Modal Update Trucking, Marine, Air, and Rail

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By Kim Biggar

Trucking

February 12: Tight Capacity Puts Pricing Power in Trucking’s Hands as Spot, Contract Rates Rise – Supply Chain Dive

Spot load posts on the DAT load board [from DAT Freight & Analytics] were up nearly 68% year over year (YoY) in January, but truck posts moved in the other direction, falling 18% YoY, creating an environment of rising rates and tight capacity for shippers on the spot market.

This led the DAT load-to-truck ratio to shoot up across trucking modes, rising 92% YoY for van, 181% YoY for flatbed and more than 54% YoY for reefers.

Spot rates followed the rising demand and were up almost 26% YoY for van, nearly 15% YoY for flatbed and 16% YoY for reefers.

February 12: Manual Processes Increase Waiting Time: Study – Ontario Trucking Association news

Shipper yards continue to be weighed down by traditional manual processes that affect everything from detention times to throughput, according to the State of Yard Management: Industry Report 2021, conducted by FourKites.

According to Truck News, the study, which collected responses from 375 supply chain professionals in the CPG (consumer packaged goods), food and beverage, retail, and manufacturing sectors, found that more than half of those surveyed said manual processes were their biggest challenges when it comes to managing yards and appointments. After manual processes, 21% said locating equipment was the biggest challenge, while 15% cited excessive operational costs. Just over 20% said poor dock door utilization was the biggest challenge when it came to managing appointments.

February 17: ELD Suppliers Say Their Devices Will Be Ready – Today’s Trucking

Several ELD suppliers have issued announcements to assure Canada’s trucking industry that they will have devices ready to comply with a federal mandate scheduled to take effect June 12.

All federally regulated carriers will have to use electronic logging devices certified by a recognized third party, proving the equipment meets underlying technical standards.

While FPInnovations can conduct the required testing, it has yet to certify any equipment. That has led the Private Motor Truck Council of Canada to lead a call for deferred enforcement.

February 25: Quebec Won’t Enforce ELD Mandate in June – Today’s Trucking

The Société de l’assurance automobile du Québec (SAAQ) has informed the Quebec transportation industry that the use of electronic logging devices (ELDs) in Quebec will not be mandatory as of June 12.

However, the SAAQ reports that work to harmonize provincial regulations with those of the federal government is still in progress, and that to make the use of the ELDs mandatory in Quebec, amendments are required to the province’s Highway Safety Code and the regulation respecting the hours of driving and rest of heavy vehicle drivers.

February 25: Transport Canada Stands Firm on ELD Deadline – Heavy Duty Trucking

Transport Canada has reaffirmed the compliance deadline for using electronic logging devices. As of June 12, 2021, all carriers operating in Canada, who are currently required to use paper or electronic records of duty status, will be required to use a certified ELD.

Marine

February 1: Containership Schedule Reliability at Lowest Level Since Records Began – The Loadstar

Global container service scheduled reliability has declined to its lowest levels since records began, according to new data from SeaIntelligence Consulting.

The analyst’s schedule reliability data for December shows just 44.6% of vessels arriving on time, “which means that, for the fifth consecutive month, global schedule reliability has been the lowest across all months since Sea-Intelligence introduced the benchmark in 2011.”

It said December’s reliability index had declined by 31.7 percentage points on December 2019.

February 2: Importers Could Face Massive Hike in Ocean Contract Costs – American Shipper

Remember when people thought container shipping spot rates would peak around Chinese Golden Week last October? They weren’t even close. Then they thought year-end. Wrong again. Then they pointed to Chinese New Year, which starts next week.

That’s not going to happen either. Spot rates remain stratospheric. Liners are cancelling voyages this month due to the port crunch on the U.S. west coast, pushing even more volume to the months after Chinese New Year.

It now appears spot rates will remain strong all the way through the second quarter. They may ebb from current highs, but they almost certainly won’t crash.

This is exactly the scenario U.S. importers feared. They will have to negotiate their annual contracts – which generally expire by May 1 – in the midst of a spot-rate boom.

February 5: Myanmar Ports Said to Be Operating Normally – Lloyd’s Loading List

Ports in Myanmar remain open and customs clearances have resumed following the military coup, though airports remain closed, according to a report from North’s correspondents in the country.

“There are no reported issues with the discharging of cargo; however, there may be delays on loading due to some warehouses being reportedly seized and closed, although there is no official information on these closures at this time,” Spica Services added.

February 8: As Digitization Improves Visibility, LCL is Becoming More Attractive to Shippers – The Loadstar

The shortage of containers in major tradelanes is driving demand for less-than-containerload (LCL) solutions.

