BRi USA News - Pile Up of Non-Essential Cargo at US Ports Raises Alarms
Dear all Valued Customers
Even as China’s manufacturing comes back online, shippers faced with plummeting demand have begun a process of slowing the supply chain — cancelling orders, requesting containers not be loaded on ships, and seeking to store cargo at destination ports. With demand in major consumer markets such as the United States evaporating due to the coronavirus disease 2019 (COVID-19), a potentially major backup of loaded containers throughout the US port system may be starting to take shape. The early signs are manifested by some of the largest ports along the US East Coast now scouring available land to boost temporary storage capacity on or off terminal grounds.
The demand is growing as some retailers and manufacturers fail to pick up containers because warehouses are full or closed due to not being deemed essential service providers responding to COVID-19, or because retailers have requested delayed deliveries at distribution centres. Although the situation remains fluid, ports are warning that because all US import gateways may be simultaneously facing the same situation, a bottleneck of national proportions may be beginning to take shape.
Some retailers and manufacturers are choosing to risk demurrage penalties rather than accept containerized goods and materials they’ve ordered, while others may have to accept demurrage penalties due to their inability to deliver to customers. This speaks not just to the threat of port congestion, but the scale in which COVID-19 has upended consumer and manufacturing demand. US importers this week triggered a wave of cancelled, reduced, and postponed ocean shipment bookings for April, but with Chinese factory production recovering, ships from China to North America are beginning to sail at full capacity.
Below is a general overview of the operations BRi USA has been able to gather for most major U.S. ports. This list will be updated as information is made available.
Port of Los Angeles/Long Beach - The ports of Los Angeles and Long Beach are generally fluid now, but in late February congestion began building after carriers responded to reduced Chinese production tied to COVID-19 by blanking sailings. With outbound vessel space being reduced, terminal operators told beneficial cargo owners (BCOs) and truckers not to return containers to their facilities once they were emptied for fear the terminals would be overwhelmed with empties. The port has reviewed their space and stated they have plenty of space to store containers, as well as the terminal tarmacs also have ample space.
Port of Baltimore – Low cargo volumes have triggered a holiday closure March 30-31, but the port operator will open an hour early (6:00 a.m.) April 1-3.
Port of New York/New Jersey - The Port Authority of New York and New Jersey is talking to warehouse owners and operators to gauge their vacant capacity and considering options to provide additional storage space.
Port of Virginia (Norfolk) - The Port of Virginia has sufficient storage space to accommodate the additional volume and does not anticipate needing to adjust operations for a potential surge.
Port of Miami – Open and operational as usual. Effective Monday, March 30, the terminals will no longer supply truckers with Haz Mat or Dangerous Goods documents at the terminal in an effort to maintain social distancing. Truckers must have these documents prior to arriving at the terminal.
Port of Georgia (Savannah) - Georgia Port Authority is opening a new space at the Garden City Terminal in Savannah where 11,130 TEU can be stored. There’s already capacity in the new space for nearly 5,000 TEU, and the other 6,000 TEU of capacity will be added by mid-April.
Also, please note that these select West Coast terminals are observing a holiday on March 31.
Government of Canada Extends Payment Timeframes for GST, Customs Duties
Following an announcement made by the Canadian Prime Minister made last Friday, the Minister of Public Safety and Emergency Preparedness exercised his authority to extend the timeframe for the payment duties. The timeframe for all payments due to the Canada Border Services Agency (CBSA) for duties and taxes on regular imports, re-assessments, penalties, etc, is extended to June 30, 2020. This also includes charges on the statement of account of March due on April 1. The CBSA will change the due date automatically, there is no need for companies to apply for the extension.
Although there is no change to the accounting timeframes prescribed by "the Regulations", importers and/or their brokers are still required to submit accounting declarations for imported goods released on minimum documentation within the required timeframes.
Containers Pile Up at Indian Docks Amid COVID-19 Lockdown
With Indian ports facing serious inland service shortages amid a 21-day countrywide lockdown that began Wednesday, exporters and importers are scrambling to move cargo in and out of terminals across the country. Some importers have stated they are having a hard time securing delivery orders from the carrier and once secured, the bigger challenge is moving boxes to their factories. “Shippers are concerned about potential detention charges, although there are talks about some extended free time,” one official said.
