Freight Market Updates

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

Want these updates in your inbox? Sign up here!

Recent Posts / View All Posts

Photo of Intermodal containers with Navegate logo at International port.

Navegate Announces Acquisition by Radiant Logistics

| News, Press Releases | No Comments
For Immediate Release We are excited to announce the acquisition of Navegate, Inc. by Radiant Logisitics, Inc. Navegate, Inc., a Mendota Heights, Minn.-based technology-enabled logistics and supply chain management company,...

Supply Chain Trends to Track for the Rest of 2021

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

Celebrating Women’s History Month

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

Black Leaders Who Revolutionized the Supply Chain & Transportation Industry

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

Imports at LA-LB Ports Fall as Ship Backlog Rises, Cargo Capacity Suffers as White House Suspends Flights Operated by Chinese Airlines, Chinese New Year Is Fast Approaching

By | COVID-19 Latest Updates | No Comments

Ocean  

Pacific International Lines (PIL) placed first newbuild order in seven years. After seeing its earnings recovered in the soaring freight market, Singapore-based carrier PIL has signed an agreement of intent with Jiangnan Shipyard for its first vessel purchases since 2015. Sources at Jiangnan Shipyard, a subsidiary of the state-owned China State Shipbuilding Corporation, revealed that PIL had placed an order for two 13,000 TEU LNG-fueled ships, with options for two more. Each ship will cost roughly $160 million and will be delivered in late 2024.

Global vessel arrival times reach all-time low. According to the newest Sea-Intelligence Maritime Analysis report, global schedule reliability of container ships fell to its lowest recorded level in December driven by another terrible performance on the trans-Pacific, when just one in ten boats arrived on time. Severe port congestion in Asia, the U.S., and North Europe until 2021 has spilled over into the new year, causing boats to be delayed and prompting companies to cancel sailings and skip ports in a frantic attempt to reclaim schedules. In December, global schedule dependability was 32%, the lowest since Sea-Intelligence began tracking the statistic in 2011. The average on-time performance for the whole year 2021 was 35.8%, with an average vessel delay of 6.86%.

Companies gifting shipping workers with benefits, attempting to alleviate labor shortage. According to Drewry, an independent maritime research consultant, container shipping pre-tax profit for 2021 and 2022 might be as high as $300 billion, whereas the industry projection for 2021 was a record-breaking $150 billion. While container shipping businesses have enjoyed a record year, the industry is experiencing a labor shortage created by discontent and underpaid workers. This threatens to destabilize the already shaky global supply chain, putting those record earnings in jeopardy. As a result, the world’s leading shipping companies are seeking to reduce employment shortages by passing on a portion of their pandemic earnings to their employees in the form of substantial one-time bonuses.

Customs

Updates to HTS numbers subject to Section 201 duties go into effect Jan. 27. The changes made to some HTS categories under the HTSUS that are subject to Section 201 solar measures are detailed on pages 184-185 of USITC Publication 5240. The new HTS shall continue duty treatment for measures taken in accordance with Section 201 of the Trade Act of 1974 under the relevant U.S. The following note will go into effect on January 27, 2022.

Ports

North America experiencing the worst port congestion. According to a new performance indicator announced by Kuehne + Nagel (K+N) cumulative container delays at the world’s major ports are presently at 11.6 million TEU “waiting days,” with North America accounting for 80% of global port congestion. K+N stated in a statement that a “typical” level of congestion at the 13 ports monitored by the key performance indicator would be fewer than 1 million TEU waiting days.

Imports drop at Southern California ports as ship backlog grows. Imports are down at the nation’s main container port complex, despite a record-breaking backlog of ships waiting to unload. According to preliminary figures from the ports, combined inbound volume at the ports of Los Angeles and Long Beach declined roughly 14% in December compared to the previous year. It was the fourth consecutive month of year-over-year reductions, even as the backlog of cargo ships off the coast of Southern California grew. According to the Marine Exchange of Southern California, the number of vessels waiting to enter the port complex surpassed 100 in December and reached a record 109 in early January.

Air

Cargo capacity suffers as U.S. suspends flights operated by Chinese airlines. The suspension of more than three dozen passenger flights operated by Chinese passenger airlines by the U.S. government in retaliation for China’s COVID policies restricting U.S. carrier operations will also remove widebody belly capacity for cargo, further stressing supply chains already under strain to meet international trade demand. In response to China’s use of so-called “circuit breaker” penalties, which automatically trigger inbound flight restrictions when a certain number of arriving passengers test positive for COVID up to seven days after arrival, the Biden administration suspended 44 flights from the U.S. beginning Jan. 30 and continuing through the end of March. In recent weeks, Chinese measures have prompted American Airlines, Delta Air Lines, and United Airlines to cancel flights.

Boeing 747-8 freighters and all 777 widebody aircraft prohibited from landing at airports with 5G towers under FAA regulations. A new FAA rule preventing Boeing 747-8 freighters and all 777 widebody aircraft from landing at airports where 5G towers might interfere with onboard safety equipment could have a disproportionate impact on large cargo carriers such as UPS, FedEx, and Atlas Air. The FAA discovered an additional hazard from interference with radio altimeters in addition to causing a landing risk in low-visibility situations, according to the airworthiness directive published Tuesday. Other systems may potentially be jeopardized.

World’s largest container line shows interest in Italian airline​​. Mediterranean Shipping Co. (MSC) is seeking a controlling stake in the new Italian flag carrier ITA Airways through a deal that would also include Deutsche Lufthansa AG. The transaction would be worth between 1.2 billion euros ($1.4 billion) and 1.5 billion euros. MSC announced on Jan. 24 that it has submitted an expression of interest to ITA’s Italian government owner outlining the concept. Separately, Lufthansa stated that it will function as an industrial partner and will consider equity participation. 

Yamoto and JAL to partner on domestic cargo flights. In response to new truck driver rules, Japan-based logistics business Yamoto has partnered with Japan Airlines (JAL) to introduce domestic cargo flights in 2024. In order to “create a sustainable and robust logistics network for long-distance cargo,” the two corporations will begin flights between Tokyo and Hokkaido, Kyushu, and Okinawa in April 2024. Three 28-tonne capacity A321 modified freighters flown by JAL’s low-cost affiliate, Jetstar Japan, will operate the routes.

Boeing reports loss as 787 costs climb. Boeing Co. said manufacturing issues and delivery delays with its 787 Dreamliner airplane will cost it another $4.5 billion as the planemaker announced its third annual loss in a row. The firm stated that it intends to deliver more 737 MAX and Dreamliner planes this year and to resolve the manufacturing issues that have stalled its operations. While it incurred charges in all three of its business groups last quarter, it also stopped losing cash for the first time in more than two years.

Trucking

Diesel reaches its peak price since 2014. According to Energy Information Administration (EIA) data issued Jan. 24, the national average price of a gallon of diesel reached its highest level in more than seven years, climbing 5.5 cents to $3.78. A gallon of fuel has cost the highest since September 15, 2014, when it reached $3.801. Over the last three weeks, the price of diesel has risen by 16.7 cents. A gallon of fuel now costs $1.064 more than it did in 2021 at this time. The EIA’s weekly survey found improvements in all ten areas, with the greatest being 7.9 cents in New England and the smallest being 2 cents in the Rocky Mountain region.

Paccar lays the groundwork for pure electric truck platform. Paccar is in the early phases of developing a new Class 8 electric truck platform that will be free of the restrictions of a diesel powerplant and a sophisticated exhaust system. The platform would be in addition to what the Bellevue, Wash.-based business employs for its workhorse Kenworth T680, which is available in diesel, electric, and hydrogen fuel cell models. Customers should not expect to see the new platform until late this decade or maybe 2030, as the firm is only getting started.

Truckers outraged by vaccine mandates roll towards Canada’s capital in protest. Truckers upset by vaccine restrictions descend on Canada’s capital in protest. Several convoys carrying hundreds of vehicles set off as part of the Freedom Convoy over the weekend, while local protests have already delayed traffic at certain border crossings. According to organizers, thousands of drivers have signed on, as well as allies from outside the industry.

Rail

Canadian National Railway (CNR) appoints new CEO, avoiding proxy battle. CNR chose a new CEO and made changes to its board of directors, a move that will allow the railroad operator to avoid a proxy struggle. Tracy Robinson, a long-time railroad official, has been named CEO and president of the Canadian railroad operator. TCI Fund Management Ltd., located in the U.K., has decided to suspend its proxy fight at Canadian National, which has appointed a new independent director and aims to nominate two new independent directors with North American railroad expertise by its annual meeting.

Labor and railways clash in contract negotiations, seek mediation. Ten rail unions have declared an impasse with U.S. freight railways over negotiations for a new labor deal and have requested the National Mediation Board (NMB) for a government mediator to assist with negotiations — a step supported by the railroads. After more than two years of negotiating, the Coordinated Bargaining Coalition (CBC), comprised of unions, stated that discussions had come to a halt. Because of the impasse, the coalition is seeking a mediator in accordance with the Railway Labor Act. The unions said that the National Carriers’ Conference Committee (NCCC), the group representing the labor interests of U.S.-based Class I rail operations in the discussions, is not bargaining “in good faith,” resulting in a “dead end” in negotiations.

