September 8: China’s First Autonomous Boxship Readies to Enter Service – Splash
The race to develop operational autonomous vessels is intensifying, with the announcement that the AV Zhi Fei, a Chinese-built 300-TEU cargo vessel is set to enter service in October on a short-sea route between Dongjiakou and Qingdao.
September 9: Peak Season Delays Push Transpac Rates Past $20K/FEU – American Journal of Transportation
Clogged ports and peak demand combined to push Asia-U.S. West Coast rates past $20K/FEU for the first time this week. Asia-East Coast rates likewise climbed by more than 10%, as backlogs have grown in ports like Philadelphia.
Delays in European ports are contributing to rising transatlantic rates too, with Europe-N. America East Coast prices spiking 18% this week to nearly $7K/FEU, 4X a year ago, after more than two months of stability.
September 10: CMA CGM Freezes Spot Rates amid Trade Chaos – American Journal of Transportation
The world’s third-largest container carrier said it’s capping spot rates for ocean freight for the next five months, yielding to pressure from some customers and regulators concerned that global trade disruptions have pushed the cost of shipping too high.
“Although these market-driven rate increases are expected to continue in the coming months, the group has decided to put any further increases in spot freight rates on hold for all services operated under its brands,” CMA CGM SA said in a statement on its website.
The decision took effect Thursday and runs through Feb. 1. The company said it’s “prioritizing its long-term relationship with customers in the face of an unprecedented situation in the shipping industry.”
September 13: 2M Blank Sailings Resurface and Take Angry Shippers by Surprise – The Loadstar
A container shipping line announcement that it would blank four sailings in the Golden Week period has left shippers, still struggling to get cargo out of Asia, “staggered” at the move.
2M is the first alliance to announce blank sailings over China’s October holiday period and has left some shippers in limbo, with booked cargo on the cancelled sailings and still struggling to find capacity on brim-full export ships from Asia.
Maersk and MSC, the 2M partners, have cancelled four scheduled Asia-North Europe loops in weeks 39 and 40, thereby removing some 70,000 TEU of capacity from the route.
The reason, said MSC, was “to enhance schedule reliability.”
September 13: Port Operations in Shanghai and Ningbo Halted by Typhoon Chanthu – Lloyd’s Loading List
Ports in Shanghai and Ningbo, the world’s largest and third-largest container hubs, have closed for the second time due to the impact of a typhoon this summer.
China’s National Meteorological Centre issued an orange alert, the second-most serious level, for the Typhoon Chanthu, which was expected to make landfall in the Zhoushan Archipelago, Zhejiang province on Monday with strong gales and heavy rainfall.
Terminal operators at the nearby Yangshan Deepwater Port, which accounts for about 45% of Shanghai’s throughput, suspended all box pickup and delivery operations from September 13.
The two main port areas, Waigaoqiao and Wusong, halted the entry and exit of containers at the same time.
September 13: Exporters Ratchet Pressure on Biden to Take on Shipping Challenges – American Shipper
A historic peak shipping season with significant container ship backlogs is being used by a coalition of U.S. agricultural exporters to promote regulatory changes attempting to rein in alleged abuses by container carriers.
In a letter sent to the White House, 76 groups representing various agricultural export commodities warned that steps taken so far by the Biden administration to address the problem are not enough. They claim that operational tactics that carriers continue to employ are burdening exporters with unreasonable costs and robbing them of foreign-market opportunities.
September 16: Record Shattered: 61 Container Ships Stuck Waiting Off California – American Shipper
The number of container ships at anchor or drifting in San Pedro Bay off the ports of Los Angeles and Long Beach has now blown through all previous records and is rising by the day.
There were an all-time-high 61 container ships in the queue in San Pedro Bay on September 15, according to the Marine Exchange of Southern California. Of those, a record 21 were forced to drift because anchorages were full.
Theoretically, the numbers – already surreally high – could go a lot higher than this. While designated anchorages are limited, the space for ships to safely drift offshore is not.
September 17: Little Relief in Sight for Container Equipment Shortages – Lloyd’s Loading List
The shortage of containers that is plaguing shippers is not due to any underinvestment in the equipment fleet, but due to the extended time they are spending in transit, according to container shipping specialist Drewry.
“Not only have we got rising cargo demand, but there is the continuing disruption across the container supply chain, which means it is taking much longer for containers to complete their voyages,” Drewry head of research Martin Dixon said, explaining that it is these delays that are leading to inefficiencies in the container fleet.
September 17: ‘Scandalous’ New Surcharge Wipes Out Effect of Carrier Rate Hike Moratorium – The Loadstar
The huge earnings of ocean carriers in the first half of the year will gather pace in Q3 and Q4, as old contracts expire to be replaced by new but much higher short- and long-term deals.
Maersk was obliged last week to again upgrade its full-year EBIT guidance by a further $4 billion to $4.5 billion, after it reported Q3 trading was “significantly ahead of our previous expectations,” assessed during its outlook update in August.
September 20: Crew Change Crisis Getting Worse – Seatrade Maritime News
A year ago, the crew change crisis was attracting mainstream media attention, but it now seems to have dropped from view, a victim perhaps of the dreaded “new normal,” while ship managers and owners continue to struggle with lengthy quarantines, travel restrictions and regulations that simply prohibit crew change.
Anglo-Eastern Univan CEO Bjorn Hojgaard took to LinkedIn to vent his frustrations that the crew change crisis is “getting worse, not better” and stating that ports and nations were to blame.
“The way we treat seafarers in 2021 is absolutely shameful. Since the pandemic started, crewing departments the world over have scrambled to facilitate crew change against increasingly difficult odds,” Hojgaard wrote.
Hojgaard is by no means alone in his frustrations over the lack of action over the crew change crisis.
September 24: Container Ships Now Piling Up at Anchorages off China’s Ports – American Shipper
There are over 60 container ships full of import cargo stuck offshore of Los Angeles and Long Beach, but there are more than double that – 154 as of September24 – waiting to load export cargo off Shanghai and Ningbo in China, according to eeSea, a company that analyzes carrier schedules.
The number of container ships anchored off Shanghai and Ningbo has surged over recent weeks. There are now 242 container ships waiting for berths countrywide.
Whether it’s due to heavy export volumes, Typhoon Chanthu or COVID, rising congestion in China is yet another wild card for the trans-Pacific trade.
September 26: Nationwide Australian Port Strikes Threaten Christmas – The West Australian
Strikes planned at ports across Australia threaten to cripple imports ahead of Christmas.
The Maritime Union of Australia has launched industrial action at Patrick Terminals sites in Brisbane, Fremantle, Melbourne and Sydney, in what the shipping container terminal operator has described as “bewildering.”
Patrick Terminals CEO Michael Jovic says the company has been negotiating with the union since February 2020 and has held nearly 70 meetings to finalize a new enterprise agreement.
September 27: Northern European Ocean Terminal and Inland Congestion Forces River Barges to Store Boxes – The Loadstar
Barges are being turned into floating storage platforms to alleviate pressures on Northern Europe’s ocean terminals, as inland waterway operators report surging congestion.
Wait times at Rotterdam have sky-rocketed over the past week to almost seven days.
A source told The Loadstar: “The cause is two-fold – obviously, ocean-side congestion is having a knock-on impact, with yards and terminals well over capacity, in terms of storage, and now refusing to accept new boxes without evacuation of the backlog.
“Barge owners are now being called in to fill their vessels with some 400 TEU of empties and find a way of connecting these to ocean carriers for evacuation.”
However, with near week-long delays for handling at the Dutch terminal, barge owners were forced to consider alternatives, with some simply offering their vessels as storage sites until the backlogs begin to clear.
September 14: Air Brokers Struggle to Find Peak Lift as Shippers Bid to Avoid Port Congestion – The Loadstar
Port congestion is providing unprecedented opportunities for air charter brokers – but an absence of passengers is creating challenges in capacity as shippers gear up for peak season.
The head of cargo charters at Hunt & Palmer, Jamie Peters, said: “When it comes to moving cargo, forwarders and shippers are facing continuous issues.
