipments of oil drilling products and auto. Port Houston hit a record for monthly container volumes for the second consecutive month, handling 323,823 twenty-foot equivalent units, an increase of 11% year-over-year as the same period last year. The Port of Corpus Christi set new tonnage records. The port moved 46.4 million tons of cargo in the second quarter of 2022 and 90.1 million tons for the year’s first six months, eclipsing prior records set in 2021.   

Customs

U.S. grants temporary duty suspension on infant formula imports. Via the NCBFAA Monday Morning eBriefing: Signed by President Biden on July 22, the Formula Act immediately grants a temporary suspension of duties on imports of certain infant formula products. The Customs and Border Protection (CBP) Office of Trade has updated the U.S. Harmonized Tariff Schedule (HTSUS) file in the Automated Commercial Environment (ACE) to account for this legislation. Thus, the agency will provide duty-free treatment of the eligible infant formula products entered or withdrawn from the warehouse for consumption from July 22 through Dec. 31, 2022. Importers or customs brokers are required to classify infant formula products with the correct Chapter 19 or Chapter 21 HTS number and the corresponding Chapter 99 HTS number. See CSMS #52739058 for HTS number details. Questions or concerns regarding this guidance should be sent to the Office of Trade, Commercial Operations Revenue and Entry (CORE) Division at [email protected].

Trucking

Shortages of chassis cause inland delays around the U.S. Import containers are piling up on inland ramps, rail yards, and marine ports as the demand for available chassis grows. While consumer preferences and demand are the clear drivers of chassis usage, two reasons remain for the chassis shortage: high dwell times and a slowdown of new manufacturing supplies from China. The consensus is that the chassis deficit will continue until 2023. It may take many months before enough chassis are ready to handle the flood of import containers clogging U.S. ports and inland rail ramps. As part of the Radiant network, we can leverage the collective to keep your supply chain moving forward, faster. Talk to a Radiant Road & Rail expert about your freight forwarding options and how to manage during the chassis shortage.

Research to begin on truck parking in Wisconsin and Iowa. A truck parking pilot study is underway by researchers from the Texas A&M Transportation Institute (TTI), the University of Wisconsin-Madison, and ParkUnload to better understand how truck drivers use existing parking spaces and to test the benefits of using a mobile parking app. The study is being funded by the Federal Motor Carrier Safety Administration under a cooperative grant program and will select certain truck parking spaces along Interstate 80 in Iowa and along I-39/90/94 in Wisconsin.

Rail

BNSF continues westbound shipping embargo to August. The railroad said Wednesday that its temporary shipping embargo on food, fuel, and other commodities shipments would remain through August. The prohibition of several westbound loads to California was announced last month to reduce congestion, which has created delays for the railroad, shippers, ports, and other stakeholders. The shipping embargo follows calls from shippers and other stakeholders for officials to intervene to ease persistent rail delays.

STB to conduct hearing on CP/KCS merger. In September, the Surface Transportation Board will conduct a three-day hearing on the proposed merger between Canadian Pacific and Kansas City Southern to discuss issues during the proceeding. “I have strongly favored public hearings in our proceedings, which not only allow the board members to deeply explore the issues with our stakeholders but also advance transparency into our decision-making,” STB Chairman Marty Oberman said in a news release. “In light of the significant issues involved in the board’s consideration of the proposed CP-KCS transaction, it is essential that we hear directly from the applicants and our stakeholders and do so in public.” FreightWaves reports that the board also agreed to modify the procedural schedule so that final briefs will be due by Oct. 14 instead of Sept. 30.   

Air

International flights resume in Beijing. For the first time in over two years, Beijing welcomes direct inbound passenger flights from overseas as China begins to ease parts of its extreme pandemic protocols. Air China Ltd.’s website shows it restarted a direct flight from Paris once a week, while ANA will resume weekly flights from Narita in August. Meanwhile, state broadcaster China National Radio reported that Etihad Airways PJSC resumed direct flights to the capital in late June after China halved the time incoming travelers must spend in a quarantine facility to seven days. According to Bloomberg, Air China will gradually resume multiple international flights to Europe and Asia, while China Eastern Airlines Corp. plans to operate more than 130 international flights per week.

International

Maersk debuts inland service between India and Bangladesh. The new inland service from Maersk’s smallest container ship will provide a faster, more reliable inland waterways solution to move containers between India and neighboring Bangladesh, Maersk says. The service commenced with a shipment of 50 containers on a barge from Kolkata in India to a river port near Dhaka in Bangladesh. According to Vikash Agarwal, Managing Director, Maersk South Asia, “while the route has created trade opportunities for the two countries over the last decades, by advancing into containerized transport provides a safer option for cargo.” The first shipment on the Indo-Bangladesh Protocol Route was completed for Coca-Cola Bangladesh Beverages, according to Maritime Executive.

EU reaches gas deal. This week, the European Union states reached a deal to regulate emergency gas cuts ahead of winter. According to CNBC, the compromise means that the rationing would be binding in an emergency, but would initially exempt some nations and industries. The “gas war” between Russia and Europe is rattling the continent. A top German official described his country’s situation as “serious.”

Russia attacks Ukrainian port one day after grain deal signed. Russia attacked the Black Sea port of Odessa with missiles on Saturday, Ukrainian officials said, breaking a deal between Moscow and Kyiv that had been reached just one day prior. The deal was made to allow the shipment of millions of tons of trapped grain out of Ukraine and ease a global food crisis. A keystone of the deal is Russia’s promise not to attack Odessa and two other ports involved in the shipments. “This attack casts serious doubt on the credibility of Russia’s commitment to yesterday’s deal and undermines the work of the UN, Turkey, and Ukraine to get critical food to world markets,” Secretary of State Antony Blinken said in a statement late Saturday.

Other

Fabergé egg found aboard seized Russian yacht. The U.S. Justice Department’s mission to seize Russian megayachts has uncovered an interesting find aboard the recently captured yacht Amadea: a Fabergé egg. At the Aspen Security Forum on Wednesday, U.S. deputy attorney general Lisa Monaco told attendees that a yacht seized in Fiji and recently delivered to San Diego turned out to have a special surprise on board, Maritime Executive reports. She did not name Amadea specifically, but it is the only yacht fitting that description. “We recovered a Fabergé – or alleged Fabergé egg – on one of these, so it just gets more and more interesting.” The Fabergé eggs are a series of intricate, handmade jeweled boxes and “surprises” produced primarily for the Romanov family in the waning years of the Tsardom of Russia. They are very rare – only 57 eggs are known to survive in museum collections, government ownership, or private hands. See a gallery of the known eggs here. The U.S. hopes to auction the seized assets of sanctioned Russian oligarchs and forfeit the proceeds from the DOJ’s “Project Klepto-Capture.” The Justice Department has asked Congress to create the legal authority to donate the funds from the project to Ukraine.

Exports of Domestic Crude Oil and Refined Diesel Rise, U.S. DOT Looking to Expedite Container Data Exchange Initiative, China to Have 9 of the Top 20 Container Ports in the World by 2023

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Ocean

Exports of domestic crude oil and refined diesel rise. Prices for gasoline and diesel at the pumps are down marginally from peaks, but they continue to remain exceptionally high. More and more U.S.-produced crude is being exported on ships to Europe, and more U.S.-refined diesel is bound for Latin America. “Rising [diesel] exports shipments have drained domestic supply,” reported Argus on Monday. Argus said that diesel exports averaged 1.45 million barrels per day (b/d) from July 1-13, more than in any month since July 2017, citing ship-movement data from Vortexa. Data from Kpler details that total clean products exports (including diesel, gasoline, jet fuel and other products) averaged 2.5 million b/d in the first half of July, one of the highest monthly averages since August 2019. 