Court awards BNSF Railway temporary restraining order, preventing unions from striking. A U.S. district court judge in Fort Worth granted BNSF a temporary restraining order, preventing two of its unions from striking. According to District Court Judge Mark Pittman, his ruling does not resolve whether the disagreement between the railway and its unions is a “major” or “minor” one under the legislation. A decision on that distinction would have affected whether or not a prospective strike was permissible. 

Amy Miles named non-executive chairwoman of Norfolk Southern Corp. (NSC). Amy Miles was named non-executive chairperson of NSC, effective May 1. Ms. Miles, an Atlanta freight railroad board member since 2014, follows James Squires, who announced last month that he would step down as chairman and CEO on that day.

Other

Is your company prepared for Chinese New Year supply chain disruption? Chinese New Year (CNY), also known as Lunar New Year or Spring Festival, is on Feb. 1st, and is one of the most important Chinese holidays, resulting in the world’s largest annual mass migration. As a result, CNY is a fierce disruptor of Chinese and global supply chains, with a four-week production halt for Chinese-based suppliers, contract manufacturers, and partners. Almost everything closes down during this time, including the government and industry, while ports and customs normally function with a small crew, focusing on perishable and priority items.

However, preparation for this year’s Chinese New Year may be more difficult than normal. It is accompanied by the Winter Olympic Games in Beijing (which begin on February 3rd) and the well-publicized lack of shipping space and container availability. As a result, it is projected that exports from China would be few or limited in the first few months of the year.

Contact our experts if you have any questions about how your supply chain may be impacted during this time, if you need assistance managing your logistics, or if you wish to tap into Navegate’s network of carriers and agents.

Though it is generally too late to avoid possible Lunar New Year delays, Navegate can assist you in enabling a resilient supply chain and minimizing overall disruptions. 

No relief for China’s strained supply chains. Covid lockdowns, quarantines, and restrictions are producing a backlog in some of China’s main ports, resulting in “chaos” and raising air freight rates by up to 50% in some cases, according to experts. Air freight costs have risen ahead of China’s extended Lunar New Year holiday, and several shipping companies have ceased operations, placing the emphasis back on overburdened supply networks. Lockdowns and other restrictions have been imposed in the main port cities of Shenzhen, Tianjin, and Ningbo, as well as the industrial center of Xi’an due to the recent spike in COVID cases. Infections have been recorded in other places as well, including Dalian and Anyang.

Occupational Safety and Health Administration (OSHA) formally withdraws its mandate for COVID-19 vaccine. OSHA said on Jan. 25 that it is formally dropping its emergency interim regulation mandating major employers to require their employees to obtain COVID-19 immunizations. The withdrawal follows a U.S. Supreme Court decision on Jan. 13 that stayed the standard, stating that opponents to the rule, including American Trucking Associations, were likely to succeed on their claims. The Supreme Court decided 6-3 to overturn the interim requirement, holding that OSHA lacked the power to enforce the mandate.

U.S. trade deficit in goods will exceed $1 trillion in 2021. For the first time, the U.S.’ trade deficit in goods surpassed $1 trillion in 2021, as an economic rebound enabled Americans to purchase a record number of imports such as toys, cell phones, and appliances. The goods trade deficit increased to $1.08 trillion in 2021, up from $893.5 billion the previous year. According to an advanced government estimate, the goods deficit grew by 3% in December to $101 billion from $98 billion. It was the highest monthly increase ever recorded. The rapid recovery of the United States’ economy in comparison to most other nations, backed by large government stimulus, helps to explain the record trade deficit.

Nationwide grocery store shortages have returned. A labor crisis worsened by the omicron surge has resulted in empty food cases and rotten food across the country. People are reporting bare shelves and coolers at supermarkets, which might feel like a replay of spring 2020. According to experts and food corporations, there is enough food in the nation, but a variety of obstacles throughout the supply chain appear to be preventing it from reaching consumers. What’s new is a labor shortage that began with the Great Resignation and has increased with the omicron surge, which has been exacerbated by short-term interruptions in particular industries and locations due to harsh weather and product recalls.

Supply chain issues might cost apparel and footwear industries $17B. According to a new analysis released by Kearney, ongoing supply chain difficulties may cost North American clothing and footwear businesses between $9 billion and $17 billion in lost EBITDA in 2022. That is a conservative estimate calculated by the report’s authors prior to the emergence of omicron, implying that the lost revenues may be substantially higher.

U.S. product returns increased to 16.6% of overall retail sales. Consumers are sending heaps of product returns back to U.S. retailers following the winter peak shopping season, with inbound products totaling 16.6% of the overall U.S. retail sales, a significant rise from the 10.6% returned in 2020, according to the National Retail Federation (NRF). The percentage of returns for e-commerce transactions was much higher, at 20.8%, although this figure did not grow over previous years’ data, according to the NRF. According to a poll issued today by NRF and Appriss Retail, the categories with the highest return rates were comparable to 2020 metrics: auto parts (19.4%), clothes (12.2%), and home improvement and housewares (12.2 %) (tied at 11.5% each).

Foreign Border Crossers Must Show Proof of COVID-19 Vaccination in U.S., COVID Clogs One of China’s Busiest Ports, Causing Ship Delays, Japanese Automakers Reduce Manufacturing Due to Omicron

By | COVID-19 Latest Updates | No Comments

Ocean  

South Korea to penalize 23 carriers for alleged predatory pricing and collusion. South Korea’s Fair Trade Commission fined 23 domestic and foreign shipping businesses a total of roughly $81 million for conspiring to fix freight costs between 2003 and 2018. The action follows the FTC’s recent revelation that it was considering fines of up to 10 times the amount levied today for violations of Korea’s Fair Trade Act.

Trends in Transpacific rates and market data. Carriers have extended existing FAK pricing through Feb. 14, and some may be valid until the end of Feb. Meanwhile, they are constructing a rolling pool to mitigate the effects of factory closures over the Chinese New Year holiday. The additional capacity has put pressure on spot markets, causing spot prices to fall from their peak. Some small forwarders, eager to capitalize on the windfall, are now lowering their prices in order to lure more volume from their competitors. The cancellation of a booking will result in a shortfall and a large cancellation cost, as well as several complaints from carriers. COVID-19 and its new variants, on the other hand, will continue to disrupt port operations and labor capacity as we go into 2022, keeping capacity constrained and rates high. Ref: HLS Transpacific Market Report Wk 03.

Customs

Non-U.S. citizens entering U.S. land border ports must show proof of COVID vaccination. Beginning Jan. 22 at 12:01 a.m. (local time), the Department of Homeland Security (DHS) will require non-U.S. citizens seeking entry into the U.S. through land ports of entry and ferry terminals at the U.S.-Mexico and U.S.-Canada borders to be fully vaccinated for COVID-19 and provide related proof of vaccination. Customs and Border Protection (CBP) will enforce the rule as COVID-19 instances continue to climb across the country, according to DHS. These new restrictions will apply to non-residents of the U.S. who are traveling for both necessary and non-essential purposes. They will not apply to U.S. citizens, LPRs, or nationals, according to DHS. For more details, ​​see this DHS fact sheet.

Rep. Blumenauer introduces bill to tighten de minimis. Rep. Earl Blumenauer (D-OR), chairman of the House Ways and Means Trade Subcommittee, announced new legislation that he claims will strengthen U.S. international trade import laws by preventing non-market economies and goods from “exploiting” the de minimis threshold, which allows imports worth less than $800 to enter U.S. commerce without paying duties, taxes, or fees. Blumenauer observed that the $800 de minimis barrier is used by more than two million parcels entering the United States every day. The bill’s full text can be found here.

Changes to trade user responses to U.S. Customs and Border Protection (CBP) Forms 28, 29, and 4647 in the works. CBP will make changes to the automated procedure for assessing entry summaries on Jan. 29. While the bulk of these changes primarily affects CBP users, trade users may notice a difference in how replies to CBP Forms 28, 29, and 4647 (issued by CBP through the ACE Portal) can be submitted until the new ACE forms application is ready in Apr. 2022. Trade users will no longer be able to submit replies directly through the ACE Portal from Jan. 29, and electronic responses will only be available through DIS (via EDI or email submission). When the new ACE forms application is released in Apr. 2022 (and may be accessed), trade users will be able to immediately reply to CBP Forms 28, 29, and 4647 using the new application. If you have any questions regarding these changes, please email [email protected].

Phase 1 of ACE Portal Modernization to begin on January 22. On Jan. 22, U.S. Customs and Border Protection (CBP) will launch Phase 1 of the ACE Secure Data Portal modernization (ACE Portal). These upgrades will include a new login screen, a redesigned home page, and improved account information display and editing tools. Users will take a few simple steps on the new login screen to generate a new username and password and link their existing ACE Portal access. Users will have one month to link their accounts and switch to the new login page. Users will no longer be able to use the legacy login page after Feb. 20. Please visit https://www.cbp.gov/trade/automated/ace-portal-modernization for further details.

Ports

Port of Vancouver delays ban on old trucks due to supply chain issues. After a year of disruption in British Columbia, and supply-chain congestion, the port authority in Vancouver, B.C. has concluded that now is not the time to implement a long-planned ban on older diesel vehicles. The port launched the “Rolling Truck Age Program” in 2015, with the goal of prohibiting trucks older than 10 years from entering its gates. The port’s goal was to minimize dangerous NOx and particulate matter emissions, which have a localized impact on public health. Because new trucks are becoming increasingly difficult and expensive to get, the port has decided to postpone the program’s launch date, which was originally scheduled for Feb. 1.’

