North America Operations Update May 26, 2021

Memorial day closures
Plan ahead for US Memorial Day holiday closures (Monday May 31st, 2021) at the port terminals and allow for extra time handling the ISF customs filing requirements on imports. For import clearance handled with our shipping partner Hillebrand, the cutoff is 5PM Eastern on Thursday May 27th for vessels sailing through Wednesday June 2nd, 2021.  NASA and its shipping partner Hillebrand’s USA offices will be closed on Monday May 31st, 2021. 

The connection between congestion and capacity
As we move into the summer months, the shipping industry is still grappling with delays from congestion, equipment shortages, and restricted capacity.  Where does that leave us as we move into the traditional peak shipping season? 

We can look to the US West Coast ports for a clear example of the domino effect of port congestion.  This region takes the largest brunt of import volume from the transpacific trade and can handle the mega containerships.  Vessels have been queued up outside the port to berth and each vessel stays longer in port as labor is restricted to 4 gangs for large vessels at LA/Long Beach, and 2 gangs per vessel at Oakland for most shifts.  Without any break in vessel arrivals, all terminal activity gets backed up – container movements (inbound/outbound), chassis supply, gate operations, rail connections and more. 

This port congestion in turn continues to impact ocean carrier operations and schedules.  When all the vessels in a scheduled rotation are delayed on their multiple stops, this prevents them from returning to the origin (Asia for a lot of West Coast calls) to meet the next rotational departure.  To realign schedules, carriers remove or “slide” one more more planned sailings.  This adds to the volume of rolled (overbooked) containers that do not make the intended vessel.  So each consecutive vessel has less capacity because they need to take on the rolled cargo.  This also takes more container equipment out of circulation with the delay.  Typically each “slide” sailing will take the next four weeks to resolve the backlog of cargo. 

Carriers are trying to mitigate the capacity limits through the vessel charter market (purchasing extra loaders to move forced slide sailings).  The charter market is tight as well due to the demand and the extra costs associated to secure this capacity, if even deployed on a given sailing loop, is passed to the market at a premium.

Shipping rush before August
The next two months we can expect to see retailers ramp up for a strong back to school and holiday season, even before the typical shipping peak in August.  Given the current situation, carriers and industry experts are predicting the shipping disruption and delays to continue throughout this year.  We encourage you to reach out to your suppliers and customers to adjust your lead times and discuss revised delivery expectations given the constraints of the shipping industry today.  

​​​​​​For more information on pending or planned shipments, please reach out to your Hillebrand representative to discuss the best possible arrangements for transport, warehousing, insurance, and customs compliance needs.