U.S. Pacific Fleet Command release video of SINKEX live fire exercise. The U.S. Pacific Fleet Command released video of a sinking exercise (SINKEX)  from last week, during which live fire is used to “gain systems proficiency while sinking a retired U.S. Navy vessel during the annual Rim of the Pacific (RIMPAC) 2022 military forces exercises,” according to Maritime Executive. The target this year was the retired guided missile frigate USS Rodney M. Davis. The ship sustained multiple strikes during the exercise and was ultimately sent to the bottom 50 nautical miles north of Kauai, Hawaii, in waters 15,000 feet deep. 

Ports

U.S. DOT looking to expedite container data exchange initiative. The U.S. Department of Transportation is looking to expedite its container data exchange initiative aimed at improving cargo flow through domestic freight networks. The DOT’s Bureau of Transportation Statistics (BTS) requested emergency approval from the Office of Management and Budget for a pilot effort to develop a proof-of-concept Freight Logistics Optimization Works (FLOW) data exchange, launched by the administration in March. The DOT anticipates the pilot project will move toward what the administration hopes becomes a permanent voluntary program with up to 200 participants during its first three years

Customs

FMC provides guidance on filing complaints under OSRA 22. The Federal Maritime Commission (FMC) has provided guidance for parties wishing to dispute charges assessed by common carriers that they believe may not comply with the Ocean Shipping Reform Act of 2022 (OSRA 22). When the Commission receives sufficient information, it will “promptly initiate an investigation,” which could ultimately result in a civil penalty and order for a refund of charges paid, the FMC said. See the guidance here

July 24 Deadline for Use of DUNS Number with FDA Food Shipments. Via the NCBFAA Monday Morning eBriefing: “Starting July 24, food import entries will be rejected if a DUNS number to identify the FSVP importer is not provided in the FDA Message Set. For the past five years, the Food and Drug Administration (FDA) has temporarily accepted the code “UNK” in lieu of a DUNS number. This practice will no longer be acceptable as of July 24. The DUNS number is location specific and should correspond to the FSVP importer’s U.S. location. If the U.S. importer has multiple locations and multiple DUNS numbers, customs brokers should use the DUNS number for the location where FSVP records are maintained. DUNS numbers can be searched or requested through Dun & Bradstreet at the Import Safety Lookup Portal. More information is also available in this CSMS.”

Trucking

California truck drivers clog traffic protesting AB5. On Monday, truck drivers in California choked traffic at the Oakland seaport while protesting the AB5 state law that could limit labor at the state’s already clogged seaports and makes it harder for independent contractors to transport goods. This could worsen the nation’s pandemic-fueled supply chain jams. California’s ports handle about 40% of container goods that enter the United States, and the trucking disruptions come at a time when unions and West Coast port employers are also negotiating a high-stakes labor contract. 

Rail

Ongoing rail labor dispute results in creation of government oversight board. Last week, President Biden signed an executive order to “establish an emergency board to handle an ongoing dispute between freight railroads and their unions over a new labor contract,” FreightWaves reports. The formation of the board aims to avert a potential strike by union members this week. The railroads and their unions have been in dispute over contracts since January 2020, with wages and health care benefits being the major negotiation points. The National Mediation Board (NMB) stepped in earlier this year to mediate, but negotiations continue to sit at an impasse. NMB released the railroads and unions from mediation and a 30-day cooling-off period began in June. The Railway Labor Act outlines all of these steps in the negotiation process, including conditions under which a union may elect to strike.

Canada invests $29m into rail projects. As part of its broader program aimed at bolstering Canada’s trade corridors, the Canadian government announced that it will invest more than CA$29 million ($22 million) in rail infrastructure in Saskatchewan and Ontario. Canada is also funding climate resiliency projects that seek to safeguard rail infrastructure. See the list of investments here

Air

Delta charters Airbus to deliver delayed luggage. Delta confirmed to Insider that they chartered an Airbus A330 from London to Detroit to deliver 1,000 delayed bags to passengers last week. “Delta teams worked a creative solution to move delayed checked bags from London-Heathrow on July 11 after a regularly scheduled flight had to be canceled given airport passenger volume restrictions at Heathrow,” a company spokesperson said. In total, US airlines lost, damaged, or delayed about 220,000 bags in June 2022 — a 135% increase from 2021.

Strike ends as SAS reaches deal with pilots unions. Scandinavian Airlines (SAS) and pilots unions reached a wage deal on Monday, ending a nearly three week long strike over a new collective bargaining agreement that grounded hundreds of flights and caused worry over the airline’s future. A majority of SAS pilots in Sweden, Denmark and Norway walked out on July 4 triggering a strike that SAS has said cost the airline between $10 million to $13 million per day.

International

Extreme heat waves in Europe lead to wildfires and heat-related casualties. This week, Britain recorded its highest temperature amid a heat wave that has impacted much of Europe. The unusually hot, dry weather has triggered wildfires from Portugal to the Balkans and led to hundreds of heat-related deaths so far. The U.K. Met Office weather agency registered a provisional reading of 40.3 degrees Celsius (104.5 degrees Fahrenheit) at Coningsby in eastern England — breaking the record set just hours earlier. Before Tuesday, the highest temperature recorded in Britain was 38.7 C (101.7 F), set in 2019. By later afternoon, 29 places in the UK had broken the record, according to AP News.

China to have 9 of the top 20 container ports in the world by 2023. By the end of this year, China is expected to have 45% or nine of the world’s top 20 container ports, according to a forecasting report released by the Chinese Academy of Sciences (CAS). Among the top 20 ports, the Shanghai port will have the most throughput capacity in 2022, the China Science Daily quoted the forecast as reporting on Wednesday, adding that most of China’s container ports hold growing demand for shipping services, including the Ningbo-Zhoushan port, as well as ports in Qingdao and Tianjin, Hellenic Shipping News reports.

Other

Tesla has competitors for “quickest car in the world.” According to the Tesla website, the Tesla Roadster has claimed the title of “quickest car in the world.” The 2022 Tesla Roadster backs up the claim with specs that say it accelerates from 0 to 60 miles per hour in 1.9 seconds, can reach speeds over 250 miles per hour with 800 to 1,000 horsepower, and it has a range of about 620 miles. However, three competing electric vehicles seem to finish ahead of the Tesla Roadster in speed estimates, according to a recent CAR Magazine report. The fastest to 60 mph, however, is a McMurtry Spierling that was built in Britain that travels 0 to 60 mph in 1.5 seconds, but only has a top speed of 150 mph. Read more from The Street

Inland Port Network in Works Along Mississippi River, California Truckers Protest AB5 Law, German Dock Workers to Strike.

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Ocean

Shipping industry facing roadblocks in plans to go green. The shipping industry is responsible for nearly 3% of the world’s emissions, and Maersk is ambitiously planning to have carbon-neutral ships on the water starting next year to combat that. Securing the correct fuel for the vessels comes with challenges–shipping companies need adequate amounts of green methanol or other “green” fuels to power the ships and make an impactful difference to their carbon footprint. If Maersk and other firms have to use fossil fuels in the interim to operate their new ships, it will mark a sidestep from their decarbonization goals, according to CNBC. “It is a chicken and egg type situation,” said Morten Bo Christiansen, Maersk’s head of decarbonization. “The vessels will arrive prior to the fuels, which is of course not ideal quite frankly. When we ordered the vessels, there was no supplier whatsoever,” he said. 

Post-Covid container demand slowing. According to Drewry’s port throughput indices, the demand surge for container shipping post-Covid appears to have run its course. Seatrade Maritime News reports that the Drewry Global Port Throughput Index stood at 141.1 points in April 2022, some 1.5% lower than April 2021, although up 1.7% on March 2022. “This is further evidence that the post-Covid demand boom appears to have run its course,” Drewry said.

