COVID-19 Latest Updates

Shippers Frustrated with Trailer Shortage, Delta Expects Revenue to Return to Pre-Pandemic Levels, Shanghai to Begin Lifting Lockdown Measures.

By June 2, 2022 No Comments

Ocean

Supply chain challenges caused by Chinese lockdowns continue. Container demand is exceeding capacity and supply chain challenges continue to worsen, exacerbated by port congestion and shipping delays in Shanghai and elsewhere in China due to Covid-19 lockdowns. Congestion at Chinese ports increased during Shanghai lockdowns in March and April, and later extended to other parts of the country. Total dry bulk congestion levels at ports in mainland China have increased between 30-40% since the beginning of March, according to S&P Global Commodities at Sea. As of May, port congestion in Shanghai has shown signs of easing, with shipping traffic being diverted to alternative ports throughout northern and southern China. Overall congestion levels remain high and longer vessel queues are being seen at alternative ports such as Tianjin and Zhoushan.

Ports

Jacksonville port completes mega-dredge. Jacksonville became the third Southeast port to complete a mega-dredge in order to handle more cargo containers from fast-growing Asian shippers. The deepening spans 11 miles to the Blount Island terminal east of the Dames Point bridge, stopping short of the two additional to the JaxPort terminal on the west side of the bridge. The Orlando Sentinel reports that SSA Marine operates on Blount Island and “will be the hub for attracting cargo ships making routes between Asia and the East Coast.” $100 million worth of improvements at Blount Island were recently completed by JaxPort which will enable two large cargo ships to dock simultaneously for service by SSA Marine.

Customs

BIS Rule Sets New Control for Certain Cybersecurity Exports. Via NCBFAA Monday Morning eBriefing: “The Commerce Department’s Bureau of Industry and Security (BIS) has finalized changes to License Exception ACE and corresponding changes in the definition section of the Export Administration Regulations (EAR) in response to public comments to an Oct. 21, 2021 interim rule. The final rule takes effect May 26. The rule established a new control on certain cybersecurity items for National Security (NS) and Anti-terrorism (AT) reasons, as well as adding a new License Exception Authorized Cybersecurity Exports (ACE) that authorizes exports of these items to most destinations except in certain circumstances. “These items warrant controls because these tools could be used for surveillance, espionage, or other actions that disrupt, deny or degrade the network or devices on it,” BIS said in the Federal Register notice announcing the final rule. The rule also corrects Export Control Classification Number (ECCN) 5D001 in the Commerce Control List (CCL).” 

Trucking

Shippers frustrated with trailer shortage. Trucking companies needing to meet increasing shipper demand for drop-and-hook trailer pools are growing increasingly frustrated with the scarcity of trailers. Trailer manufacturers have been unable to keep up with demand because of ongoing supply chain issues overseas and in North America. One roadblock is sourcing materials from Asia and Europe with COVID-19 lockdowns in China and war in Ukraine. “This is an unprecedented situation and we’ve never seen these circumstances before,” Don Ake, vice president for commercial vehicles at FTR, told JOC.com. “We’ve seen some improvement in deliveries since last year, but that improvement is going to flatten out” because of fresh disruption. Ake said units shipped are down 4 percent from a pre-pandemic peak in 2018. According to the US Bureau of Labor Statistics producer price index, the price of trailers has soared 53 percent since April 2018.

Truck and Engine Manufacturers Association files lawsuit for more emission standards lead time. On May 27, the Truck and Engine Manufacturers Association (EMA) filed a federal lawsuit with the U.S. District Court for the Central District of California alleging that California environmental regulators failed to give manufacturers enough lead time to meet the state’s new emission standards. In its lawsuit, EMA alleges that the federal Clean Air Act requires that manufacturers be given “four full model years” of lead time before new emission standards become effective. The manufacturers said that the California Air Resources Board gave them only two years, according to Transport Topics. The Omnibus Regulations would require engine manufacturers to redesign, test and build their engines to comply with all of the new requirements, EMA said.

