BRi Global News - Ever Given Could Be Stuck for Weeks, Raising Risk of Port Congestion, Blank Sailings
Dear all Valued Customers
Watch this video for a better understanding of the situation and what is unfolding at this time
A container ship blocking the Suez Canal may take weeks to free, the salvage company said, as officials stopped all ships entering the channel on Thursday in a new setback for global trade.
The 400 m (430 yard) Ever Given is blocking transit in both directions through one of the world’s busiest shipping channels for oil and grain and other trade linking Asia and Europe. In fact, the congestion of the Suez Canal may delay nearly 7% of seaborne U.S. major grain shipments, according to USDA and vessel data analysed by Bloomberg.
The Suez Canal Authority (SCA) said eight tugs were working to move the vessel, which got stuck diagonally across the single-lane southern stretch of the canal on Tuesday morning amid high winds and a dust storm.
According to reporting from NBC, $3 billion worth of goods typically traverse the canal every day, with more than 150 ships now in a holding pattern on either side of the waterway.
As Port Congestion Grows, Blank Sailings are Possible
Europe’s hub ports are preparing for a tidal wave of volume that will arrive all at once when the Suez Canal is reopened, increasing the risk of congestion and so-called structural skipped sailings that could drive already record-low vessel reliability even lower.
There is a prolonged delay expected in moving ships through the Suez, which will have a ripple effect of forcing carriers to cancel future sailings as they try to catch up with the previous delays. The resulting cancellations in an already tight shipping market could force rates even higher.
Unlike the blank sailings instituted by carriers in response to weak cargo volumes, these missed voyages would be structural in nature. When a vessel has been delayed for a week or longer at a given port — or in this case outside the Suez Canal — the carrier will then institute a “structural” blank for that ship’s next sailing to rectify the service schedule.
Transportation through the canal will remain suspended for the foreseeable future. Experts say it will take anywhere from days to weeks to remedy the situation. Some carriers are exploring alternate routes, including through the Cape of Good Hope. However, with that extended route, shippers can expect an 3,500 miles from Singapore to Rotterdam, or 12 to 14 days of additional transit time.
BRi is monitoring the situation and will deliver updates to clients whose freight may be affected by the canal's blockage.
Please reach out to your BRi Representative with questions.
Maersk Eureka Delayed While En Route to Long Beach
The arrival of the Maersk Eureka at the Port of Long Beach, California, will be delayed by about three weeks because of a mechanical problem at sea.
The notice of the latest delay came from MSC Mediterranean Shipping Co., which told customers, “Maersk has informed us that the container ship Maersk Eureka, deployed on our Sequoia service, had to stop at sea due to a damaged fuel pump.”
It is estimated that the repairs will not be completed until Wednesday, and a Maersk spokesman told American Shipper the Eureka was holding its position 650 miles off Dutch Harbor, Alaska. The customer notice pointed out that “no containers have been lost or damaged and all reefers are on power.” But because of the repairs, the Eureka is expected to be 15 to 20 days behind schedule, MSC said. Read more here.
BRi is monitoring the situation and will deliver updates to clients whose freight may be affected by this delay
Please reach out to your BRi Representative with questions.
UP Adding Ag Shipping Capacity Through PNW Ports
Union Pacific Railroad entered an agreement with rail transportation and logistics company Savage to develop a new intermodal terminal at the former's Idaho rail yard in an effort to speed containerized agricultural exports out of the US Pacific Northwest. The new rail yard will serve shippers of containerized hay and other agricultural exports to Asia.
FMC Orders Some Ocean Carriers and Marine Terminals to Report on Demurrage and Detention Practices
In response to complaints by U.S. exporters and Democratic and Republican Congressional representatives, the U.S. Federal Maritime Commission (FMC) announced that it was ordering 10 ocean carriers and 17 marine terminals to report on demurrage and detention practices and penalties assessed on shippers as well as the availability of empty containers for U.S. exporters to ship their goods.
The Agriculture Transportation Coalition was pleased with the FMC’s action - but realizes there is more work to be done - saying that, “it has the potential to significantly reduce unreasonable demurrage and detention charges. But the export transport crisis continues, with lost sales and other additional costs amounting to millions of dollars a week. Solutions are urgently required; we are continuing to work with Congress, USDA (U.S. Department of Agriculture) and the FMC to expedite relief.”
Merged CP-KCS Offers New Cross-Border Intermodal Growth Ramp
The proposed merger between Canadian Pacific Railway and Kansas City Southern Railway provides new opportunities to grow intermodal business between Mexico and Canada, if the companies can navigate several challenges once the $29 billion deal wins regulatory approval, market observers say.
Some intermodal marketing company (IMC) executives and industry analysts agree there is potential for new container business, but others question whether CP’s US service is quick and cheap enough to compete. Canadian Pacific believes there will be intermodal growth opportunities if a merger with Kansas City Southern is approved, but there are challenges to overcome to get shippers to use the new available lanes between Mexico, the US Midwest, and Eastern Canada.
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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 queries regarding this News, please do not hesitate to contact your Customer Solutions Representative.
Keeping you updated,
BRi Customer Solutions Team
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