Effective September 15, 2021, a 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. This is the second General Rate Increase announced for the month of September, 2021. As we get into Peak Shipping Season, it is not uncommon to see General Rate Increases imposed more than once per month. Add the global impacts of Covid-19, extremely tight capacity and intense demand all at the same time and there you go.
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.
Just when you thought things couldn’t get worse, Bloomberg News is reporting that China has decided to partly shut-down the world’s third-busiest container port after a worker became infected with Covid. This will obviously create additional delays in ocean shipping and negatively impact US importer’s supply chains. Of course, these delays will also result in higher shipping charges for those companies who are willing to pay premiums to ensure there goods are actually placed on ships.
According to Bloomberg, all inbound and outbound container services at Meishan terminal in Ningbo-Zhoushan port were halted Wednesday, August 11th until further notice due to a “system disruption,” according to a statement from the port. An employee tested positive for coronavirus, the eastern Chinese city’s government said.
The closed terminal accounts for about 25% of container cargo through the port, calculates security consultant GardaWorld, which said “the suspension could severely impact cargo handling and shipping.” Germany’s Hapag-Lloyd AG said there will be a delay in sailings. This is the second recent shutdown of a Chinese port due to the coronavirus, after the closure of Yantian port in Shenzhen from late May for about a month. That led goods to back up in factories and storage yards and also likely lifted soaring freight rates, which are at record levels and a source of inflation.
The fear is that this new disruption will further strain shipping and supplies of goods, dampening growth and driving up prices. An extended shuttering at Ningbo could be especially painful for the world economy because seaborne trade usually rises toward the end of the year as companies ship Christmas and holiday products.
“There may be far-reaching downstream consequences going into Black Friday and holiday shopping seasons” and the next 24 hours will determine whether there is a large outbreak or not, said Josh Brazil, vice president of marketing at project44, a supply-chain intelligence firm. “One of the few givens in 2021 is endemic delays, and the fact that conditions can change almost overnight.”
In addition to the closed terminal, containers for shipment through the other terminals in the port will likely slow. The port will now only accept containers within two days of a ship’s estimated arrival time, according to a statement from shipping and logistics firm CMA CGM SA. The biggest exports through Ningbo in the first half of this year were electronic goods, textiles and low and high-end manufactured goods, according to the city’s Customs Bureau. Top imports included crude oil, electronics, raw chemicals and agricultural products.
Speaking about the outbreak, Hugo De Stoop, CEO of oil shipper Euronav NV said “there will be an impact on China’s oil demand, but the length of the impact is unclear.” For port outbreaks “the Chinese authorities are very, very strict. When they find a case they will be very quick to shutdown, isolate the workers, isolate the coworkers who have had contact with that specific worker and then reopen as quickly as possible,” he told Bloomberg Television adding that this strictness in dealing with outbreaks can disrupt markets.
All the close contacts of the infected worker have been identified and are in quarantine, according to Ningbo City’s statement. A port spokesman who declined to give his name said there was no new information when contacted Thursday. The port was the third busiest globally in terms of container shipments in 2020 and the second busiest in China after Shanghai, according to maritime publication Lloyd’s List.
The discovery of the port worker that tested positive for Covid-19 shows that virus-prevention measures in Ningbo City still has loopholes, the local government said in a statement on its website Thursday, which urged officials to implement quarantines, disinfection and close affected areas to prevent the virus’ spread.
Need help navigating the “new normal” in international shipping? Firstly, be sure to check out our blog frequently and subscribe to our newsletter where we keep you up-to-date on the latest information. Secondly, reach out to one of our international shipping experts. We’re ready to help!
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.
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.
The United States Postal Service filed notice today with the Postal Regulatory Commission (PRC) regarding a temporary price adjustment for key package products for the 2021 Peak Holiday Shipping Season. This temporary rate adjustment is similar to one imposed in 2020 that anticipated heightened peak-season package and shipping demand, which typically results in extra handling costs.
The planned Peak-Season Pricing, which was approved by the Governors of the Postal Service on Aug. 5, 2021 would affect prices on commercial and retail domestic competitive parcels, such as Priority Mail Express (PME), Priority Mail (PM), First-Class Package Service (FCPS), Parcel Select, USPS Retail Ground, and Parcel Return Service. International products would be unaffected. Pending favorable review by the PRC, the temporary rates would go into effect at 12:00 a.m., Central Time, on Oct. 3, 2021, and remain in place until 12:00 a.m., Central Time, Dec. 26, 2021.
This seasonal adjustment will bring prices for the U.S. Postal Service’s commercial and retail customers in line with competitive practices. No structural changes are planned as part of this limited pricing initiative.
“Delivering for America,” the Postal Service’s 10-year plan for achieving financial sustainability and service excellence, calls for appropriate pricing initiatives. The Postal Service has some of the lowest mail postage rates in the industrialized world and continues to offer great values in shipping. These temporary rates will keep the Postal Service competitive while providing the agency with the revenue to cover extra costs in anticipation of peak-season volume surges, similar to levels experienced in 2020. The forecasted additional revenue from the time-limited increase will depend on the volume of packages shipped between Oct. 3 and Dec. 26, 2021 – the period the Postal Service historically considers its “holiday peak season.”
The planned price changes include:
Priority Mail, Priority Mail Express, Parcel Select Ground and USPS Retail Ground:
$0.75 increase for PM and PME Flat Rate Boxes and Envelopes.
The PRC will review the prices before they are scheduled to take effect on Oct. 3, 2021. The complete Postal Service price filings with prices for all products can be found on the PRC website under the Daily Listings section at prc.gov/dockets/daily. The price change tables are also available on the Postal Service’s Postal Explorer website at pe.usps.com/PriceChange/Index.
The USPS reports that its “Delivering for America” 10-year plan aims to reverse a projected $160 billion in losses over the next 10 years. The Plan’s growth and efficiency initiatives will spur cash flow and savings to make $40 billion in capital investments over the next 10 years – including approximately $20 billion towards the Postal Service’s mail and package processing network, facility upgrades and procurement of new processing equipment. It’s important to remember that The USPS generally receives no tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations.
Need help navigating rate increases? Reach out to our consultants today to learn how to take control of rising shipping costs.
This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie SettingsACCEPT
Privacy & Cookies Policy
Privacy Overview
This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.