“Everything is geared towards Q4, with expectations of a substantial peak period, but it is becoming impossible to locate any large aircraft capacity with less than one or even two weeks’ advance notice; there are extremely limited openings.
“Any that do exist come at a very high premium that most customers are turning down… for now, at least.”
September 16: Air Freight Rates Surge Ex-Asia – Lloyd’s Loading List
The latest figures this week from the Baltic Air Freight Index see average spot rates on Shanghai (PVG) to North America reaching almost US$11 per kilo at $10.98, while HKG to North America prices are also edging towards the $10 mark, at $9.70 per kilo this week, as strong peak season demand collides with highly constrained capacity heightened by the recent further constraints to capacity at PVG due to COVID-related shutdowns.
September 23: Air Cargo Handlers Face Staff Shortages on Both Sides of the Atlantic – The Loadstar
Fluctuating volumes, pandemic-induced government support schemes and staff shortage woes have left ground handlers facing “very different labour dynamics” across networks.
COO of Menzies Aviation Mervyn Walker said the ongoing impact of COVID-19 differs country to country and is forcing the company to make “tailored” approaches to tackling recruitment challenges, which some claim are worsening.
September 23: TIACA Warns Air Industry Not Ready for Q4 – Inside Logistics
The International Air Cargo Association (TIACA) warns that the industry is facing unprecedented challenges to deal with expected fourth-quarter demand for air cargo services.
“Air cargo has played a vital role these past 18 months and is facing a potentially record fourth quarter, but planning must start now,” said Steven Polmans, TIACA. “Resourcing and capacity will be issues, handling and facility space will be an issue, delivery and drivers will be an issue. We should be proud of the innovative, agile and flexible approaches adopted by the industry these past 18 months and now we must equally rise proactively to these new challenges as the weight of customer expectations mount.”
September 1: KCS Shareholders in Hot Seat as CP Sets Deadline on Merger Offer – FreightWaves.
It’s up to Kansas City Southern’s shareholders now to determine whether the railway will continue its plan to merge with CN or revert to Canadian Pacific.
CP President and CEO Keith Creel is standing firm on a September 12 deadline for KCS shareholders to respond on whether to accept CP’s $31 billion “superior offer” to acquire the company.
Rivals CN and CP have both been seeking to acquire KCS. CP and KCS announced in March their plans to merge, but then CN put forth a competing, $33.6 billion bid and KCS opted in May to go with CN.
But on August 31, the Surface Transportation Board rejected CN’s proposed voting trust, which would be used as part of the process to acquire KCS. The board said the trust “is not consistent with the public interest standard under the Board’s merger regulations.”
September 3: KCS Punts Merger Vote until Late September – FreightWaves
Kansas City Southern shareholders are holding off on voting or moving on merger proposals from CN and, apparently, Canadian Pacific until late September. The announcement of the postponement referenced votes “on the previously announced definitive merger agreement with CN … and other proposals … .”
Shareholders held a meeting on September 3 and decided to hold another meeting September 24. In the meantime, KCS will “evaluate its options and the KCS Board of Directors will continue to make decisions based on the best interests of the Company and its stockholders,” KCS said.
September 15: CN Rail Walks Away from Kansas City Southern, Ending Takeover War – Transport Topics
Canadian National Railway Co. declined to increase its offer for Kansas City Southern after a months-long takeover battle, ceding to Canadian Pacific Railway Ltd. a prize that would create the first railroad spanning the U.S., Canada and Mexico.
Kansas City Southern terminated its $30 billion agreement with Canadian National and agreed to Canadian Pacific’s $27 billion merger proposal, according to a statement Sept. 15. The merger will need approval from shareholders, Mexican regulators and the U.S. Surface Transportation Board.
September 22: Freight Markets Remain Strong, but First Signs of Clouds on the Horizon – Today’s Trucking
ACT Research reports that the freight market is likely to remain hot, but “there might be a cloud or two on the horizon.”
Industry analyst Jim Meil said there are some concerns about COVID, inflation, rising oil prices, supply chain disruptions and labour availability. Microprocessors, which are in short supply, are also going up in price due to demand, he noted. The cost has increased 4% this year, which contributes to inflation.
But analyst Tim Denoyer said the freight market remains strong, and repeated his projection for a peak season that will be “stronger for longer” than norms. With record numbers of container ships anchored or adrift off the U.S. West Coast, he said the industry is experiencing the longest freight backlog ever.
The railroads are also backed up, and there’s a chassis shortage that is keeping a lid on service levels.
“Truckload volumes will stay strong through the holidays,” Denoyer said.
Next year some of the tailwinds driving freight volumes and rates this year will disappear, but anticipated infrastructure spending will give freight another boost. Industrial demand is also expected to improve next year – another boon for freight.
September 23: ATA: U.S. Mandatory Vaccinations Would Trigger Truck Driver ‘Exodus’ – Ontario Trucking Association
American Trucking Associations President and CEO Chris Spear issued a statement in response to the Biden Administration’s proposed vaccine mandate on employers with more than 100 employees:
“The first rule of any public health policy should be ‘do no harm.’ Unfortunately, these latest mandates and the unintended consequences they’ll create fall short of that standard.
“These proposed requirements – however well-intentioned – threaten to cause further disruptions throughout the supply chain, impeding our nation’s COVID response efforts and putting the brakes on any economic revival.”
September 26: Average Annual U.S. Driver Salaries Have Cracked $70K – Truckload Indexes
For the first time since Todd Amen’s ATBS firm has been tracking fleet and average independent owner operator salaries, pay levels have cracked an annual rate of more than $70,000.
That was the bottom-line number that came out of ATBS’ semi-annual webinar in which Amen reviews data on how drivers are doing. The numbers he draws from are from a huge base of financial information compiled through his company’s activities offering tax and other financial services to owner operators and fleets.
“We’re in the best trucking environment I have ever seen in my history of trucking in 30-plus years,” said Amen, the company’s president and CEO.
August 3: Container Lines Fighting Losing Battle on Capacity – Lloyd’s Loading List
Container lines are fighting a losing battle to inject sufficient capacity into the market as schedule delays absorb the huge amount of additional tonnage that has already been deployed on key trade lanes.
“Despite data from CTS showing a very modest global demand growth … most freight rates continue to set records and shippers find themselves in a situation of fighting over available capacity,” said Sea-Intelligence chief executive Alan Murphy. “The current predicament is driven in the main by lack of capacity and not by a demand boom.”
In practical terms, a carrier offering a weekly service using 10,000-TEU vessels on the transpacific would need six ships for the six-week round trip. But if a ship were delayed by a week due to port congestion at either end of the voyage, an additional vessel would be required to maintain the same capacity. “This means the carrier de facto needs to increase nominal capacity by 16.7%, simply to maintain the same weekly capacity,” said Murphy.
“The effect of this is exactly the same as if the market demand had increased 16.7%, as that would have required the same injection of net capacity in the market.”
August 3: Shipping Braces as China Goes into Lockdown Mode – Splash
Shipping will need to start to make contingency plans if cases of COVID-19 continue to escalate in China.
The Delta variant has broken through the country’s virus defences, which are some of the strictest in the world, and reached nearly half of China’s 32 provinces in just two weeks. While the overall number of infections – more than 360 so far – is still lower than COVID resurgences elsewhere, the wide spread indicates that the variant is moving quickly, with many millions of Chinese now in lockdown.
“For freight markets, the implications include delays at ports as authorities screen crews of incoming vessels and a hit to China’s oil demand if widespread lockdowns are imposed,” said a report from Braemar ACM.
“As long as lockdowns remain confined to China, the impact on freight markets is likely to be muted, especially in the case of wet and dry freight. The container market seems most vulnerable if we see more severe disruptions to manufactured-products supply chains,” commented Plamen Natzkoff, senior trade expert at VesselsValue.
August 4: China Typhoons Create Latest Supply Chain Threat as Ports Shut – American Journal of Transportation
Extreme weather in China is becoming the latest challenge to global supply chains, as a heavy typhoon season threatens to further delay goods stuck at some of the world’s busiest container ports.
