BRi USA NEWS - Liners Highly Unlikely to Slash Service for Chinese New Year - OCEAN AND AIR FREIGHT PRICING WILL CONTINUE TO CLIMB IN 2021
Dear all Valued Customers
Every year, the global supply chain grapples with a major disruptive event: Chinese New Year (CNY). Volumes at sea typically plunge as Chinese factories shut down. Carriers temporarily blank sailings due to lack of outbound boxes, and importers pull cargoes forward before the holiday to ensure they have enough inventory.
Last year, the COVID-19 outbreak extended the normal CNY period of blank sailings in 2020 by several weeks, which essentially lengthened the traditional vacation break. This doubled the usual CNY holiday effect. The mirror-opposite scenario is taking shape in 2021, as Chinese factory workers will still take their vacations, but carriers appear almost certain to blank drastically fewer sailings than usual.
China is holding its CNY celebrations from Feb. 12-26 this year. As of last Friday, carriers had announced just five blank sailings on the trans-Pacific and seven on the Asia-Europe route for the CNY period. Last year, there were 73 CNY blank sailings on those routes (excluding blanking due to the COVID outbreak). In 2019, there were 67. Mallory Alexander Asia-Pacific is tracking all extra loaders put into service as well as any blank sailings related to Chinese New Year here.
It is clear that the carriers are currently scheduled to blank far less than in previous years, and another reason for this may involve regulation. Freight rates are historically high and have already caught regulators’ attention. The Federal Maritime Commission is monitoring carriers’ blank-sailing actions, and they increased carrier reporting requirements in late November.
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. Shipper demand remains strong and is forecasted to remain steady through the end of the year. The ports are experiencing delays of 5 days due to increase in export volume. All terminals are open for normal operations this week.
Ports of Los Angeles/Long Beach – As of today, there are 36 ships at anchor at the Port of Los Angeles. Vessel bunching, delays of several days in vessel berthing, congested marine terminals, long truck lines at terminal gates, chassis shortages owing to excessive street dwell times, and import warehouses filled beyond capacity have plagued the Southern California gateway since summer. 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. All terminals are open for normal operations this week.
Port of Oakland – CMA CGM will launch a Yantian-to-Oakland premium service, which will be the only first-call inbound service from Asia to date for the Northern California port. Vessel wait times have increased to 1-3 days. Labour shortage continues to impact the berthing line up of all terminals in the harbor. All vessels berthing priority will continue to be assigned using the first come first serve format. All terminals are open for normal operations this week.
Port of Houston – This week, the new 26 acre Houston Terminal East Empty Yard has opened within Bayport Container Terminal. This new and expanded footprint provides additional container yard capacity to support volume growth and promote quality service levels to the trucking community. All terminals are open for normal operations this week.
Port of New York/New Jersey – Although there is tightness throughout the New York-New Jersey supply chain, including mounting container dwell times at marine terminals and chassis dwell times at warehouses, the gateway remains pretty fluid. Nonetheless, the port is still experiencing significant delays due to congestion and recent weather. Chassis are in short supply and some truckers are levying congestion fees due to extended wait times at the port. All terminals are open for normal operations this week.
Port of Virginia - All terminals are open for normal operations this week.
North Carolina Ports - All terminals are open for normal operations this week.
South Carolina Ports - Charleston's vessel wait times range from 0-12 hours, and the port is experiencing vessel bunching due to previous holiday closures. All terminals are open for normal operations this week.
Port of Georgia - Beginning this year, rail cars are now traveling newly installed track linking Garden City Terminal’s Chatham and Mason rail yards. The Mason Mega Rail project is now more than 75 percent finished. All terminals are open for normal operations this week.
Port of Vancouver - Vessel wait times increased to 5-7 days, with anywhere from 5 days to 2 week delays in getting containers loaded onto the rail. Yard is at 102% of capacity.
Port of Prince Rupert - Vessel wait times continue to be 4-5 days, with anywhere from 5 days to 2 week delays in getting containers loaded onto the rail. Yard is now at 111% capacity. Import volumes remain strong so expect vessel backlog to continue.
Chinese Cities Reportedly Go Dark as Country Faces Shortage of Coal, a Major Australian Export
Several major Chinese cities have reportedly gone dark as authorities limit power usage, citing a shortage of coal.
Analysts said prices of the commodity in the country have shot up due to the reported crunch. The reports also follow rising trade tensions between Beijing and Canberra, leading some analysts to tie the coal shortages and blackouts to the unofficial ban on Australian coal. Concerns about the availability of electricity for ordinary Chinese spiked in December, as the power shortage was caused by the Chinese factories production and demand surge.
According to Mallory Asia-Pacific, the restrictions on power are primarily in cities in southern China including Hunan, Jiangxi and Yiwu/Zhejiang. Also, with the Chinese New Year holiday coming soon, it is expected that industrial electricity will be shut down for a period of time, and the situation will improve.
Reminder: South China Feeder Services Suspended in Anticipation of Chinese New Year
BRi USA anticipates that the delay of barge service will create a backlog in south China for mother vessel connections. This leaves transportation by truck, which may be limited. Further, we have received notification of carriers not accepting bookings for certain destinations in an effort to alleviate congestion including Manila, India (TP service only), Hong Kong, Yantian and Shekou, to name a few. Please reach out to your Mallory Representative with any questions or concerns you may have regarding your shipments.
USTR Imposes Additional Duty on Certain France Imports
On December 6, 2019, the U.S. Trade Representative announced a determination that France’s Digital Services Tax (DST) is unreasonable or discriminatory and burdens or restricts U.S. commerce.
As a result, 85 FR 43292 announces the U.S. Trade Representative’s determination to take action in the form of additional duties of 25 percent on some cosmetics, soaps, and handbags of France – effective today, January 6, 2021.
As specified in Annex A of the Federal Register Notice, products provided for in new HTSUS heading 9903.90.01, will be subject to the additional ad valorem duty of 25 percent. The additional duties provided for in the new HTSUS heading established by Annex A apply in addition to all other applicable duties, fees, exactions, and charges.
Annex B of the notice contains a list of the tariff subheadings covered by the tariff action along with short product descriptions.
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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 feel free to contact your Customer Solutions Representative.
Keeping you updated,
BRi Customer Solutions Team
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