14/4/2021

Dear all Valued Customers

 

US shippers and importers that rely on rail are bracing themselves for a long struggle through a period of congestion and delays. However, some have lost patience and shifted traffic to truck.

 

The Los Angeles-Long Beach port complex has become synonymous with congestion for months, and problems are expected to continue at least into June, with imports projected to remain at elevated levels.

 

Meanwhile, other parts of the country are also struggling with delays:

 

•          Chicago - Congestion on the rail network in the Chicago area has led to several intermodal rail yards being clogged up as a result of a combination of factors. The Intermodal Association of North America registered a 13.6% increase in 40ft intermodal units moving out of the north-east and Midwest for January and February, while nationwide intermodal volumes were up 9.3%. At the same time, increased volumes of containers continued to pour into Chicago from Pacific ports, adding to the congestion at rail yards.

 

•          New York/New Jersey - In February, the terminals in New York and New Jersey were closed for five days because of weather conditions. Due to this, Norfolk Southern is still working through the backlogs. Additionally, import volumes through east coast ports have climbed, partly because importers shifted traffic from Asia there to avoid the delays on the west coast.

 

•          Memphis - Last month, Memphis emerged as a bottleneck for exporters from the south sending their cargo to the ports of Charleston and Savannah, as both Class I rail carriers serving the area decided to limit the number of containers on trains out of Memphis in response to elevated import levels that have made it more challenging for them to balance import and export containers at intermodal terminals to reduce congestion.

 

•          Los Angeles/Long Beach - A shortage of railcars is now adding to the delays at the port complex. Railcar turn times have doubled to about 10 days. According to the Pacific Merchant Shipping Association, a body of shipping lines and terminal operators, the average dwell time of rail containers continued to increase in February.

 

Experts say that an easing of volumes is not in sight. The National Retail Federation is just one industry that has projected increased volume this year of between 6.5% and 8.2%, and has predicted record volumes at least into June.

 

FMC Targets Refunds for Unfair Carrier Demurrage and Detention Charges

 

US Federal Maritime Commissioner Rebecca Dye is quoted as saying [the FMC] is planning to help shippers “get their money back” from “unreasonable” demurrage and detention (D&D) charges.

 

In November, the FMC launched an investigation into shipping lines’ role in the country’s port congestion, including D&D charges, empty container returns and the practice by some of declining agricultural exports in favour of repositioning empties to Asia.

 

Commissioner Dye is leading the investigation into possible violations of the Shipping Act and, in particular, an interpretive rule on D&D published in May. She admits the issue lies with the carriers and ports and discerning between where the blame for a container's demurrage and detention lies.  

 

Some Actions Raise Chances of Montreal Port Disruption

 

Tensions between Montreal employers and longshore workers escalated over the weekend with tit-for-tat actions, raising the chances of a return to last year’s state of labour unrest at Canada’s second-largest port.

 

Montreal port employers said they won’t be paying longshore workers their full salaries after tonnage fell 11 percent last month owing to cargo diversions. The longshore union responded by saying that it wouldn’t be working overtime or on weekends, or participating in training.

 

Ripples from Suez Ending in Waves of Price Rises on All Container Tradelanes

 

There are reports of “sharp increases” in Asia-Europe container spot rates this week, as the fallout from the week-long Suez Canal blockage restricts both vessel and equipment capacity in Asia.

 

The Ningbo Containerized Freight Index (NCFI) North Europe and Mediterranean component jumped by 8.7%, almost matching the 8.6% increase on the Shanghai Containerized Freight Index (SCFI).

 

Meanwhile, on the transpacific tradelanes, the Freightos Baltic Exchange (FBX) reading for Asia to the US west coast increased 4% this week, 251% higher than for the same week of last year. For the east coast, the FBX was up 2% – 108% up over the year before.

 

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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, please do not hesitate to contact your Customer Solutions Representative.

 

Keeping you updated,

BRi Customer Solutions Team

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