With boxes available only at exorbitant rates, more shippers and forwarders are more open to less-straightforward alternatives to full-container offerings.

LCL has also been aided by the intensified push for digitization – this has led to better quoting capabilities and pricing transparency.

A second significant ramification of digitization has been a marked improvement in visibility. Given the sometimes large number of hand-offs in the LCL segment, poor visibility has historically been one of its disadvantages, but digitization has advanced track and trace capabilities, said Graham Cousins, chief strategy officer of Vanguard Logistics Services.

February 9: Container Congestion Chaos as Yantian Pushes Deadlines Pre-New Year Holiday – The Loadstar

Severe congestion has hit roads leading to the southern Chinese container gateway of Yantian, as exporters desperately try to clear a backlog of orders before the new year holiday begins at the end of the week.

And it appears forwarders and shippers trying to get shipments out of the Pearl River Delta could find themselves caught in a classic Catch-22 situation after the port announced it was bringing forward the cut-off time for gating-in export containers.

Yantian now requires a week, instead of just two days, prior to the sailing of the vessel as the port attempts to clear congestion in the yards and entry roads.

February 11: The Permutations for Shipping of a Muted Chinese New Year – Splash

The world’s largest human mass migration is a muted affair this year, something that will have significant ramifications for shipping.

Chinese authorities – afraid of a COVID surge – have adopted a carrot and stick approach to ensure fewer people travel during the Lunar New Year holiday period, which started on February 10.

The country is expected to see 77.6% of its 280 million migrant workers stay put for the holiday.

There’s early signs factories are remaining busy during this traditionally fallow industrial period, while MarineTraffic data today shows major ports have a solid flow of ships coming to berth.

A new report from Ocean Insights warned that another kink in global supply chains would become apparent in the coming weeks – namely Chinese truckers who had opted to go home for the holidays, making them subject to mandatory quarantines and unable to drive. This would choke factory-port connectivity starting in about two weeks, with inventory backups lasting for months.

February 17: Major Economic and Logistics Impacts for Businesses Expected if Work Stoppages Occur at Port of Montreal – Port of Montreal press release

As the negotiation process is currently suspended and the truce between the dockworkers’ union CUPE 375 and the Maritime Employers Association (MEA) draws to a close, and in the context of an unprecedented pandemic that the Canadian economy must continue to face, the Montreal Port Authority (MPA) hopes that the parties will quickly reach an agreement to avoid a new work stoppage by the dockworkers. Already, the Port of Montreal’s user companies and clients are feeling the impacts.

Nearly a month before the end of the truce between the employer and the union, scheduled for March 21 at 6:59 am, the MPA has found that several Quebec and Ontario businesses that use the Port of Montreal, including some that move critical cargo to combat COVID-19, are already diverting containerized goods to other ports, and that others are planning to do so if a new work stoppage occurs soon.

This situation, similar to the 19-day work stoppage during the summer of 2020 when dozens of companies publicly disclosed the impacts on their operations, could cause major delays in the supply chain and higher freight costs, right as the economic recovery and a broader reopening of the retail sector in Quebec and Ontario get under way.

February 17: Statement by Minister of Labour, Filomena Tassi, on Negotiations at Port of Montreal

The Minister of Labour, Filomena Tassi, issued the following statement on February 16 regarding the collective bargaining negotiations between the Syndicat des débardeurs, the Canadian Union of Public Employees, Local 375 and the Maritime Employers Association:

The Government of Canada has faith in the collective bargaining process. Since October 2018, the Federal Mediation and Conciliation Service (FMCS) has been working closely with the Syndicat des débardeurs, Canadian Union of Public Employees, Local 375 and the Maritime Employers Association. This nearly two and a half year commitment to the negotiation process is evidence of our belief that the best deals are made at the negotiating table.

I have reached out to all parties throughout the negotiation process, as have a number of my ministerial colleagues. At my request, Mr. Peter Simpson, Director General of the FMCS, and Mr. Robert Bellerose, Regional Director, Quebec Region – FMCS, two senior mediators, were recently added to the file to provide further assistance to the parties in their negotiations.

After seven days of meetings, the mediators suspended face-to-face meetings with the parties after determining that the gap between the parties is too significant at this time to conclude a collective agreement.

I have asked the mediators to continue to be in close contact with the parties. If their positions change in a way that is likely to lead to an agreement, the federal mediators will reconvene the parties as soon as possible.

The Government is keenly aware of the central role that the Port of Montréal plays in movement of goods across Canada, particularly in Quebec and Ontario. Reaching an agreement at the bargaining table is in the best interest of workers, unions, employers and all Canadians.