Ports

Inland port network in works along Mississippi River. As many as five states are experiencing a major multiyear effort to develop a container facility network along the Mississippi River. Initial cargo is anticipated to move through the network in 2024. Organizers say that it has taken nearly a decade to develop the network. Freightwaves reports that the pieces in development include a terminal and rail expansion in Plaquemines Parish in southern Louisiana; the development of container terminal facilities in Memphis, Tennessee, St. Louis, Fort Smith, Arkansas, and potentially Joliet, Illinois; and a container-on-vessel service that would call at those locations. “We’re creating a new transportation alternative for the supply chain. We’re calling it the new north-south trade lane for containerized cargo,” said Sal Litrico, chief executive officer of American Patriot Container Transport LLC. The network and the container-on-vessel service will allow Midwest agricultural, energy and chemicals shippers to take advantage of the expanded Panama Canal, according to developers.

Customs

NCBFAA Highlights Concerns with FMC’s Carrier Automated Tariffs NPRM. From the NCBFAA Monday Morning eBriefing: NCBFAA on July 6 responded with written comments to the Federal Maritime Commission (FMC) Notice of Proposed Rulemaking (NPRM) on Carrier Automated Tariffs by highlighting a number of significant concerns for the agency to consider. The NPRM, published in the May 10 Federal Register, specifically proposes the ability for NVOCCs to cross-reference VOCC tariffs, a prohibition on administrative fees connected with pass-through charges, a new co-loading definition, and a proposed requirement for annotated invoices. NCBFAA expressed concern that the NPRM’s proposed ability for NVOCCs to cross-reference VOCC tariffs would pose an undue burden on both NVOCCs and shippers. NCBFAA’s detailed comments related to the NPRM are available here.

Trucking

California truckers protest AB5 Law. Independent truckers working for the nation’s busiest seaport complex in Southern California stopped work on Wednesday to protest a state law that makes it harder for businesses to treat workers as independent contractors rather than employees. This comes as the U.S. Supreme Court last month declined to take up a challenge to California’s law known as AB5. Backers say AB5 helps clamp down on labor abuses by companies that use freelance or other so-called “gig” workers. The trucking industry warns that it would devastate the nation’s fragile supply chain. The contractors’ actions come at a critical time for California ports involved in high-stakes West Coast labor talks, Reuters reports. Trucking disruptions threaten to add to the growing anxiety surrounding The U.S. supply chain and soaring inflation. 

Maersk advisory on ​​Toronto/Montreal congestion impact on trucking service. Maersk sent out an advisory to customers detailing that truck wait times at both the Canadian National and Canadian Pacific railways in Toronto have improved in the last couple of weeks. “Volume continues to arrive in Toronto at high levels causing final mile deliveries across the board to be delayed. We are working with our truck vendors to obtain additional capacity to support the volume. Containers are being targeted based on longest dwell,” Maersk said.  

Rail

Maersk advisory on ​​Toronto/Montreal congestion impact on rail service. In the same advisory sent to trucking customers, Maersk notified rail customers of the continued congestion at the terminals and inland ramps. “Due to congestion in Toronto, Canadian National is metering the number of Toronto-bound releases from Prince Rupert to ensure they do not gridlock its facilities.” For Canadian Pacific, “Toronto-bound traffic is no longer being metered. However, dwells may remain high due to yard capacity. We are working with terminal leadership to load the longest dwelling,” Maersk said. Read more here.

Air

USDOT cracks down on airline fees. Last week, the U.S. Department of Transportation (USDOT) told airlines to eliminate fees to seat children with an accompanying adult and warned that it “will crack down on other consumer-unfriendly fees,” according to a report from ABC7. The USDOT also published its first ‘Bill of Rights’ to help passengers with disabilities. The actions come after U.S. PIRG and other consumer advocacy groups sent a letter to Congress asking the chairs and ranking members of the Senate Commerce, Science & Transportation Committee and the House Transportation & Infrastructure Committee to tell airlines to change their policies to prioritize passengers.

Flight cancellations and delays continue to rise. Airports around the world were tallying more than 10,000 flight delays and 1,700 cancellations all before 9 a.m. Eastern Time on Monday, July 11, according to FlightAware tracking data. Flight cancellations and changes have shot up this year, and over 75% of travelers who have taken an overnight trip outside their local area this year have experienced at least one travel-related issue, according to a new Bankrate.com survey. Issues include high prices, long waits, poor customer service, limited availability, or lost money due to canceled or disrupted plans, according to Forbes

SAS pilots to resume negotiations with airline this week. Scandinavian airline SAS and unions representing pilots resumed negotiations this week to form a new labor deal to end a week-long strike. Since July 4, SAS has canceled more than 1,200 flights. Talks with many of its pilots over a new collective bargaining agreement collapsed, and the pilots then launched the strike, crippling the airline. Swedish mediator Jan Sjolin said, “what has now happened is that we have asked the parties to gather in Stockholm from Wednesday.” Henrik Thyregod, head of the Danish pilots union, told Reuters he was certain an outcome would be reached but was unsure of how long the negotiations would take. “I expect to discuss … a collective bargaining agreement, so we can get the pilots back in the cockpit and the passengers back in the air,” he said. 

International

German dock workers to strike. As of Thursday, German dockers are set to commence a 48-hour strike in response to wage negotiations with employers reaching an impasse. Dockers will stop work at German ports from 06:00 hrs on Thursday until 06:00hrs Saturday, the nation’s longest dock strike for more than 40 years. The action by 12,000 port workers will halt operations at the key container hubs of Hamburg, Bremerhaven, and Wilhelmshaven, and will be the third and longest period of industrial action in the increasingly bitter wage dispute, according to the Loadstar. The strike will have a serious impact on liner networks and reportedly worsen supply chain congestion at North European container hubs.

Ukraine to revive Danube River ports for exports. With the removal of Russian forces from Snake Island, it’s now possible for Ukraine to revive inland ports along the northern edge of the Danube River Delta. The northern branch of the Danube delta follows Ukraine’s southern border, and it is lined with multiple small river ports. With Russia blocking all of Ukraine’s coastline, the nearly abandoned ports have taken on a new importance for transporting grain out of the country. 

Other

India set to overtake China as most populous country. According to a new report from the United Nations looking at population trends, India is expected to surpass China as the world’s most populous country by 2023. This is important because India is the world’s largest democracy and viewed by the West as a key counterweight to China’s influence in the region. The world’s population is set to reach 8 billion by Nov. 15, and 9.7 billion in 2050.

NASA releases first images from James Webb telescope. Images of a star nursery, a cosmic dance, and others were released this week by NASA to showcase the advancements of the James Webb telescope. See the spectacular images here.

Twitter sues Elon Musk for backing out of deal. Twitter filed a lawsuit on Tuesday in an attempt to hold the billionaire to his $44 billion deal to buy the company. According to CNBC, Musk claimed that Twitter “violated the deal agreement by failing to provide the information he requested to verify the number of spam accounts on its platform and failed to proceed with the ordinary course of business by conducting layoffs,” but Twitter alleges that Musk willingly agreed to terms that were “as he touted, ‘seller friendly.'”

Ocean Shipping Companies Must Immediately Comply With OSRA, USDOT Announces New Rail Safety Funding, Scandinavian Airlines Files for Bankruptcy in the U.S.