​​Covid clogs one of China’s busiest ports, causing ship delays. Containers are piling up at China’s already overburdened Shenzhen port as congestion in the U.S. rippled back to Asia, delaying ships picking up products from the industrial and technological hub. Southern Chinese manufacturers are presently making a last-ditch effort to ship out products before the Lunar New Year holiday, which begins next week, with the People’s Daily reporting that trucked volumes entering Shenzhen’s Yantian terminal on Jan. 13 were almost 30% higher than Dec. levels. Ships arriving at the Yantian terminal are delayed on average by seven days, and the number of ships arriving from Europe and the U.S. has dropped by more than 40% in the last two weeks.

Ports of LA- LB to ‘revisit’ container dwell fee on January 21. The ports of Los Angeles and Long Beach have continued to postpone their “Container Dwell Fee,” saying in a news release that they will “revisit” its probable implementation on Jan. 21. Since the fee was announced on Oct. 25, 2021, the two ports have reported a combined 55% decrease in aged cargo on the docks. So far, the executive directors of both ports have resisted implementing the tax based on repeated weekly “monitoring” of their container throughput statistics.

Air

Airlines cancel some flights in preparation of 5G launch in U.S. Two of the country’s largest cellular carriers agreed not to activate some 5G connections near airport runways, a temporary compromise to address air-safety concerns that have already forced overseas airlines to cancel several U.S.-bound flights. AT&T Inc. and Verizon Communications Inc. accepted the new limitations, ending a months-long standoff between the cellular carriers and aviation regulators, who had agreed to curtail flights due to worries about the impact of 5G signals on aircraft instrumentation.

Delta Cargo adjusting domestic capacity. Delta Cargo is modifying domestic capacity temporarily to “guarantee that we can satisfy” customer service performance demands. The business said that it will be “paring capacity” on narrowbody flights in major domestic hub operations from Jan. 17 to Feb. 15 at specified periods of the day. According to Delta Cargo, international and domestic widebody flights would be unaffected.

Trucking

New vaccine regulations take effect at Canadian border. New, stricter COVID-19 vaccine restrictions went into effect on Jan. 15 for anyone crossing the border from the U.S. into Canada. This includes truck drivers and other critical jobs. Similar rules are anticipated to go into effect in the U.S. on Jan. 22 when the Department of Homeland Security enforces its rules to limit the spread of the coronavirus and urge more individuals to be vaccinated.

China attempts to restrict spread of Covid-19, resulting in major bottleneck. Thousands of trucks transporting loads of produce have been stalled at border crossings since Chinese officials tightened gate operations in an effort to limit Covid-19 outbreaks. The backlog is the result of Beijing’s zero-Covid policies, which have put certain cities on lockdown, delayed operations at major ports, and grounded air transport yet again. They are also interfering with trade routes across its land borders, which are vital to the region’s farmers and merchants. Thousands of trucks carrying dragon fruit, jackfruit, watermelons, and other food have been held up at the border in neighboring Vietnam for weeks.

Diesel prices up 6.8¢ to $3.725. According to Energy Information Administration (EIA) statistics posted on Jan. 17, the national average price of diesel increased for the second week in a row, rising 6.8 cents to $3.725 per gallon. Diesel prices have climbed 11.2 cents per gallon on average in the last two weeks after falling 12.1 cents in the preceding seven. A gallon of fuel now costs $1.029 more than it did in 2021 at this time. Gasoline prices rose by 1.1 cents to a national average of $3.306 per gallon. In its weekly poll, the EIA reported that fuel prices climbed in all ten areas.

Robin Hutcheson to Head Federal Motor Carrier Safety Administration (FMCSA). Transportation Secretary Pete Buttigieg announced the appointment of Robin Hutcheson as Deputy Administrator of the FMCSA on Jan. 19. Hutcheson, as deputy administrator, will serve as the agency’s acting administrator. Hutcheson has been the Department of Transportation’s deputy assistant secretary for safety policy for the past year. She takes over for Meera Joshi, who left the agency in January to become New York City’s deputy mayor for operations.

Rail

Rail unions begin strike preparations. Following the announcement of the Burlington Northern Santa Fe Railway’s “Hi-Viz” attendance policy, members of the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation union (SMART-TD) initiated steps to strike on Jan. 13.

Other

Supreme Court halted OSHA’s Emergency Temporary Standard (ETS). On Jan. 13, the U.S. Supreme Court suspended OSHA’s ETS, which required employers with 100 or more workers to develop a mandatory vaccination program or have unvaccinated employees submit to weekly COVID-19 testing and wear a mask at work. The ETS entered into effect on Jan. 10, but the judgment prevents it from being enforced until then. The Supreme Court determined that, while OSHA has the jurisdiction to regulate occupational health and safety, COVID-19 extends far beyond the workplace. As a result of this decision, OSHA will be unable to enforce the ETS, and companies will be exempt from compliance.

Army Corps of Engineers to get $14 billion to aid with supply chain management. The Biden administration announced the allocation of $14 billion to the Army Corps of Engineers to support 500 projects, with a focus on supply chain issues and climate change. The investment is mostly a result of President Joe Biden’s $1 trillion infrastructure package, and the government is attempting to demonstrate how the projects would reduce supply chain backlogs. According to a White House information sheet, three specific projects are linked to eliminating supply chain bottlenecks by making it simpler to transfer commodities.

Automakers reduce manufacturing in Japan due to increase in omicron. The newest wave of coronavirus infections in Japan has further hampered Toyota Motor and the country’s major manufacturers’ production schedules. Toyota will halt operations at up to 21 production lines across 11 Japanese sites for four days, beginning Monday. The carmaker was forced to close due to an increasing number of sick personnel on its production floors and among its suppliers. Honda Motor anticipates passenger vehicle output at its Suzuka factory in Mie Prefecture to be 10% lower than previously forecast. Honda’s Yorii factory in Saitama Prefecture has already decreased output by 10% for this month. The facility is slated to reopen to the public next month. Nissan Motor reduced output in December. The firm is hard at work acquiring components to restore output. Since Dec., Suzuki Motor has been operating at around 70% of the capacity predicted at the start of the fiscal year.

Federally regulated supply chain for Covid-19 supplies is growing. The Biden administration is planning to make 400 million N95 masks available across the country as part of Washington’s response to a statewide rise in Covid-19 cases. The masks will be accessible at pharmacies and community health centers late next week, obtained from the Strategic National Stockpile, a medical-equipment safety net created in the early months of the pandemic. This week, the government also began accepting orders for at-home rapid testing.

Despite record sales, IKEA’s carbon footprint shrunk from pre-pandemic levels. IKEA, the world’s largest furniture retailer, said that it was on pace to become climate positive by 2030, despite record sales, as its yearly carbon emissions dropped 6% from pre-pandemic levels. Inter IKEA said that emissions in the value chain – from raw material manufacturing to consumer use and disposal of products – totaled 26.2 million tonnes of CO2 equivalent in the year to Aug., compared to an upwardly revised 27.9 million in fiscal 2019, when emissions dipped for the first time.

International Energy Agency (IEA) predicts oil demand to exceed pre-covid levels in 2022. According to the IEA, global oil demand will exceed pre-pandemic levels this year due to rising Covid-19 vaccination rates and the fact that subsequent virus waves have not been strong enough to necessitate a return to harsh lockdown measures. The IEA raised its oil demand growth prediction for the following year by 200,000 barrels per day, to 3.3 million barrels per day, in its monthly oil market report.

Tianjin Under Partial Lockdown Due to Omicron, New Global Supply Meter Indicates Some Relief on the Horizon, and Canada Requiring Truck Drivers Be Fully Vaccinated

By | COVID-19 Latest Updates | No Comments

Ocean  

Tianjin placed under partial lockdown due to Omicron crisis. Over the weekend, the Omicron variant broke out, causing the port city of Tianjin, near Beijing, to go into partial lockdown. Exit restrictions have been implemented, and extensive testing is currently ongoing throughout the city. Ningbo, the world’s largest port, has had three partial lockdowns in the last six months. MSC is anticipated to further solidify its position as the world’s largest container line throughout the course of 2022, with a confirmed vessel orderbook of nearly exactly 1 million TEU, the largest of all carriers. Maersk reported in China that vessel calls and departures from Covid-19-affected Ningbo are regular, although trucking activities near the port are still disrupted due to a partial lockdown of the city.

ONE container ship loses containers in the Atlantic Ocean. While on way to New York, a containership operated by Ocean Network Express (ONE) experienced a container collapse in the Atlantic Ocean. The incident occurred on board the M/V Madrid Bridge, according to ONE. The disaster occurred on Jan. 7, about 0800 UTC, while traveling from Singapore to New York, USA. According to the ship’s owner, Kawasaki Kisen Kaisha Ltd (K Line), there were no casualties and no containers with dangerous goods were lost. It is uncertain how many containers were lost overboard or collapsed on deck. The ship is currently on its way to New York.

Taiwan’s major liner operators raise capacity ahead of the Chinese New Year. Following in the footsteps of its South Korean equivalent, the Taiwanese government has urged domestic ocean liners to secure adequate container shipping slots for local exporters. Evergreen, Yang Ming, and Wan Hai, the island’s three major liner operators, will increase capacity this month to accommodate increased demand as exporters scramble to transport products before the lunar new year holiday begins on February 1.

