BRi USA NEWS - Experts Believe Peak Season May Extend Through October
Dear all Valued Customers
Logistics experts now believe that US imports will remain at peak levels at least through October, mainly due to the steady flow of personal protective equipment (PPE) and the sharp incline of e-commerce. While many forecasted that the peak season would run through September, e-commerce patterns are playing a huge role in the surge in imports as many shoppers favour online purchases due to COVID-19.
Experts say that consumers are shopping for more things online than they would previously, and this growth is contributing to the change in peak-season patterns for the trans-Pacific eastbound trade. Additionally, some large retailers are still replenishing inventory that was exhausted after the US reopened non-essential businesses from lockdown. To cap off the continued surge in imports, volume of PPE purchases have stayed elevated due to federal and local governmental purchases of the products.
With a continued surge comes equipment imbalance and elevated rates
While experts do not have a clear picture of what the next few months many hold, Logistics Consultant John Monroe said “purchase orders placed with factories in China may point to the strength in US imports continuing until the end of the year.” In a recent survey by Nansha Port, they cited that many factories stated they have strong purchase orders through the balance of 2020.
Asia volumes continue to be elevated from Southeast Asia, especially Vietnam. Two of the tightest trade lanes from Asia for vessel capacity are currently Yantian, China and Ho Chi Minh, Vietnam to Los Angeles and Long Beach. As a result, equipment continues to be tight in these areas, with 40-foot high cube containers scarce, and some carriers recommending booking only 40-foot containers, as that is all that is available.
The current surge in imports has also already pushed spot rates to record highs, with last week’s rate from Asia-US West Coast up 125% over the same week in 2019 and the Asia-East Coast rate up 56% year over year. If the proposed September 1 GRI takes effect, it is expected that rates will surge past the $4,000 mark at an all-time high.
To deal with tightening equipment and congestion, some shippers are considering all-water services from Asia to the US East Coast regardless of the cost differential. Usually the Asia to US East Coast rates are around $1,000 more than US West Coast rates, however, over the last few months that differential is ranging from $300-$500. With recent congestion and equipment issues at West Coast ports, many shippers are considering alternate routes to get their goods as efficiently as possible.
Updated Equipment Shortages at China Ports
The BRi Asia-Pacific Team is reporting that nearly all carriers are experiencing varying equipment shortages at major China ports due to a recent surge in cargo. Below is a recap on the current capacity equipment status:
• Shanghai: 20GP supply is normal; 40GP supply is tight for APL/CMA, 40HC in short supply for APL/CMA/ONE and ZIM has a critical shortage, 45HC supply is normal
• Ningbo: 20GP & 40GP supply is normal, 40HC supply is tight for APL/HSUD and CMA/ZIM/ONE have critical shortages, 45HC in short supply for all carriers
• Qingdao: 20GP supply is normal; 40GP supply is tight for HMM, 40HC supply is tight for ONE/COSCO/ZIM/HMM and CMA has a critical shortage, and 45HC in short supply for APL/CMA/COSCO
• Shenzhen: 20GP supply is normal; 40GP is tight for EMC/HPL/Maersk, 40HC & 45HC in short supply for all carriers, with Maersk having a critical shortage of 40HC.
• Wuhan: 20GP supply is normal; 40GP supply is tight for ZIM/CMA/APL/MSC, 40HC supply is tight for ZIM/MSC/CMA as well, and no 45HC equipment for call carriers
Our Asia-Pacific Team is also reporting that with the extra loaders being deployed into schedule to ease space pressure, port congestion and vessel delays are occurring for 1-2 days on average, and 2-4 days in some cases at all major Asia-based ports. Also, we have received reports of some carriers altering port rotations and shipping severely congestion ports.
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Hurricane Clean Up Continues
The remnants of Hurricane Laura continue to move toward the Atlantic Ocean, but they remain a potential disruption to freight activities, as the clean-up and recovery in Louisiana and Texas is ongoing and could take weeks.
The Port of Houston reopened Friday following a two-day closure due to Hurricane Laura, which made landfall as a powerful category 4 storm along the Texas-Louisiana border last week. Container terminals are now operating under normal hours, and free time has been extended for two days. The Port of New Orleans remained open throughout the storm.
Meanwhile, railroads operating in southern Louisiana expect to continue post-hurricane clean-up work this week:
• Union Pacific which took heavy damage to its rail network near Lake Charles, Louisiana. As of Saturday morning, most of UP’s service had been restored, although the rail line running from Longview, Texas, to Alexandria, Louisiana, and on to Houston remained out of service. UP recently advised customers with rail shipments in the area to expect a minimum of 72 hours in additional transit times as crews restore service to affected tracks.
• Norfolk Southern sustained minimal damage, but customers did see delays in New Orleans over the weekend.
• CSX sustained minimal damage, but advised that delays are possible at the New Orleans and Memphis gateways, as a result of disruptions on connecting railroads.
• BNSF experienced minor service impacts.
• Kansas City Southern experienced minor service impacts.
Most major highways, including I-10 in Louisiana, have fully reopened. Some lingering closures exist on local roads, according to the Louisiana Department of Transportation and Development.
Additional 45-day Compliance Period for Hong Kong Goods to be Marked as 'Made in China'
U.S. Customs and Border Protection (CBP) announced an additional 45 day transition period for compliance with the new marking rules for goods of Hong Kong.
The 45 days is in addition to the 45 days announced in the original CSMS message (#43633412).
As a result, effective November 9, 2020, CBP will begin enforcement of the new rule requiring importers to ensure that goods produced in Hong Kong are marked to indicate the country of origin of China.
This rule will be enforced unless the goods are exempt from marking requirements.
Section 301 tariffs will not be assessed on these products.
Additionally, CBP has updated their FAQs Guidance on Marking of Goods of Hong Kong.
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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 USA News, please contact your Customer Solutionis Representative,
Keeping you updated,
BRi Customer Solutions Team
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