Modal Update Trucking and Marine

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By Kim Biggar

December 9: Massive Numbers of Trucks Will Be Needed to Move Vaccines – Inside Logistics

As the world awaits the approval of COVID-19 vaccines, freight carriers are gearing up for an initial 2021 goal of transporting an average of 271 million ultracold and cold doses per month (nine million doses per day).

Early modeling by global tech market advisory firm, ABI Research, shows that there will be at least 857 temperature-controlled trucks leaving Pfizer and Moderna manufacturing facilities or distribution centres each month.

Should AstraZeneca also receive approval, these numbers will be materially increased. Distribution and delivery will continue to grow and get more complicated after the large urban and suburban areas are covered.

December 14: Cargo Theft on the Rise – FreightWaves

The COVID-19 pandemic has provided an opportunity for cargo thieves, with third-quarter thefts increasing each month year-over-year, according to data from CargoNet.

The firm found that there were 319 reported cargo thefts in Q3 this year, compared with 259 in Q3 2019.

Scott Cornell of Travelers Inland Marine said cargo thieves are focused.

The economic toll the 2008 Great Recession took on Americans shifted buying habits, and thieves responded.

“By 2010, food and beverage became the Number 1 stolen commodity,” Cornell said. “During economic crisis, people go back to basics – you’re going to clothe yourself, you’re going to feed yourself.

“As we sit here today, food and beverage has held that Number 1 spot since then,” he added.

December 30: FedEx, UPS Dig In on Surcharges, Making It Tough for Shippers to Bargain Them Away – FreightWaves

For years, delivery surcharges — the fees that carriers charge on top of their base rates — have nicked and cut parcel shippers’ budgets. But what occurred in the past may be nothing compared with what lies ahead, at least for unprepared shippers.

For the record, UPS Inc. and FedEx Corp. have announced 4.9% general rate increases (GRI) on parcels tendered by non-contract customers. But that number means little to the millions of the carriers’ core contract customers. Indeed, a complex array of rate and surcharge changes will result in most of those shippers absorbing harder hits than from the benchmark GRI, unless they can bargain down the carriers on many of the levies. 

Marine

December 1: COVID-19 Sees Vessel Operating Costs Rise at Their Fastest Pace in Over a Decade – Splash

Vessel operating costs have risen at their fastest pace in over a decade this year, on higher insurance cover premiums and COVID-19-related expenses, according to new research carried in shipping consultancy Drewry’s Ship Operating Costs Annual Review and Forecast 2020/21 report.

Drewry estimates that average daily operating costs across the 47 different ship types and sizes covered in the report jumped 4.5% in 2020, compared with underlying increases of 2% and 2.5% respectively in the previous two years. This followed a period in which opex spending stagnated or contracted over three consecutive years by 8% in 2015-17.

December 1: UN Adopts Seafarer Resolution as Union Calls for Home for the Holidays – The Maritime Executive

The plight of seafarers caught at sea or unable to reach their ships to start work due to the travel restrictions and regulations related to the pandemic remains a concern for the organizations representing seafarers.

In a resolution to address challenges faced by seafarers, the United Nations General Assembly on December 1 adopted a resolution calling on member states to designate seafarers and other marine personnel as key workers. Saying that it recognizes the need for an urgent and concrete response, the United Nations resolution calls for the implementation of relevant measures to allow stranded seafarers to be repatriated and others to join ships, and to ensure access to medical care.

December 2: CP and Hapag-Lloyd Add Port of Saint John Service – press release

Canadian Pacific and Hapag-Lloyd AG announced that Hapag-Lloyd will begin regular service via CP and the Port of Saint John starting in 2021.

CP regained access to the Port of Saint John in June 2020 with the acquisition of the Central Maine & Quebec Railway and through connections with the Eastern Maine and New Brunswick Southern railways.

“Having Hapag-Lloyd call the Port of Saint John regularly is the first step in the port becoming a world-class gateway,” said CP President and Chief Executive Officer Keith Creel.

