Competitive Edge

November 16th, 2022

SEVERE WEATHER – Florida responds to impacts from Hurricane Nicole

Florida’s ports that were closed ahead of Hurricane Nicole are now open.

All roadways and bridges closed due to the storm are now open. All transit agencies are now open. For a closer look, please refer to this news release.

UPDATE: U.S. and Canada Ports – Number of Cargo Vessels at Anchor 

• Vancouver: 37 Vessels at Anchor (+1)
• Savannah: 30 Vessels at Anchor (+5)
• Houston: 14 Vessels at Anchor (-8)
• San Francisco/Oakland: 8 Vessels at Anchor (+1)
• Los Angeles/Long Beach: 7 Vessels at Anchor (+3)
• Mobile: 4 Vessels at Anchor (-3)
• New York/Newark: 3 Vessels at Anchor (-2)
• Charleston: 0 Vessels at Anchor (0)

Note: Count taken on November 8, 2022. This count does not include vessels moored and being unloaded at port docks. Colored numbers in parentheses represents the change from last week over. Data is courtesy of MarineTraffic’s live vessel traffic map.

Have another U.S. or Canadian port you’d like us to track weekly? Let us know!

Takeaways

U.S. West Coast: The USWC saw little week-over-week change in respects to its vessel count.
However, some shippers aren’t seeing this glitter as gold. Despite being the least congested of America’s coasts, struggling rail service and stalling labor contract negotiations have contributed to weary shippers averting the WC.
U.S. Gulf Coast: Houston’s vessel count observed another significant dip. With a dwell fee now in play for shippers, the Gulf’s main gateway is seeing less marine traffic coming its way.
U.S. East Coast: Solely off the last two months, New York is the mecca of trade activity for the U.S. Typically, the country’s third busiest (behind Los Angeles and Long Beach), the EC port has jumped ahead of its WC counterparts as shippers remain weary of WC routings. The vessel count remains relatively minimal at New York, but its operations have struggled, mainly with dwelling containers. 
Canada: Unlike its US counterparts the port shares the WC with, Vancouver seems to be in a congestion purgatory. Canada’s largest port has never departed below 30 vessels for the past several weeks. Berthing delays remain a hurdle the port is struggling to clear. 

IMPORT: Asia to North America (TPEB)

Recent Developments:

• Contract negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) remain active. The existing labor contract between the two parties expired July 1.
• Rail congestion is considerable at most ports, including inland hubs.
              • Los Angeles, Long Beach, and Houston are the posterchildren of this challenge. Dwell times are around 15 to 20 days. However, glowing improvements to congestion at some inland hubs, like Dallas, are promising signs going forward.

Rates: Rates remain low but have finally settled. There is speculation whether rates will continue to fall again or if we reached the post-pandemic floor.
In addition, carriers have announced GRIs, effective yesterday, affecting all U.S. and Canadian destinations. Of course, these typical general increases will bring added costs to ocean freight rates.
Space: Space is open.
Capacity: Carriers have reduced their capacities to balance the market amid low demand. Capacity remains generally open for transpacific trade.
Equipment: Chassis availability is in a crunch in pockets, but with production amping up and lower import volumes coming through, there is hope of relief. Congested rail ramps remain a frequent fixture.
TIPS:
• Book at least two weeks prior to the ready date.
• For cargo ready now, take advantage of open space and softened rates on the spot market.
• Blank sailings are in play which may affect schedule integrity.

IMPORT: Europe to North America (TAWB)

Recent Developments:

• Labor-related tensions are still stirring in the U.K. While Liverpool has reached an agreement with the dockworker union, Britain’s largest port, Felixstowe, remains without any deal. Further strikes remain a possibility.

We discussed the U.K.’s current labor tensions during today’s live webinar, where we were joined by our British partners, EORI (UK) LIMITED, to discuss the impacts in greater detail. Watch here

Rates: Steady decreases to rates over the past few weeks have stabilized. However, additional capacity to the transatlantic trade should usher rates to fall over the next several weeks.
Space: Space to both U.S. coasts have benefited from added capacity.
Capacity: Capacity is increasing as additional vessels enter USEC loops.
Equipment: Equipment availability at European seaports is still in a crunch. Inland terminals in Europe are also still reporting equipment shortages. On the U.S. side, chassis availability has improved.
TIPS:
• Book five or more weeks prior to ready date.
• Stay up to date with your forwarder and carrier with advisories on added capacities and declining rates for the trade lane.
• Strongly consider premium services for no-roll options and improved reliability of cargo.

EXPORT: North America to Asia

Recent Developments:

• Savannah’s congestion remains a lead contributor to operational woes at the Georgian port.
• Schedule reliability, or lack thereof, remains an anxiety for exporters. In particular, Oakland saw its volumes dwindle in September as a result.

Rates: So far, no GRIs announced for November.
Capacity: Capacity remains stable.
Equipment: Inland ports, notably Kansas City and Memphis, are reporting container and chassis deficits (the latter improving). Standard equipment at ports remains available unless advised otherwise.
TIPS:
• Book four to five weeks prior to the time of departure to secure necessary equipment and vessel space.

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Freight News

Exporters express frustration over USWC port disruptions

Exporters, especially agriculture exporters, have been quite frustrated over the disruptions throughout the U.S. West Coast.

One of the more recent disruptions was the one-day work stoppage at the Port of Oakland on November 2nd due to marine clerks picketing over a travel pay issue for dockworkers who come into the port from outlying locations.

Just on Monday this week, operations at the Oakland International Container Terminal – the Port of Oakland’s largest container terminal – were halted due to job action taken by members of the ILWU that are linked to the current contract talks and jurisdictional dispute in Seattle. As of Tuesday, it was fully operational.

Normally in a situation like that an arbitrator is swiftly called in to make a spot ruling. However, because the dockworkers have been laboring since July 1st without a contract and the arbitration process that is associated with it, it can make it more difficult and take longer to restore port operations following walkouts, reports detail.

Which leads to another disruption of sorts on the USWC, the ILWU contract talks. Those talks began this past May, and while some optimism was showing a few months after, that has kind of faded. As some experts are feeling an agreement won’t be reached until sometime next year.

Some say they will continue to try and ship much of their discretional cargo as possible through the U.S. East and Gulf Coasts, to avoid the disruptions out on the West Coast.

Safety concerns surrounding the increasing volume of
lithium batteries

The U.S. air cargo community have expressed their concerns over supply chain safety in regards to the increasing volume of lithium batteries in products ordered online, that enter the country by post and avoid customs checks – the Journal of Commerce notes.

Lithium batteries are known as dangerous goods that require specialized transport.

One expert noted that global lithium battery usage was increasing by around 30 percent a year, with soaring demand for consumer electronics and mobility devices.

Currently, the U.S. “de minimis” threshold for products that do not require customs declaration is $800, a level that allows most goods ordered online containing lithium-ion batteries to be able to go around the strict regulations that control the transport of dangerous goods.

Rechargeable lithium-ion batteries are popularly found in smart phones, tablets, cameras, laptops, etc. But with the popularity of demand for these, there has been an increased fire risk.

The issue that has been occurring is some – in an effort to avoid the increased cost – counterfeit lithium batteries are not declared as such and incorrectly packaged or shipped with too high a charge, which can pose a significant risk of fire while in transit.

Blogs of the Week

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Interlog Insights

In last week’s Interlog Insights we discussed what does a new normal for logistics mean? Are we returning to a stable market?
How long are rail unions cooling-off until possible strikes are in play? And what is Canada doing to alter the way its ports work?

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