Yantian port in southern China’s export and industrial hub of Shenzhen stopped drop-off services of containers on August 3 due to a typhoon alert, the port said on its official social media account. Just two weeks earlier, Shanghai’s Yangshan mega-terminal facility and nearby ports evacuated ships as Typhoon In-Fa slammed into the coast, bringing widespread flooding and toppling containers stowed in the hold of a bulk carrier traveling to the U.S.
There may be worse to come, as officials predict more typhoons will hit China this month.
August 5: Ocean Contract Rates Surge Almost 30% in a Month – Lloyd’s Loading List
July saw the container shipping industry “enter uncharted water,” as long-term contracted rates surged by their largest-ever monthly increase – “climbing by close to one third,” analysis by ocean freight rates specialist Xeneta indicates.
According to the latest Long-Term XSI Public Indices from Xeneta – which crowdsources real-time rates data from leading shippers – the global index recorded a “staggering” month-on-month jump of 28.1% compared with June, “blowing the previous record (a 11.3% rise in May 2019) out of the water.”
The benchmark now stands 78.2% higher than in July 2020, and up 76.4% in 2021 alone.
August 9: Ningbo and Shanghai, the World’s Two Largest Ports, Experience Unprecedented Congestion – Splash
The world’s two largest ports are experiencing unprecedented volumes of tankers, bulk carriers and containerships backing up into the East China Sea as a combination of renewed COVID cases, fierce weather and strong U.S. demand creates further supply chain havoc.
The two ports were hit hard by a typhoon late last month and have seen productivity slow as new anti-COVID measures are being carried out at most Chinese quaysides in the wake of the sudden spread of the Delta variant of COVID-19 over the past three weeks.
Sea-Intelligence has carried out a data-led inspection of container port congestion at 22 ports around the world. The results show Shanghai and Ningbo recently coming under huge pressure from growing congestion.
Among the 22 ports surveyed, only Los Angeles, Long Beach, Oakland, Rotterdam, Antwerp and Vietnam had more-severe congestion than China’s big two ports.
August 10: Reefer Cargo the New Battleground, with Rates Rising and Equipment Scarce – The Loadstar
Container shipping bottlenecks are creating winners and losers in reefer cargo, with consumers footing the bill for the increased logistics costs.
According to Drewry, average reefer freight rates jumped 32% in Q2, and are on track for a 50% increase by the end of Q3.
Increases on the major east-west tradelanes were particularly strong, Drewry noted, where available capacity has seen record demand in recent months, and reefer shippers have to compete with dry freight BCOs for slots.
August 11: The World’s Largest Port, Ningbo, Starts to Turn Ships Away as a Worker Tests Positive for COVID-19 – Splash
Operations at a terminal of the world’s largest port were suspended on August 10 following a case of COVID-19 being detected in a worker.
Ningbo-Zhoushan port started to turn ships away on the morning of August 10 in the wake of the positive test. Initially, the ports authority claimed that its operating system was down early this morning before the Ningbo Municipal Health Commission came clean with the news. The infected worker was part of the workforce at Ningbo Meidong Container Terminal.
Splash had already reported on August 9 about the unprecedented volumes of tankers, bulk carriers and containerships backing up outside Ningbo-Zhoushan port.
August 23: Ningbo’s Meishan Terminal Partially Reopens – Lloyd’s Loading List
The blocked Meishan terminal at the Chinese container port of Ningbo appears to have partly been reinstated, with new arrivals of three containerships last weekend – and after Meishan started to handle vessels at berth in the middle of last week.
The three vessels that entered the terminal had been waiting in the anchorage for up to nine days.
This development came after two large boxships left Meishan over the weekend after being at berth for more than 10 days due to the coronavirus-led closure of the facility.
No official announcement has yet been made as to when the terminal will reopen, although talks have been circulated in the market that local authorities plan to fully restore its operations on September 1.
August 25: Ningbo Disruption Adds to Equipment Shortage – Lloyd’s Loading List
Recent disruptions in Ningbo and Vietnam as a result of the pandemic are set to worsen an already tight equipment supply situation in China, driving up shipping costs again.
Data from equipment platform Container xChange indicates that early disruptions at Yantian and nearby terminals in May and June are still causing “disruptive ripples” in the supply chain.
“We saw a real and measurable spike in container prices and a major drop in container availability when terminals at Yantian saw operations disrupted through most of June,” said Container xChange co-founder Christian Roeloffs. “Early indicators suggest we are likely to see the same impact in Vietnam and at Ningbo.”
August 26: More than Half of HMM Seafarers Quit as Pay Dispute Heats Up – But Talks Go On – The Loadstar
More than half of HMM’s 600-strong seafarer workforce have quit following management refusal to meet pay demands.
Some 453 staff voted in the seafarers’ union strike ballot last weekend, more than 90% backing action in protest at a reluctance to give generous salary increases after a pay freeze between 2011 and 2019, due to the company’s poor performance in those years.
Meanwhile, the union said on August 25 it would extend negotiations by a week, to September 1.
August 27: Container Shipping Reliability Drops Further – Lloyd’s Loading List
Container shipping vessel schedule reliability dropped further in July as global port and congestion disruption continued, and the average delays for late vessel arrivals continued to deteriorate, according to new analysis by Sea-Intelligence.
The container shipping analyst’s latest Global Liner Performance (GLP) report indicates that vessel schedule reliability fell month-on-month by 3.8 percentage points in July to 35.6%, down “a massive 39.7 percentage points” from last year.
August 27: Big is Beautiful to Carriers in the New Shipping Contract ‘Beauty Contest’ – The Loadstar
Shippers and BCOs must be prepared to take part in “beauty contests” to determine their suitability for long-term contracts with their carriers.
But, given the extent to which the market has pivoted in favour of the shipping lines since the pandemic, one thing is certain: Contract shippers will be paying much more next year to move their cargo, and possibly for years to come.
According to freight rate benchmarking company Xeneta, carriers such as Maersk, on track to carry 60% of their business on contracts by the year end, will focus on locking-in more of their carryings supported by long-term agreements.
The advantages for carriers in nailing down long-term contracts with shippers during the current period of unprecedented freight rate inflation are obvious. Moreover, to facilitate forward planning for ship and equipment orders, the lines need to be less exposed to the volatility of the spot market.
August 6: Uptick in Passenger Air Travel Hitting Cargo Capacity – Lloyd’s Loading List
The recent uptick in passenger air travel has seen a significant number of ‘preighters’ returning to passenger (pax) mode, raising fresh concerns that the air freight capacity squeeze is set to intensify as the peak season approaches, according to a leading freight forwarder.
August 13: Cargo Airlines Cancel Hundreds of China Flights amid COVID Outbreak – American Shipper
Chinese restrictions to control a spike in COVID infections have severely curtailed cargo operations at several airports and reduced crew availability, forcing airlines to cancel hundreds of flights as the peak shipping season kicks into high gear in a sector already struggling to keep up with high demand.
Logistics professionals say the growing scarcity of long-haul aircraft could push freight rates near $20 per kilogram on certain trade lanes within a few weeks, making air transport five or six times more expensive than normal for the fall rush. The only time shipping costs have been that high was during the early days of the pandemic when the mass grounding of passenger flights took away a vast amount of cargo space.
August 16: Pandemic Rules Bring China Air Cargo Chaos as Ground Staff Quit and Rates Soar – The Loadstar
Ground handling staff in China are quitting in droves over new COVID rules, triggering the cancellation of hundreds of flights and the prospect of freight rates reaching “extraordinary” levels.
According to one Chinese forwarder, long handling times at Shanghai Pudong (PVG) saw some cargo flights taking off empty over the weekend. “Export cargo handling times are six to 10 hours, two-to-three times longer than normal,” he said.
“PVG is the most affected and, over the weekend, many flights could only load a small part of their outbound cargo, while others just flew back without any cargo, creating a huge backlog for upcoming flights.”
August 19: Air Cargo Charter Market Set for ‘Extremely Challenging’ Peak Season – Lloyd’s Loading List
Constrained capacity and elevated prices continue to be the dominant features of the air cargo charter market with leading brokers predicting an extremely challenging peak season as strong demand rises even further to a backdrop of ocean freight chaos and buoyant cross-border e-commerce volumes.
