Trans-pacific rates and cargo rollovers continue to climb, with capacity constraints at Asian hubs also continuing. Spot rates from Asia to the United States have increased by up to 15%, and shippers will have to continue paying higher prices to secure space and equipment. These spiking rates are causing increased cargo rollovers, serving as a sobering reminder that under-capacity and volatility are new normals of the industry.
Meanwhile, Asian ports continue to be tight on capacity and equipment, with space being full until mid or late June. If you have any questions regarding these issues, don’t hesitate to reach out to one of our experts.
More countries and ports impose restrictions on Indian seafarers. As COVID-19 cases continue to rise in India, vessels from India are being denied entry into nearby countries, affecting shipping schedules and disrupting global supply chains. The spread of the virus has prompted the government to curb the use of oxygen for non-medical uses, so the supply of empty containers to India could be impacted. Our Navegate team will continue to stay updated on the situation in India and how it may affect supply chains.
U.S. Department of Commerce rules that an anti-dumping duty on Chinese-made marine and domestic chassis will remain unchanged. The Commerce Department determined that China Intermodal Marine Containers (CIMC), the world’s largest chassis manufacturer, illegally dumped chassis to artificially lower prices. These findings will be reviewed by the International Trade Commission (ITC), and if the commission finds “material injury” then chassis costs may triple what they were three years ago. This decision will have implications on cargo and trucking owners who depend on chassis to keep goods flowing. More information on the case can be found in an article by JOC.com.
USTR Katherine Tai appears in back-to-back hearings with Congress. On May 12-13, Tai testified in Congress highlighting the Biden Administration’s Trade Policy Agenda. She highlighted the administration’s goals for closing racial inequities and combating climate change but did not spend much time talking about new trade agreements, indicating that this area isn’t a focus of the administration. Tai is also reviewing the China tariff policies and is only having discussions with trading partners related to the Section 232 tariffs on aluminum and steel, not the Section 301 tariffs.
The Port of Los Angeles makes a dent in backlogs. According to the Port of LA’s Executive Director, all key performance indicators are pointing in the right direction in Southern California. Terminal operators are further clearing out the backlog that was built last fall with reduced dwell times.
Air carriers CMA CGM and DHL expand air routes and destinations. CMA CGM’s new air cargo division announced that it will be expanding destinations into the Middle East in the next several weeks. The division will add destinations in Beirut, Istanbul, and Dubai, adding air freight capacity to an already congested network.
DHL Express has announced that it will replace its Hong Kong Ho Chi Minh City-Penang route with a direct flight from Hong Kong to Penang, Malaysia five times a week. This new route will add cargo capacity and shorten transit times to accommodate the increased shipment volumes.
Air cargo surcharges increase. Due to a rise in parcel demand and less reliable container shipping services, as well as retailers vying to replenish depleted inventories, FedEx Express and UPS are increasing air cargo peak surcharges on the Asia-US trade route. These carriers expect that pricing will be elevated for at least the next year; the air cargo rates are still far above pre-pandemic levels due to ongoing increased demand.
The Southeast recovers from fuel shortages due to the Colonial Pipeline outage. Shippers in the Southeast may still face days of disruptions to trucking services, with the potential for missed deliveries and pickups. The Colonial Pipeline outage caused a shortage of gasoline, which tightened the already limited capacity of the trucking industry. Spot prices will most likely increase as fuel shortages persist and shippers find difficulty securing trucking space.
Kansas City Southern (KCS) declares Canadian Railway (CN) proposal superior. Upon reviewing a revised acquisition proposal from CN, KCS has decided that CN’s proposal was better than Canadian Pacific’s (CP) original proposal. CP has no plans to counterbid CN’s offer, and KCS has notified CP with its intentions to terminate the agreement. The merger will create the first railroad with operations in Canada, the U.S., and Mexico.
There were train derailments in Iowa and Minnesota this week. A 47-car pile-up occurred in Sibley, Iowa. The train derailed on a Union Pacific railroad and released ammonium nitrate, causing an evacuation within a five-mile radius. The railroad is working with authorities through an investigation.
In Albert Lea, Minnesota, another Union Pacific train derailed. The train was carrying mixed commodities, but leaked hydrochloric acid, and prompted a shelter-in-place order for the area. There were no injuries in either of the incidents, but if you have goods moving through the area, delays may be expected.
A major bridge in Memphis is indefinitely closed and causes supply chain disruptions. The Hernando de Soto Bridge on Interstate 40 in Memphis, Tennessee closed down and halted traffic last week after inspectors discovered a crack in the bridge. The interstate connects Tennessee and Arkansas and is above a waterway that allows crops to be transported to export markets. It could take up to a couple of weeks for a full inspection of the bridge, so if you have goods moving through the area, delays may be likely.
Stay updated on logistics and supply chain trends for the rest of 2021. As mid-year approaches, our Navegate experts identified key supply chain trends to watch for the rest of 2021. From continued capacity constraints to ongoing industry disruptions, learn how to manage and respond in our latest blog and how we can help.