Custom

International Trade Administration’s  (ITA) new trade chief takes charge. Marisa Lago was sworn in as the undersecretary of commerce for international trade on December 28. In this position, she will lead ITA, which assists U.S. businesses in entering or expanding into international markets, enforces fair trade laws, promotes U.S. products and services abroad, conducts in-depth trade analyses, develops strategies that will shape the future of international trade, and engages in commercial diplomacy around the world.

Ports

As Omicron rises, America’s busiest port complex struggles. Infection rates are fast climbing among dockworkers at the ports of Los Angeles and Long Beach, just as marine facilities are attempting to ramp back up following worker absences over the holidays. According to the Pacific Maritime Association, which arranges terminal labor, some 800 dockworkers were off ill for Covid-related causes at the start of this week. This equates to around 10% of the roughly 8,000–person daily workforce required for container moving in Southern California. Terminal operators claim that with such low personnel levels, they will struggle to reduce the backlog of around 100 container ships waiting to offload at the ports.

Congestion Dwell Fee for Ports of LA, LB postponed again. The 10th delay comes as the ports of Los Angeles and Long Beach have again delayed their “Container Dwell Fee,” this time until Jan. 17. The fee was earlier scheduled to go into play on Monday, Jan.10. Since the fee was announced on Oct. 25, the two ports have reported a 45% decrease in aged cargo on the docks. After another week of monitoring data, the executive directors of both ports indicated they will continue to examine the rollout of the fee.

Air

Flight cancellations delay airfreight deliveries. Canceled flights have dramatically cut aircraft capacity and interrupted expedited shipment operations, giving airfreight forwarders a rocky start to the New Year. Though cancellations have decreased in recent days, airlines have suspended thousands of flights in recent weeks due to winter weather and personnel shortages caused by an increase in Covid-19 cases. The cancellations have caused delivery delays and increased transportation costs for merchants and manufacturers looking to fly products across congested maritime ports around the world.

Asia’s air freight demand remains strong. The Asian air freight market remained resilient in November, with volumes continuing to rise compared to levels in 2019. According to the latest data from the Association of Asia Pacific Carriers (AAPA), cargo demand at the region’s airlines climbed by 16.5 % year on year during the month and remained higher than in the pre-pandemic months of 2019. After accounting for an 11.8 % year-on-year increase in provided freight capacity, the international freight load factor remained “elevated,” averaging 73.2 % for the month.

FedEx air shipments delayed as Omicron variant leads to staff shortages. The spike in COVID infections caused by the omicron variant, as well as adverse weather that has prompted passenger airlines to cancel thousands of flights, is now impacting FedEx Express operations. The package and freight carrier warned on Friday that staffing issues in its aviation network due to increased illness rates among pilots and ground employees, coupled with harsh winter weather events, are impeding deliveries.

Trucking

Canada requires all truck drivers and essential workers be fully vaccinated starting January 15. Prime Minister Justin Trudeau is moving forward with a vaccine mandate for foreign truckers, despite mounting criticism that it would worsen driver shortages and raise the cost of products imported from the U.S. As part of its effort against COVID-19, Canada will begin requiring all truckers coming from the U.S. to produce proof of immunization starting on Jan. 15. According to the Canadian Trucking Alliance (CTA), this might force 16,000, or 10%, of cross-border drivers off the road.

Diesel prices rise by 4.4% to $3.657 a gallon. According to Energy Information Administration (EIA) data released Jan. 10, the national average price of diesel increased 4.4 cents to $3.657 per gallon following seven consecutive reductions. The main fuel used by trucks today costs 98.7 cents higher per gallon than it did in 2021 at this time. Diesel prices increased in nine of the ten regions covered by the EIA’s weekly study. The West Coast, excluding California, saw the greatest rise of 7.5 cents. Gains of at least 5 cents were also recorded on the Gulf Coast and Lower Atlantic. Only the Rocky Mountain area fell, by 2.1 cents.

Rail

Companies increasingly relying on long-distance trains. Long-distance railway freight shipments between China and Europe, which were once uncommon, have become considerably more popular during the pandemic as businesses looking for alternatives to congested and expensive air and sea routes. Rail shipments are especially popular among businesses that need to transport perishable or time-sensitive items but do not want to pay for air freight. Containers can travel by rail between Europe and China in as little as 20 days, but a voyage by sea might take up to 70 days due to pandemic disruptions.

Union Pacific (UP) eliminating peak-season rail surcharges. According to a company advisory reported by JOC.com, Union Pacific Railroad will cancel peak season surcharges on excess domestic intermodal contract loads that were as high as $5,000 per container, beginning Sunday, Jan. 9. The move indicates that domestic intermodal congestion in theuU.S. has significantly improved in recent weeks.

Rail unions ‘disappointed’ with vaccination requirement judgment. Efforts to block the adoption of a COVID-19 vaccine mandate on Chicago’s commuter train system were unsuccessful last week when a federal court denied two rail unions’ pleas to suspend it. The U.S. District Court for the Northern District of Illinois, Eastern Division, denied a preliminary injunction sought by the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) to halt Metra’s vaccine mandate. The court ruled that instead of going on strike, the unions must reach an agreement with Metra on the vaccination.

Other

China enforcing shutdowns due to Covid-19 surge. With Covid-19 spreading across China, key industries are closing plants, ports are congested, and personnel is in short supply as the government enforces city lockdowns and mass testing on a scale not seen in nearly two years. The likelihood of further disruptions in the world’s second-largest economy, which has adopted a zero-tolerance approach to tackling the virus, is raising concerns that the disruptions will spread across the global economy. Companies such as memory chip producer Samsung Electronics Co., German automaker Volkswagen AG, and a textiles firm that supplies Nike Inc. and Adidas AG are already experiencing production delays.

New global supply meter indicates some relief on the horizon. Bloomberg reported on Jan. 5 that the Federal Reserve Bank of New York has developed a new Global Supply Chain Pressure index that pulls together 27 variables that measure everything from cross-border transportation costs to country-level manufacturing statistics in the euro area, China, Japan, South Korea, Taiwan, the U.kK., and the U.S., to assess the effect of supply chain disruption events. The gauge also indicated that supply chain stresses are expected to ease in the future.

White House announced new plan for fair and competitive supply chain for meat and poultry. The Biden Administration recently produced a fact sheet describing its proposal to promote a more equitable, competitive, and resilient meat and poultry supply chain. The White House intends to facilitate meetings between stakeholders and the Administration, to commit $1 billion of American Rescue Plan funds to expand independent processing capacity, to strengthen rules to protect U.S. agriculture and consumers, to promote competition through efforts such as a new joint initiative between the DOJ and the USDA, and to increase market price transparency.

Vessels Anchored in Port of Savannah Drop to Less Than Five, Toyota Surpasses GM As Best-Selling Automaker, Airlines Cancel over 1,000 Flights 11 Days in a Row

By | COVID-19 Latest Updates | No Comments

Ocean  

U.S. Federal Maritime Commission (FMC) investigating Wan Hai for empty container detention charges. FMC launched an investigation against the container line Wan Hai over detention costs applied to shippers when it allegedly did not provide a means for shippers to return containers. The probe notably refers to 21 instances last spring in which shippers were charged for detention, with rates ranging from $125 to $1,550 per container.

Mediterranean Shipping Co. (MSC) ranks first in ocean carrier capacity. Due to its massive orderbook, MSC has surpassed its 2M partner Maersk as the top worldwide ocean carrier by capacity at the start of 2022, according to the most recent statistics from maritime data source Alphaliner. According to Alphaliner’s current top 100 carrier rankings, the Geneva-based carrier has slightly over 4.284 million TEU of ships on the water and booked for future delivery. Maersk, on the other hand, has little over 4.282 million TEU in existing and pending capacity, according to Alphaliner statistics.

Custom

Ethiopia, Guinea, and Mali have been removed from African Growth and Opportunity Act (AGOA) program. According to a Presidential Proclamation of December 23, 2021, the following Sub-Saharan African nations are no longer eligible for AGOA preferential treatment for goods entered or removed from a warehouse on or after January 1, 2022. Ethiopia, Guinea, and Mali are the nations that have been terminated. Click here for the Presidential Proclamation.

Ports

Amount of vessels anchored in Port of Savannah drops to less than five. The Georgia Ports Authority (GPA) attributes the improvement to greater collaboration with shippers and trucking companies after raising concerns in September when the terminal was clogged with containers and 30 vessels were anchored outside the harbor. GPA stated that if shippers continue to remove their containers swiftly, it could take care of all the anchored boats within a couple of weeks due to four pop-up storage sites around Georgia and increased capacity in the Garden City Terminal, which can now handle up to 570,000 TEU per year.

LA-LB ports postpone container dwell fee until January 10th. The ports of Los Angeles and Long Beach have again delayed their “Container Dwell Fee,” this time until Jan. 10. The charge was initially scheduled to go into effect on Monday, Jan. 3. Since the fee was announced on Oct. 25, the two ports have reported a combined reduction of 35% in old cargo on the docks. Following another week of monitoring data, the executive directors of both ports are scheduled to continue their reassessment charge implementation.