Capacity remains very tight for full freighters while the space offered by passenger aircraft operating in all-cargo mode is also in high demand, said Chapman Freeborn’s head of cargo, Pierre Van der Stichele.
“Between spring and summer, we did see a slight easing for a short period but the capacity crunch is back on. Due to recent events taking place in the world, such as the recent earthquake in Haiti, we are already seeing further demand, with relief agencies needing capacity for humanitarian flights.”
He said it was “practically impossible” to obtain wide-bodied freighter capacity at short notice unless there was a last-minute cancellation of a flight, which sometimes occurs due to a delay with cargo.”
August 20: Cargo Logjam Building after COVID Disrupts Handling at Shanghai Pudong Airport – The Loadstar
COVID testing disrupted cargo operations at Shanghai Pudong Airport (PVG) on August 20, with widespread delays and flight cancellations expected over the weekend.
Ramp handler Shanghai International Airport Services suspended activities after a positive case was detected, and all staff were sent for testing or quarantine, according to forwarders.
One said: “But PVG is not closed – none of the terminals are closed, that is just a rumour – the problem is with the ramp handler only.”
Nevertheless, the impact is likely to be substantial. The forwarder said there were serious delays for flights on August 20 and over the weekend, with many more cancellation notices expected from airlines in the week of August 23.
August 25: Air Freight Rates Soar due to Shanghai Challenges – Lloyd’s Loading List
Fresh outbreaks of COVID-19 among air cargo handlers in Shanghai and other Chinese airports that are causing cancellations and a lot of uncertainty for ex-China air cargo are also pushing up air cargo rates, with spot prices ex-Shanghai rising 15% to 25% to U.S. destinations this week and 12% to15% to airports in Europe, new data from digital rates specialist Freightos reveals.
These prices “are double their level a year ago and are at their highest point since May 2020 when the industry was under extreme pressure due to the rush on PPE,” highlighted Judah Levine, head of research at Freightos.
August 26: Air Cargo Carriers Shift Operations as Shanghai Disruption Drags On – Supply Chain Dive
Air carriers are adjusting their operations and diverting shipments in the face of freighter suspensions at Shanghai Pudong International Airport due to the closure of a terminal, PACTL, that began Aug. 20 after COVID-19 cases were reported among cargo workers.
Lufthansa Cargo is not accepting any additional freight for transport to Shanghai through August 27, and Qatar Airways, Air Bridge Cargo and Polar Air Cargo have diverted future shipments to other airports in China.
The exact duration of the suspensions remains unclear. However long the freighter suspensions last, “the impact will be significant,” said C.H. Robinson.
August 26: Air Freight Peak Season Has Arrived a Month Early – Lloyd’s Loading List
Air freight’s annual autumn and winter peak season has arrived a month early, air freight forwarders and sources are reporting, due to a combination of factors including manufacturing production delays, ocean freight turmoil, and COVID-related air-capacity reductions and regional lockdowns.
August 10: CP Boosts Bid for Kansas City Southern – Inside Logistics
Canadian Pacific Railway has submitted a new proposal to Kansas City Southern (KCS) rail shareholders, upping its previous US$25 billion bid to $31 billion.
The new bid still falls short of Canadian National’s offer of $33.6 billion, which KCS has conditionally accepted.
CP claims its new proposal “represents improved terms” to those agreed to in the CP-KCS merger agreement entered into on March 21, 2021, and says they are “substantially similar” to those in the CN merger agreement.
However, CP says its bid “offers significantly higher regulatory certainty” than the proposed CN merger.
August 12: Kansas City Southern Rejects New Takeover Bid from Canadian Pacific – MarketWatch
Kansas City Southern railroad is trying to keep its $33.6 billion merger with Canadian National on track by rejecting a competing $31 billion bid from rival Canadian Pacific earlier this week.
Kansas City Southern said on August 12 that its board unanimously decided to continue backing Canadian National’s higher offer. KCS shareholders are scheduled to vote whether to accept CN’s offer on August 19, but the U.S. railroad said it may now delay that vote if the U.S. Surface Transportation Board doesn’t issue its decision on a key part of Canadian National’s acquisition plan before August 17.
August 9: Driver Pay Hikes Not Letting Up – FreightWaves
Demand for truck capacity remains high, but the lack of qualified drivers to meet the need is even greater. Elevated consumer spending has resulted in a peak-like freight market for more than a year now, and the reasons why driver employment has been lagging are well known.
Many of the drivers who left the industry at the pandemic’s onset over fears of contracting the virus have yet to return. Low driver school enrollments due to COVID protocols and some 85,000 operators with failed drug tests (according to Drug & Alcohol Clearinghouse data) are just some of the obstacles the fleets face.
The result has been a race to raise pay in efforts to recruit and retain drivers even as the driver market may be loosening somewhat.
August 16: Federally Regulated Trucking Companies Not Required to Mandate Vaccinations – Today’s Trucking
The federal government’s announcement requiring mandatory COVID-19 vaccinations for federal workers will not apply to federally regulated trucking companies, the Canadian Trucking Alliance (CTA) confirmed.
Transport Minister Omar Alghabra made the announcement on August 13, saying federal public service employees will need to be vaccinated as early as the end of September.
Vaccinations will also be required for those working in the federally regulated transportation sectors of air, rail and marine, as well as all commercial air passengers.
But federally regulated trucking companies will not be required to mandate vaccinations, though the government is “strongly encouraging” employers to continuously urge vaccination within their workforces, the CTA says.
August 20: Canada’s Spot Market Cools in July – Today’s Trucking
Canadian spot market load volumes fell 11% in July, reflecting Canadian and U.S. holidays. Daily postings were down an average of 6% per day.
However, Quebec bucked the trend with strong outbound volumes both domestically and cross-border. Load volumes were up 31% compared to July 2020, according to the latest data from Loadlink Technologies.
Outbound cross-border loads were up 24% from June, and 49% year-over-year, Loadlink reported. Quebec led the way with a 66% increase in outbound cross-border loads.
However, inbound cross-border loads were down 29% from June. All regions in Canada saw decline sin inbound cross-border loads, with Western Canada the least affected with a 15% drop.
August 20: CIFFA Submits Position Paper to All Political Parties Ahead of Federal Election
Critical Issues in Transportation Affecting Canada’s Recovery, a paper outlining CIFFA’s position on issues important to maintaining and developing a strong transportation and supply chain sector in the country, was recently sent to all political parties in advance of the federal election announcement.
Thank you to the members who contributed through their participation in CIFFA’s committees. Their input shaped the document, with perspectives on customs services and border modernization, trade gateways, and key issues in the marine and aviation sectors.
The report is available in English and French.
August 26: CIFFA Posts New Air Cargo Screening Resource
A list of ground handlers has been compiled for CIFFA membership, showing their capabilities and services available for screening 100% of international air cargo transported on commercial aircraft, as per the ICAO (International Civil Aviation Organization) requirement.
Find the spreadsheet on the Resources webpage.
July 5: Port of Vancouver Operations Update
All rail service into and out of the Port of Vancouver has been halted as a result of the B.C. wildfires. Currently, there are a large number of trains waiting to arrive at the port. Both CN and CP Rail are working closely with Transport Canada and onsite inspectors to determine the necessary steps to resume safe rail operations.
With rail impacts on terminal operations, vessel delays and heightened anchorage demand are expected. The port is working closely with its container terminal operators, railways, and government to understand the impacts of these delays on terminal operations and to develop a recovery plan.
July 6: Box Cargo Shifts to Bulk Vessels to Find Affordable Capacity – Lloyd’s Loading List
Freight forwarders and cargo owners are shifting some containerized cargo to bulk vessels to find affordable and available capacity to move shipments amid the rapidly rising prices and the highly disrupted current ocean freight markets – although this is expected to have only a limited effect on the current capacity squeeze.
