NASA signs industry letter to Biden Administration in Advance to G7 Summit
As part of the Toasts Not Tariffs coalition, NASA and 49 U.S. associations representing the US beverage alcohol industry sent a letter to the Biden administration to continue to work with overseas trading partners to settle the underlying disputes and cancel the associated additional tariffs on wines and spirits. Tariff and trade disputes are expected to be addressed next week and will be watching closely for good news. View the coalition press release and letter here.
White House Releases Supply Chain Disruption Report
In other administration news, the White House issued a report this week with findings following a review of short-term supply chain disruptions and the impact on various product supply chains. The report also issued recommendations to establish a Supply Chain Disruptions Task Force to look at the supply/demand imbalance and the impact on various industries, including transportation, agriculture and food sectors. View the report recommendations published in a statement release by whitehouse.gov here.
Record-setting US import volumes
In the latest reporting from Global Port Tracker, US Ports* handled a record 2.15 million TEU in April, a 33% increase from prior year, and immediately followed a 2.27 million TEU record in March. Projections for May are estimated at 2.32 million (51% increase) and June at 2.13 million (33%). (Ports covered – LA/LB, Oakland, Seattle/Tacoma, NY/NJ, Houston, Port of Virginia, Charleston, Savannah, and Florida ports (Pt. Everglades/Miami/Jacksonville). Read full article on American Journal of Transportation here.
Will there be relief to the shipping cycle?
A recent article published by American Shipper highlights the extreme consolidation in the containerized shipping industry. Carriers operate in only three alliances on major shipping corridors which has allowed them to adjust capacity quickly (take ships out of rotation or cancel schedule sailings) when demand falls to avoid downward rate spiraling. Link to article here.
US West Coast Port Congestion
When demand shot up, carriers added back in capacity, however the existing supply chain infrastructure cannot adjust as rapidly. With the record volume demand we are seeing now this year, carriers have cancelling scheduled sailings not because of lack of demand, but because of severe delays at ports along their rotation.
Los Angeles / Long Beach
This port complex has been dealing with the longest vessel queue since December of last year. In March this year, vessel waiting times to berth averaged between 9-15 days, and as of this week the waiting time is 3-7 days with yard capacity at Los Angeles is 82%. With no change in the import demand or labor restrictions, the improvement points to ocean carriers cancelling or “sliding” sailings to increase schedule integrity, restricting new bookings, and adding calls to other ports. This year carriers created four new trans-Pacific services to Seattle/Tacoma and two to Oakland.
Today the vessel concentration at Oakland has exceeded Los Angeles and Long Beach, with vessel waiting times between 15-20 days. Oakland has an even greater labor shortage than Southern California but has been taking steps to increase the labor pool. The Pacific Maritime Association (PMA) reports that employers and the union have hired 950 part-time workers and are moving existing part-time up in the process so they can handle container operations. The training process for new recruits takes 30-60 days. In addition Oakland is now operating three new cranes that arrived in January, following the installation and testing process that lasted until the end of May.
In Washington, Terminal 18, the largest at the Pacific Northwest port complex has been operating at 120% capacity. Offloaded containers must vacate the yard first before there is room to accept inbound containers off ships. The resulting vessel waiting time is 8-10 days to berth. The terminal is trying to address this by using other terminals to move containers, preparing more acreage for container storage and extending gate hours or operating Saturday gates when possible.
Engine fire on the NYK Delphinus 0086W/E
Container shipping is not without perils and we advise our members to secure insurance for any shipment. On its way to Oakland last month, the NYK Delphinus had a fire in the engine room, which was extinguished, and the vessel owners declared general average. Cargo owners, or their appointed insurance companies, must contact the appointed Average Adjusters to resume transit or delivery. Our shipping partner Hillebrand has been reaching out to NASA members if they had shipments on board, but if you have an insured shipment and have not been contacted, please reach out to your local Hillebrand representative or call Hillebrand’s customer service team in Edison at +1 732 388 0101. Marine insurance information including the policy details offered by NASA and it’s shipping partner Hillebrand can be viewed here.
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.