Month in Review – March 2021

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Trucking

March 8: ACT’s Driver-Availability Index Reflects Three-Year Low – The Trucker

The latest release of ACT’s For-Hire Trucking Index, which includes data for January 2021, showed a Driver Availability Index that has tightened to its lowest point in the past three years.

Tim Denoyer, ACT Research’s Vice President and Senior Analyst commented, “The Driver Availability Index tightened to a new low in January, to 25.0 from 28.1 in December. For the second straight month, this was the tightest reading in the three-year history of this index. Rising driver pay for several months has yet to impact the tight driver market. The surge in pandemic cases, which is now reversing, and extended unemployment benefits, which are set to be extended further, are also supply constraints.”

March 10: FMCSA Chief Joshi: Drivers Will Take Hit from Automated Trucks – FreightWaves

How the move toward driverless trucks will affect the truck driver workforce is a challenge that must be addressed, whether the timeline toward full automation ends up short or long, according to the nation’s top truck safety regulator.

“We can argue about scope and timeline, but what we can’t argue about is that this a reality: There will be a major shift in workforce,” said Meera Joshi, acting administrator at the Federal Motor Carrier Safety Administration (FMCSA). “Automated vehicles will certainly make inroads into the workforce.”

March 16: U.S. DOT Study Predicts No Mass Layoffs from Driverless Trucks – FreightWaves

A U.S. Department of Transportation (DOT)-sponsored study on automated driving systems (ADS) concludes that truck drivers should not fear significant job losses due to automation unless driverless technology is adopted on a fast timeline.

Produced by DOT’s Office of the Assistant Secretary for Research and Technology, Macroeconomic Impacts of Automated Driving Systems in Long-Haul Trucking for the first time estimates productivity benefits due to ADS in the trucking industry, as well as indirect benefits for the wider economy.

“Our model indicates that the productivity enhancements from the adoption of ADS in the long-haul trucking sector will increase GDP, capital, employment, wages, and welfare that can be monetized into billions of dollars,” the study asserts.

“Additionally, our model concludes that these economic benefits can likely be reaped without mass lay-offs of long-haul truck drivers. Assuming the occupational turnover remains near today’s levels, employment levels in the long-haul trucking sector will necessarily fall due to automation, but will not force lay-offs in the slow- and medium-speed adoption scenarios,” it states.

March 23: Softening Lockdown Restrictions Send Spot Market Freight Volumes Soaring – Today’s Trucking

Canadian spot market load volumes are surging, with February hitting a single-day level not seen since 2018 and March on pace to reach the strongest levels in three years.

Loadlink Technologies reports that average daily volumes for the month were up 19% in February, attributing the strengthening to loosening COVID-19 lockdown restrictions in many parts of Ontario and Quebec. Domestic loads were up 20%.

Based on early March volumes, Loadlink is predicting March numbers will set a new monthly high not seen since June 2018, and suggested the index may be in for a double-digit increase from February to March.

March 30: Truck Driver Shortage a Worldwide Phenomenon – Today’s Trucking

Fleets are struggling to hire the truck drivers they need despite economic slowdowns associated with COVID-19, and not just in Canada.

The IRU — an international supply chain group that counts members such as the Canadian Trucking Alliance and American Trucking Associations – is reporting driver shortages around the world.

Some countries are struggling with even bigger shortages than those experienced in Canada.

Trucking HR Canada data identified 20,000 unfilled truck driving jobs in 2020, and it projects 23,000 vacancies by 2023. Based on about 300,000 truck driving jobs last year, that puts the Canadian vacancy rate at more than 6%.

“[The] driver shortage threatens the functioning of road transport, supply chains, trade, the economy, and ultimately employment and citizens’ welfare. This is not an issue that can wait. Action needs to be taken now,” says IRU Secretary General Umberto de Pretto.

March 30: Federal Carbon Price Increasing on April 1 – Ontario Trucking Association

The Canadian Trucking Alliance (CTA) is reminding the trucking industry that the federal carbon price on diesel is set to increase to $0.1073 (about 10 cents) per litre on April 1, 2021.