Lars Jensen, CEO of shipping consultancy Vespucci Maritime, said this is “an example of the ‘pricing-out’ mechanism currently at play. As long as there is insufficient capacity, rates will increase until one of two things happen: either the supply chain bottlenecks are resolved and free up capacity to again match demand, or prices increase to a point where demand declines – either because the cargo is not moved at all or because, as in this example, it gets moved in a different way.”
July 7: South China Port Disruptions ‘Could Extend to Christmas’ – Lloyd’s Loading List
Dwell times at the major ports in and around the south China city of Shenzhen “remain disruptively high,” despite trending downward in recent days with the Port of Yantian at full capacity again, according to freight visibility platform Project44.
It said the data suggests that disruptions related to China’s COVID-19 quarantine efforts could extend well into the year, impacting seasonal shipments as far out as Christmas.
July 9: Detention and Demurrage Charges Targeted in White House Executive Order – gCaptain
President Biden signed a wide-ranging executive order directing over a dozen federal agencies to take action to promote competition in the American economy and urge a crack down on anti-competitive practice.
The order includes a total of 72 initiatives aimed at tackling “some of the most pressing competition problems across our economy.” One of the initiatives directs the U.S. Federal Maritime Commission to take steps to protect American exporters high costs imposed by the ocean carriers and crack down on “unjust and unreasonable fees,” including detention and demurrage charges that have soared during the pandemic, costing shippers big.
July 11: Port of Vancouver Operations Update
A new Ministerial Order was issued by the Minister of Transport to enact precautionary safety measures to further protect against wildfires during extreme weather conditions. The order places operational restrictions on CN and CP rail lines routing between Kamloops and Boston Bar (Ashcroft Subdivision) and Kamloops and North Bend (Thompson Subdivision) when the fire hazard rating is listed as “extreme.” Restrictions include reduced speed limits and fire mitigation measures.
Additionally, the order requires risk mitigation action by all Class 1 railways throughout Canada when the air temperature is 30°C or above and the fire hazard level is listed as “extreme.” The Ministerial Order took effect at 00:01 PDT on July 11, 2021 and will remain in effect until October 31, 2021.
Anchorage demand continues to be high and nearing capacity. Anchorage assignments are made to ensure fluidity across all ship types and essential services.
July 14: Container Congestion Registered in Every Corner of the Planet – Splash
The state of global container congestion continues to roil supply chains right across the world.
Lars Jensen, founder of container consultancy Vespucci Maritime, has estimated that 10% of the world’s shipping capacity has been taken out due to port congestion issues.
July 15: Port of Vancouver Customer Update on Wildfires in B.C. Interior
The wildfire situation in the B.C. interior remains in flux throughout the region. Spot fires may continue to occur and cause disruption, including temporary stoppages of rail services. CP and CN rail lines routed through the impacted area remain operational.
Anchorage demand remains high and anchorage assignments are near capacity. Demand for large vessel anchorages presently exceeds supply.
July 20: Ships Back Up Across COVID-Hit Southern Vietnam – Splash
Ships are backing up Yantian-style off southern Vietnam as COVID-19 wreaks further havoc on Asian supply chains.
The Vietnamese government put the whole southern region into lockdown on Sunday as COVID-19 cases have soared recently. Ho Chi Minh City had already been in lockdown for a week prior with most of its terminals now severely congested. Further south, many ships are at anchor off Vung Tau, an important feeder and transhipment hub, waiting for berth space to open up.
Many Vietnamese factories have been forced to close in recent weeks. In 2020, Vietnam had only 1,465 COVID-19 cases for the whole year across a population of around 98 million, making it one of the best-performing countries in the world against the pandemic. However, daily data from Monday shows Vietnam had 4,843 new cases in one day, triple the whole of 2020.
July 20: U.S. FMC Establishes Ocean Carriers Audit Program – FMC Press Release
The Federal Maritime Commission has established a new audit program and dedicated audit team to assess carrier compliance with the Agency’s rule on detention and demurrage as well as to provide additional information beneficial to the regular monitoring of the marketplace for ocean cargo services.
The “Vessel-Operating Common Carrier Audit Program” was established Monday at the direction of Chairman Daniel B. Maffei and launched immediately.
The Audit Program will analyze the top nine carriers by market share for compliance with the Commission rule interpreting 46 USC 41102(c) as it applies to detention and demurrage practices in the United States. The Commission will work with companies to address their application of the rule and clarify any questions or ambiguities. Information supplied by carriers may be used to establish industry best practices.
Other focus areas of the audit process may include practices of companies related to billing, appeals procedures, penalties assessed by the lines, and any other restrictive practices.
July 28: Port of Vancouver Operations Update
The CP and CN rail lines from Kamloops to Vancouver are in operation. CP reports no backlogged traffic and CN reports minimal backlogs. Targeted speed restrictions, increased track inspections, and fire prevention measures remain in place under Ministerial Order (MO) 21-06. Track inspections required under the Order may cause temporary delays. The hot and dry weather pattern is expected to cause increased fire risk this week, which may lead to more areas of southern B.C. to be classified with extreme fire danger ratings. The evolving fire situation may result in temporary stoppages to rail operations.
The Port of Vancouver continues to experience high volumes of on-dock container cargo and increased dwell times at all container terminals. Bulk commodities have seen a return to near-normal frequencies in deliveries by rail. Processed railcar volumes to and from the coast remain consistent.
Anchorage demand has diminished in the short term and requests across all anchorage classes can now be accommodated within the port’s jurisdiction.
June 30: New Air Freight Security Rules Began July 1 – Lloyd’s Loading List
Air freight stakeholders are bracing for possible disruptions as new global air freight security rules come into force requiring that 100% of international air cargo transported on freighter aircraft is treated and screened to the same security standards as those required for cargo carried on passenger aircraft.
Air freight representatives have some concern that the new rules have not been communicated effectively throughout the supply chain, with considerable uncertainty even among organizations that have been actively involved in the process.
July 2: Record Heatwave across Pacific North-West Disrupts Air and Road Supply Chains – The Loadstar
The heatwave that has hit the Pacific north-west and western Canada has brought disruption to cargo.
Road surfaces have warped, and buckled in some places. A section of route 544 in Washington State had to be closed after the surface was declared unsafe and the Seattle Department of Transportation has been dousing the city’s three steel drawbridges to prevent the metal from over-expanding.
In some places, the heat has melted power cables.
Extreme heat reduces lift for aircraft, causing flight cancellations and forcing carriers to reduce weight, impacting the payload capacity, in extreme cases.
July 8: Airfreight Demand Returns to Pre-Pandemic Levels, but Capacity Could Take Longer to Materialize – Supply Chain Dive
Demand for airfreight continued to show a strong recovery, growing 1% in June compared with the same month in 2019, despite the fact that capacity has yet to return to pre-pandemic levels, according to the latest data from Clive.
Demand for airfreight cratered in the early days of the pandemic, and growing above a 2019 level indicates a return to normal levels of demand. Clive’s figures show demand grew 36% YoY. Airfreight capacity was up 31% YoY, but is still down 22% from 2019 as belly capacity has yet to return.
Rates from Hong Kong to the U.S. fell nearly 24% from a mid-May peak to reach $7.24 per kilogram as of Monday, according to figures from the TAC Index. But rates are still high in historic terms, up nearly 69% YoY and 119% compared with the same point in 2019.
July 9: Trouble at Sea Means Early Peak and Sudden Wave of Air Freight Rate Spikes – The Loadstar
Forwarders have reported a sudden spike in demand in air cargo, forming a ‘very early peak.’ It’s all due to production backlogs and modal shift from the troubled sea freight sector.
“Since last week, rates are climbing everywhere,” said one European forwarder. “Demand increased massively, with distressed ocean freight being moved to air.”
Following a lull in May and June, traditionally a quiet period, volumes – and rates – are climbing again.
July 15: Teething Problems for New Cargo Screening Requirements – Air Cargo News
Air cargo is facing delays in the U.S. after stricter screening requirements were implemented for freighter shipments at the start of the month.
New International Civil Aviation Organization (ICAO) rules mean that United Nation member states are required to screen 100% of cargo before it is loaded on freighter aircraft.