Air

Cathay Pacific postponed cargo flights as Hong Kong tightens COVID regulations. Cathay Pacific has suspended all long-haul freight and cargo-only passenger flights for a week after Hong Kong authorities increased the quarantine time for inbound air cargo crews from three to seven days. The additional quarantine time limits the number of available pilots, making Cathay’s typical flying schedule difficult to maintain.

U.S. cargo carriers object Saudi Arabian Airlines’ request for trans-Atlantic freighter flights. Three major U.S. all-cargo airlines are opposing Saudi Arabian Airlines’ request for authorization to run cargo flights from Liege, Belgium, to New York and Chicago because the Kingdom of Saudi Arabia does not allow U.S. carriers to travel there from other nations. FedEx Express, UPS, and Atlas Air all stated in separate comments to the Department of Transportation on Tuesday that they favor expanded air traffic rights but that the Saudi government prevents them from flying the most financially efficient routes. They contended that the country’s flag carrier should not be given a benefit that is not reciprocated since it would place them at a great disadvantage.

Airlines cancel over 1,000 flights 11 days in a row. By Wednesday evening, almost 1,700 flights in the U.S. had been canceled, marking the 11th consecutive day of more than 1,000 cancellations and the airline industry’s worst stretch since the pandemic began. According to the aviation data tracker FlightAware, airlines also delayed more than 3,900 flights by Wednesday evening. Since Christmas Eve, airlines have canceled almost 22,000 flights.

California filed a lawsuit against Amazon’s San Bernardino air freight facility. The state of California asked a federal appeals court to rehear its case challenging a new air cargo facility at San Bernardino International Airport, which is a significant package hub in Amazon’s air network. According to Attorney General Rob Bonta, the initial judgment violates current environmental legislation and exposes the neighboring community to dangerous diesel truck and jet pollutants.

Trucking

​​Chicago spot truck prices increasing from East, Gulf coast ports. Spot truckload prices in the U.S., which climbed in December, are reaching new highs as 2022 begins, particularly in lanes related to U.S. seaports and border crossings. Freight volumes traveling inland from ports remain high, and truck capacity that was constricted over the holidays has not been released. This is causing concern among shippers who are prepared to embark on yearly contract negotiations with their trucking partners.

Stoughton expanding chassis manufacturing in Texas. Stoughton Trailers is establishing a chassis manufacturing line in Waco, Texas, as part of the company’s ambitious goal to boost production this year in order to solve a severe equipment shortage that is contributing to worldwide and domestic supply chain bottlenecks. The chassis and trailer maker currently has operations in Evansville and Stoughton, Wisconsin, but establishing a third facility is vital to growing yearly output from 10,000 to 25,000 chassis, according to the company’s November statement.

Rail

$231 million rail project will connect Port of Mobile to central Alabama. Alabama authorities revealed plans for a 280-mile rail project to improve transportation to and from the Port of Mobile, the state’s sole seaport. Norfolk Southern is contributing more than half of the project’s cost. The $231.6 million A-USA Corridor, according to state authorities, may help improve the nation’s supply chain while also drawing new manufacturing, warehousing, and distribution facilities to Alabama.

Other

New Jersey takes action to fight waterfront crime alone. New Jersey formally notified the Waterfront Commission of New York Harbor of its intention to resign from its decades-long collaboration with New York state to combat organized crime in maritime operations. New York now has 90 days to dispute the withdrawal, but previous court decisions indicate that it will be a difficult struggle. The commission was established about 70 years ago by an agreement between the two states to combat corruption and violence associated with port labor activities. It has recently attempted to enforce diversity in the dockside workforce. The break has no effect on the Port Authority of New York and New Jersey, which oversees the regional transportation network.

Toyota surpasses General Motors (GM) as best-selling automaker in U.S. In a shift driven partly by a global computer-chip shortage that has battered the automobile industry, Toyota overtook GM as the top-selling vehicle maker in the U.S. Toyota’s overall U.S. sales of 2.3 million increased by nearly 10% over 2020, while GM’s sales fell by 13% as a result of the semiconductor shortage, which impacted manufacturing and left dealer lots with low inventory. Toyota benefitted from its earlier decision to hoard computer chips, a departure from its reputation as a just-in-time manufacturer.

Graphic Packaging Holdings’ latest initiative to provide more sustainable packaging for consumer goods. A $600 million facility in Michigan will begin operations to convert recycled cardboard into paperboard, making it the first of its kind built in the U.S. in ages. The massive machine marks a significant new step by Graphic Packaging Holding to incorporate eco-friendly packaging into their supply chains. Graphic currently provides packaging to the nation’s largest food, beverage, and consumer-products firms, and the company claims that green investing has created a large market for replacing plastic with paper.

McDonald’s Forced to Ration French Fries in Japan, Convicted Truck Driver May Have Prison Term Reduced, and Preparing Your Business for 2022 Beijing Winter Olympics

By | COVID-19 Latest Updates | No Comments

Ocean  

Imports into the U.S. remain high, up 40% from pre-COVID 2019. As predicted, demand surges ahead of the Chinese New Year (CNY) on Feb. 1 causing rates to rise again. Capacity is full into CNY, with the space conditions to LAX being the worst due to port congestion, which caused vessel delays. Urgent shipments to LA-LB must deal with new carriers that only offer premium-high prices. Ref: HLS Transpacific Market Report Wk 52.

U.S. Government to digitize crew checks on ships bound for the U.S. After ten years of developing an automated system for screening crews embarking on commercial ships, the U.S. is now ready to go paperless. U.S. Customs and Border Protection is revising its regulations in an interim final rule to be published in the Federal Register, requiring vessel owners to submit Form I-418, known as the passenger/crew list, in electronic form rather than the present paper requirement. The new procedure is intended to streamline vessel arrivals and departures by removing unnecessary data given by vessel masters and agents and simplifying vessel inspections. The regulation will take effect 60 days after it is issued.

Evergreen prepares cranes following completion of LA port dredging. Evergreen Marine has purchased six new ship-to-shore cranes after completing a portion of a multi-year project that would allow its Port of Los Angeles marine terminal to accommodate two post-Panamax container ships at the same time and enhance terminal capacity by 30% over the next decade. The ocean carrier said in a regulatory filing with the Taiwan Stock Exchange on December 27 that its subsidiary Everport Terminal Services had entered into a $22.2 million leasing arrangement for the six container gantry cranes.

U.S. chassis supply remains weak as the new year approaches. According to U.S. chassis makers, it will take until the third quarter of 2022 for every chassis order placed in 2021 to be filled, keeping the U.S. container shipping industry in a vulnerable position during the first half, barring a dramatic slowdown in imports. As importers take longer to offload containers and transport companies struggle to return empty boxes, chassis are moving more slowly. When terminals refuse to take empty containers, the chassis beneath is therefore left in limbo. Furthermore, chassis producers in the U.S. have often been unable to retain enough workers to run production lines. Chassis makers are also experiencing difficulties in sourcing subcomponents like air tanks, axles, and suspension systems, causing the manufacturing cycle to take longer than expected.

Ports

Ports of Los Angeles and Long Beach postpone container dwell fee for the 8th time. The ports of Los Angeles and Long Beach have again delayed their “Container Dwell Fee,” this time until Jan. 3, 2022. After many delays, the fee was supposed to go into effect on Monday, Dec. 27. Since the fee was announced on Oct. 25, the two ports have reported a combined decrease of 41% in lingering cargo on the docks.

Tacoma port project aims to reduce congestion. At the Port of Tacoma, a new project to increase container storage capacity will hopefully help operations flow more smoothly. The port has received a $15.73 million grant from the Maritime Administration’s Port Infrastructure Development Program (PIDP) to help fund the building of increased container storage on a 24-acre site owned by the port. The off-dock location, which is anticipated to be finished by 2023, will free up essential on-dock space at surrounding ports.

Air

UPS to increase air and ground fuel surcharges. UPS Inc. will increase the fuel surcharges it assesses on the majority of its air and ground delivery customers. Surcharge levels on domestic air and ground services, including transborder shipments, will climb between 8% and 10% beginning Jan. 3, according to projections by consultant TransImpact LLC based on information provided on UPS’ website. According to the website notification, surcharges for international air transport will also rise.

Trucking

Price of diesel falls once again. The national average price for a gallon of diesel continues to drop as 2021 comes to an end, falling further 1.1 cents in the Energy Information Administration’s (EIA) weekly report.  Trucking’s major fuel finished the year at $3.615 per gallon, marking the sixth consecutive weekly fall. The EIA recorded the national average as $2.64 per gallon in its first report of 2021. Diesel prices fell in nine of the ten locations examined. Only California witnessed a rise, with prices increasing by 0.3 cents to $4.771 a gallon. The Rocky Mountain area had the greatest decline, 2.7 cents, with a gallon currently costing $3.704.

Used class 8 vehicle prices increase. According to ACT Research, the average retail price of a used Class 8 vehicle in Nov. increased 11.8% over the previous month’s record and increased 67.8% over a year ago. The November average retail price set a new high of $80,769. The average retail price for a Class 8 was $72,204 a month ago. According to ACT, it was $48,118 a year ago. 

