News

Industry Update – October 2021

Situation in USA and Canada:

Port Congestion

The USA continues to experience extensive congestion across its terminals, rail networks and warehouses, which is having a significant impact on the whole supply chain. All major ports are having severe congestion due to increased volume, particularly on the west coast. Vessel waiting times at Long Beach and Los Angeles ports are up to 14-15 days due to yard congestion, high import volume and labour shortage. Vessel waiting times at east coast ports are between 1 to 5 days due to high import volume.

The situation is similar in Canada, vessel waiting times at Vancouver port are up to 8 days.

Latest anchorage stats show that port congestion has reached an all-time-high with 73 container ships at anchor off the ports of Los Angeles and Long Beach (Source – American Shipper).

Intermodal issues

There have been ongoing chassis shortages across the US due to increased volumes at terminals and inland rail facilities. This is resulting in extended pick-up delays and deliveries. Most notably, Chicago, Long Beach/Los Angeles, New York and Philadelphia markets are encountering a severe shortage of available chassis.

Due to this reason, most carriers are not offering to/from door services, one major carrier offering direct services out of both west coast and east coast ports is anticipating the situation will remain the same until the end of Q1 2022. Consequently, our options for moving to/from door in the US and Canada are extremely limited.

Chicago rail ramp remains heavily congested caused by labour shortages, driver shortages and chassis availability issues, all of which have increased container dwell time at the ramp significantly. It has been reported that more than 20 miles of trains of containers are currently lining up outside the Chicago area waiting for deramp. Subsequently, some vendors have started closing facilities for multiple days, implementing gate restrictions or lane suspensions and carriers are moving cargo to secondary yards to mitigate delays and avoid congestion. Delays at this major rail hub are expected to continue through the rest of 2021.

US Customs Holds

Inspections on containers leaving the USA bound for Australia and New Zealand are continuing to increase. US Customs representatives have advised that there are several reasons for this:-

Due to Covid rules, Customs officers are not able to visit warehouse facilities to inspect cargo, therefore port inspections have increased.
There has been a huge drive on drugs being exported from the US to NZ and AU.
They are stopping large numbers of containers on every sailing for inspections, everyone is being affected.

These inspections are causing everyone grief. Carriers are reporting that with space being so tight and allocations few and far between, that last-minute changes and inspections at the port are causing further chaos. Unfortunately, we have no control over Customs and can only pass on details of inspection delays and additional costs incurred when we are alerted to these.

Situation in Europe:

All major ports in North Europe and the UK are grappling with severe congestion due to the large volume of import containers coming to the ports and shortage of HGV drivers, that caused extended container dwell times significantly. Additionally, due to the driver shortage, delays are at least 2 weeks on most collections in the UK. Many shipping lines cannot offer space from Europe due to limited space allocation, equipment shortages and congestion at transhipment hubs, vessels are fully booked out for the next couple of months. Some have suspended their services to Australia until the end of the year.

Felixstowe port, UK has suspended receiving empty restitution from most shipping lines to avoid further congestion. As a result, carriers have to direct all empty units to other nearby ports, which led to substantial additional haulage charges. However, experts are anticipating that this suspension will create domino effects resulting in greater disruptions than the obvious congestion in the upcoming weeks. Some carriers are now considering omitting UK ports and overlanding containers at Rotterdam or Antwerp for eventual relay back to the UK to mitigate import backlogs (Source – The Load Star).

Situation in Asia:

China – Port congestion, Typhoon Chanthu and COVID-19 situation

Due to heavy export volumes, China is experiencing rising port congestion countrywide. According to the latest report, the number of container ships anchored off Shanghai and Ningbo ports has surged over the last few weeks, there are currently over 150 vessels waiting to load export cargo off these two hubs (Source – Freight Waves). Congestion in Chinese ports has definitely slowed down the flow of exports out of this region, which has further strained the already disrupted global trade.

The recent Typhoon Chanthu that impacted Shanghai and Ningbo ports in late September has caused major disruptions to the supply chain, led to serious space/equipment shortages and vessel delays in the region.

In addition, Xiamen city was placed under lockdown earlier last month as several positive COVID-19 cases were detected in the area. As a result, all airlines, trains and trucks to Xiamen were stopped, which halted all depot, trucking, port and terminal operations abruptly.

Limited space and equipment

The extreme shortages of space and equipment are being felt throughout Asia. Many carriers are not accepting bookings from Japan to Australia or have currently stopped their services for this trade lane due to limited space and congestion. One major shipping line is fully booked until the end of January 2022 for service ex Japan. The situation is similar in Korea, Vietnam and India – carriers are not offering services or have refused to quote from these origins due to a deficit of equipment for both 20’ and 40’ containers. These ongoing issues are the main indicators for skyrocketing freight rates during this peak season.

Situation in New Zealand:

Further to our previous update, Auckland port continues to be congested, other ports are also facing ongoing congestion and operational constraints. Due to these circumstances, services to New Zealand are extremely limited as the majority of carriers are not offering services or do not have the capacity, particularly from Europe and the USA to New Zealand, as shipping lines have a very small space allocation for this trade lane.

General Rate Increase from USA to Australia and New Zealand:

One carrier from USA has announced increases on its services from mid-October through to November 01^st, from the east and west coast of USA ranging from USD 400-500/20GP and USD 800-1000/40GP.

LCL Congestion Surcharge from USA Increase:

We have been advised of an increase in congestion surcharge for all LCL shipments coming from USA effective 10^th November 2021. The new surcharge will be:

USD 20 per w/m

Minimum USD 20.

US LCL Export CFS Receiving Charge Increase:

From 23^rd October 2021, there will be an increase in Export CFS Receiving Charge applied for all LCL cargo from all US origins. The new surcharge will be as follows:

USD 17.50 per w/m

Minimum USD 35

Maximum USD 90.

General Rate Increase from Australia and New Zealand to USA and Canada:

Announcements were made in relation to a General Rate Increase for all cargo moving from Australia and New Zealand to USA and Canada, effective 01^st November 2021, as follows:

USD 1,500 per container