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West Coast Port Congestion Increasing

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According to an article in Food Logistics, cargo movement data tracked by Project 44, indicates that port congestion has increased again across all four major Southern California ports (Hueneme, Los Angeles, Long Beach, and San Diego).  The report also claims that 41 vessels are currently anchored outside of LA and Long Beach awaiting berth space, while 33 vessels are currently moored at both ports.

The data indicates that regional ports are rallying by handling record volumes of containers as shippers rush to get products to warehouses and store shelves in time for the Holiday Peak Shopping Season.

According to Project44:

  • Industry experts attribute the latest surge to proactive shippers, who are bolstering their inventories in preparation for the holiday season. However, processing the influx of containers across west coast ports is running up against capacity issues facing North American rail and road carriers, as inland congestions tacks on additional delays
  • Despite the record number of containers being processed at the Port of LA and Long Beach, the rail and road infrastructure on the West Coast is preventing the efficient removal of containers out of the port
  • The average weekly dwell times at LA and Long Beach have dropped by nearly 3 days last week indicating a strong rally to handle the backlog of container vessels
  • Blank Sailings to Long Beach connecting Chinese manufacturers to U.S. businesses are not showing significant changes, signaling that carriers are either confident of the port’s ability to process the box volume, or that there are simply no other alternatives
  • And finally, the capacity/volume mismatch between maritime ports and overland transport could get worse in the weeks and months ahead, setting the stage for another breaking point in supply chains

It’s obvious that some importers have taken the steps to order early in hopes of “beating the holiday rush”, however even these importers will be experiencing delays in the actual arrival of much of their goods.

Reach out to us today to learn how we can help you get your goods where they need to go and on-time.

importers

Ocean General Rate Increases Continue

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No one should be surprised that these Ocean Shipping General Rate Increases are coming at a rate of one and sometimes two per month as we saw in September.  With the staggering shipping volumes from Asia to North America continuing with no real end in sight this is the result of the Supply vs. Demand equation.  Effective October 1, 2021, another General Rate Increase (GRI) has been filed for all cargo imported from Asia ports of loading, to U.S.A., Canada, and Mexico ports and ramps of discharge.

The proposed increases are as follows:

USD   1,800 / 20′

USD   2,000 / 40′

USD   2,250 / 40′ HQ

USD   2,250 / 40′ Reefer

USD   2,532 / 45′

USD   3,200 / 53′

Importers continue to struggle with trying to control their supply chain and logistics budgets, and this is no easy task.  In addition, many companies will need to decide if having these products actually makes sense as these shipping costs skyrocket.  The fact is that as profits get squeezed, businesses either cut their losses and decide it’s not worth selling specific products, or pass these added costs onto the ultimate consumer.  You don’t have to be a brain surgeon to understand that rising consumer costs are headed are way and with a vengeance.

Importers should also be aware of the following key dates and circumstances for potential additional spikes in shipping volumes that will only exacerbate the Supply vs. Demand Equation.  Mark these dates down on your calendar so you are well informed ahead of management questioning why goods continue to be late and more costly.

October 1-7, 2021: Golden Week – National Holiday in China.

February 1-7, 2022: Chinese New Year – Factories closed 1 week before and up to 2 weeks after

February 4-20, 2022: Beijing Winter Olympics – Factories will close, so the air pollution will not be so evident.

Hyundai Marine: Possible strike – workers haven’t had a raise in 5 years since their Gov’t bail out

May 2022 ILWU / PMA contract negotiations – Automation will be the main issue – Looks to be the most contentious yet

Looking to gain control over rising shipping costs?  Reach out to our logistics experts today to learn more.

FedEx Implements Peak Season Surcharges

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According to a report from FreightWaves on Friday, August 13th, FedEx Corp. announced a series of new surcharges to cover the delivery of shipments during the upcoming Peak Shipping Season, as well as a separate 60-cents-per-package surcharge to extend into 2022.

The holiday surcharge cycle will begin on October. 4th with levies on shipments that typically move outside of FedEx’s main processing stream and that require some type of extraordinary handling.

  • $5.95-per-package surcharge will be imposed on shipments requiring “special handling”
  • $62.50-per-piece charge will be imposed on so-called “oversize shipments” that don’t fit the company’s conveyable processes
  • $350-per-package charge will be levied on “unauthorized” shipments that FedEx generally discourages because of their large sizes and weights which makes them more appropriate for LTL shipping and handling rather than within the parcel shipping environment.