Convicted truck driver may have prison term reduced. A court has scheduled a hearing on Jan. 13 to examine Rogel Aguilera-110-year Mederos’s sentence for his role in a 2019 accident in Colorado that killed four people. The resentencing hearing was scheduled at the request of the prosecution in the case, who stated that their office will suggest a term of 20 to 30 years. Aguilera-Mederos was sentenced to 110 years in prison after being convicted in October of four counts of vehicular murder and 23 additional offenses. The punishment has sparked widespread outrage, with almost 5 million people signing a Change.org petition urging Colorado Gov. Jared Polis to commute Aguilera-Mederos’ sentence or grant clemency. Kim Kardashian, a celebrity and criminal justice reform activist, recently tweeted about the Aguilera-Mederos case, urging Polis to intercede.

Rail

Canadian railway (CN) partnership with Google Cloud paves the way for technology innovation. CN announced a seven-year agreement with Google Cloud aimed at advancing their technology initiatives into what CN refers to as “digital scheduled railroading” (DSR), or the next level beyond precision planned railroading. According to CN (NYSE: CNI), DSR will update the railway’s technological infrastructure in the cloud and give consumers more access throughout the supply chain. According to a Dec. 14 press release, CN will collaborate with Google Cloud to create an intuitive digital platform driven by Google Cloud’s AI and machine learning technologies to provide clients with more visibility for service planning, shipping, tracking, and payment. CN will also attempt to migrate the majority of its digital infrastructure to Google Cloud to “scale with customer and industry expectations.”

Other

Despite bottlenecks and Omicron variant, holiday sales up 8.5%. According to one spending indicator, holiday sales increased at the quickest rate in 17 years, despite buyers grappling with increasing costs, product shortages, and a raging new COVID-19 variant in the final few weeks of the season. Mastercard SpendingPulse, which measures all types of payments such as cash and debit cards, said on Dec. 26 that Christmas sales were up 8.5% over the previous year. According to Mastercard SpendingPulse, an 8.8% rise was forecasted. The findings, which covered the period from Nov. 1 to Dec. 24, were driven by purchases of apparel and jewelry. Holiday sales increased 10.7% over the pre-pandemic 2019 holiday season.

McDonald’s forced to ration french fries due to supply shortage in Japan. After floods at a Vancouver port and the coronavirus pandemic cut off supplies of one of its core offerings, McDonald’s in Japan will only provide small-sized french fries to customers. While the fast-food business is working with suppliers and importers to find alternate flights, it will only sell the small size until Dec. 30. The medium and large-size options were removed from the menu in hopes that as many customers as possible will continue to have access to french fries.  McDonald’s believes that supply concerns affecting its 2,900 Japanese locations will be fixed by New Year’s Eve and that the change will not affect their hash brown offerings. To reflect the smaller portion, customers will receive a 50 yen (44 cents) discount on set foods.

Is your business ready for the 2022 Winter Olympic Games and Chinese New Year? Although the Chinese New Year (CNY) is China’s most significant public holiday, another event that may have an impact on your business is the 2022 Winter Olympic Games. Set to be hosted in Beijing, Yanqing, and Zhangjiakou, China, the Chinese government has announced that all heavy industrial companies in northern China will be closed from Jan. 1 to Mar. 8, 2022. Contact one of our Logistics Experts to understand how you can be well-prepared to prevent supply chain interruptions during forthcoming Chinese holidays and festivities.

USDOT Commits $241 Million to Ports, Sun Country Pilots Approve Four-Year Labor Agreement With Amazon, Kardashian Supports Truck Driver Convicted to 110 Years for Colorado Tragedy

By | COVID-19 Latest Updates | No Comments

Ocean  

Detention and demurrage reform gains traction in Congress. Congress is pressing forward on forcing container lines and marine ports to verify storage rates that fulfill U.S. shipping law requirements, according to legislation passed by the House on Dec. 8 and soon to be addressed by the Senate.

Ports

U.S. Department of Transportation (USDOT) commits $241 million to ports to help improve supply chain. Transportation Secretary Pete Buttigieg is awarding more than $241 million in grants to strengthen U.S. ports as part of the Biden administration’s near-term goal to repair America’s snarled supply chain through infrastructure improvements to quicken the flow of commodities. The transportation funds are being made available to 25 projects in 19 states right now. Under President Joe Biden’s new infrastructure law, the amount of money available for port upgrades would nearly double to $450 million in grants each year for five years beginning next year.

New Louisiana port aims to move freight to the Midwest. A new port under development on the Mississippi River intends to draw ships coming through the Panama Canal by shifting cargo from huge boats onto smaller, faster ships that can reach other upriver ports in the south and Midwest in less than a week. The Louisiana Gateway Project, also known as the Plaquemines Port Harbor and Terminal District, is located on 5,500 acres 20 miles south of the Port of New Orleans and 50 nautical miles from the Gulf of Mexico. The site is expected to be fully functioning on a small scale by the spring of 2024, with plans for expansion over the next seven to ten years.

Georgia port employs the pop-up model to relieve supply chain congestion. The Port of Savannah, one of the busiest in the country, is trying a new pop-up container yard concept to help reduce the backlog of cargo that has been piling up for months. Cargo ships waited 12 days to offload at the Port of Savannah in October – three times as long as in 2019. To assist, the port created four in-land pop-up ports, one of which is hundreds of miles inland near the North Carolina border. The number of cargo containers waiting is now approaching seven.

LA-LB ports postpone container dwell fee until Dec. 27. The ports of Los Angeles and Long Beach have again delayed their Container Dwell Fee, this time until Dec. 27. After many postponements, the fee was supposed to go into effect on Monday, Dec. 20. Since the penalty was announced on Oct. 25, the two ports have reported a combined 46% decrease in old cargo on the docks. Following another week of monitoring data, the executive directors of both ports are expected to reassess fee enforcement.

NY-NJ vessel backlog increasing due to increased ship calls. An increasing number of larger container ships have arrived at the Ports of New York and New Jersey, causing more vessels to remain at anchor as berth space fills up to offload the larger ships. The backlog of boats calling at the biggest U.S. East Coast port by volume is the consequence of a 20% increase in imports through October and efforts to seek ports that are not experiencing congestion. The Port Authority of New York and New Jersey (PANYNJ) reported eight container ships anchored as of Wednesday, up from five on Monday.

Air

Emirates SkyCargo reaches a vaccine milestone. Emirates SkyCargo has made a significant contribution to the global distribution of COVID-19 vaccinations. Since October 2020, almost 2800 tonnes of vaccinations have been delivered aboard Emirates aircrafts, equivalent to nearly 600 million doses. With the increased roll-out of vaccination and booster programs across worldwide markets, Emirates SkyCargo saw a steady increase in demand for COVID-19 vaccine transportation in the second half of 2021.

Shippers attempting to avoid bottlenecks are being delayed at the airport. An increase in freight planes and labor shortages at air-cargo hubs such as Chicago O’Hare International Airport has impacted operations for ground-handling businesses that unload aircrafts, resulting in cargo piling up. Airlines, handlers, and freight companies have stated that they are striving to improve loading and security procedures by using warehouse robots and trained sniffer dogs.

UPS orders more Boeing 767 freighters. UPS has placed an order with Boeing for 19 medium widebody 767-300 freighters in response to high persistent air cargo demand, particularly for e-commerce shipments. The new aircrafts will be delivered between 2023 and 2025, and according to aircraft appraiser Avitas, have a combined base value of $1.5 billion.

Air freight capacity increases while prices remain high. Air cargo capacity returned to 2019 levels at the end of November, but strong demand and congestion have pushed up transpacific rates. According to data from Accenture’s Seabury Consulting, air cargo capacity in the last two weeks of November was 5% lower compared with the same period in 2019, but 2% higher than at the beginning of the month. This contrasts with a 9% year-on-year decrease in capacity six months ago and a 20% decrease a year ago.

Sun Country pilots approve four-year labor agreement with Amazon. Sun Country Airlines pilots have accepted a new four-year contract with Amazon, per the organization that represents them. According to the Air Line Pilots Association, 93% of eligible pilots voted to approve the deal, which aligns their pay rates, retirement contributions, commuter policies, and work restrictions with those of industry peers.

Flights grounded due to omicron surge. Major airlines have canceled flights around the world as an increase of omicron cases disrupt Christmas travel. On Christmas Eve, United Airlines canceled nearly 150 flights, citing staffing issues for flight crews and ground workers. Delta Airlines canceled roughly 90 flights, citing a variety of concerns, while Flight Aware reported that over 1,900 flights had been canceled internationally. The cancellations come at one of the busiest seasons for travel

Trucking

Kardashian expresses support for truck driver convicted to 110 years for Colorado tragedy. Kim Kardashian, a celebrity and criminal justice reform activist, has joined the public uproar over a 110-year sentence handed down to a truck driver convicted in a fatal Colorado incident in 2019. This comes four days after a prosecutor who assisted in the conviction requested that the judge review the sentence. Alexis King, a deputy district attorney in Jefferson County, Colorado, submitted a request for a hearing on Friday. More than 4.5 million people have signed a Change.org petition demanding Polis to award Aguilera-Mederos clemency.

Diesel falls for the fifth time in a row. According to the Energy Information Administration (EIA), the national average price of diesel fell 2.3 cents to $3.626 a gallon for the fifth time in a row. Since hitting a 2021 high of $3.734 on Nov. 15, the price of a gallon of fuel has dropped 10.8 cents. The major fuel used by trucks now costs $1.007 more than it did this time last year.

Rail

Landslides in British Columbia impact rail service. Maersk’s most recent customer advisory gives an update on the situation in Western Canada in light of the substantial rainfall that has resulted in landslides. Rail services into and out of the Port of Vancouver have been restored, although gradually.