Based on diesel fuel consumption in Canada and the estimated miles travelled by Canadian trucks through domestic trips (in all provinces), CTA estimates the trucking industry will pay $538 million in carbon pricing this year. By 2023 this figure will increase to $1.2 billion and by the end of the proposed carbon tax pricing schedule, increasing by $15 per tonne until 2030, will escalate to $3 billion.

Marine

March 4: U.S. Lawmakers Call Out Container Practices in Letters to FMC, Say Ocean Carriers Reject Exports for Revenue – Supply Chain Dive

Lawmakers have written to the Federal Maritime Commission voicing concern about the current state of the ocean shipping market that has resulted in U.S. exporters having a difficult time obtaining containers.

So far, three letters were sent to the FMC: one by Rep. Kim Schrier, D-Wash., another by Senators Roger Wicker, R-Miss. and John Boozman, R-Ark., and a third by Senators John Thune, R-S.D., and Amy Klobuchar, D-Minn.

“From what I am hearing from Washington state exporters, the current lack of container availability cannot be attributed to pandemic-related disruptions alone,” Schrier wrote in her letter to the FMC. “Ocean carriers seem to be making a revenue-based decision to reject U.S. exports.”

March 5: Aggressive Carriers Pushing Some Importers to Shun China, ‘Biting the Hand that Feeds Them’ – The Loadstar

There are growing signs that the sky-high freight prices on the Asia-Europe trades may be beginning to structurally undermine it, as European importers begin to look for alternatives to sourcing from China.

Keith Gaskin, group commercial director of Seko Logistics in the UK, said: “I am seeing importers in the UK and Europe actively telling their merchandisers to look for near-shoring solutions, because the freight rates from Asia have reached such heights it is making their business untenable.”

While Mr. Gaskin admitted that switching sourcing locations was not an overnight process, he added: “We are seeing Turkey as a new sourcing location for a lot of products, and it is growing exponentially. And there is other manufacturing capacity across eastern and central Europe, as well as parts of North Africa.

“Carriers have now realized they are in a position to control the market – by restricting capacity they can control the rates. But by taking this ultra-aggressive approach, I am worried that they are biting the hand that feeds them.”

March 9: U.S. Reefer Carriers are Rejecting Half of Tenders – FreightWaves

In the U.S. reefer market at this time, reefer carriers are rejecting 50.3% of tendered loads, up from 40% in early February and up from 10% at this time last year. So, as concerning as tight transportation markets are for shippers that don’t need temperature controls, those that do are in far worse shape.

March 9: Storage Rent Doubles as Import Boxes Pile Up at Chittagong Ahead of Ramadan – The Loadstar

Chittagong Port Authority (CPA) this week doubled the rent for FCL import containers staying in the port yard for more than 11 days after the facility became flooded with uncollected boxes, disrupting Bangladesh’s prime gateway.

The number of FCL containers at the port yard exceeded its designated capacity of 34,864 TEU, forcing the port authority to store them at places allocated for other boxes.

March 9: 112 U.S. Congress Members Sign Letter to FMC Seeking Investigation into Export Challenges

In a letter to the Federal Maritime Commission, 112 members of the U.S. Congress wrote “to share our mounting concern over reports that certain vessel operating common carriers (VOCCs) are declining to ship U.S. agricultural commodity exports from our ports.”

They have asked the FMC to investigate these reports and “provide monthly updates to Congress until the matter is resolved.”

Read the letter here.

March 12: Rates Hold Steady Despite Softer Demand, with Carriers Firm on Contract Prices – The Loadstar

Container spot rates from Asia to Europe remained virtually unchanged this week, despite softer demand, assisting carriers to lock-in shippers with huge contract rate hikes.

On the transpacific, there was no let up in demand and BCOs are struggling to secure new deals with carriers.

Moreover, in practice, shippers are often obliged to pay more than spot to guarantee equipment and space availability.

