BRi USA NEWS - Shipping Line Service Levels Continue to Collapse
Dear all Valued Customers
Trans-Pacific eastbound shippers are faced with a new low for ocean reliability. Unprecedented demand has had a ripple affect across the trade, ranging from equipment and capacity shortages to mounting congestion at the ports of Los Angeles and Long Beach (LA-LGB) and some East Coast ports. On-time performance for carriers has dropped to 32.1 percent and 34.5 percent, according to the most recent published Sea-Intelligence Maritime Intelligence data.
Evidence of decline in reliability can be seen this week at LA-LGB, were 20 containers ships waited at anchor on Monday, according to the Marine Exchange of Southern California.
Another 16 are scheduled to arrive this week. While carriers have attempted to cope with demand by adding capacity, schedule reliability has suffered. Overall, global carrier on-time performance stands at 52.4 percent, a record low. Vessel delays across the trade have also increased to an average close to 4.86 days.
The LA-LGB ports continue to be stressed resulting in congested terminals, lengthy container dwell and truck wait times, chassis shortages and overflowing distribution warehouses.
The East Coast ports of New York and New Jersey are also feeling the effects.
The ports were already experiencing chassis shortages, and now truckers are spending hours in line trying to return empty containers to one terminal and then hours in another line to pick up full containers at another terminal.
While 25-30 percent of the loads are match back loads, the waits for the one-way container moves are causing severe terminal congestion, and in some cases, resulting in the trucker exceeding their hours of service limit.
The Port Authority of NY-NJ has stated that they are working with carriers and key port stakeholders to address congestion, possibly even using barges to reposition empties or longshore labour to shuttle empties after hours.
Below are a few considerations for your supply chain in this time while the global shipping industry is stressed on many levels:
Carriers are charging and increasing premium fees. These fees are not like general rate increases, and are agreed upon by the shipper. Currently carriers are not filing for GRIs since many shippers are willing to pay the premium fees. Note that those that choose to pay the premium fee are guaranteed equipment and/or space, but this varies by alliance (also note some do not guarantee either). Premium shippers still may have their bookings rolled. Premium fees also do not include equipment in the US such as chassis or premium services such as priority offloading.
BRi USA is currently making bookings three weeks in advance and with multiple carriers (when possible) to improve the chances of securing equipment for our shippers. Equipment is currently allocated by the carriers on a first come, first served basis. Any unused bookings are released prior to the cut-off for where cancellation fee would be levied by the carrier. Note that securing equipment still does not guarantee space on the vessel, and bookings may be rolled. Planning your bookings ahead so we can potentially secure equipment is crucial to the success of this process.
Carriers have begun reinstating blank sailings or omitting ports shortly before vessel arrival. This is due to lack of equipment and bottlenecks at destination, but could also be due to the carrier winter deployment schedules.
It is not expected that this stress on the industry for trans-Pacific and Asia-Europe trades will subside until Chinese New Year (Feb. 11-17, 2021) – March 2021 may be the first month where we start to see shipping line service levels improve!
BRi USA is working diligently to ensure minimal inconveniences and service disruption where possible!
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 – OOCL said it will implement an “emergency intermodal surcharge” of $350 per dry container from Jan. 1 to address congestion and container imbalances. The surcharge applies to all truck deliveries from the ports of Seattle and Tacoma, but moves in which a shipper has designated a specific trucker are exempt from the fee. All terminals at the ports are open and operational this week.
Ports of Los Angeles/Long Beach – OOCL said it will implement an “emergency intermodal surcharge” of $350 per dry container from Jan. 1 to address congestion and container imbalances. The surcharge applies to all truck deliveries from the ports of Los Angeles and Long Beach, but moves in which a shipper has designated a specific trucker are exempt from the fee. CMA CGM's previously announced emergency intermodal surcharge is effective now as well. 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 – OOCL said it will implement an “emergency intermodal surcharge” of $350 per dry container from Jan. 1 to address congestion and container imbalances. The surcharge applies to all truck deliveries from the port of Oakland, but moves in which a shipper has designated a specific trucker are exempt from the fee. 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. All terminals are open for normal operations this week.
Port of Houston – The Port of Houston is now the number one port in the United States in terms of total waterborne tonnage, according to newly released government statistics. It is also ranked first for foreign waterborne tonnage and number of vessel transits. Nearly 285 million tons of cargo moved through the Port of Houston overall in 2019, which was about 47 million tons more than any other U.S. port and a 6% increase compared to the previous year. All terminals are open for normal operations this week.
Port of New York/New Jersey – Truckers serving the Port of New York and New Jersey say difficulties in returning empty containers to ocean carriers are getting worse, amid a new federal investigation into whether ocean carriers’ operational issues and practices are contributing to congestion at the top East Coast gateway. The increase in one-way container moves means drivers spend more time waiting on line at different terminals, and running down the hours of service they can legally drive. NY-NJ port officials are looking at ways to ease the burden, which comes as trucking demand surges thanks to accelerating container volumes. The ports of NY/NJ are open this week for normal operations and gate hours.
Port of Virginia - The Port of Virginia has an initiative to keep adding new chassis units, while retiring old ones, to ensure a young and road-worthy chassis fleet for the motor carriers servicing the port. In FY 2020, Hampton Roads Chassis Pool (HRCP II) - on behalf of and wholly owned by the Virginia Port Authority, operates and manages the intermodal chassis and empty container yards - added 3,600 new chassis to its fleet. In FY 2021 5,000 more new units will be put into service. All terminals are open and operational this week.
North Carolina Ports - All terminals are open and operational this week.
South Carolina Ports - 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 - The Georgia Ports Authority has reached a major milestone on its Mason Mega Rail Terminal, as rail cars are now traveling the newly installed track linking Garden City Terminal’s Chatham and Mason rail yards. The additional track boosts on-terminal storage capacity by 35 percent and allows GPA to build more trains of nearly 10,000 feet in length on terminal for both Class I railroads, CSX and Norfolk Southern. The Mason Mega Rail project is now more than 75 percent finished. Additionally, volumes at the Port of Savannah reached an all-time high in October, up 8.3 percent compared to the same month last year. All terminals are open and operational this week.
Port of Prince Rupert - Vessel wait times have increased to 4-5 days. Yard utilization is at 111%. On dock rail is experiencing an average 3.5 day delay. Vessel backlog is expected through December. All terminals are open and operational this week.
Port of Vancouver - Vessel wait time is 4-5 days. Yard utilization is at 101%. Vessel backlog is expected to continue through December. All terminals are open and operational this week.
Shippers See Their Cargo Bumped as Vaccine Shipments Take Off
The distribution of Covid-19 vaccines is going to be complex, with strings of networks reaching around the world, and depending on manufacturing sites and government orders.
Shippers are beginning to feel the pain as vaccine distribution begins, and they are getting bumped from booked flights.
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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 Solutions Representative.
Keeping you updated,
BRi Customer Solutions Team
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