Other

Supreme Court will hold a special session to discuss vaccine mandates. On Jan. 7, the Supreme Court will hear arguments in the cases of two Biden administration measures pertaining to vaccine mandates for millions of workers. Workers at larger organizations must get vaccinated or wear face masks and be checked weekly under the plan. The regulation might affect 84 million American employees.

Churchill borough council approves development of Amazon distribution facility. After months of hearings and hours of public debate, Churchill’s seven-member borough council approved Texas-based Hillwood Development Co.’s plan to develop a 2.6-million-square-foot Amazon distribution and logistics facility at the abandoned Westinghouse Research and Technology Park in Churchill.

​​Target sales jump during the holiday season. According to Bloomberg Second Measure, which analyzes anonymized U.S. consumer transactions to calculate revenue, Target improved sales by around 10% in November. The big-box retailer’s gains more than doubled those of leading competitors Walmart and Amazon. 

Nike‘s supply shortage suppresses growth once more. Nike Inc.’s sales continue to suffer as a result of global supply-chain constraints. For the second quarter in a row, the sneaker giant said that its growth was stifled by a halt in manufacturing and distribution of its merchandise throughout the world. Nike reported revenue of $11.4 billion in the fiscal quarter ending Nov. 30, up 1% from the same time last year. Analysts predicted $11.2 billion in sales.

What can you do as we head into 2022? The last year has demonstrated that supply chains must be responsive and adaptable in order to deal with market volatility and unforeseen outside impacts. Contact one of our experts to learn how we can help you get ahead and prepare for the unexpected.

Container Imports Drop in Ports of LA and LB, FedEx Completes Major Expansion at Miami International Airport, Truck Driver Found Guilty Sentenced to 110 Years

By | COVID-19 Latest Updates | No Comments

Ocean  

USDOT announces maritime grants in response to supply chain needs. To help relieve freight bottlenecks across the country, the U.S. Department of Transportation announced a series of grants for commercial maritime operations and freight hubs along key supply chain segments. As part of the America’s Marine Highway Program, the Maritime Administration (MARAD) granted roughly $13 million in funding to nine projects.

Crew reportedly kidnapped in the Gulf of Guinea. Following what appeared to be a slowdown in cargo ship attacks in the Gulf of Guinea with the increased international presence in the region, a recent kidnapping was reported in the same vicinity as prior attacks in the region of Equatorial Guinea. While facts are limited at the time, security experts Dryad International reports that six crew members are suspected to have been taken in an area where another vessel was involved in another kidnapping incident in late October. As a result, MDAT-GoG issued a warning about “an enhanced high risk of pirate activities.”

Heavy drinking suspected as ship capsizes in Baltic Sea collision. Swedish and Danish officials launched a search and rescue effort after two general cargo ships collided and one capsized in the Baltic south of Sweden. One crew member from a Danish vessel perished, and another was missing, while Swedish investigators claimed they were looking into suspicions of gross negligence and drunkenness among the crew on the British vessel.

Nine people killed and two missing after freighter sinks in Bohai Sea. A Chinese ship with 14 crew members went down off the coast of Yantai, Shandong Province. The ship Tian Feng 369 was traveling in the Bohai Sea around 30 nm northeast of Yantai in the early hours of Sunday morning. The Beihai Rescue Bureau of China’s Ministry of Transport got notification of the ship’s distress and sent a helicopter and a search and rescue vessel to the area to help; however, by the time they arrived, the vessel had gone down and the crew had scattered in freezing water. A daylong search operation in gusty winds resulted in the rescue of three survivors. Two additional crew members are still missing.

Ports

Oakland Port imports rebound in November. Despite the supply chain disruption, container traffic at the Port of Oakland is starting to pick up again. Cargo imports handled by the Port of Oakland grew 6.5% in November from the previous year, the hub stated in an emailed statement on Dec. 15. Meanwhile, export volumes fell 9.4% due to a backlog of ships traveling to overseas markets, according to the port.

Container imports drop in ports of Los Angeles and Long Beach. Import flows at the ports of Los Angeles and Long Beach are dropping, despite a mounting ship backlog. Container imports at the busiest U.S. port plummeted 9.6% last month and were down 10.1% from October. This was the port complex’s third consecutive yearly fall, and the greatest dip since May 2020, when pandemic-related shutdowns shattered global trade. The decline happened despite the fact that the backlog of ships waiting for berths reached a new high of 101 vessels this week, with the flotilla now extending out to sea under new queuing regulations.

Air

Singapore Airlines selects Airbus freighters for cargo fleet renewal. Singapore Airlines Ltd. has signed a letter of intent with Airbus SE to purchase seven A350 freighters, with an option to purchase five more, as the airline eliminates its aged cargo fleet. Singapore Airlines stated in a statement that delivery of the planes will begin in the fourth quarter of 2025, but did not specify a price.

Importers shifting to air to bypass ocean backlogs encountering disruptions. With supplies low and ocean shipping backlogs delaying imports for weeks or even months, many U.S. importers are switching from ocean to air. Normally, it would be a successful, if costly, method; however, as the COVID-19 epidemic continues, it has worsened some of the exact issues shippers were attempting to avoid: capacity restrictions, bottlenecks, and delayed delivery. Airline companies are doing everything they can to preserve or increase capacity.

Trucking

White House will reveal plan to recruit truck drivers. In collaboration with industry experts, the Biden administration is establishing a multimodal plan to strengthen trucker recruiting efforts through various avenues. The Biden-Harris Trucking Action Plan highlights, among other things, apprenticeship programs like the one included in the $1 trillion infrastructure plan passed by Congress in November, as well as increased attempts to attract military veterans for trucking jobs. Transportation Secretary Pete Buttigieg and Labor Secretary Marty Walsh have scheduled a meeting with transportation stakeholders at the White House on Dec. 16 to discuss the plan’s details.

Cummins (NYSE: CMI) recalling X12 diesel engines due to fire hazard. Cummins Inc. is recalling roughly 11,000 X12 diesel engines sold to 25 off-road and specialty equipment manufacturers due to a high-pressure gasoline leak caused by a damaged fuel tube, which resulted in a vehicle fire and dozens of warranty claims. The recall applies to all engines equipped with a certain injector fuel delivery tube that might break, resulting in a high-pressure fuel spill. According to Cummins, the problem is likely to affect only 1% of the 10,938 engines recalled.

Truck driver found guilty in fatal Colorado incident sentenced to 110 years. Rogel Lazaro Aguilera-Mederos, of Houston, was sentenced to 110 years in a Jefferson County, Colorado, courtroom by Judge A. Bruce Jones, who ordered him to consecutively serve the minimum term on all 27 charges. Aguilera-Mederos insisted there was nothing he could do once the breaks went out on the truck coming out of the Rocky Mountains, resulting in a catastrophic 28-vehicle pileup that killed four people and injured six others.

Rail

Canadian Pacific (CP) and Kansas City Southern (KCS) awaiting government clearance of recently completed merger. CP has officially closed its acquisition of KCS, and both companies are now awaiting Surface Transportation Board approval of their merger. The deal is estimated to be valued at around US$31 billion. For each share of KCS common stock held, KCS investors will get 2.884 CP common shares and US$90 in cash, and US$37.50 in cash for each share of KCS preferred stock kept.

Other

Three-judge panel will rule on Vaccine Mandate appeal for Private Employers. The U.S. 6th Circuit Court of Appeals in Cincinnati announced that a three-judge panel, instead of the entire court, will rule on a challenge to President Joe Biden’s mandate that all private employers with at least 100 employees be vaccinated against COVID-19 or wear masks and undergo weekly tests.

FedEx Express completes significant expansion at Miami International Airport. FedEx Express has completed a $72.2 million expansion of its air cargo hub at Miami International Airport, providing increased capacity and capabilities to e-commerce and perishables shippers doing business in the Americas and Caribbean. The project expands the primary sort facility by more than 138,000 square feet, bringing it to a total of more than 282,000 square feet. 

Governor Hogan launches a supply chain resilience initiative. Gov. Larry Hogan unveiled a new program in Maryland targeted at tackling supply chain concerns in manufacturing. The new initiative is being launched by the Maryland Department of Commerce in collaboration with the Maryland Manufacturing Extension Partnership. This program will provide Maryland firms the opportunity to learn and share best practices for strengthening their supply chains. It will also assist manufacturers in navigating the current supply chain crisis, improving outcomes, and lowering risk. It will make it easier for manufacturers to interact with local suppliers, consumers, and partners.

As companies strive to improve their operations from lessons learned during the pandemic, resilience has become the keyword for supply chains. Companies and governments are reinforcing their supply chains with digital technologies such as Navegate to increase their ability to withstand future shocks. Contact a Navegate expert to learn how our agile, digital solutions can help strengthen your supply chain.

96 Cargo Ships Waiting to Berth at SoCal Ports, U.S. Senate Rejects Mandatory Vaccination for Private Employers, Apple’s Nightmare Before Christmas.

By | COVID-19 Latest Updates | No Comments

Ocean  

Ocean Shipping Reform bill passed by the House. The Ocean Shipping Reform Act of 2021 (OSRA) was approved by the U.S. House of Representatives by a vote of 364 to 60. The bill now advances to the U.S. Senate, where legislators are working on a counterpart bill that they hope to propose soon. The bill grants the Federal Maritime Commission (FMC) the authority to set minimum conditions on ocean carrier service contracts and moves the burden of evidence in regulatory proceedings from shippers to container lines. It also makes reciprocal commerce a part of the FMC’s purpose.