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Ocean

Ocean shipping companies must immediately comply with OSRA. All companies involved in ocean shipping must quickly start making operational changes to comply with the Ocean Shipping Reform Act of 2022 (OSRA), which addresses carrier billing and related issues. The general counsel of the Federal Maritime Commission (FMC) recently issued an opinion confirming several provisions of the law had taken effect immediately. Those provisions include new requirements related to demurrage and detention invoices and prohibitions on noncompliant invoices charged by ocean carriers to their customers for demurrage or detention. Under the new law, if the FMC determines after an investigation that an invoice was inaccurate or false, it can now “assess penalties or direct carriers to issue refunds, as well as impose possible civil penalties,” FreightWaves reports. If you have any questions or concerns, contact a Navegate expert. 

First LNG dual-fuel Suezmax tanker delivered to EPS. Several important milestones in the efforts to deploy next-generation greener vessels were hit as China’s Guangzhou Shipyard recently completed the delivery of the 158,000 dwt tanker Greenway to Singapore-based Eastern Pacific Shipping. The vessel is also the world’s first Suezman LNG dual-fuel tanker, according to the shipyard. Eastern Pacific placed the order for the vessel along with a sister ship in 2019 as part of its effort to reduce the carbon emissions of its operations. 

Ports

California ports postponing dwell fee again. Last year, the ports of Los Angeles and Long Beach proposed a controversial fee on import containers that sat too long in terminal yards. The threat of the fee seemed to do the trick, and chased more boxes out of the gates. Nearly every week since then the ports have reported progress and announced that the fee enforcement would be postponed. Last week, the two ports said that the fee would be delayed again due to a combined 31% drop in aging containers since October. FreightWaves reports that if the numbers are run using a different start date, you get a very different picture. “The combined number of import containers at both ports dwelling for nine days or more has more than doubled since early February, to 48,932 as of Wednesday. This is almost exactly the number of containers dwelling on Los Angeles and Long Beach on Nov. 15 (48,905), back on the day the fee plan was originally to be implemented.” The question remains to be seen if the fee will ever truly be implemented.

U.S. East and Gulf coast ports anticipate sustained volume surge. Ports on the U.S. East and Gulf coast are trying any available means to increase their efficiency in anticipation of a sustained summer volume surge. The swell of imports could potentially exacerbate a backlog of vessels already queuing up outside their harbors, including tapping nearby land to store imports and empty containers. Total U.S. imports have grown another 3 percent in the first five months of the year after rising 13.1 percent for the full year in 2021, according to PIERS. Vessel backlogs are being primarily attributed to longer dwell times for import boxes caused by bottlenecks at jam-packed warehouses and inland rail ramps. 

Customs

BIS denies U.S. exports to Belavia Belarusian Airlines. The Bureau of Industry and Security (BIS) issued an order temporarily denying all export privileges for Belavia Belarusian Airlines due to ongoing violations of the comprehensive export controls imposed on Belarus by the Commerce Department, according to the NCBFAA Monday Morning eBriefing. The state-owned airline of Belarus has been providing flight services for passengers and cargo on U.S.-origin aircraft in violation of U.S. export controls, BIS says. “This temporary denial order (TDO) will prevent Belavia from leveraging any U.S. technology to operate its fleet of airplanes, thus making it more difficult for the airline to keep flying,” said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod in a statement.

Trucking

Growing health concerns for truck drivers. Skin care and musculoskeletal well-being are becoming growing concerns for truck drivers. Drivers may get an unhealthy amount of UV ray exposure from constant sun while driving. The front windshield of a truck is built to shield against the most dangerous UV rays; however, there is no equivalent protection on the driver-side window. Although a casual amount of sun exposure provides healthy doses of Vitamin D, too much exposure causes skin damage and could lead to skin cancer. Drivers should look into protective measures such as wearing a broad-spectrum sunscreen that protects against both UVA and UVB rays, and wearing protective clothing, as well as a wide-brim hat. They should also not ignore changes or suspicious areas that appear on their skin. Drivers also can use tinted window films known for filtering out the most harmful of the sun’s rays that can go right through window glass, even on a cloudy day. For more information or ideas, check out this Transport Topics article on the subject.  

Rail

USDOT announces new rail safety funding. The U.S. Department of Transportation recently announced new funding for rail safety operations around the country. The department indicated there is nearly $600 million in available funding for grants to be used for the country’s railroad crossing elimination program. Grant recipients would need to use the funds to “enhance the safety and eliminate long delays at railroad crossings nationwide,” Transport Topics reports. The grants were approved as part of the $1 trillion Infrastructure Investment and Jobs Act. The Federal Railroad Administration (FRA) will manage the program, and transportation agencies have through September to apply for a grant. 

Air

Scandinavian Airlines files for bankruptcy in the U.S. This week, Scandinavian Airlines filed for bankruptcy in the U.S., warning that “the announcement of a strike by 1,000 pilots a day earlier had put the future of the carrier at risk,” according to ABC News. The move could add to the growing travel chaos across Europe. Scandinavian Airlines said it had “voluntarily filed for chapter 11 in the U.S., a legal process for financial restructuring conducted under U.S. federal court supervision.” Filing for Chapter 11 in New York puts civil litigation on hold while the business reorganizes its finances. The company’s operations and flight schedule should remain unaffected, and SAS will “continue to serve its customers as normal.”

International

Finland and Sweden closer to NATO membership. As of Tuesday, Finland and Sweden were one step closer to becoming full members of NATO with the formal signing of their accession agreement with the military alliance. Their upcoming NATO memberships mark a major shift in their security policies and the overall defense architecture in Europe. For most of their recent history, both countries had adopted a neutral stance toward Russia, but the unprovoked invasion of Ukraine propelled them to take a new direction.

India trade gap hits record high in June. Last month, India’s trade deficit widened the most on record as high global commodity prices drove up the import cost of goods such as oil and gold. Preliminary data released by the Commerce Ministry showed that the gap between exports and imports rose to $25.63 billion in June, from $24.3 billion in May. Bloomberg reports that imports jumped 51.02% in June from a year ago, while exports rose 16.78%. Inbound shipments of petroleum products during the month climbed to $20.73 billion, and gold imports rose to $2.61 billion. The data comes after the Indian government tightened oil exports and import of gold in an effort to rein in a worsening deficit and tame the rupee’s record fall. 

Other

Amazon nixes plans for at least 16 warehouses. So far this year, Amazon has shut down or delayed plans for at least 16 scheduled facilities, even though CFO Brian Olsavsky said the company chose to expand its warehouse network based on “the high end of a very volatile demand outlook.” Olsavsky told investors on Amazon’s Q1 2022 earnings call, “we currently have some excess capacity in the network that we need to grow into. So, we’ve brought down our build expectations. Note again that many of the build decisions were made 18 to 24 months ago, so there are limitations on what we can adjust midyear.” 

Maersk Ships on East Coast Face Major Delays, Port Bottlenecks Extending to Rail Networks, Delta Pilots to Protest Flight Cancellations.

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Ocean

Maersk ships on east coast face major delays. Maersk vessels are affected by delays of up to three weeks as a result of bottlenecks at major container ports on the US east coast. According to Maersk, the delays are a result of a combination of congestion, many ships, and a lack of container space.

Ports

New Jersey plans for offshore wind ports to boost state’s economy. New Jersey plans to use the development of the offshore wind industry off the U.S. East Coast to bring in new jobs, economic impact, and clean energy. The state has more than $1 billion of public and private investment to back up the project. This new industry will bring in an estimated $109 billion worth of investment over the next decade, and officials in New Jersey want to ensure the state leverages its ports, its infrastructure and its skilled workforce to claim its share, according to Maritime Executive

Port of Oakland reducing free wait time for import containers. Beginning July 1, the Port of Oakland is reducing the tariff-free time from seven days to four days to reduce congestion on its marine terminal, and may raise penalties for containers that sit for too long, CNBC reports. “We think the (demurrage) rates need to be higher to encourage cargo owners to move their cargo faster,” said Danny Wan, executive director for the Port of Oakland. The port is experiencing the longest dwelling times for import containers. “The average dwell in Oakland terminal is now 9-12 days,” Wan said. “It used to be 3-4 days. The 9-12 days incorporates rail dwell time because all rail cargo needs to be moved off the terminal to a near-dock rail facility.” 