Rail

BNSF struggling to move containers due to chassis shortage. BNSF Railway is struggling to move containers in certain US inland markets due to a shortage of chassis, the railroad told JOC.com. The chassis shortage is forcing drivers to wait hours to get a load. BNSF said it’s taking preventative measures to avoid a repeat of last summer, when Chicago was gridlocked due to a major surge in international intermodal volume as shippers took longer to unload containers and return chassis for the next customer, JOC.com reports. The Logistics Park Chicago terminal has been clogged for several months, and BNSF has begun grounding containers in Memphis and Kansas City in the last month, according to trucking executives and non-vessel-operating common carriers (NVOs). 

Air

Norwegian Air buys from Boeing, ending dispute. Norwegian Air has ended a contract dispute with Boeing after agreeing to buy 50 Boeing 737 Max 8 aircraft and securing options for 30 more of the planes at an undisclosed price.Earlier this year, Norwegian said it would consider switching to Boeing rival Airbus (EADSF), so the deal is a boost for the US plane maker. CNN reports that the deal marks a return to aircraft ownership for Norwegian after it was forced to resort to leasing deals during bankruptcy proceedings last year.

Delta expects revenue to return to pre-pandemic levels. Due to a surge in travel and higher fare costs, Delta Air Lines is expecting revenue to return to 2019 levels this quarter, the carrier said in a filing Wednesday. Delta’s updated revenue forecast comes less than a week after announcing the airline would trim its schedule to try and curb flight disruptions that impacted tens of thousands of passengers last month, according to CNBC.

International

Shanghai to begin lifting lockdown measures. On Wednesday, Shanghai authorities announced that they will begin taking major steps toward reopening China’s largest city after a two-month COVID-19 lockdown. During a daily news conference on Tuesday, Vice Mayor Zong Ming full bus and subway service will be restored as will basic rail connections with the rest of China. NPR reports that schools will partially reopen on a voluntary basis for students and shopping malls, supermarkets, convenience stores and drug stores will continue to reopen gradually with no more than 75% of their total capacity. According to BBC, at least 650,000 residents are still confined to their homes in “sealed off” or “closed off” zones. 

Iran responds to calls from the EU to release seized Greek tankers. The European Union and France called on Iran last week to release the Greek tankers it seized. Iran responded with renewed threats against Greek shipping. This comes after Iran said it was not detaining the crew members of the two tankers and Iran’s Foreign Minister said the incident “should not hurt relations with Greece,” Maritime Executive reports. The escalation by Iran is renewing concerns for shipping and the state of the world oil market. France’s foreign ministry called on Iran over the weekend to immediately release the crewmembers and the two tankers, calling the actions a “violation of international law.” EU spokesman Peter Stano described Iran’s actions as “unacceptable,” saying that the EU was “pursuing the matter.”    

Other

DA Identifies Infant Formula Firms/Products Receiving Enforcement Discretion.  Via NCBFAA Monday Morning eBriefing: “To increase availability of infant formula, the Food and Drug Administration (FDA) outlined the procedures for processing certain infant formula products from specific overseas companies which will be afforded enforcement discretion. The list of firms/products can be found here. This process will remain in effect until Nov. 14. Specific ACE transmission instructions are provided in this CSMS Message #52010923.”

Recent developments amid Russia-Ukraine crisis:

EU agrees to ban 90% of Russian oil imports by 2023. European Council chief Charles Michel said that the European Union has agreed on a partial ban on Russian oil imports. “Agreement to ban export of Russian oil to the EU. This immediately covers more than 2/3 of oil imports from Russia, cutting a huge source of financing for its war machine,” Michel announced in a tweet on Monday evening. Michel’s announcement followed a European Council summit attended by EU leaders in Brussels on Monday to discuss a sixth package of sanctions against Russia. Leaders of the European Council said that the EU agreed to ban 90 percent of Russian oil imports by the end of the year, CNN reports.