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With the surge in Asia exports, the world’s largest container manufacturer is working overtime to keep up with demand. Many analysts warn that despite the box builder and the carriers’ efforts, equipment shortages are expected to persist into January, possibly even further into the first quarter of 2021.
China International Marine Containers (CIMC) - a subsidiary of China Cosco Shipping, said last week they are working double shifts in an effort to keep up with demand. CIMC currently manufactures almost 60 percent of the world’s general purpose containers today.
Although the carriers have been working to aggressively reposition empty containers, the demand has also made it necessary to acquire more. In just in the past six months, Maersk has said they have grown their fleet by almost 10 percent and expects to grow another two percent in 2021. Hapag-Lloyd has grown their fleet by eight percent and CMA CGM also increased their fleet by almost nine percent this year.
For most carriers, vessel capacity is completely utilized for every sailing. Sailings are fully booked months out, which has left little excess capacity and pushed spot rates to new heights. The Chinese Ministry of Transportation and Communications has taken several steps to encourage carriers to cap rates and inject more capacity into the trade. Ministry Spokesperson Gao Feng was quoted this week as saying, “Based on the preliminary work, we will work with relevant departments to continue to promote increased capacity allocation, support to accelerate container return, improve operational efficiency, support container manufacturing companies to expand their production capacity, while increasing their efforts to monitor the market, strive to stabilize market prices and provide strong logistics support for the steady development of foreign trade.”
Despite all efforts to grow their fleet, analyst Drewry said that the global container fleet will actually decline one percent, indicating that container shortages are actually a result of positioning issues rather than a lack of equipment.
The unprecedented demand has caused severe congestion at ports in both Europe and North America. While steps are being taken to resolve congestion, the amount of volume has all port stakeholders stressed, including carriers, terminals, warehouses and truckers. Severe congestion has been present at the ports of Los Angeles – Long Beach (LA-LGB), but demand has also created bottlenecks at East Coast and Gulf Coast Ports too.
BRi USA is committed to helping our clients by mitigating the effects of equipment shortages.
Major North American Ports Status Update
Below is a general overview of the operations BRi USA has been able to gather for most major ports. This list will be updated as information is made available.
Port of Seattle and Tacoma – The Port of Seattle is experiencing vessel wait times of 12-36 hours. The entire port is impacted by traffic congestion due to the bridge closure. T18 yard continues to be full. Berth congestion is expected during the next two weeks with longer than usual port stays. We expect vessels will have to anchor upon arrival waiting 12 to 36 hours for next available berth. Import volume decreased slightly but dwell remains the same. All terminals at the ports are open and operational this week.
Ports of Los Angeles/Long Beach – November container volume at the Port of Los Angeles was up 22% year-over-year. It was reported that 88 container vessels called the Port of LA in November. There were nine “extra loaders,” added calls because of high demand in Asia, and there were no cancelled sailings. All terminals are open for normal operations this week, select terminals are offering additional gates. Carriers and terminals for both ports are unable to confirm ETAs due to congestion, and containers may get buried. Chassis shortages continue to persist at both ports although equipment providers are working overtime to remedy. Delays for port cargo or for cargo to be moved inland by rail can be excessive - up to weeks.
Port of Oakland – Full import containers at the Port of Oakland were up just under 1% in November 2020 compared to November of last year. Loaded export boxes at the Oakland seaport dipped 2.6% in November 2020 compared to the same month in 2019. Labour shortage continues to impact all terminals in the harbor by limiting their planning and execution, which has created delays in their vessel line-ups. Vessel wait time has increased to 1-2 days. All terminals are open for normal operations this week.
Port of Houston – All terminals are open for normal operations this week.
Port of New York/New Jersey – Total volume at the Port of New York and New Jersey rose by 13.4 percent in October 2020 versus October 2019. This increase brings their year through October total to 6,137,859 TEUs (3,452,130 containers). The port is still experiencing significant delays due to congestion. Chassis are in short supply and some truckers are levying congestion fees due to extended wait times at the port. The ports of NY/NJ are open this week for normal operations and gate hours.