We strongly encourage both parties to immediately do the hard work necessary to reach an agreement. The Government of Canada will continue to be there throughout the negotiations to support their efforts.

February 17: Maersk Will Operate World’s First Carbon-Neutral Containership by 2023 in Big Methanol Breakthrough – Splash

Maersk has officially fast-tracked its decarbonization plans, with a methanol-fuelled 2,000-TEU feeder vessel set to be ordered this year to begin operating in 2023. The container line also said that all future Maersk-owned new-builds will have dual-fuel technology installed.

Both the methanol-fueled feeder vessel and the decision to install dual fuel engines on future newbuildings are part of Maersk’s ongoing fleet replacement.

February 23: No Rate Relief in Sight for Ocean Shippers as Lunar New Year Passes – Supply Chain Dive

There is no relief in sight for ocean shippers looking for a downturn in rates on the Transpacific route, as spot prices have risen another 7% in the last week between China/East Asia and the North American West Coast, according to figures from Freightos.

Volume flowing to the West Coast is expected to stay elevated in the coming weeks, with the forecast from the Port of Los Angeles showing volumes up nearly 503% YoY in the second week of March.

February 24: Shipping Lines Start to Give Myanmar a Miss as Protests Impact Supply Chains – The Loadstar

Shipping lines have begun suspending cargo bookings into Myanmar.

A nationwide general strike took place this week, with hundreds of thousands on the streets protesting against the military power-grab on February 1.

“The situation is becoming more and more tense,” according to Hapag-Lloyd.

February 25: Ocean Carriers Hold All the Cards in Contract Talks with Shippers – American Shipper

It’s annual-contract negotiation season for U.S. importers — and the hand they’ve been dealt couldn’t be worse. The deck is heavily stacked in ocean carriers’ favour.

Incredibly, Asia-West Coast spot rates are now nearing a base rate of $5,000 per forty-foot equivalent unit (FEU), not including a few thousand dollars of extra charges slapped on top. There’s talk that spot rates could stay strong until Q4, if not 2022.

Annual contracts are usually finalized by May or June. The risk to shippers: If they don’t agree to much-higher long-term rates than they’re used to, they could be even more exposed to spot rates, which would cost them even more.

Air

February 5: Montreal Airports Up Landing Fees – Inside Logistics

Montreal’s airport authority, ADM Aéroports de Montréal, is increasing fees in an attempt to stay financially afloat during the pandemic.

For 2020, the not-for-profit ADM estimates it will have a shortfall of $300 million. It says new restrictions, the emergence of variants of COVID-19, and the extended border closure will continue to put significant pressure on its financial performance in 2021.

Effective April 1, the airport is increasing landing fees for all-cargo flights. An airport improvement fee will also be charged for all non-terminal flights and general aviation at Montréal-Trudeau International Airport, effective on the same date.

February 15: ‘It’s a Juggling Act’ Say Handlers as Cargo Congestion Swamps Europe’s Airports – The Loadstar

Forwarders and other stakeholders are being urged to help stem the chaos at airports, as multiple hubs and handlers across western Europe face severe congestion, with no sign of flows easing despite China’s holiday.

Cargo flows continue to be high – but also unpredictable – and handlers say they expect volumes to continue throughout the Chinese new year break.

Dnata at Schiphol is among the handlers struggling, with one airline reporting that the facility was “imploding.”

February 18: Asia Air Freight ‘Very Strong’ Despite CNY Holiday – Lloyd’s Loading List

The Asia air freight market has remained very strong despite the Chinese New Year (CNY) holiday being in full swing, with the combination of strong demand and very little available capacity resulting in peak-level rates, according to Flexport’s latest weekly update.

Rates are highest out of North Asia and Southeast Asia on both the Transpacific eastbound and Far East westbound trade lanes.

February 18: Clean Planet Introduces Ultraclean Jet Fuel: 75% Reduction in CO2 Emissions, Made from Non-Recyclable Plastics – American Journal of Transportation

Sustainable and green-energy company Clean Planet Energy has announced a breakthrough product in its mission to significantly reduce carbon emissions in transport. Branded as ‘Clean Planet Air’ in its launch video, the certified kerosene/jet fuel can be used as a direct replacement for the fossil-fuel equivalent, yet it reduces C02 emissions by a minimum of 75% in comparison, while removing thousands of tonnes of waste plastics from the environment every year.

Clean Planet has developed other fuels that directly substitute the fossil-fuel requirements for large marine vessels. This latest announcement now means Clean Planet covers almost all major road, sea and air transport fuel types.