Customs

Modernization of the Customs Broker Regulations 19 CFR 111 Update. From the NCBFAA Monday Morning eBriefing: The Customs and Border Protection (CBP) Notices of Proposed Rulemaking (NPRMs) for the long-awaited update to 19 CFR 111 are in the works toward finalization. Specifically, the NPRM for the Modernization of the Customs Broker Regulations (85 FR 34836) and the NPRM for the Elimination of the Customs Broker District Permit Fee (85 FR 34549) were published on June 5, 2020. The comment period for both NPRMs ended August 4, 2020. CBP provides this webpage, as well as this fact sheet, to keep the customs broker industry informed on the status of the NPRMS.

Trucking

California’s Independent Contractor Law ignored by Supreme Court. The injunction that bars California’s AB5 independent contractor law from being implemented in the state’s trucking sector will remain in place for the foreseeable future as a result of the U.S. Supreme Court’s silence on the issue. The California Trucking Association v. Bonta, the organization’s lawsuit against the state over AB5, was nowhere to be found on the list of “orders,” on Monday, the cases that the Supreme Court mostly denies certiorari of lower court appeals but accepts a small fraction. FreightWaves reports that attorneys in the trucking industry were expecting some sort of resolution Monday, given that the case was on the agenda for a court conference last Thursday.

Rail

BNSF implementing temporary embargo on some California-bound shipments. According to a service advisory, BNSF is planning a temporary embargo of westbound automotive shipments and specific agricultural and industrial commodities to address congestion in Southern California. FreightWaves reports that the embargo will expire July 31 and doesn’t include intermodal shipments because they are managed using an alternate system, BNSF said. Read more about details of the embargo here. 

Port bottlenecks extending to rail networks. Port bottlenecks are spreading from ocean freight to rail networks, raising costs and adding new shipping complications for importers trying to manage the flow of goods. The Wall Street Journal reports that retailers are waiting weeks to move cargo by train out of Southern California’s ports of Los Angeles and Long Beach. Some retailers have given up on the railroads and are turning to trucks for shipments of furniture, apparel and other consumer goods. 

Amtrak train derailed in Missouri. On Monday, eight Amtrak cars and two locomotives were impacted by the derailment of a passenger train traveling from Los Angeles to Chicago “after striking a truck that was obstructing a public crossing.”  There were reportedly 275 passengers and 12 crew members on board at the time. Three train passengers and the driver of the truck that struck the train are confirmed dead, according to the Missouri State Highway Patrol. 150 people were taken from the scene to 10 area hospitals with injuries ranging from minor to serious.

Air

Flight cancellations continue to surge. Flight-tracking website FlightAware reported over 800 flights canceled on Monday afternoon, following a chaotic travel weekend with more than 1,500 domestic flights canceled Saturday and Sunday. Delta canceled at least 224 flights on Monday, while United canceled 128 flights and American Airlines canceled 67. Airlines now have fewer employees than before the pandemic after offering buyouts and early retirement packages to trim staff and save money, despite receiving $54 billion in federal assistance during Covid’s peak to avoid involuntary layoffs. As a result, operations can quickly fall apart when there’s bad weather, understaffed air traffic control centers or sick staff, CNN reports.

Millions awarded to Manchester-Boston Regional Airport for air cargo facility. $7.9m will be awarded to Manchester-Boston Regional Airport (MHT) by the U.S. Federal Aviation Administration to help build a new air cargo facility that is expected to support the e-commerce boom, according to AirCargoNews. This funding award will go towards finishing the construction of a 31,000 sq/m cargo facility apron that will include the aircraft apron, taxiway connectors, utility relocation and an access road. The funding is provided by a congressional directed spending request that US Senator Jeanne Shaheen secured through the FY2022 omnibus federal spending bill. 

Severe staff shortages plague air freight and travel industries. The cargo handling industry lost thousands of workers during the pandemic resulting in a severe shortage of skilled ground handlers to move goods, according to the International Air Transport Association (IATA Niall van de Wouw, chief air freight officer at Xeneta, highlights the shortage as a key problem: “There is enough capacity in the air but there’s not the capacity on the ground,” he says. “Whether it’s truck drivers, or people loading ships or planes, or people in warehousing, there seems to be a global issue of finding operational people at the lower end of the pay-scale.”

Delta pilots to protest flight cancellations. Hundreds of off-duty Delta Air Lines pilots are demanding a pay increase and that the carrier change their schedules to reduce flight disruptions, and plan to picket this week. In a statement on Monday, the Air Line Pilots Association said that its nearly 14,000 members are working longer hours even as the airlines cancel thousands of flights, angering customers. The union says that pay hasn’t changed since 2016, even though pilots played a major role in helping Delta recoup its financial losses from the coronavirus pandemic. The labor group is also asking for improvements in retirement benefits and job protections.

International

Underground freight tunnel network to begin construction in Switzerland. A project to build an underground freight tunnel network stretching from Geneva to St Gallen will commence work on August 1. The Cargo sous terrain (CST) project will connect Switzerland’s key hubs starting in 2031. The goal of the CST is to reduce the environmental impact of transport, take the strain off the road and railway networks, and improve the delivery of goods across the country. The project consists of a three lane underground tunnel network with automated, driverless electric transport vehicles traveling at 30km an hour operating 24 hours a day. There will also be a rapid overhead roof track for smaller package deliveries.

Other

Tesla begins laying off staff and rescinding job offers. Business Insider reports that “Tesla workers who started their jobs only months or even weeks ago have been let go, while others have had offers withdrawn as the company begins to impose cuts announced by Elon Musk in early June.” Elon Musk told Tesla executives to pause all hiring at the beginning of June because he had a “super bad feeling” about the economy and needed to cut 10% of the company’s workforce. He later tweeted that the head count would increase, but the number of salaried staff would not rise. Two former employees are reportedly suing the company, saying the electric-car maker “violated federal law by laying off hundreds of employees on short notice.”

Airfreight Volume Surge Causes Worry Among Forwarders, Flight Cancellations Rise Amid Weather Issues and Staffing Shortages, President Biden Signs New OSRA Into Law.

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Ocean

World’s largest cargo ship arrives in UK. The world’s largest cargo ship, the Ever Ace, has arrived in the UK to unload 3,267 containers. The vessel currently holds the record for the most containers loaded on a single ship. The 1,300ft (400m) ship is capable of holding up to 23,992 standard containers. 

Three New FMC Initiatives Assist Shippers, Improve Supply Chain Performance. The Federal Maritime Commission (FMC) has established three new initiatives to continue to improve legal and regulatory compliance of regulated entities, provide enhanced assistance to shippers, and focus on remedies to supply chain problems. The Commission will establish a new and permanent International Ocean Shipping Supply Chain Program, re-establish the Export Rapid Response Team, and take steps necessary for carriers, marine terminal operators, and operating seaports to employ a designated FMC Compliance Officer at the direction of FMC Chairman Daniel Maffei

Ports

Labor talks at West Coast ports cause fears among businesses. Labor talks between management and the International Longshore and Warehouse Union whose members load and unload the ships has businesses that depend on the ports up and down the west coast worried. The contract that covers about 16,000 members of the International Longshore and Warehouse Union working at the ports is due to expire July 1, and it’s unlikely a deal will be reached before that date. Management and the union issued a statement last week in an attempt to assure businesses that they’re ready and willing to keep working under terms of the existing contract. 

