Ocean carrier space is getting worse across the board. For most places out of China, space will be full until the end of December, and it appears that this congestion will continue until the Chinese New Year and well into January. Many shipments are facing 3-4 weeks rolling of carriers, and equipment shortages are also increasing. Because of these shortages, it is recommended to move along with any shipment size that is available. If you need help navigating these challenges, don’t hesitate to reach out to one of our Freight Experts.
Vietnam 301 tariffs might come in January. Under a new timeline of the Trump administration’s 301 investigations on Vietnamese imports related to currency valuation and illegal timber sourcing, new tariffs, quotas, or other restrictions on Vietnamese imports could be imposed as early as January 2021. Hearings regarding these tariffs will be held on December 28th (timber) and December 29th (currency) with requests to appear at either hearing are due by December 10th. Post-hearing rebuttal comments will be due by January 6th (timber) and January 7th (currency). While this timeline is just a few weeks before the inauguration of President-elect Joe Biden, it is still likely that the Trump administration will impose these restrictions. Importers of wood products from Vietnam will most likely be affected, and it is recommended that those who will be affected by these tariffs make their voices heard at the upcoming hearings.
Southern California warehouses are tight, nearing capacity. The ports of Los Angeles expect to see a 41% increase in volume this week, compared to the same week this time last year in 2019. Congestion at the port continues, as well, with terminal dwell times doubled to five days, warehouse space doubled to about seven days, and truck turn times increasing. For greater efficiency at the port, the port staff plans to propose to the Los Angeles Board of Harbor Commissioners a monetary incentive for dual transactions, ensuring that trucks enter the gates with a container and leave with one.
The U.S. Federal Maritime Commission (FMC) will launch a formal investigation into ocean carriers’ operational issues that are believed to cause the increasing congestion at ports on the U.S. West and East Coasts. The FMC will investigate practices by ocean carriers to ease the congestion at the ports of Los Angeles and Long Beach and New York and New Jersey. The FMC cited three main issues causing congestion at the ports: detention and demurrage practices, empty container returns, and “the refusal by some lines to carry US exports as they expedite the return of empty containers to Asia to be refilled with higher-paying import cargoes.”
Air freight rates remain stable but still high. With ocean capacity remaining tight for the next several weeks and months, air freight rates are as high as they were when the COVID-19 pandemic first started in March and April and are remaining that way for the foreseeable future. There is limited air transportation service out of China, Hong Kong, and Indonesia, while air service is delayed out of the Philippines due to a typhoon, so delays are expected.
Christmas tree season continues, so trucking capacity is expected to remain tight. Capacity will worsen in Christmas tree producing areas such as Wisconsin, Michigan, Pennsylvania, Maine, Oregon, Washington, Montana, and northern California. As people continue to order trees throughout the holiday season, these trucking shortages are likely to continue until after Christmas.