Indian containerized freight, has been hit hard by severe truck driver scarcity and drayage capacity issues. As an example, terminals at Jawaharlal Nehru Port Trust [JNPT] are operating at approximately 30 percent of capacity because of a sharp drop in gate-in and-gate-out activity,” a terminal official told JOC.com.
“The movement of [export-import] containers by road has virtually come to a standstill,” JNPT said in a trade advisory. “While vessels continue to be handled at all the port terminals, the gate-in of export and evacuation of import containers is not happening. In order to fill the road transportation gap until total normalcy is restored, authorities have been successful in convincing train operators to immediately put into service two to three trains each on a daily basis.”
Several trade associations are facing serious difficulties finding trucks due to the lockdown and restrictive measures on public movement. While most carriers are continuing to call the Indian ports, customers are cautioned that service delays are imminent around the movement of containers in and out of terminals, the issuing of delivery orders, and transhipment bookings.
Further, force majeure — which typically comes into effect when unforeseeable events or circumstances prevent one party from meeting contractual obligations — has been extended to all private ports governed by the Gujarat Maritime Board (GMB). Some ports have already declared force majeure while still maintaining limited operations.
As a reminder, while transportation is considered to be an essential service, limited commerce is still moving.
Our partners have updated the following conditions:
• The Indian Government is considering “relaxing” the lockdown, though it currently remains effective until April 14
• Many shipping lines have issued waivers for detention up to April 7
• Ports and container freight stations are operational, but working at low levels
• There are very few available for customs clearances, trucking, etc., even though many in the logistics industry are working remotely from home.
The lockdown situation and flow of cargo is a very fluid situation at this time.
Please check with your assigned BRi Customer Service Representative for availability prior to making any bookings.
Philippines Update on Logistics Operations
To further expand on our report of the difficulties in moving cargo in/out of the Philippines due to the COVID-19, we have received the below update from our global partner:
- The government has imposed quarantine over the entire Island of Luzon until April 13, 2020
- The Executive Department of the Government are working from home, except for security, health and emergency frontline services and border control, which are limited to a skeletal workforce.
- Only private establishments providing basic necessities and such activities related to food and medicine production shall be open. Business Process Outsourcing establishments and export-oriented industries shall remain operational under strict social distancing guidelines
- The international seaports in Subic, Manila, Batangas, Cebu, Cagayan de Oro, Davao, General Santos are fully operational though the local customs office at North Port in Manila has been shut down due to the confirmed several cases of customs official infected with COVID-19, thus affecting import and export processing. A majority of the ports are under enhanced community lockdown thus access and movement to and from the port is restricted
- The Manila International Airport and Mactan-Cebu International Airport are fully operational though both Philippine Flag Carriers, Philippine Airlines and Cebu Pacific have temporarily shut down their services until April 14. Most of the foreign airlines servicing passengers have stopped operating for the time being thus affecting air cargo movement. Only limited air freighters are still operating, with airfreight rates increasing significantly.
- Export Companies must secure exemption passes from the Economic Zone authority for truck movements. The Philippine Export Zone Authority has suspended business in Cavite Economic Zone 1 and 2 until further notice and this affects 40% of the export volume of Cavite province. Other Export Zones such as the Mactan Economic Zone in Cebu, PHIVIDEC in Cagayan de Oro, and Subic Bay Economic Zone are business as usual. Due to the authority of the local government units to implement localized enhanced community quarantine, some of these Export Zones do not have enough workers for continuous operations.
- Import volume is still affected by the closure of Chinese factories during the lunar new year celebration and the COVID-19 stoppage but feeder vessels are still calling the international seaports as per their regular schedules. Feeder space for exports remains open with no space restriction at the load port.
Please check with your BRi Customer Service Representative for availability to/from the Philippines prior to making any bookings.
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. Feel free to contact your Customer Solutions Representative, should you have any queries or concerns regarding USA News.
Keeping you updated,
BRi Customer Solutions Team
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