March 14: Update – Port of Montreal Labour Dispute

The Freight Management Association of Canada provided the following information.

In a memo, the Canadian Union of Public Employees (CUPE) 375 informed its members on Sunday that the Maritime Employers Association (MEA) issued a final offer to the union late on Friday, March 12.

The union president stresses that this is an offer, not an agreement in principle between the parties. There are no details on the content of the MEA offer.

The memo says the union executive committee will undertake a detailed analysis of the offer and submit it for a vote by the members.

March 16: Update on Labour Situation at Port of Montreal

CIFFA received notice that the Longshoremen’s Union CUPE Local 375 has advised its members that, on March 15, a hearing took place before the Canada Industrial Relations Board on the issue of the union being said to be negotiating in bad faith. A ruling from the CIRB is expected soon.

On March 12, the employer, the Maritime Employers Association, put forth a final offer to the union. It is not an agreement in principle.

The union will send out the final offer to members on March 18.

The Port of Montreal will be closed on March 21 from 7:00 am to 3:00 pm for a special meeting of members, during which time the contents of the final offer will be discussed.

March 16: Shippers Brace for Fresh Price Hikes in the ‘New Normal’ for Ocean Freight – The Loadstar

Shippers are bracing themselves for a fresh onslaught of freight rate hikes and peak season surcharges (PSS) from April, as ocean carriers reinforce their supply chain dominance across tradelanes.

For headhaul routes, transpacific carriers, having eased off on their general rate increases in September following a shot across the bows by the Chinese regulators, are again preparing to roll out rate hikes next month.

March 17: Update on Port of Montreal Labour Situation

On February 1st, the Maritime Employers Association filed a complaint to the Canada Industrial Relations Board (CIRB) alleging that the union had not bargained in good faith, and a CIRB decision was rendered March 17 of no impasse.

The MEA said it acknowledges this decision and said it will follow with attention the recommendations emanating from the CIRB.

March 21: Longshoremen Vote 99.71% Against MEA Final Offer but Say They Will Ask MEA to Return to Negotiations

Ninety-one percent of the Longshoremen’s Union Local 375 members voted on the Maritime Employers’ Association’s final offer, presented to the union on March 12. Of 1,023 total votes, 1,020 members refused the final offer, meaning that 99.71% voted no to the MEA offer.

During a press conference, the union cited hours of work, job security, ocean carrier profitability and the need for the “real decision-makers” to be at the table as issues.

Michel Murray, the CUPE union representative, said that, “Symbolically, the union also voted today to ask the employer to go back to the negotiation table. We intend to call the mediators this evening and our goal is to go back to the negotiation table to work on a collective agreement.”

The MEA said it recognizes the will of the union to pursue further negotiations and that its priority is to have a decision as soon as possible.

March 22: ONE Suspends Import Bookings into Myanmar

In a notice to customers, Ocean Network Express (ONE) informed that it has temporarily suspended import bookings into Myanmar with immediate effect, due to severe disruptions caused by ongoing protests.

March 23: Feds Planning Back-to-Work Legislation in the Event of Port Strike: La Presse

An article in Quebec’s La Presse newspaper (available only in French) suggests that the Trudeau government plans to react quickly to any strike action on the part of the longshoremen at the Port of Montreal.

Apparently, Filomena Tassi, the Minister of Labour, is preparing back-to-work legislation in the event a strike is declared.

Quebec Premier François Legault is said to have met with Prime Minister Justin Trudeau last week and to have stressed that a strike would harm any economic recovery after a year dealing with the COVID-19 pandemic.

The two parties, the Longshoremen’s Union Local 375 and the Maritime Employers’ Association, are said to be heading back to the negotiating table this week after the union rejected the employer’s so-called “final offer” on Sunday, March 21.

March 23: No Jab-No Job Threat Could Provoke Next Crew Crisis – Splash

The International Chamber of Shipping (ICS) has warned that lack of access to vaccinations for seafarers is placing shipping in a ‘legal minefield’ and leaving global supply chains vulnerable.