Brandon Fried, Airforwarders Association executive director, said that warehouses are beginning to fill up as the new regulation kicks in. “Most freighter carriers are only accepting cargo that has been screened in advance, as many lack the warehouse capacity or are not prepared to perform the task efficiently, if at all,” he said.
“As terminals begin to fill, freighter airlines are rejecting cargo. As a result, forwarders are being forced to make several return trips to airline handling facilities as carriers struggle with significant space constraints.”
July 5: CP Customer Advisory: Service Interruption – B.C. Interior Fires
CP’s mainline operations in B.C. are shut down due to wildfires.
CP teams are on site and supporting local authorities. Crews have inspected the tracks, and crews and materials have been mobilized to conduct repair work as soon as it is safe to do so.
Customers should continue to expect delays.
Given the operational impairments, CP has issued embargoes for the B.C. interior to manage the traffic into the area.
July 6: Update on B.C. Fires: CP, CN
CP Rail’s mainline outage in British Columbia near Lytton has been cleared. CP noted in a customer bulletin that “the backlog is significant and … customers may expect delays of 72 to 96 hours from start up.”
CN said that all intermodal and carload traffic northbound and eastbound from Vancouver, as well as traffic inbound to Vancouver from east/north of Kamloops, continues to be affected by the wildfires.
CN is working to detour limited traffic where possible to decongest the network via:
An embargo has been issued preventing traffic to be billed westbound to Vancouver from northern B.C. and east of Kamloops and from the BNSF, UP and Vancouver area towards the east. BNSF and UP traffic into the Vancouver area is permitted. Intermodal traffic is not impacted by this embargo; it is strictly focused on carload traffic.
Current gate restrictions on intermodal traffic to/from B.C. South is still in effect and CN is working with customers to find alternative solutions for their shipments.
July 6: 2022 Truck-Age Policy Will Prevent Trucks 10 Years or Older from Entering Vancouver Port – Today’s Trucking
The Vancouver Fraser Port Authority has defended its truck-age policy after about 200 local truckers held a rally to protest the restrictions.
The United Truckers Association (UTA) says the “unfair and biased policy” will prevent trucks more than 10 years old from entering the port in 2022.
The port authority said, “The rolling truck-age program is a policy that was first announced several years ago, providing considerable notice for the industry to prepare for these changes. This program was introduced in alignment with our work to reduce the environmental and health impacts of port operations on communities.”
UTA spokesman Gagan Singh said the group will launch legal action before the end of July. He said the government of British Columbia, not the port authority, has the right to impose restrictions on the age of trucks.
July 8: B.C. Wants Comments on Off-Dock Drayage Recommendations – Inside Logistics
The B.C. government is seeking comments on the implementation of the off-dock drayage recommendations recently released by the independent B.C. container trucking commissioner.
The Off-Dock Drayage Recommendation Report was published on May 12, 2021, in response to a request from the minister to examine opportunities to make targeted adjustments to the rates and policies related to off-dock drayage activity in the Lower Mainland.
Transport minister Rob Fleming said he encourages “stakeholders to engage in open communication with the B.C. container trucking commissioner, so we can move forward and help us all reach our shared goals.”
July 7: CIFFA Survey Sheds Light on Member Investment in Technology
A CIFFA member survey undertaken in June asked members about their use of technology, including freight management systems, business process automation, predictive analytics, digitization, artificial intelligence and cybersecurity.
Drew Simons of CIFFA Associate Member Roxville Technology Inc. drafted the survey and presented the summary to the CIFFA Technology Committee on June 29.
CIFFA invited 68 members to participate in the survey, completed via Microsoft Teams. Sources of answers were anonymous, and members who participated received a copy of the full report.
CIFFA extends appreciation for the support and assistance of our members who contributed.
Access the survey summary here.
June 1: Boxships Make Alternate Plans Following Yantian COVID Outbreak – Splash
A COVID-19 outbreak around Yantian Port has seen boxships weigh anchor in the South China Sea and others switch port calls to Nansha in the latest pandemic headache to hit liner planning departments.
The outbreak, first detected at the key boxport 10 days ago, has seen three berths closed and others work at just 30% of their capacity as authorities put in place strict disinfection and quarantine measures.
Yantian is Shenzhen’s largest box facility, located to the east of the city. Vessel tracking from MarineTraffic shows there are already more than 30 ships at anchor waiting to access the port.
June 2: Mid-Value Products ‘Getting Priced Out’ of Ocean Freight – Lloyd’s Loading List
A number of significant lower-value commodities, such as furniture and large electrical and electronic appliances, are becoming ‘priced out’ of major intercontinental ocean freight markets because of the elevated freight rates facing importers currently, new analysis by Sea-Intelligence has revealed.
June 2: Container Ship Scores ‘Off the Charts,’ ‘Fantasy’ Charter Rate: $135,000/Day – American Shipper
In a sign of just how frenzied the container market has become, a freight forwarder is reportedly paying $135,000 per day for a short-term charter of the S Santiago, a 15-year-old container ship with a capacity of 5,060 TEUs.
“Charter rates for short employment … have gone out of control,” said Alphaliner in its new weekly report.
To put the enormity of the charter deal in perspective, the shipowner will earn back one-sixth of the ship’s value in a single voyage — and one-third of the vessel’s value if the charterer takes the option for the second voyage.
June 7: Yantian Port Congestion Spreads into Nearby Hubs – Lloyd’s Loading List
Heavy congestion at Yantian Port, a key export hub in Southern China, has shown little sign of abating and has even spilled over to neighbouring harbours.
“The situation continues to deteriorate as more positive COVID cases have been confirmed in Shenzhen, where Yantian port and Shekou port are located,” said Maersk in customer advisory.
According to the Danish shipping giant, operation in the eastern area of the Yantian International Container Terminals is running at a productivity level of 30%. At the same time, the western area remains suspended.
“We expect continued terminal congestion and vessel delays upwards of 14 days in the coming week,” it said.
June 10: Container Shortage Worsens as Box Ships Avoid Chinese Ports that Need Empties – The Loadstar
The availability of containers at southern Chinese ports continues to deteriorate as carriers omit calls due to a wave of Covid outbreaks in Guangzhou province.
According to the latest data from Container xChange, the ports of Yantian, Shekou and Nansha have been hit worst by the box shortages.
“Far fewer empty boxes are arriving back to southern China as container lines skip calls, and many shippers will face long delays or higher prices for equipment if they can’t avoid using the affected ports,” said Container xChange founder Dr Johannes Schlingmeiner.
June 11: China Congestion Pushes Carriers as They Are ‘Forced’ to Add Surcharges – The Loadstar
Carriers, faced with increasing congestion, low productivity and a mounting backlog of exports in southern China have been forced to omit port calls, extend gate-in times and, in Ocean Network Express (ONE)’s case, added a $1,000 surcharge on reefer cargo to Yantian.
ONE and Maersk are omitting calls at Yantian terminals in an effort to maintain schedules, as congestion and delays in Europe, the U.S. and Asia build. The Pearl River Delta region is of particular concern.
The lines are reducing arrival times for export cargo in some ports to three days before the vessel’s estimated time of arrival from seven, and Maersk expects the situation to deteriorate, given that some terminals are operating at around 30% of normal productivity.
June 11: More than 300 Liners Waiting for Berth Space, Container Congestion Mapped Globally – Splash
From Shekou to Seattle, Amsterdam to Auckland, containerships are backing up like never before in the 65-year history of the industry as the liner industry grapples with the enormous strain brought by COVID-19 and exceptional consumer behaviour.
While much has been written about the ongoing port congestion issues in the U.S. and the fallout from a recent outbreak of COVID-19 at ports in South China, data shows the global phenomenon of liner congestion in 2021.
As it stands currently, there are more than 300 containerships waiting for berth spaces to open up around the world.
June 17: Rise in Trans-Pacific Spot Rates is Relentless — and Accelerating – American Shipper
The trajectory of trans-Pacific spot rates brings to mind the retail-trader catchphrase “to the moon.”
