19/4/2021

Dear all Valued Customers

 

Shippers Must Plan to Navigate the 'New Normal'

 

The US container shipping system has maxed out its capacity - and on the back of what’s shaping up to be the sharpest US economic recovery since 1984, there are growing signs that it will only get messier in the foreseeable future for shippers and their transportation partners.

 

The elevated volumes have been unrelenting. On a year-over-year basis, US imports from Asia have risen by double-digit percentages in every month since August 2020. The retail demand and US manufacturing rebound have and will continue to weigh further on a port and inland network system that’s looking even more stressed than it was just four months ago.

 

New forecasts for the US economy suggests things are heating up faster, with IHS Markit predicting a 6.2 percent expansion this year. That’s a 0.5 percentage point upgrade from just a month ago. Some experts say that a 10 percent growth is not entirely out of the question too.

 

Congestion Spreading

 

Congestion has spread from Southern California up the coast to the Pacific Northwest, onto the East Coast, and inland to distribution hubs such as Chicago and Memphis. For Los Angeles and Long Beach; despite labour, chassis, railcar and warehouse availability improving; terminal operators say they simply need more train arrivals to clear out the congestion. New York and New Jersey continue to struggle with congestion due to the increased volume and closures related to weather earlier in the year. Additional congestion is expected, as 9 vessels containing an estimated 70,000 TEU released from the blockage of the Suez Canal are to due to arrive at the port next week. It is anticipated this additional freight will certainly have the potential to temporarily increase congestion problems at the largest East Coast port in the USA.

 

Norfolk and Savannah are beginning to see delays as well due to the level of demand. Vancouver and Prince Rupert are too experiencing congestion, but all eyes are also on these ports with the potential labour action in Montreal.

 

Chicago has struggled with a 13% increase in import volume, while Memphis became a bottleneck for exporters as they scrambled to send freight out of other sea ports due to carriers limiting their cargo acceptance.

 

Carrier Overcapacity is Unlikely to Return

 

Prior to the impact of the global pandemic, those engaged in sea freight transportation have been accustomed to ample capacity, and therefore the ability to negotiate favourable rates and additional services - such as free time. Under that environment, a challenge such as the recent Suez Canal incident, was easier to absorb.

 

Those days are unlikely to return. Carriers have added capacity through larger vessels, mergers and acquisitions and alliances, but they have also figured out how to manage their capacity better through blanked sailings. Some overcapacity may return here and there, but gone are the days of simply finding another carrier to move additional loads or last-minute bookings, at least at contract rates.

 

From a shipper’s perspective, this means the current conditions are the new normal for the foreseeable future. Now more than ever, assessing inventory strategies and supply chain flexibility are paramount.

 

Market Update

 

BRi USA is monitoring the global situation carefully and will provide updates as they are made available.

 

Ocean

 

• General conditions indicate that space is fully booked until mid-May.
• ONE/HPL/YML/HMM(EC6)/EMC(AUG) will launch a new direct service connecting Taiwan, South & Central China, and Busan to US Gulf Ports (Houston, Mobile, New Orleans). Maiden voyage is set for May 9, 2021.
• 2M(TP23)/ZIM(ZSE) will launch a new transpacific line connecting South East Asia and the US East Coast. It will connect Yantian and Vietnam in Asia with U.S. South Atlantic ports via Panama Canal, on weekly basis with "best-in-class" transit time. Maiden voyage is set for May 15, 2021.

 

Equipment

 

• Unstable schedule and serious equipment shortages forced carriers to implement more blank sailings in April. The window for securing equipment in April has been closed, and even for some carriers through mid-May, especially for USEC.
• All shipping lines are in tight supply of 40HQ at this moment.  

 

Air

 

• Capacity out of Asia and Europe is tight, most freighters are completely booked, some through May.
• While rates have declined since early pandemic levels, they are rising again due to tight capacity. Some carriers are updating their rates daily.
• Carriers are booking space 7-10 days in advance in some cases for US imports.
• We are seeing delays at the airports when tendering the cargo for exports, and the airlines will not hold cargo until the flight schedule departure date.
• Several airlines are moving shipments on more expensive Express Services only.

 

Domestic Trucking

 

• Truck capacity is tight as demand has increased and vaccine rollout has increased, but truckers have not added capacity to their fleets.
• Truck rates have increased as driver pay increases have become necessary to meet demand.
• Most loads are booked a week in advance.

 

Port of Montreal: What a Full Strike Could Mean

 

On Tuesday, longshoremen at Canada’s second-busiest port began a partial strike, refusing to work overtime on weekends. It came in response to a move by their employers to stop providing a guaranteed base pay regardless of hours worked. 

 

Another full strike is an increasingly likely possibility. The longshoremen, represented by Canadian Union of Public Employees (CUPE) 375, struck for 12 days last summer after talks with the Maritime Employers Association (MEA) failed to produce a contract. The strike ended with a seven-month truce that expired in March.

 

The labour dispute is hurting the port and the wide swath of the Canadian economy that relies on it. The Montreal Port Authority said cargo volumes fell by 11% in March – this at a time when competitors in Canada and the U.S. are contending with a deluge of container traffic spurred by COVID demand.

 

DOC Announced Final Determinations in Antidumping Duty Investigations of Mattresses

 

On March 19, 2021, the Department of Commerce (Commerce) announced its affirmative final determinations in the antidumping duty (AD) investigations of mattresses from Cambodia, Indonesia, Malaysia, Serbia, Thailand, Turkey, and Vietnam, and affirmative final determination in the countervailing duty (CVD) investigation of mattresses from China. Final rates ranged from 2.22% (origin Indonesia) to 763.28% (specific producer/exporter from Thailand). The final determination from the ITC should be announced sometime in May, according to the case calendar. 

 

From 2017 to 2019, mattress imports from Vietnam increased from $64,401 to $166,698,279 (imported value). The recent actions have seemingly resulted in suppliers looking to new sources, as there was a significant drop in imports year over year, according to Furniture Today.

 

BRi ERP and Order Management Program – track your product/shipments anytime and anywhere

 

To ensure you maintain visibility to your shipments as they move through the supply chain, please take advantage of BRi PATHWAY.

 

The information in PATHWAY is real-time and available 24/7.

 

To obtain a login for your account, please respond to this email so we can get you started!

 

As a valued customer, we hope that you will continue to trust us to source the best options for your supply chain needs now and into the future. Should you have any questions regarding this New item, please do not hesitate to contact your Customer Solutions Representative.

 

Keeping you updated,

BRi Customer Solutions Team

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