According to ICS, vaccinations could soon become a compulsory requirement for work at sea because of reports that some states are insisting all crew be vaccinated as a pre-condition of entering their ports.

However, reports estimate that developing nations will not achieve mass immunization until 2024, with some 90% of people in 67 low-income countries standing little chance of vaccination in 2021. ICS calculates that 900,000 of the world’s seafarers – well over half the global workforce – are from developing nations.

This is creating problems for shipowners, who may be forced to cancel voyages if crewmembers are not vaccinated.

March 24: Suez Canal Blocked by Stranded Evergreen Boxship – Splash

An ultra large container ship, the Ever Given, operated by Evergreen ran aground on the Suez Canal on March 23, blocking traffic in both directions.

A large backlog of ships is now massing on either side of the waterway, waiting to go through.

Diggers are currently trying to dig around the bow, while Egypt has mustered every available tug to shift the giant vessel.

March 24: Congestion Hits Auckland, Posing a ‘Multimillion-Dollar’ Problem for Shippers – The Loadstar

Delays at the New Zealand port of Auckland have become a “multimillion-dollar problem” for the nation’s shippers.

Rocketing demand for containers, staff shortages and a half-finished automation program have combined to create a “perfect storm” of delays, exporters say.

Local reports claim Ports of Auckland Ltd is using only a third of its crane capacity and has been unable to fully use its new automated straddle carriers, because overseas engineers were blocked from entering the country after its borders closed.

Last week, the port’s congestion prompted Hapag-Lloyd, Maersk, Hamburg Süd and MSC to “structurally remove” Auckland from their jointly operated Oceania-U.S. east coast service in a “continued effort to safeguard schedule reliability.”

March 26: Shipping Rates Likely to Soar, New Cape Surcharge Expected as Ships Are Diverted – The Loadstar

Container spot rates from Asia to Europe look set to surge again, as carriers are obliged to blank sailings in response to the Suez Canal blockage.

The Loadstar understands that shipping lines are considering introducing a Cape surcharge for vessels that are diverted around Africa to recover the extra cost of bunker fuel consumed in the additional seven-to-10-day transit.

March 29: Ships Moving in Suez Canal after Ever Given Freed – American Journal of Transportation

Ships were starting to move in the Suez Canal after the dislodging of the giant Ever Given container ship cleared the key trade route for traffic.

There were 437 ships waiting to transit through the waterway, shipping agent GAC said earlier, citing the canal authority.

The Ever Given reached the Great Bitter Lakes, where it will undergo inspections.

March 31: Citing ‘Operational Challenges’, THE Alliance Delays Network Reorganization – Splash

Faced with extreme supply chain issues roiling global trade, THE Alliance has decided to delay the implementation of its new east-west networks from April 1 to May.

With the Suez Canal blocking, container shortages and ongoing congestion issues at ports around the world, the grouping made up of Hapag-Lloyd, HMM, Ocean Network Express (ONE) and Yang Ming has decided now is not the best time to reshuffle tonnage, according to Alphaliner.

THE Alliance had already communicated that it was delaying reorganizing its transatlantic services, citing “operational challenges” the industry is currently facing. Alphaliner reports that other network changes have also been put on hold for a month.

Air

March 3: Global Air Cargo Volumes Recover to Pre-COVID Level Inside 10 Months – American Journal of Transportation

A robust global air cargo market has virtually completed its recovery to post-COVID volume levels inside 10 months, according to airline performance data for February 2021 from industry analysts CLIVE Data Services and TAC Index.

For the four weeks of last month, chargeable weight stood at just -1% compared with February 2019 and was 2% ahead of the same month of 2020.

March 11: Tight Capacity and Vaccine Demand Surge Set to Keep Air Freight Rates High – Lloyd’s Loading List

Constrained capacity, a surge in the roll-out of vaccine shipments worldwide, and already-high demand in the air cargo sector for other commodities are likely to keep air freight rates at their current buoyant levels for some time to come, according to a senior executive at a leading air charter broker.