Customs

New strategy for Uyghur importations released. The strategy for the enactment of the Uyghur Forced Labor Prevention Act was released last week by the Department of Homeland Security. The purpose of the act is to strengthen the existing prohibition against the importation of goods made wholly or in part with forced labor into the United States and to end the systematic use of forced labor in the Xinjiang Uyghur Autonomous Region. Read the strategy to prevent the importation of goods mined, produced, or manufactured with forced labor in the People’s Republic of China here.

President Biden signs new OSRA into law. President Biden signed the Ocean Shipping Reform Act of 2022 (OSRA 22) into law on June 16, the first significant change to OSRA in 20 years. The bill revises requirements governing ocean shipping to increase the authority of the Federal Maritime Commission (FMC) to promote the growth and development of U.S. exports through an ocean transportation system that is competitive, efficient, and economical. The legislation also prohibits common ocean carriers, marine terminal operators, or ocean transportation intermediaries from unreasonably refusing cargo space when available or resorting to other unfair or unjustly discriminatory methods.

Trucking

States receive funds to reduce truck crashes. The Biden administration recently announced a record allocation of $463.5 million for Motor Carrier Safety Assistance Program (MCSAP) grants administered by the Federal Motor Carrier Safety Administration to help prevent truck crashes. The funding for states and U.S. territories in 2022 level is a 52% increase from 2021. “FMCSA’s core mission is safety, and our work supports the U.S. Department of Transportation’s comprehensive National Roadway Safety Strategy working towards zero fatalities on our roadways,” said FMCSA Deputy Administrator Robin Hutcheson, in announcing the latest funding in early June. “MCSAP grant funding is an important tool to help reduce large truck crashes by supporting critical safety programs in every state.” Texas, California, and Florida were the top recipients of the funding, receiving over 20% of the money available in the  program.

Cummins says that hydrogen is the future of trucking. Executives at engine Cummins Inc. believe that high fuel prices could compel fleets to take a long term look at hydrogen and electric-powered vehicles. “I think we’re all faced with the growing cost pressure of both diesel and gasoline — it’s a reality, and for many of our customers it’s about their business bottom line,” said Jennifer Rumsey, president and chief operating officer of the Indianapolis-based company, during an appearance on Transport Topics’ Newsmakers program. “There may be a place where this will drive a shift, where customers will consider alternative fuels and different fuels.” Cummins sees hydrogen-fueled trucks as suited to long-haul trucking, while EVs are more tailored to regional and final-mile delivery routes, Rumsey says. She noted that a broad transition will take time, and will come with cost and engineering challenges.  

Rail

Canadian National Railway confirms IBEW member strike. Operations are continuing at Canadian National Railway (CN) after members of the International Brotherhood of Electrical Workers (IBEW) went on strike last week. CN says that it has deployed a contingency plan that allows for the maintenance of normal levels of safe rail operations across Canada and allows the railway to serve its customers for as long as required “While the company is disappointed with the current situation, CN remains committed to finding a resolution and it continues to encourage the IBEW to end its strike through an agreement or through binding arbitration,” CN said in a release. 

Air

Airfreight volume surge causes worry among forwarders. The Airforwarders Association says that forwarders need to be prepared for a volume increase in air freight loads, according to AircargoNews. Brandon Fried,  the executive director of the Airforwarders Association says that the forecasted surge in demand for US air cargo capacity will be largely driven by a lack of sailings with ocean suppliers, but air cargo forwarders must “learn to be adaptable” in the current climate of already constrained airfreight capacity. Fried also told members of the Los Angeles Air Cargo Association (LAACA) that although global air cargo capacity is increasing, the US capacity crunch will be driven by a perfect storm of canceled China to US sailings, congestion at US airports, limited warehouse space, the labor shortage and rising inflation.

Flight cancellations rise amid weather issues and staffing shortages. Airlines canceled more than 35,000 flights last weekend— 6% of the total scheduled on Thursday and 5% on Friday. Flight cancellations have risen to 3% of all US-scheduled flights in 2022 compared to 2% in 2019, according to FlightAware data. Weather and staffing issues have been the main causes of cancellations, according to Business Insider. 

International

Chinese oil imports from Russia soar in May. Reuter’s reports that China’s crude oil imports from Russia soared 55% from a year earlier to a record level in May, displacing Saudi Arabia as the top supplier, as refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine.

Devastating earthquake hits Afghanistan. Disaster management officials say that the death toll from an earthquake in Afghanistan on Wednesday hit at least 1,000, with more than 600 injured and the toll expected to grow. Hundreds of houses were destroyed by the magnitude 6.1 event, which occurred at a depth of 51km (32 miles). It is the deadliest earthquake to strike Afghanistan in over 20 years and a major challenge for the Taliban.

Other

Raw material costs for electric vehicles doubled since 2020. According to a new report from AlixPartners, raw material costs for electric vehicles more than doubled during the coronavirus pandemic, forcing automakers from General Motors and Tesla to start-ups like Lucid and Rivian to significantly raise prices on new vehicles. As of May, average raw material costs for an EV totaled $8,255 per vehicle, up 144% from $3,381 per vehicle in March 2020. EV-specific costs have increased to $4,500 from roughly $2,000 in the past two years.

House Passes Ocean Shipping Reform Act, U.S. Ready to Ban Imports from Xinjiang, 29 Truck Manufacturers Facing Recall Over Steering Loss.

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Ocean

Dry-bulk shipping spot rates drop. Spot rates dropped in the past week across dry bulk shipping as a result of spiking bunker prices, falling demand, and partying by shipowners. The Baltic Exchange’s Capesize 5TC, which averages spot rates for five key routes, fell 19% to $19,665 per day on Friday, June 10, while the Panamax 5TC dropped 17.5% to $23,662 per day. At the same time, China’s latest Covid-19 lockdown slammed the country’s iron ore demand, and India held off on coal imports as it braces for monsoons. 

House passes Ocean Shipping Reform Act. The U.S. House of Representatives has voted 369 to 42 to pass the Senate’s version of the bipartisan Ocean Shipping Reform Act. This will give the government’s shipping competition commission greater authority to help U.S. exporters. The bill was introduced in the Senate in February by Senator Amy Klobuchar (D-MN) and gives the Federal Maritime Commission (FMC) greater authority to regulate certain ocean carrier practices and to promote the growth and development of U.S. exports “through a maritime system that is transparent, efficient, and fair.” 

Ports

President Biden visits Port of Los Angeles. President Biden visited the Port of Los Angeles last week, where he discussed supply chain progress and challenges. He also addressed the issue of rising inflation, which he called his “top economic priority.” See the video here: 

U.S. container ports still reporting high throughputs. The ports of Long Beach, California, and Charleston, South Carolina, reported exceptionally strong throughputs for May. Long Beach had total throughput of 890,989 twenty-foot equivalent units, and imports totaled 436,977 TEUs. A spokesperson told American Shipper that it was “a great month” with throughput “well north of 900,000 TEUs.” On the East Coast, Charleston handled 255,104 TEUs in May (including imports, exports, and empties), up 11% year on year. It was the port’s third-highest monthly total in history, topped only by March 2022 (264,334 TEUs) and April 2022 (264,099 TEUs).

Customs

U.S. ready to ban imports from Xinjiang. U.S. authorities are poised to implement a ban on imports from China’s Xinjiang region when a law requiring it becomes enforceable later in June, a U.S. Customs official said on Wednesday, adding that a “very high” level of evidence would be required for an exemption. Reuters reports that in December, President Biden signed into law the Uyghur Forced Labor Prevention Act (UFLPA) in an effort to safeguard the U.S. market from products potentially tainted by human rights abuses in Xinjiang, where the U.S. government says China is committing genocide against Uyghur Muslims.

