BRi Global - News Update 9th July 2021
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- Topics (I would ask all of you to read the highlighted areas as this information is extremely important at this time!)
- U.S. Executive Order Urges Regulatory Agencies Crack Down on Carriers and Railroads
- Truck Capacity Constraints Worsen on US-Mexico Border
- Fight for Trans-Pacific Vessel Space Intensifying – Asia/USA
- Vietnam Orders Lockdown Amid COVID-19 Resurgence
President Joe Biden will order U.S. transportation agencies to crack down on anti-competitive conduct and unjust fees in the rail and sea shipping industries to try to lower costs to consumers, the White House said on Thursday. The executive order, scheduled to be announced today, also urges the Surface Transportation Board to allow shippers to challenge inflated rates more easily when there’s no competition between routes. The order, which is part of a broader order that includes 72 initiatives by more than 12 federal agencies to promote competition across the U.S. economy.
A fact sheet provided by the White House states that, "[the order] Encourages the Federal Maritime Commission to ensure vigorous enforcement against shippers charging American exporters exorbitant charges."
Federal Maritime Commission Chairman Daniel Maffei has welcomed a White House executive order calling on the Justice Department to help the FMC investigate and potentially fine ocean carriers charging shippers unreasonable rates and fees. In responding to the order, Maffei stated that because the FMC is an independent agency, it technically is not subject to presidential executive orders. “However, I very much intend to cooperate with it,” he said, citing the agency’s ongoing investigation into ocean shipping practices.
According to the aforementioned fact sheet produced by the White House, the order, "Encourages the Surface Transportation Board (STB) to require railroad track owners to provide rights of way to passenger rail and to strengthen their obligations to treat other freight companies fairly."
In a rebuttal, the Association of American Railroads recently said that “Competition remains fierce across freight providers, and any proposal mandating forced switching would put railroads – an environmentally friendly option that invests $25 billion annually in infrastructure – at an untold disadvantage."
STB officials were not immediately available to comment as to how much the lack of competition was affecting rates and service and whether the order would place greater scrutiny over the CN-KCS merger. Stocks of the major Class I railroads were down 5-6% on news of the order.
BRi USA will continue to monitor this situation and provide updates as they become available.
Truck Capacity Constraints Worsen on US-Mexico Border
US businesses shipping goods to and from Mexico are being forced to innovate and consider new ways to move goods as the COVID-19 pandemic disrupts transportation networks on both sides of the border. However, shippers find that alternative transportation options are limited, as capacity constraints that were tight even before the pandemic worsen as the disruption persists.
Fight for Trans-Pacific Vessel Space Intensifying
Consumer demand in the US is predicted to drive import growth through the peak shipping season this fall.
After 11 months marked by double-digit year-over-year increases in US imports from Asia, and volumes rising 40 percent in the first five months of this year alone, the trans-Pacific shipping network - from Asian-origin ports to US destinations - has been sagging under the pressure. Nonetheless, analysts say the worst is yet to come, putting upward pressure on already record spot rates, and intensifying vessel delays and congested marine terminals at major US seaports.
Vietnam Orders Lockdown Amid COVID-19 Resurgence
Ho Chi Minh City, the southern economic hub of Vietnam, will impose a 15-day partial lockdown beginning today, July 9. This is the second set of restrictions, after the first measure was put into place in early April for 22 days. In the last five weeks, the populous city has continued seeing high infections. Vietnam reported over 1,000 cases for the first time on Monday and similar numbers on Tuesday and Wednesday, most of those in Ho Chi Minh City, where residents were rushing to secure supplies before the lockdown was enacted.
Accordingly, the city has tightened control over public gatherings (no more than 10 people), residents, transportation and traveling from the affected areas, and set up Covid-19 checkpoints at the entrance gates. This lockdown will cause significant delays in trucks reaching ports, as drivers will need a negative COVID-19 test before passing between provinces.
Keeping you updated
BRi Customer Solution Team
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