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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 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.
BRi USA is monitoring the global situation carefully and will provide updates as they are made available.
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.
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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 questions regarding this New item, please do not hesitate to contact your Customer Solutions Representative.
Keeping you updated,
BRi Customer Solutions TeamBack to News Page