Port of Virginia - The Port of Virginia in November set a new record for monthly TEU volume having handled nearly 280,000 units, a number that surpasses the previous mark – set in October – by more than 5,600 units. Additionally, November was the sixth consecutive month of month-over-month growth for the port. When compared with November 2019, the month held solid growth in both export and import loads, which totalled increases of 15% and 21%, respectively. All terminals are open and operational this week.
North Carolina Ports - All terminals are open and operational this week.
South Carolina Ports - South Carolina Ports welcomed today 15 hybrid rubber-tired gantry cranes to the Hugh K. Leatherman Terminal. The arrival of this new cargo-handling equipment is significant as SC Ports prepares to welcome the first cargo ship to the Leatherman Terminal in March. The Leatherman Terminal’s Phase One will add 700,000 TEUs of annual throughput capacity to the Port of Charleston when it opens. At full build-out, the three-berth terminal will double SC Ports’ current capacity by adding 2.4 million TEUs of throughput capacity. All container and other operations remain open. SC Ports in Charleston, Greer and Dillon are operating normally for gates and vessels at this time.
Port of Georgia - All terminals are open and operational this week.
Port of Prince Rupert - Vessel wait times continue to be 4-5 days. Since beginning of December, the terminal has lost 2 full days of work due to high winds. Yard utilization is now at 100% of capacity (down from 107% capacity 7 days ago). On dock rail is at 62K (2 days of average dwell). Rail delivery projections in week 50 were 203K feet (20 trains). Week 51 projection is 228K feet (21 trains). Vessel ganging has increased back to 5 gangs per shift, 15 gangs per day. Import volumes remain strong so expect vessel backlog to continue through December. All terminals are open and operational this week.
Port of Vancouver - Vessel wait times continue to be 4-5 days. Yard utilization is at 94%. On dock rail is at 48K feet (6.4 days of CN dwell).
There was significant drop in volume week over week, but average dwell was unchanged. Import volumes remain strong so expect vessel congestion to continue through December. All terminals are open and operational this week.
GSP Set to Expire December 31
Unless a bill is passed before the end of the year, the Generalized System of Preferences (GSP) Program will expire.
The GSP is one of the US’s oldest trade programs and while a renewal is currently proposed in the House of Representatives, it is not without concerns for importers.
• The renewal is currently proposed for six months, something that could change importers’ budgets if they potentially could be paying tariffs after June 2021.
• The bill is tied to forced labour concerns and states it covers all products originating from countries with questionable child labour practices. If not passed, this would exclude India, Turkey, Thailand, Indonesia, Kenya, Ecuador and the Philippines from the GSP.
• The proposal would be tied to the US unemployment rate. With this rule, GSP would only be effective if the rate stays at four percent or below, something that has only happened two out of the last 20 years.
BIS Interim Final Rule - Imports of Aluminium and Steel Under Section 232
The Bureau of Industry and Security (BIS) issued an interim final rule that revises aspects of the process for requesting exclusions from the duties and quantitative limitations on imports of aluminium and steel authorized by the President under Section 232 of the Trade Expansion Act of 1962, as amended (‘‘232’’)
Request for Comments and Notice of a Public Hearing Regarding the 2021 Special 301 Review
Each year, the Office of the United States Trade Representative (USTR) conducts a review to identify countries that deny adequate and effective protection of intellectual property (IP) rights or deny fair and equitable market access to U.S. persons who rely on IP protection. Based on this review, the U.S. Trade Representative determines which, if any, of these countries to identify as Priority Foreign Countries. USTR requests written comments that identify acts, policies, or practices that may form the basis of a country’s identification as a Priority Foreign Country or placement on the Priority Watch List or Watch List.
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BRi Customer Solutions TeamBack to News Page