Carriers implemented general rate increases (GRIs) on June 1. Spot rates rose. They enacted more GRIs on Tuesday. Rates jumped again, even more than they did earlier in the month. And another wave of GRIs is set for July 1. Add fallout from China port congestion to the mix, and it’s a recipe for rates to keep climbing.
“Despite record highs, rate levels continue to sharply increase,” said Lars Jensen, CEO of consultancy Vespucci Maritime.
June 17: Europe Import Misery Grows as Congestion Drives More Services from Port to Port – The Loadstar
North European importers are facing more vessel diversions as carriers lose patience with congested box terminals and dump their cargo at other ports.
Moreover, shippers are increasingly being asked to pick up the tab for inland on-carriage or relay to destination ports.
2M partners Maersk and MSC have advised their customers they will skip Hamburg on their AE7/Condor loop from Asia for a further four weeks, due to congestion at its Eurogate Terminal.
June 21: Mounting Evidence that Container Crunch Will Persist until 2022 – American Shipper
A widely held theory on pandemic spending is that container imports surged because Americans bought a lot more goods when COVID prevented them from buying services. Ergo, with more vaccinations and fewer hospitalizations, Americans will resume spending on services and consequently have less to spend on goods, the pandemic-induced driver of import demand will wane, spot rates will fall, and the market will return to some semblance of normality.
And yet, Americans’ spending on restaurants, air travel and other services has rekindled but there’s still no evidence of a drop in spending on goods.
Container imports remain at peak volumes. Spot ocean rates are still rising. Inventory-to-sales ratios remain stubbornly low – so low that it now looks inconceivable that they can revert to normal this year.
Paul Bingham, director of transportation consulting at IHS Markit, said, “We’re too far into the year without having recovered [inventories] to get out of this in 2021. We have to look to 2022 for any hope. So many portions of the supply chain are so far behind that it’s not going to happen in the next six months.”
June 23: Yantian Returns to Full Operations, Box Backlog Expected to Take Many Weeks to Clear – Splash
Yantian Port expected to resume normal operations on June 23 after a month-long cut in productivity brought about by a COVID-19 outbreak. Shippers have been warned it will take many weeks to clear up the immense container backlog in south China that has brought further strain to global supply chains over the past four weeks.
All berths will resume normal operations, while the number of laden gate-in tractors will be increased to 9,000 per day, and the pickup of empty containers and import-laden containers will return to normal.
The arrangements of accepting export-laden containers will resume normal operations within seven days of a vessel’s ETA.
June 28: Extreme Freight Rates Begin to Change Shippers’ Calculations – The Maritime Executive
High freight rates are starting to have an impact on consumer goods. Already, consumers have started to feel the pinch of the surge on items such as furniture and coffee. Along the transpacific route, Alan Murphy, CEO of Sea-Intelligence recently estimated that freight rates for assembled furniture now account for a whopping 62 percent of the total retail value. It’s the same case for large appliances, for which up to 41 percent of the retail price is the shipping. As container rates continue to rise unabated, these commodities might be priced out; their thinner margins make it impossible to absorb rising costs.
In an interview with BBC, Scott Humphreys, the manager of a furniture supply enterprise based in the UK lamented the serious global supply chain bottlenecks, which are making it virtually impossible for his business to operate.
Peppermill Interiors imports almost half of its stock from East Asia, primarily China. “A single armchair used to cost us £12 to bring in from China. It now costs us £100. So the price we sell the chair for has gone up by 25 percent – but that isn’t extra profit for us,” said Mr. Humphreys. “Some of the cheaper items, they’ve doubled in price. There’s no point bringing them in anymore.”
June 28: Box Rates Up 332% Year on Year, Schedule Reliability Hits Dire New Lows – Splash
Shippers might be paying 332% more per box that they were this time last year, according to the latest data from Drewry, yet they’re having to put up with the worst schedule reliability in the history of containerization.
In the first five months of 2021, 401 vessel arrivals on the transpacific and 144 on Asia-Europe were over 14 days late, according to data from Sea-Intelligence. Putting these numbers in perspective, the combined 2012-to-2020 total of such late vessel arrivals was 388 on the transpacific and 69 on Asia-Europe.
The average delay for vessel arrivals that were marked as late remains extremely high globally, at close to six days, compared to a long-term average of around four days.
Liners have gone public recently, admitting that the current late arrivals situation is not good enough.
June 29: Demurrage and Detention Charges Double in a Year – Lloyd’s Loading List
Demurrage and detention charges imposed on shippers by containers lines have soared at unprecedented rates globally over the last year – more than doubling, on average, at the world’s 20 largest container ports – according to the Demurrage & Detention Benchmark 2021 report published by Container xChange.
However, the rates are “hugely inconsistent,” with large differences apparent both by port and by carrier, the new annual report highlighted, varying from just $132 at Busan in South Korea to more than $2,500 two weeks after discharge at the Port of Long Beach and neighbouring Los Angeles.
Across the world’s 20 largest container ports, the report found that average D&D fees levied by container lines on customers two weeks after a box was discharged from the vessel more than doubled across ports and shipping lines between March 2020 and March 2021, climbing 104% or the equivalent of $666 per container, across all container types. None of the world’s top 20 ports by throughput saw a decrease in D&D fees over the period.
June 29: Crewing Costs are Rising due to Vaccine Delays and Travel Restrictions – The Maritime Executive
For more than a year, the major seafarer unions, shipping lines and organizations including the International Maritime Organization have been warning of the problems being caused in the shipping industry by COVID-19-related travel restrictions and the failure to recognize seafarers as essential workers. Renewed travel restrictions resulting from the new variations of the coronavirus, combined with delays in obtaining vaccinations for seafarers, are likely to further add to the problems as carriers work to manage growing demand and increased shipments as the global economies recover.
According to crewing agency Danica Crewing Services, costs are rising in the crewing sector and crew shortages are beginning to be seen as COVID-19 travel restrictions and vaccination delays are increasingly impacting the availability of trained seafarers. Danica warns that continued restrictions and vaccination delays are causing crew shortages and rising wages that are likely to get worse during the coming months.
June 1: Transport Canada Air Cargo Security Program Update
Transport Canada provided an update on the Explosives Detection Dog Handler Team (EDDHT) program.
Certification has not yet begun on the program. Transport Canada is confident that it will start the process by mid-June.
The agency will implement an interim approval process to approve the handler teams currently in the application system to be able to start screening by the July 1, 2021 deadline. The approval process will be strictly focused on desktop reviews and, once COVID restrictions are lifted and once there is a clear line of sight, they will start on-site assessments. They will keep applicants informed during the process.
For the time being, there is a provisional certification process they can use, to recognize the teams that have applied to the program so far.
Transport Canada will begin a parallel certification process by mid-June. This will include recognizing third-party certification by provincial/territorial entities. These teams will then be considered available to industry to provide screening.
Transport Canada is then hoping to certify, within a window of 6-12 months, the rest of the applicants.
EDDHT screening will be available only to all-cargo carriers.
Transport Canada is hoping to mitigate the impact of the pandemic, certifying EDDHT all-cargo carriers where the risk is lower.
Mutual recognition with the U.S. is another key component, and negotiations are currently underway with the U.S. that cannot yet be commented on.
While this does not provide enough clarity and we are under the wire on the July 1 deadline, TC asks industry to bear with it until such time as things have been figured out.
June 1: Asia and North America Lead Cautious Aviation Recovery While Other Markets Stall – American Journal of Transportation
Aircraft utilization on domestic routes in Asia Pacific and North America has grown significantly since the start of 2021, whilst other markets have stalled or declined, according to IBA, an aviation data and advisory consultancy.
In a webinar looking at the state of the airline industry, IBA outlined how utilization has grown from 55% of pre-pandemic levels in February in both Asia Pacific and North America, to 79% and 66% respectively by the end of April 2021.
Domestic routes currently account for over 80% of all flights according to data from IBA’s Insight.IQ intelligence platform.
By contrast, utilization in Europe and CIS has remained largely flat, increasing from a much lower operating level of 27% to just 33% during the same period. Utilization in Africa and Latin America, while both operating at over 50% of pre-pandemic levels, fell from February to April, and the Middle East grew only marginally from 49% to 51%.
