Dear all Valued Customers
Ocean carriers have announced more blank sailings from Asia to Europe and the US, as they struggle to match capacity with falling demand.
THE Alliance (THEA) partners Hapag-Lloyd, ONE, Yang Ming and HMM will cancel two additional head haul voyages of the FE5 loop in weeks 21 and 23 at the end of May and suspend the FE4 string for two months from the end of April – from weeks 18 to 26. The final FE4 voyage before the suspension is next week, with the sailing from Qingdao of the 24,000 teu HMM Algeciras, the first voyage of HMM’s flagship ULCV within THEA, and it could see the world’s largest containership idled after it completes the round trip. The South Korean carrier joined THEA as a full member on 1 April. It is due to receive 12 24,000 new ULCVs by September, all stemmed to be phased into the FE4 loop, to replace 11 Hapag-Lloyd 15,000 teu vessels.
Meanwhile, Ocean Alliance partners CMA CGM, Cosco (OOCL) and Evergreen yesterday announced 13 more blank sailings during April and May on the transpacific, “in response to the expected low demand in the market”, which brings the grouping into line with the 2M and THEA groupings’ blanked capacity on the route.
Changing Loading Windows Challenge US Ag Shippers
An abundance of blank sailings in response to the coronavirus disease 2019 (COVID-19) has shippers struggling with constantly changing windows during which to deliver their products to ports for export, costing them extra in terms of storage and equipment fees if they miss loading times.
The blank sailings are disrupting vessel schedules and creating costly logistics problems for exporters who must coordinate the transport of containers from inland warehouses to seaports within the narrow windows that carriers have set for receiving export containers. The disruption is occurring as export of some ag products such as citrus, meat, and cotton are growing.
Exporters are struggling to comply with carrier-imposed deadlines known as the earliest receiving date (ERD) for delivering their containers to the ports. Ag shippers say the knock-on impact of sudden changes in the ERD due to changes in vessel arrival dates is resulting in exporters paying costly penalties at packing houses, rail ramps, and marine terminals when they are unable to meet the shipping and receiving commitments they made at those locations.
ERDs intended to mitigate terminal congestion
Ocean and rail carriers set ERDs because they can’t have containers sitting idle at their ramps or terminals, taking up space needed for cargo handling operations. ERDs, also referred to as export receiving dates, are basically a window of several days at rail ramps, and about a week at marine terminals, within which the export containers must be delivered. If the containers are delivered before the ERD, the shipper is charged a fee.
Shippers incur penalties for failing to meet pickup or delivery commitments throughout their supply chains. They are penalized for failing to deliver empty containers to packing warehouses in the designated window, or pulling the loaded containers from the facilities in the allotted time. Fees are also charged by railroads for delivering the export containers to a rail ramp before the designated ERD, or delivering the containers to marine terminals before the earliest return date.
Blank sailings spawned ERD problems
ERD changes became a big problem in February when carriers began to cancel sailings during the slack post-Lunar New Year period. Additional blank sailings took place in March when COVID-19 disrupted production in China. Carriers over the past couple of weeks have announced additional blank sailings lasting into mid-June as COVID-19 disrupts consumption patterns in the US. From early February to mid-June, carriers have cancelled, or plan to cancel, 150 sailings to the West Coast and 65 sailings to the East Coast.
FAA Issues Guidance for Cargo in Passenger Cabin
The Federal Aviation Administration is giving airlines the greenlight to carry cargo in the passenger cabin to maximize efficiency and relaxing take-off and landing quotas at congested airports.
The agency on Thursday issued guidelines for commercial carriers to follow if they transport cargo in stowage bins, passenger seats or on the floor, with the seats removed. The safety alert essentially tells carriers they can carry shipments up top as long as they adhere to all regulatory requirements for the safe carriage of cargo. Passenger cabins are not designed for all-cargo configurations, but the rules allow goods to be carried there if all normal requirements for the safe carriage of cargo are followed.
The safety alert instructs operators how to assess the risk for carrying goods in the passenger space, including weight and balance, fire detection and suppression and hazardous materials considerations. Carriers have to verify the contents to make sure no dangerous goods are carried in the upper deck. The FAA also recommends that one or more crew members travel in the cabin with the cargo to respond to any potential fire, since fire suppression systems are not present as they are in the cargo hold of modern widebody aircraft. Passenger cabins only have fire extinguishers.
It was reported earlier this week that American Airlines and Delta Air Lines asked the FAA for permission to carry cargo on the main deck without passengers on board. The use of cargo-only passenger charters has increased in popularity since early March as a way to alleviate the shortage of air transport since airlines grounded most of their fleets.
CMA CGM Reorganizes APL, Limiting to TP – US Trade
CMA CGM announced this week the reorganization of the APL brand and is transferring service allocation to CMA CGM for the following trade routes:
• Asia, Red Sea Trade, effective May 15
• Asia, Indian Subcontinent, effective May 15
• Asia, Middle East Trade, effective June 15
• Asia, Latin America Trade, effective July 1
This move by CMA CGM limits the APL brand to essentially servicing only the Trans-Pacific -US Trade
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. Please feel free to contact your assigned Customer Solutions Representative, should you have any queries or concerns.
Keeping you updated,
BRi Customer Solutions Team
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