New NOA Form Effectively Immediately. Customs and Border Patrol CSMS #52176791 – New EPA Form 3540-1 Notice of Arrival of Pesticides and Devices (NOA). A new EPA Form 3540-1 has been approved by OMB. The new form provides clarity for some of the data elements and the instruction section of the form. There are no new data elements on the form. The new form has been uploaded to EPA’s website and disseminated to the EPA regions for use. EPA will continue to receive submissions of the old form through Friday, June 17, 2022. After June 17, 2022, the old form will be obsolete and EPA import specialists will return the old form to the importer (or their authorized agent) with a copy or web link to the new form. 

Trucking

29 truck manufacturers facing recall over steering loss. More than 105,000 vehicles at 29 companies including most heavy-duty truck manufacturers are facing recalls because of missing parts that could lead to loss of steering. Bendix Commercial Vehicle Systems subsidiary R.H. Sheppard reported the issue to the National Highway Traffic Safety Administration on May 28. The filing lists 29 customers including three subsidiaries of Daimler Truck North America; Volvo Trucks North America; Kenworth, Peterbilt, and Navistar, as well as multiple crane and heavy equipment manufacturers. Sheppard estimates 1% of 105,271 recalled vehicles could have the issue, which results from steering gears being assembled without the required number of recirculating balls.

Rail

Norfolk Southern launches new initiative to provide expedited intermodal service. Norfolk Southern launched a new initiative to provide expedited service between the East and West coasts with three partners: ocean carrier Hapag-Lloyd, western U.S. Class I counterpart Union Pacific and the Port of Virginia. The partnership, named OceaNS Bridge Express, will provide shippers a new option to reach West Coast markets, and suggests that the four parties are seeking opportunities to maximize recent capital investments while also addressing ongoing congestion. The service will originate at the Norfolk International Terminal at the Port of Virginia and interchange with UP in Chicago. NS told FreightWaves that “the service aims to cut down travel time because it takes advantage of an additional call in Virginia, which was not previously an option. Containers traverse the remainder of the trip via NS and UP, instead of taking the Hapag-Lloyd ship all the way to Los Angeles or Oakland.” This service shortens transit time and prevents shippers from having to wait for space at the West Coast ports, according to NS. 

Ocean Network Express suing Union Pacific. Ocean Network Express, a Singapore-based company, has sued rail provider Union Pacific over packages it says were lost or stolen during the pandemic when train traffic slogged amid supply-chain slowdowns. Reportedly stolen from the trains’ cargo containers were solar panels and a big shipment of L-arginine, an amino acid used to build protein, according to the lawsuits. Ocean Network Express said it lost $166,000 worth of the amino acid after contracting with Union Pacific in June 2021 to transport it from St. Louis to the Los Angeles port, where it would then be shipped to Shanghai, China. 

Air

Global air cargo traffic fell marginally in April. Global air cargo traffic fell 11.2% in April, including a 15.8% drop in Asia-Pacific demand. Industrywide cargo traffic in cargo tonne kilometers (CTKs) decreased in April due to the global supply chain and capacity challenges that continue to limit airfreight operations. April marks the second month of decline as the war in Ukraine continues to impact connectivity and capacity to Europe.

Cargolux adds new Ireland-U.S. freighter. Freighter carrier Cargolux has expanded its transatlantic services with a new route from the Republic of Ireland to the U.S. The flight will operate on a routing of Los Angeles, Seattle, and Shannon once per week utilizing one of the carrier’s B747 freighters, according to AirCargoNews. Cargolux explained that the introduction of Shannon is an opportunity for the freighter carrier to meet growing customer demand and expand its presence in the British Isles.

Delta Cargo assists Operation Fly Formula. Delta will work as part of Operation Fly Formula to supply much-needed baby formula to the U.S. from Europe. Delta Cargo will transport a total of 212,000 pounds of Kendamil baby formula from London’s Heathrow Airport (LHR) to Boston Logan Airport (BOS) and Detroit Metropolitan Wayne County Airport (DTW) over the course of 13 flights from June 20-24

International

Weekend quarantine measures in Shanghai impact exports. CNBC Supply Chain Heat Map provider OrientStar Group reports that Shanghai’s weekend quarantine of 15 out of its 16 districts affected the flow of exports bound for the Port of Shanghai. “Highways were closed because of this latest round of quarantine,” the logistics company told CNBC. “Trucks loaded with cargoes and containers were unable to enter the Shanghai terminal. Many clients have no choice but to change the loading ports to Ningbo or other outports along the Yangtze River.” The port of Ningbo became the alternative port for logistics during the two-month lockdown that started in April and as a result congestion at that port has been increasing.

South Korean truckers return to work after strike deal. Unionized truckers in South Korea are back on the roads after the union and the transport ministry reached a tentative agreement, ending a nationwide, eight-day strike that crippled ports and industrial hubs, Reuters reports. Shares in some affected industries rose after the strike had delayed cargo shipments from autos to cement and alcohol, costing South Korea more than $1.2 billion in lost output and unfilled deliveries.

Iran begins testing new trade corridor to ship Russian goods to India. Iran’s state-run shipping company began its first transfer of Russian goods to India using a new trade corridor that transits the Islamic Republic, an Iranian port official said. The Russian cargo consists of two 40-foot (12.192 meters) containers of wood laminate sheets, weighing 41 tons, that departed St. Petersburg for the Caspian Sea port city of Astrakhan, the state-run Islamic Republic News Agency said.

Other

Global energy market takes hit after Texas LNG plant explosion.  Company officials at a major natural gas production facility in Texas say that an explosion last week could knock the plant off line for at least three weeks. This comes as global energy market supplies are already stretched thin. The cause of the blast at the Freeport LNG facility in Quintana is not clear, the company said. There were no injuries and all employees have been accounted for, spokeswoman Heather Browne told The Washington Post. Experts warn that a prolonged closure of the Freeport facility could have a significant effect on energy prices.

Amazon to begin delivering packages by drone to homes in Northern California this year. Residents of San Joaquin County farming towns Lockeford and Acampo, as well as parts of Lodi, will be able to order “thousands of everyday items” online and can expect a drone to drop them in their backyards in less than an hour, said Av Zammit, an Amazon spokesperson. 

U.S. inflation hits 40-year high. The increasing inflation rate puts pressure on the Federal Reserve to extend an aggressive series of interest-rate hikes. Labor Department data from June 10 showed that the consumer price index increased 8.6% from a year earlier. The inflation gauge rose 1% from a month earlier and the core CPI, which strips out the more volatile food and energy components, rose 0.6% from the prior month and 6% from a year ago.

Uber Eats launches free nationwide shipping. As of June 7, Uber Eats customers can now select “Home” on the app and scroll until the “Nationwide Shipping” tab is visible to view available restaurants with shipping available to any location in the continental U.S. More than 15 merchants currently offer the service. 

U.S. Port Queue Numbers Remain Down from Highs, Federal Maritime Commission Wants More Oversight for Container Shipping Industry, New Aluminum Import Monitoring Requirements Start June 29.

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Ocean

Federal Maritime Commission wants more oversight for container shipping industry. The U.S. Federal Maritime Commission’s top official says more oversight is needed, even though the agency has had unprecedented support from Congress and the White House for holding the container shipping industry accountable to its customers. FMC Chairman Daniel Maffei acknowledged he may have been too optimistic about the ocean carriers’ ability to self-regulate, particularly as it relates to late fees associated with container demurrage and detention while speaking at the National Industrial Transportation League’s Transportation Summit. “I will admit to being a bit naïve,” Maffei said. “I thought our [interpretive rule on demurrage and detention, issued in April 2020] was pretty simple to understand: If the fee incentivizes cargo movement, it’s appropriate. If it doesn’t, it isn’t.” The FMC is considering a new rule on demurrage and detention billing practices that could apply to marine terminal operators and non-vessel-operating common carriers as well as the vessel operators, FreightWaves reports.