December 3: Ocean Carriers Push Shippers to Use 20-Foot Containers with 40-Foot in Short Supply – Supply Chain Dive

Demand for ocean shipping has maxed out carrier capacity for the foreseeable future, leading shippers to deal with an uptick in rolled cargo and carriers to turn away bookings for shipments out of Asia, according to Gene Graves, the executive director of United Shippers Alliance.

Carriers keep pushing back the timeline for when they expect the situation to improve, Graves said. “At one time it was the end of October, then the end of November, and then December and now — and I think it’s a good, conservative thing — they’re saying that space won’t free up and equipment won’t get better until after Chinese New Year, which is the first part of February,” he said.

December 7: Equipment and Capacity Squeeze Sees South China Cargo Bookings Suspended – The Loadstar

Shipping lines have announced the temporary suspension of cargo bookings into South China in January, blaming reduced capacity from local feeder operators.

OOCL reported a “sharp” drop in available feeder capacity, due to COVID quarantine rules affecting ship crews, telling customers it would suspend bookings for South China ports from as early as January 11 until February 23.

ONE made a similar announcement, with restrictions beginning on January 5 and lasting at some ports until February 26.

Ports impacted include Guangdong, Guangxi, Hainan, Yunnan, Guizhou and Fujian.

December 7: Cargo Owners Bearing the Costs of Current Container Congestion – Lloyd’s Loading List

Cargo owners are bearing most of the cost burden of the current congestion crisis that is affecting multiple container ports around the world – including loss of business as well as additional costs – with the ports themselves unlikely to suffer any significant long-term consequences, according to analysis by Drewry.

Drewry research highlighted that shippers “generally bear the burden of inefficiencies within the supply chain… But for inefficiencies caused by disruption – such as COVID-19 – shippers have to bear the indirect cost as well, such as loss of business due to late delivery and increased stock holding,” caused by longer or less-reliable service lead times.

Those indirect costs come in addition to container shipping lines passing on the cost of delays to shippers by adding a congestion surcharge to freight rates, while ports and hauliers pass on the cost in the form of higher demurrage charges and storage cost, he notes.

December 11: ONE Apus Stack Collapse Losses Expected to Top $200 Million – The Loadstar

Shippers and forwarders with shipments on board the ONE Apus have been warned to expect general average to be declared on the casualty.

The 14,000-TEU vessel suffered a massive container stack collapse en route to Long Beach after encountering heavy weather near Hawaii on November 30.

The carrier confirmed that 1,816 boxes were lost overboard, including 64 dangerous goods boxes. The ship abandoned its original route and returned to Japan, berthing at Kobe on December 8.

December 17: Container Ships Experience Record Delays as Demand Spikes – American Shipper

Sea-Intelligence’s Global Liner Performance Report for November found that average global carrier schedule reliability across 34 trade lines fell to just 50.1% last month.

It is the worst global score recorded since Sea-Intelligence introduced its reliability measure in 2011. The second- and third-worst scores were recorded in September and October.

December 22: ‘Slidings’ Replacing Blank Voyages as Ocean Carriers Stretch Transit Times – The Loadstar

Ocean carriers are looking to extend transit times in a bid to improve schedule reliability and cut costs.

They are starting to add more buffer time into schedules to mitigate the impact of chronic global port congestion.

December 29: Trans-Pacific Shipping Rates Just Popped to New All-Time High – American Shipper

Is this the end of the mysterious trans-Pacific rate plateau? The good news for ocean carriers — and bad news for shippers — is that rates are rising yet again.

Base spot rates for container shipments from Asia to the U.S. West Coast had been curiously flat since late September. Rates kept to a narrow band at record-high levels of around $3,800-$3,900 per forty-foot equivalent unit (FEU).

The unnatural flatness of the rate trend line during a period when demand was not flat led to speculation that the trans-Pacific rate level was, in fact, not natural.