The special-handling and oversize surcharges apply to all U.S. air and ground services, as well as international ground services. The unauthorized shipment surcharge applies on U.S. and international ground services. All three charges expire Jan. 16, 2022.

FedEx’ “Surcharge Season” really kicks in hard on Nov. 1 when a $1.50-per-piece levy will be imposed on all deliveries moving under FedEx’s Ground Economy program, (formerly branded as “SmartPost”), when FedEx tendered parcels to the U.S. Postal Service for final deliveries to private residences. Earlier this year, FedEx said it had completed a multiyear effort to bring all of that business in-house.  These surcharges will be phased in under three separate timelines as follows.

The first surcharge of $1.50 per piece is set to begin on November 1 and expire on Nov. 28. A second surcharge, which will be double the prior levy to $3.00 per package), begins the following day, November 29th and runs until Dec. 12. For the third cycle, which runs from Dec. 13 to Jan. 16, FedEx will reduce the surcharge to its original $1.50 per piece.

Also on Nov. 1st, FedEx will begin six weeks of residential delivery surcharges on large enterprise customers using its domestic express and ground services. The surcharge amounts will apply to customers shipping more than a combined 25,000 weekly packages of Express and Ground residential deliveries, as well as Ground Economy.

This year, FedEx will have two holiday surcharge cycles. The first will run from Nov. 1 to Dec. 12 and is based on weekly package volumes that will move Oct. 4-17. The second cycle runs from Dec. 13 to Jan. 16, and applies to weekly volumes tendered Nov. 15-28.

The per-piece pricing formula will be determined by a “peaking factor” that takes the appropriate holiday volume, divides that sum by the weekly average residential and Ground Economy parcels shipped between Feb. 3rd and March 1, 2020 — the last period of normalized pre-COVID-19 volumes, and then multiplies that number by 100, FedEx said.

Effective Jan. 17, customers whose volumes made them subject to the holiday surcharge will pay a 60-cents-per-piece levy on those shipments. There is no end date to that surcharge cycle, FedEx said.

Need help navigating the holiday surcharge madness? Reach out to our logistics experts today to learn how you can get ahead of rising shipping costs.

Covid-19 Still Plaguing Global Supply Chains

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No one could have imagined that some 16 months after the “official” start of the pandemic that Global Supply Chains would still be negatively impacted by Covid-19.   But the reality is we STILL are and probably will be for a while.  The folks at Everstream Analytics monitors and produces a weekly summary of supply chain impacts due to the ongoing COVID-19 pandemic. Their updates are provided free-of-charge to the industry and we are re-publishing this week’s report for all of our readers.

  • COVID-19 protocols and labor shortages continue to cause substantial flight delays at major Chinese airports, including at Beijing Capital Airport (PEK), Shanghai Pudong Airport (PVG), Zhengzhou Airport (CGO), and Xiamen Airport (XMN). Furthermore, China Cargo Airlines and China Eastern Airlines will suspend passenger belly freighters until the end of August.
  • Chinese authorities completed COVID-19 testing of 12 million residents in Wuhan. Last week, parts of an unspecified industrial and technology zone were sealed off, but no further restrictions on manufacturing and logistics have since been announced.
  • Indonesian authorities relaxed COVID-19 restrictions in 26 areas including Jakarta, Bandung, Surabaya, and Semarang, while measures were extended in 45 other districts and cities until August 23.
  • In Vietnam, containment measures in Hanoi will remain in place until August 23, while movement restrictions in Ho Chi Minh City and several surrounding provinces were extended until mid-August.
  • Australian authorities imposed tighter restrictions in parts of New South Wales through August 16, while measures in Victoria are expected to be eased after August 12.
  • Domestic and international travel restrictions will remain in place across Honduras until at least m.id-August.
  • Argentina extended the land border closure with Brazil until October 1, but truckers are exempt with a negative COVID-19 test taken within one week of transit.
  • In Pakistan, several cities across the state of Punjab, including Lahore, Multan, Rawalpindi, and Faisalabad will remain in lockdown until August 31st.

Covid-19 continues to play havoc with international supply chains with no end in sight.  As you can see from the details below, the disruptions are coming from a wide range of regions throughout the world.  Supply Chain Executives and their Corporate Management Teams will need to continually track their current global suppliers, as well as give strong thought to seek competent suppliers closer to home.  This decision simply cannot be put off any longer.  These Covid-19 disruptions, coupled with tight capacity constraints and skyrocketing shipping costs for all modes of transportation, make alternative supplier analysis a must.