Hyundai cargo ship completes first autonomous long-haul journey. a Hyundai cargo ship completed the first trip across the Pacific controlled by autonomous shipping technology this month. The Prism Courage, an “ultra-large” liquid natural gas tanker operated by SK Shipping built by HD Hyundai subsidiary Avikus made the trip. The tanker was equipped with the company’s HiNAS 2.0 technology, a Level 2 oceanic shipping automation suite broadly analogous to the same tier of SAE autonomy in cars, according to thedrive.com. HD Hyundai claimed a 5 percent reduction in greenhouse gasses and a 7 percent increase in fuel efficiency on Prism Courage’s journey, while reportedly avoiding approximately 100 potential collisions.

Ports

U.S. port queue numbers remain down from highs. U.S. Ports are getting recovery time as container ship traffic slows. “This appears to be a much needed respite for some ports that have seen significant delays over the course of the year to date,” said S&P Global Commodity Insights. “Congestion is easing in [some] areas,” said Flexport. It advised importers to “take advantage of currently available space.” According to data from the Marine Exchange of Southern California, there were only 25 container ships waiting to berth in the ports of Los Angeles and Long Beach last Friday. That’s the lowest tally since July 28, 2021, FreightWaves reports

Global efficiency index sees Southern California’s ports ranked least efficient in 2021. The second edition of the Container Port Performance Index, a collaboration between the World Bank and S&P Global Market Intelligence, ranked the ports of Long Beach and Los Angeles in the last two spots of the 370-port global index. Rankings were determined by the amount of time vessels spend in port making a cargo exchange. Averages were weighted by call size and vessel size, according to FreightWaves

Customs

New Aluminum Import Monitoring Requirements Start June 29. From the NCBFAA Monday Morning eBriefing:The U.S. Commerce Department Aluminum Import licensing applications will require both fields of “country of largest smelt” and “country of second largest smelt,” starting June 29. Commerce defines the field for the country of smelt for the largest (and second largest) volume of primary aluminum as the country where the largest volume of new aluminum metal is produced from alumina (refined aluminum oxide) by the electrolytic Hall-Héroult process. “Based on public comments in response to the preliminary rule, in the final rule, it was determined that importers/[customs] brokers would need time to gather the required information for the countries of smelt and a grace period was granted for these fields; importers were permitted to indicate ‘unknown’ for one year upon implementation of the regulations,” Commerce said in a trade message. Commerce extended the temporary period to allow for license applicants to state “unknown” in the fields for countr(ies) of smelt for the largest and second largest volume of primary aluminum until June 28. The department will begin requiring the requested information for these fields for license applications on or after June 29, meaning that filers may no longer state “unknown” for these fields after that date.” For more information, visit the Aluminum Import Monitoring (AIM) website.

Trucking

Why are gas prices at record high? Russia’s invasion of Ukraine, China lockdowns ending, less oil and gas from other sources, and a strong demand for gas are all contributing factors to the continued rise in gasoline prices across the U.S. and the world. Regular gasoline hit a record $4.87 a gallon in the U.S. Monday according to AAA’s survey — up 25 cents a gallon in just the last week. Tom Kloza, global head of energy analysis for the OPIS, said the national average is expected to hit $5 a gallon within the next two weeks. More than one out of every five gas stations nationwide is now charging more than $5 a gallon for regular, and just more than half are charging $4.75, according to CNN

U.S. supply chain disturbances easing. Transport Topics reports that a “gauge of supply chain pressure in the U.S. economy fell to the lowest level since December 2020, as activity such as trucking cools from elevated levels with few signs yet of a worrying collapse.” The Logistics Managers Index dropped to 67.1 in May, the second straight decline from a record of 76.2 reached in March. Faster gains in warehouse and inventory costs offset slower moves in transport prices. According to the survey-based report released June 7, “the logistics industry continues to expand, driven primarily by strong growth in the inventory and warehousing metrics.”

Rail

Bill introduced to give tax credit for scrapping old railcars. A bipartisan group of congressional leaders has introduced legislation that would provide a tax credit for companies seeking to replace or modernize “inefficient, outdated” freight railcars. The Freight Railcar Act, introduced last Friday has 29 co-sponsors. An iteration of this bill was first introduced in the House in August 2020. A similar bill was introduced in March 2021. The Railway Supply Institute (RSI), a trade group representing railcar and rail equipment manufacturers, praised the reintroduction of the bill.

Air

China airfreight rates expected to rise over coming months. There is expected to be a surge in volumes as production levels continue to ramp up and companies look to meet a backlog of demand that has built up as a result of Shanghai emerging from a months-long lockdown. Rates out of Hong Kong and China remained high over the last couple of months despite an easing of demand. “As China takes some of its biggest steps toward reopening major cities, we expect rates to climb again over the next month,” wrote Bruce Chan, senior analyst at investment bank Stifel. “With Covid-19 cases declining in Shanghai, for example, the city is entering its final stages of reopening, which is expected to carry through mid-July, and we anticipate that the significant backlog will be cleared through origin port and airport facilities.”

Two of the world’s largest maritime carriers expanding in air freight. CMA CGM announced this week that CMA CGM Air Cargo is officially a French airline, having received its air carrier accreditation from the French Civil Aviation Authority. CMA CGM’s air cargo business is relocating its headquarters from Belgium’s Liège Airport to Paris-Charles de Gaulle International Airport (CDG). Additionally, Maersk completed its $644 million acquisition of Senator International, a freight forwarder located in Hamburg, Germany that specializes in managing commercial airfreight shipments. Maersk says it hopes to transport around one-third of its annual air volumes within its own controlled freight network, which includes Maersk freighters as well as completely leased freighter services from other cargo carriers.  

International

First international multimodal transportation container departs from Xiamen to Europe. Last week, a China-Europe freight train loaded with automobile lamps and other goods departed on Saturday from Xiamen, Fujian province, bound for Moscow, Russia, marking the first international multimodal transportation container from Xiamen to Europe. The shipping-rail intermodal transportation channel from Taiwan to Russia has provided a faster solution for sending goods from Taiwan and Southeast Asia to Russia, cutting the transportation time by nearly half that of the traditional shipping service and with lower logistics costs for exporters.

Forwarders warn to expect continued delays after Shanghai lockdown is lifted. As Shanghai recovers from lockdown, continuing restrictions indicate that it may take weeks or months to recover to standard production levels and shipper container volumes. Ocean carrier schedules, according to Loadstar, will most likely return to normal in late June.

Other

Apple shifting iPad production from China to Vietnam. Apple is moving some iPad production out of China and shifting it to Vietnam after strict COVID lockdowns in and around Shanghai led to months of supply chain disruptions. This is a first for the tech giant, and they have also asked multiple component suppliers to build up their inventories to guard against future shortages and supply snags.

Trade between the U.S. and Pakistan continues to increase. Pak-USA trade of goods and services witnessed a surplus of 55 percent during the first ten months of FY2022 as compared to FY2021, according to the latest report. The U.S. Embassy in Islamabad shared the news on its official Twitter account last week. “The United States has long been Pakistan’s #1 export destination, and our trade continues to grow. U.S.-Pakistan trade in the first ten months of Pakistan’s FY 2022 increased by 34 percent compared to the same period in FY 2021,” said US Embassy in its tweet

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