COVID-19 Latest Updates

Ocean Capacity Constrained at Asian Hubs, U.S. Customs Enforcing Harsher Reviews, Air Freight Rates Soar

By October 22, 2020 No Comments

Ocean 

Ocean freight space is incredibly tight, especially at core Asian hubs. To combat delays, major carriers like Maersk and CMA CGM are adding extra sailings for the U.S. East Coast in the next few weeks. With most lines still sailing well below normal capacity,  bookings out of the majority of Asia are hard to come by—space out of India is nearly booked out through the end of the year. These capacity crunches and associated delays are largely a result of carriers booking space well beyond capacity, leaving them with a backlog of rolled shipments to move. Most routes are at capacity through the end of November, so prepare to book at least 4 weeks out for any upcoming shipments and brace for any already-booked shipments to be rolled. 

As a result of constrained capacity, ocean freight rates are projected to remain high, but steady through the end of the month. With Chinese agencies working hard to keep rates stable, no general rate increases (GRIs) are anticipated in the coming weeks.

Customs

More Section 301 investigations have been opened, alleging illegal timber sourcing in Vietnam and suspicions of currency fixing. Specific rates and HTS numbers are still unknown, which could amount to tariff rates of 200% or more. Comments on the investigations are open until November 12th. 

Some commodities are being shifted onto Section 301 tariff lists. These changes may impact a wide variety of imports that haven’t previously been subject to any duty and are being moved with minimal notice. 

U.S. Customs has recently been enforcing harsher reviews in many areas, leading to an increase in the frequency of exams across the board. Work with your supply chain partners to ensure proper documentation and markings—from HTS codes to origin. If you need help with avoiding delays at customs, don’t hesitate to contact one of our Customs Experts

Ports

A new breakbulk terminal in New Orleans began operations at the beginning of the month and will receive vessels by the end of October. The terminal will primarily serve dry and project cargo, easing traffic for oversized items like wind turbines and steel and pipe imports.

Congestion is expected to worsen over the next two weeks at the ports of Los Angeles and Long Beach in California. The congestion is caused by a record level of imports, which are expected to stretch drayage capacity and cause some challenges for import distribution warehouses. 

Air

Shippers are turning to air freight as ocean capacity books up, sending rates soaring. As air capacity continues to tighten, rates are returning to the levels experienced in March and April of this year, at the start of COVID-19 disruptions.

Trucking

U.S. trucking capacity remains tight but relatively stable. Domestic spot market rates are rising less rapidly than they have in recent weeks, but major transport hubs remain congested.