February 24: Joint Statement by Transport Canada and the U.S. Department of Transportation on the Nexus between Transportation and Climate Change – Transport Canada statement

Canada’s Minister of Transport, the Honourable Omar Alghabra, and United States Transportation’s Secretary, the Honourable Pete Buttigieg, issued the following statement:

Recognizing the transport sector constitutes one of the largest sources of greenhouse gas emissions for both nations, and in light of the integrated nature of our transportation sectors, we are committed to reinvigorate our bilateral cooperation to fight climate change and limit the environmental impacts from our transportation networks—on land, air and sea.

We will work together to accelerate policy actions that help our transport sectors grapple effectively with the climate challenge. A healthy environment and economy support the goals of both countries to ‘build back better’ from the COVID-19 pandemic, and leverage actions at the state, provincial, territorial and local levels.

On aviation, we are committed to work together on a shared vision toward reducing the sector’s emissions in a manner consistent with the goal of net zero emissions for our economies by 2050, and on robust standards that integrate climate protection and safety. We intend to advance the development and deployment of high integrity sustainable aviation fuels and other clean technologies that meet

rigorous international standards, building on existing partnerships, such as through ASCENT– the Aviation Sustainability Center– and pursue policies to increase the supply and demand of sustainable aviation fuels.

February 24: COVID-19 Cash Burn Continues – Urgent Preparations for Restart – IATA press release

The International Air Transport Association (IATA) released new analysis showing that the airline industry is expected to remain cash negative throughout 2021. At the industry level, airlines are now not expected to be cash positive until 2022.

Estimates for cash burn in 2021 have ballooned to the $75 billion to $95 billion range, from a previously anticipated $48 billion.

With airlines now expected to burn cash throughout 2021, it is vital that governments and the industry are fully prepared to restart the moment governments agree that it is safe to reopen borders.

February 26: Airline CEOs Urge White House Support for Greener Aviation Fuel – Reuters

The CEOs of American Airlines, United Airlines and Delta Air Lines and other airline officials met virtually with White House officials to discuss tackling aviation pollution and urge U.S. support for greener aviation fuel.

United Chief Executive Scott Kirby made clear the carrier was fully committed to confronting the climate crisis and sought White House support for “incentives for sustainable aviation fuel and carbon capture in the forthcoming economic stimulus proposal.”

White House National Climate Advisor Gina McCarthy, economic adviser Brian Deese and Transportation Secretary Pete Buttigieg took part in the meeting, including discussion of using biofuels to power air travel and reduce carbon emissions.

Rail

February 2: CP and Union Reach Tentative Deal – Inside Logistics

Canadian Pacific Railway Limited and the Teamsters Canada Rail Conference Rail Canada Traffic Controllers (TCRC-RCTC) have reached a tentative three-year agreement.

The TCRC-RCTC represents approximately 300 rail traffic controllers in Canada.

“We believe this tentative agreement is in the best interests of our members, and look forward to its successful ratification,” said TCRC-RCTC General chair Jason Bailey.

February 16: Negotiations Between MEA and CUPE 375

Further to negotiations between the Maritime Employers Association (MEA) and CUPE 375, the MEA shared the following message:

Last Friday, February 12, the Federal Mediation and Conciliation Service informed both parties that negotiation was suspended until further notice.

We are now assessing all options and remain ready and available to negotiate.

Our priority remains to reach a settlement as soon as possible.

In order to comply with the truce concluded with the Port of Montreal Longshoremen’s Union, the Maritime Employers Association will not comment on the ongoing negotiations.

February 23: Shippers Say U.S. Railroads Conspired to Boost Prices by Imposing Co-ordinated Fuel Surcharges – Inside Logistics

A U.S. federal judge has ruled that the details of conversations between the four largest American railroads should be included in lawsuits challenging billions of dollars of charges the railroads imposed in the past.

The ruling on February 19 undercuts one of the defences Union Pacific, BNSF, CSX and Norfolk Southern had offered in dozens of lawsuits major companies filed last year questioning the way railroads set rates. The lawsuits say the railroads conspired to boost prices starting in 2003 by imposing co-ordinated fuel surcharges and pocketing billions of dollars in profits.

February 25: CN Updating ESG Strategy – Railway Age

CN is undertaking four environmental, social and governance (ESG) initiatives that the railroad reports are in line with emerging best practices and were informed with input from investors, customers, employees and local communities.

The railroad is:

· Creating the CN Indigenous Advisory Council

· Holding an annual advisory vote on its climate change action plan

· Committing to having at least 50% of the independent directors on its board come from diverse groups, including gender parity, by the end of 2022

· Revamping governance policies to reflect best practices in Canada and the U.S