  • Beijing locked down six residential communities following a COVID-19 outbreak. Other cities such as Zhangjiajie and Zhuzhou in Hunan have also issued lockdown and stay-at-home orders.
  • Nanjing Lukou International Airport has suspended all flights until at least August 11. The suspension is due to a recent outbreak of the Delta COVID-19 variant.
  • Port of Cat Lai in Vietnam stopped receiving certain import and transshipment cargo until at least August 16 amid container pile up due to a shortage of employees and trucks.
  • Authorities in Thailand have extended COVID-19 restriction measures for two weeks and expanded the lockdown zones from 13 to 29 provinces. The lockdown measures include a night curfew and a curb on inter-provincial travel.
  • Queensland extended COVID-19 lockdown measures in Brisbane until August 8; lockdown measures implemented include orders for non-essential businesses to remain shut.
  • The Netherlands reinstated work-from-home guidelines amid increasing COVID-19 cases; recommendations to work from home are not compulsory and apply to those who can do so.
  • Bulgarian authorities have extended the country’s state of emergency until at least August 31 to allow for the modification of COVID-19-related restrictions on short notice.
  • Oman has extended the nightly COVID-19 curfew with all movement and commercial activities to be restricted between 22:00 and 04:00 local time until further notice.
  • Paraguay extended COVID-19-related measures to August 9 with a nightly curfew to remain in effect between the hours of 01:00-05:00.

This report, from Everstream Analytics monitors and produces weekly summaries of supply chain impacts around the globe due to the ongoing COVID-19 pandemic. The update is provided free-of-charge to the industry.

We will continue to provide these update as they become available.  Reach out to us if you need more information on how your supply chain may be affected by restrictions.

Ocean Freight Rates on the Rise AGAIN!

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This should come as no surprise to any company whose business relies on imports from Asia to North America.  Once again the ocean carriers operating in this service lane have announced the following increases.

Effective September 1, 2021 General Rate Increase (GRI) has been filed for all cargo imported from Asia ports of loading, to U.S.A., Canada, and Mexico ports/ramps of discharge.

 

 

The proposed increases are as follows:

General Rate Increase – September 1, 2021

USD   1,800 / 20′

USD   2,000 / 40′

USD   2,250 / 40′ HQ

USD   2,250 / 40′ Reefer

USD   2,532 / 45′

USD   3,200 / 53′

We are fairly sure that similar General Rate Increases will take place at least into the first quarter of 2022.  The factors that could change all of this of course would be a slow-down of the US economy as a result of new Covid-19 infections caused by the Delta and other variants, and/or continued increases in inflation that could ultimately cause a recession.  Only time will tell.

Want to gain control over rising shipping costs?  Reach out to us today to learn more.

importers

Update: Covid-19 Disruptions

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Covid-19 continues to play havoc with Global Supply Chains with various starts and stops throughout the world.  Here are the latest updates on from our friends at Everstream Analytics, who monitors and produces these weekly summaries of supply chain impacts due to the ongoing COVID-19 pandemic.

The update is provided free-of-charge to the industry.

  • In China, authorities shut down Nanjing Lukou International Airport due to a COVID-19 outbreak among its workforce. The airport may be facing increasing congestion due to the closure.
  • Across the city of Nanjing, officials also set up more than 60 checkpoints to control the flow of all vehicles and people between Nanjing and other provinces amid the COVID-19 outbreak.
  • In Vietnam, Ho Chi Minh City imposed a 12-hour curfew starting July 26 to curb rising COVID-19 cases. Meanwhile, authorities in Hanoi have announced a two-week lockdown until August 8 to control a surge of COVID-19 cases.
  • Authorities in Bangladesh have re-imposed a countrywide shutdown to stem a new tide of COVID-19 infections after a weeklong recess due to the Eid al-Adha festival. The restrictions will last until August 5 and affect people movements as well as manufacturing, including in key sectors such as garment and textile.
  • In Australia, authorities announced the end of a lockdown in the state of Victoria from July 28, while restrictions in New South Wales would be extended for four weeks.
  • The President of South Africa announced that lockdown regulations were eased from July 25 as the country moved to adjusted level 3 lockdown. While interprovincial travel and larger outside gatherings have been allowed once again, a nightly curfew remained in place.
  • Authorities in the Dominican Republic re-imposed a nationwide nightly curfew amid rising COVID-19 infections. Exemptions remained in place for those providing essential services.
  • Similarly, the government of Honduras extended a nationwide curfew until at least August 1 to control the COVID-19 outbreak.

Please reach out if you need support navigating this difficult and uncertain times.  ICC is here to help.