Chapman Freeborn’s head of cargo Pierre Van der Stichele said that, although prices for full freighter charters slipped after Chinese New Year, he believes prices are set to rise again.

“I really don’t know whether this a sign of a downward trend, but I certainly wouldn’t bet on it,” he noted. “Rates are more likely to increase again because, if you’re trying to find a 100-tonne-capacity pure freighter at the moment, it’s still super hard.

“Right now, the demand for cargo is very strong and there are no signs of a swift recovery in capacity and the core fleet of freighters is fully committed until at least December 2021,” he said.

March 18: Bargain Hunters Beware: No Time to Shop for Airfreight Deals – American Shipper

Volatility and uncertainty are the watchwords for the air cargo sector, but analysts and logistics professionals say extremely tight capacity and elevated freight rates are here to stay for the rest of the year, with none of the usual doldrums until the fall holiday rush. And finding aircraft with cargo slots is a big challenge all over the world, not just on the major trade lanes connecting China, North America and Europe.

High retail and industrial demand for shipping is putting pressure on the international airfreight sector, which is still about 20% below normal capacity because passenger jet traffic is heavily restricted.

Air cargo carriers are prioritizing customers willing to pay a premium for faster service. At the head of the line are e-commerce shippers, automakers that need components to keep assembly lines running, pharmaceutical manufacturers and certain retailers of high-value products.

Rail

March 21: Canadian Pacific, Kansas City Southern Plan to Merge into “The First USMCA Railroad,” CPKC – Railway Age

Canadian Pacific Railway Ltd. (CP) will purchase Kansas City Southern (KCS) in a cash and stock transaction worth US$29 billion, the two Class I railroads announced on March 21. The combined entity will be named Canadian Pacific Kansas City (CPKC).

The Surface Transportation Board will need to approve the transaction.

The merger comes as trade between the U.S. and Mexico is expected to increase as the two North American nations are enjoying far better relations following U.S. President Joe Biden’s inauguration.

“Joining seamlessly in Kansas City, Mo., CP and KCS together will connect customers via single-network transportation offerings between points on CP’s system throughout Canada, the U.S. Midwest, and the U.S. Northeast and points on KCS’ system throughout Mexico and the South Central U.S.,” CP and KCS said in a joint statement. “The combined network’s new single-line offerings will deliver dramatically expanded market reach for customers served by CP and KCS.”

March 23: Blockbuster CP-KCS Rail Merger Faces Lengthy Regulatory Journey – American Journal of Transportation

Canadian Pacific Railway Ltd.’s agreement to buy Kansas City Southern could face a long journey to win regulatory approval from the U.S. Surface Transportation Board.

“They have total authority over making the decision over whether this goes forward,” said Deb Miller, who served as a member of the board until 2018. “I think this will get a very long and hard look from the board.”

While Canadian Pacific said in a statement it expected board approval for the $25-billion deal sometime in 2022, it’s a process that could take years instead of months, said Miller.

March 29: CP-KCS Merger Synergies ‘Promising’: Survey – Railway Age

The majority of shippers participating in Cowen and Company’s survey on the proposed Canadian Pacific (CP)/Kansas City Southern (KCS) merger have a positive view of the transaction, and merger synergies “look promising,” according to the firm, which released results March 29.

These shippers (44%) were joined by respondents who said they have “no opinion” of the merger (38%); only 18% said they had a negative view. While it’s still early in the process, 50% of those with a negative option said they do not plan to take action with the Surface Transportation Board (STB), while 3% do and 47% have not yet decided, according to the Cowen Rail Shipper Survey.

When asked if a seamless CP/KCS connection would cause them to change freight allocation, 43% of shippers said it would, while 57% said it would not.

CIFFA Advocacy, Communications, Activities

March 1: CIFFA Sustainability Committee Looking for Interested Members

CIFFA is creating a Sustainability Committee and is soliciting interest from members who may like to participate.