June 11: TSA to Exempt ‘Secure’ Exporters from New Air Cargo Screening – American Shipper
Three weeks before new security rules go into effect for all export cargo moving by air, the Transportation Security Administration has finalized plans giving businesses the ability to opt out of screening every shipment prior to loading if their facilities have approved security controls. The air cargo industry is splintered over whether an alternative approach will provide the same protection and be fairly applied.
The TSA said manufacturers, suppliers, warehouses, vendors, e-commerce fulfillment centers and third-party logistics providers are eligible to become a Secured Packing Facility (SPF), enabling them to tender outbound shipments to airlines without screening to meet international requirements.
The program is designed to minimize the compliance burden associated with self-inspecting 100% of air cargo shipments, or outsourcing the task to other parties.
But critics of a flexible framework argue that without screening the cargo itself, bad actors could slip improvised explosive devices into a box or container at a temporary storage facility. Tendering cargo to airlines under different security parameters for passenger and freighter aircraft, they say, could cause confusion at the receiving end about whether freight was properly secured.
June 23: WestJet Cargo to Launch Dedicated Freighters, Q2 2022 – WestJet press release
WestJet announced that it is launching a new dedicated cargo service, using 737-800 Boeing converted freighters (BCFs) as dedicated aircraft. The first of these BCFs are expected to be in service by the second quarter of 2022.
Throughout 2022, WestJet Cargo will grow its fleet of 737-800BCFs to work in tandem with the current offering of WestJet’s existing cargo business.
June 2: May 2021 Traffic Results ‘Encouraging’ – Railway Age
Intermodal had the “best January to May period ever” and total carloads for May 2021 “were the most for any month since October 2019 on a weekly average basis,” AAR Senior Vice President John T. Gray reported on June 2.
U.S. rail volumes for May 2021 were “encouraging,” he noted in the Association of American Railroads’ (AAR) traffic report for May and the week ending May 29.
June 30: STB Closes Comment Period on CN-KCS Voting Trust Proposal – Progressive Railroading
CN and Kansas City Southern announced that the Surface Transportation Board’s (STB) comment period regarding the companies’ application for a voting-trust approval has closed.
Consistent with the timeline that the STB has set for reviewing the voting trust, CN and KCS will review all comments submitted and file their response by July 6.
June 3: Truck Driver Shortages Expected to Worsen Significantly in Many Countries – Lloyd’s Loading List
Truck driver shortages are expected to worsen significantly this year, a leading trade body has warned.
The shortage is expected to increase by over a quarter on 2020 levels in almost all of the 23 countries included in a recent global survey of road transport firms conducted by the International Road Transport Union (IRU).
“Gaps are set to increase at a much higher rate in some countries, including by 150% in Spain, 175% in Mexico and 192% in Turkey,” it noted.
“Almost 40% of road transport operators surveyed cite skills gaps as the number one cause of driver shortages, in markets as diverse as the Czech Republic, Norway, Romania, Russia, Ukraine and Mexico. This puts skills gaps well ahead of all other factors including poor image of the sector, difficult working conditions and the challenge of attracting young people and women into the profession.”
June 4: Ottawa Takes Aim at Driver Inc. Companies – Ontario Trucking Association
The Canadian Trucking Alliance (CTA) is applauding Labour Minister Tassi and Employment and Social Development Canada (ESDC) officials for launching a significant enforcement campaign to end the illegal practice of Driver Inc.
The ESDC pilot program has been launched in Ontario, where known violators of the labour misclassification scheme who operate within the underground economy will be inspected, audited and face regulatory and legal consequences of a variety of labour contraventions.
“Minister Tassi is showing strong leadership on this issue, which is threatening the livelihood and the very existence of legally responsible, compliant trucking companies and their employees,” said CTA Chair Jean-Claude Fortin. “We strongly believe the results of this enforcement campaign in Ontario will continue to demonstrate the scope of this growing problem in our industry and signal the need for nation-wide enforcement.”
June 16: Pandemic Has Taken Toll on Drivers’ Physical and Mental Health – Today’s Trucking
Professional drivers have had a particularly rough go of COVID-19. Consider their occupation was already one of isolation. Then there’s the fact they’ve been counted on to continue working through the pandemic, while others stayed home.
Access to washrooms, showers, and healthy food were limited. So was the ability to socialize with customers, other drivers, and coworkers. Not to mention the high prevalence of comorbidities – conditions such as obesity, diabetes and high blood pressure, which are likely to contribute to a worse outcome if infected with COVID – among the driver population.
Andrea Morley, nutritionist and health coach with NAL Insurance’s Healthy Trucker program, expressed concern about the toll the pandemic has taken on drivers’ mental and physical health. Mental health issues can contribute to difficulty in focusing on work and fatigue – concerning conditions for any truck driver.
The LifeWorks Mental Health Index showed mental health hit its lowest point in January 2021, with a slight improvement since. Morley urged employers to look out for signs of mental health struggles among staff and drivers.
June 17: Pandemic Response Dominates this Year’s Top 10 Legal Issues for Private Fleets – Today’s Trucking
As businesses take steps to return to normal following broad economic shutdowns put into place to contain the COVID-19 pandemic, they will be facing many new challenges related to employees.
Heather Devine, a partner at Alexander Holburn-Beaudin & Lang, gave her annual Top 10 Legal Issues countdown to the Private Motor Truck Council of Canada during its virtual annual conference. It’s no surprise that most of this year’s issues centred around the pandemic, and employer-employee relations.
June 18: Trucking HR Canada Releases New Labour Market Snapshot – Canadian Trucking Alliance
Trucking HR Canada released a labour market information (LMI) update, providing a snapshot of truck driver employment in Canada.
Employment of truck drivers has rebounded to pre-COVID levels with the seasonally adjusted employment of drivers higher than the occupation’s 10-year average by about 11,100 jobs. Although the pandemic had an initial impact on employment during the first wave, employment has rebounded, and the second and third wave has not resulted in a similar drop in employment. This indicates the occupation has already returned to similar pre-pandemic shortages. The pressure on trucking companies’ recruitment, training and retention initiatives is thus not going away anytime soon.
June 14: Launch of the New CIFFA Website, Phase 1
CIFFA is pleased to announce Phase 1 of the launch of the new www.ciffa.com. In our redesign, we have focussed on improving the member experience by simplifying the navigation, greatly improving the speed, and providing members with access to the same content and tools you have come to rely on.
Notable improvements:
CIFFA had planned to launch a fully integrated platform later in June, including a member and student portal, but out of necessity, we have had to launch the website before the portal was ready.
Phase 2, the member and student portal launch, is scheduled for the end of June. Members and returning users (students) will not be able to log in until phase 2 is complete. All existing students have been contacted and provided with direct access to their courses. We kindly ask for patience as we work diligently over the next few weeks to complete the scheduled updates.
June 28: CIFFA Announces New Director: Joel MacKay, President and Owner, Mactrans Logistics Inc.
CIFFA announces a new appointment to its Board of Directors.
Joel MacKay is the President and owner of Mactrans Logistics Inc., a North American 3PL. Joel and his team have built Mactrans from a group of three people in 2009 to over 30 associates today, with offices in Toronto, Montreal and Moncton. Mactrans has been named one of Canada’s Fastest-Growing Companies by Canadian Business (Maclean’s) for the last five years and one of Canada’s Top Growing Companies by the Globe and Mail for the last two years. Mactrans is a proud member of the SmartWay Transportation program and the Transportation Intermediaries Association (TIA). Both Joel and Mactrans look forward to being part of CIFFA.
Joel has 30 years’ experience in the Canadian transportation industry starting at the age of 15, when he worked on the loading dock for Speedy Transport. During high school and university, Joel returned every summer and held various operations positions. Upon graduating from Western University in 1997, Joel started in transportation sales. Joel held sales positions at CCX (now XPO) and Livingston before starting Concord Logistics Solutions in 2006 with a partner. In 2009, Joel went out on his own and founded Mactrans Logistics. Joel is the proud father of two girls and is grateful for all the support his father, industry veteran Roy MacKay, has provided him throughout his career.