96 cargo ships waiting to berth at SoCal ports. On Friday, there were 40 cargo ships waiting for berths within 40 miles of the ports of Los Angeles and Long Beach. However, there were 56 container ships waiting further out at sea, bringing the total to an all-time high of 96, according to the Marine Exchange of Southern California. In addition to the 96 ships waiting offshore on Friday, there were 31 container ships at terminal berths, bringing the total to 127, which is at or near an all-time high. The overall number of container ships at ports or waiting offshore continues to rise: it is up 25% from the beginning of November, 41% from the beginning of October, and 79% from the beginning of September.

Abandoned exporters scramble for space prompting more ad hoc charters. Asian exporters who have been “abandoned” by Maersk are seeking arrangements with competing carriers, sparking a new round of ad hoc charters to North European ports for next month. Maersk’s “strategic change” of its ocean business, announced earlier this year, has resulted in many smaller forwarders and NVOCCs discovering that the carrier will no longer accept their reservations – other than through the Maersk Spot platform – after 1 January. However, with short-term freight rates still high and demand strong ahead of the Chinese New Year (CNY) in the first week of February, operators are scrambling to locate more loaders. Yet, there are no open containerships available.

Amazon makes its own shipping containers and only waits two days outside of ports. Since 2018, Amazon has begun manufacturing its own shipping containers and chartering its own private ships to bypass supply chain bottlenecks. Amazon now uses its own transportation network for 72% of its shipments. Amazon’s technique allows it to avoid port delays of up to two months. While the majority of merchants have been forced to wait months for items that have become stranded at sea, Amazon has been able to transport goods into ports in as little as two days.

Customs

Update on Rep. Blumenauer’s Effort to Reduce De Minimis Amount. On December 2, the House Ways and Means Trade Subcommittee conducted a hearing on China trade policy, during which Trade Subcommittee Chair Earl Blumenauer (D-OR) recommended that Chinese corporations utilize de minimis to avoid U.S. trade regulations. Visit the National Customs Brokers & Forwarders Association of America, Inc. (NCBFAA) website for more info.

Ports

12.1 million containers left U.S. ports empty. MarketWatch analyzed data from the country’s nine main ports and found that from January to October, the equivalent of 12.1 million containers had left the country’s largest ports empty, up 46.2% from 2020 and 37.8% from 2019. The number of empty export containers contrasts sharply with the 20.6 million full container TEUs that have arrived at the nine busiest U.S. ports this year, an increase of 22% over last year.

Port of Charleston sets a new all-time cargo record. South Carolina Ports, including the Port of Charleston, has released its monthly cargo data for November, revealing that the port established a new all-time high for the number of containers handled in a single month. SC Ports handled 250,711 TEUs in November at Wando Welch Terminal, North Charleston Terminal, and Hugh K. Leatherman Terminal, a 21% increase year over year. This puts the company’s fiscal year-to-date total to 1.17 million TEUs since July 1, up roughly 17% from the same period last year.

Ports of LA-LB Congestion excess dwell fee delayed again. The ports of Los Angeles and Long Beach have announced a suspension of their “Container Dwell Fee” until Dec. 6. The charge was initially scheduled to go into effect on Monday, Nov. 29. Since the price was announced on Oct. 25, the two ports have reported a combined 37% decrease in aged cargo on the docks. Following another week of monitoring data, the executive directors of both ports are expected to review fee implementation. Not sure when or how the excess dwell fee will impact your business? Contact one of our experts for help and guidance.

Air

No relief in sight from rising air freight charges. According to experts and analysts, shippers anticipating a reduction in air freight prices early next year could be disappointed. A variety of issues, including the Omicron variant and its anticipated influence on belly capacity and lockdowns, increased spending on commodities rather than services, and labor scarcity, might all contribute to prices remaining high.

CMA CGM’s air freight network continues to grow. CMA CGM Air Cargo, which was recently launched, has expanded its cargo network with the inclusion of three additional destinations. The airline has added Dubai, Beirut, and Istanbul to its current routes from Liège to Chicago, New York, and Atlanta. The service between Liege and Dubai will start on May 19, and the A330F capacity supplier intends to transport freight from Africa and Asia to and from Europe. Flights between Liege and Istanbul and Beirut will start in the coming weeks.

Omicron will limit freight capacity while keeping rates high. The Omicron variant is expected to keep air cargo capacity tight, resulting in higher air freight rates. According to investment bank Stifel senior analyst Bruce Chan in the most recent Baltic Exchange market report, the new variation would limit network capacity owing to safety controls, episodic infection, and national reaction.

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

Trucking

Knight-Swift Transportation expands with $150 million acquisition. Knight-Swift Transportation, located in Phoenix, is one of the largest trucking businesses in the U.S., and has announced the acquisition of Midwest Motor Express. This is the company’s second major less-than-truckload (LTL) acquisition in 2021.

CBP and CBSA updated joint emergency protocols in response to flood situation in Canada. Due to severe weather conditions in British Columbia, Canada, which have caused flooding, landslides, road closures, and other supply chain disruptions, Canadian domestic truck carriers may need to travel through the U.S. to reach destinations in Canada. Any Canadian carriers that now operate between the U.S. and Canada, as well as domestically, are recommended to implement standard transit practices. This will expedite crossing and reduce border delays caused by these temporary procedures.

Rail

Rail freight rising due to HGV driver shortage. Due to a lack of HGV drivers, more firms are turning to rail freight, while current customers are increasing their needs. Railfreight operators have increased their resources in response. GB Railfreight, which launched a new training facility in Peterborough in April, claimed it runs 400 trains every day and has taught 70 new drivers in the last year.

Can rail transportation put an end to consumers’ long freight waits? While the COVID-19 outbreak has exacerbated supply chain challenges for international shipping and increased the cost of air cargo, rail freight has remained relatively trouble-free. The majority of rail cargo from Asia to Europe are car components, fashion items, healthcare supplies, and technology. The trade channels from Asia have been dubbed The New Silk Road, and a gathering of industry executives is being held in Amsterdam to discuss them.

Landslides in British Columbia Have an Impact on Service. Maersk’s most recent customer advisory gives an update on the situation in Western Canada in light of the substantial rainfall that has resulted in landslides. Rail services into and out of the Port of Vancouver have been restored, although gradually. 

Other

Senate rejects mandatory vaccination for private employers. The Senate narrowly approved a resolution Dec. 8 to overturn the Biden administration’s rule that companies with 100 or more employees get their staff vaccinated against the coronavirus or submit to weekly testing. The result was 52-48 in favor. 

China establishes China Logistics Group. China formally formed a new state-owned logistics enterprise, according to state broadcaster CCTV, in order to reinforce domestic and global supply networks in the wake of the pandemic’s severe disruptions. CCTV said that the new business was founded by the combination of China Railway Materials 000927.SZ, China National Materials Storage and Transportation Group, Huamao International Freight Limited Company Shenzhen Branch, China Logistics, and China National Packaging Corporation.

T.J. Maxx and Off-Price Retailers are set to dominate in 2022. According to Census Bureau data, clothes and accessory retailers in the United States made over 11% more money through October than in 2019. That is a significant increase for an industry that grew by less than 1% in 2019. Retailers were also able to increase profits since a shortage of inventory allowed them to avoid discounts. Year to date, the S&P 500 subindex of clothing businesses has outperformed two of the three off-price retail heavyweights.

Apple’s nightmare before Christmas. It’s being reported that iPhone and iPad assembly was suspended for several days for the first time in more than a decade due to supply chain difficulties and limits on power consumption in China. Apple is falling millions of units short of its manufacturing targets after unveiling the iPhone 13 and new iPads in September, costing the company billions of dollars in sales. It is now too late for consumers in many countries to purchase some Apple items in time to present as holiday gifts.

Amazon fined $1.3 billion in an antitrust case in Italy. Amazon.com Inc. was fined $1.3 billion by Italy’s antitrust authority for undermining competitors by favoring third-party sellers that use the company’s logistics services. According to the regulator, Amazon rewarded sellers in Italy who paid it to utilize its warehousing and distribution services, including making them more likely to show as the default choice, or “Buy Box,” when consumers clicked to buy a product.

Nordstrom pack and holds inventory to reduce supply chain risk. Nordstrom is boosting its usage of pack and hold inventory at its Rack subsidiary “by a factor of two to three times” since it expects global supply chain problems to continue until 2022, according to CEO Erik Nordstrom during the company’s third-quarter earnings call. Nordstrom Rack will acquire higher quantities of relevant products while they are available and reserve a part of them for deployment “in moments of strong demand, restricted supply, or system bottlenecks,” according to Nordstrom.

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

By | COVID-19 Latest Updates | No Comments

Ocean  

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

Ports

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

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

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

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

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

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

Air

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

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

Trucking

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

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

Rail

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

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

Other

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

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

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

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

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

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

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

By | COVID-19 Latest Updates | No Comments

Ocean  

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

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

Ports

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

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

Air

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

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

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

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

Trucking

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

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

Rail

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

Other

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

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

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

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

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

Get Moving. Forward. Faster.

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