Many sustainability initiatives are developed by freight forwarding and logistics companies and, given the wide array of sustainable development goals (SDGs) to which logistics can contribute, these initiatives cover a broad spectrum.

The mandate of the CIFFA Sustainability Committee will, therefore, be to identify best practices in the areas of sustainability and to provide guidance on the development and implementation of sustainability goals to membership.

The CIFFA Sustainability Committee is chaired by Christina Fisker, VP, Customs & Compliance at FCL Fisker Customs & Logistics. Christina can be reached directly at christina@fisker.ca for further information.

If you are interested in joining the committee, please contact admin@ciffa.com and, once a meeting date is established, you will be contacted.

March 1: Prime Minister Responds to CIFFA’s Letter about Potential Strike at Port of Montreal

CIFFA received correspondence from the Prime Minister’s Office in response to an email message sent on February 19 about the deteriorating situation in labour relations at the Port of Montreal. The reply was as follows:

“On behalf of Prime Minister Justin Trudeau, I would like to acknowledge receipt of your correspondence of February 19, 2021, regarding labour relations at the Port of Montreal.

“Thank you for writing to the Prime Minister. You may be assured that your comments, offered on behalf of the Canadian International Freight Forwarders Association, have been carefully reviewed.

“I have taken the liberty of forwarding your correspondence to the Honourable Filomena Tassi, Minister of Labour, and the Honourable Omar Alghabra, Minister of Transport, for their information and consideration.”

March 8: Response to CIFFA Letter from Minister of Labour

CIFFA received the following message from Barbara Moran, Acting Assistant Deputy Minister, Policy, Dispute Resolution, and International Affairs in the Labour Program of Employment and Social Development Canada.

“On behalf of the Honourable Filomena Tassi, Minister of Labour, I am responding to your email, which the Office of the Prime Minister, the Right Honourable Justin Trudeau, forwarded to her. You wrote regarding the Port of Montréal and ongoing collective bargaining negotiations between the Syndicat des débardeurs, the Canadian Union of Public Employees, Local 375 and the Maritime Employers Association.

“The Government recognizes the central role that the Port of Montréal and its workers play in the movement of goods across Canada and we are actively supporting the parties in their efforts to reach an agreement. The Federal Mediation and Conciliation Service has been working closely with the parties since 2018 and is continuing to assist them in their negotiations. Reaching an agreement at the bargaining table is in the best interest of workers, unions, employers and all Canadians.

“We will continue to monitor the situation closely.”

March 10: CIFFA Among Signatories to Letter to Ministers of Labour and Transport Regarding Threat of Labour Stoppage at Port of Montreal

CIFFA and 15 other business and industry associations representing Canadian businesses wrote this week to The Honourable Filomena Tassi, Minister of Labour, and The Honourable Omar Alghabra, Minister of Transport, saying they are “gravely concerned about the possible threat of another labour stoppage at the Port of Montreal” and urging the federal government “to use all tools at its disposal to facilitate a dialogue between the Maritime Employers Association and the longshoremen’s union to arrive at a negotiated agreement prior to the expiration of the truce on March 21st.”

Read the letter here.

March 16: CIFFA Joins Canadian Associations in Support of Bill C-11 to Update Federal Privacy Legislation

CIFFA is one of 29 associations that have signed a statement sent to the Standing Committee on Industry, Science and Technology.

The statement calls on the federal government to establish national standards for privacy legislation to ensure that consumer data is adequately protected and that Canadian businesses can remain competitive. Bill C-11, says the statement, provides an opportunity to achieve this goal and avoid a “patchwork of potentially incompatible rules in different provinces.”

The associations stress the importance of aligning Canada’s legislation with international privacy laws, in particular the European Union General Data Protection Regulation (GDPR).

March 17: CIFFA a Signatory to Statement from National Industry Associations Regarding Threat of Strike Action by Longshoremen at Port of Montreal

The Canadian Chamber of Commerce issued a press release, “Leading industry associations call on federal government to prevent strike action at the Port of Montreal,” which listed CIFFA among the signatories.