Supply chain outlook and port updates
Where are we today? It appears the lengthy queue outside of Southern California is getting shorter… down to about a week of delay for containers to berth. But what does that trend mean for shipping in general and where did the vessels go?
In part we definitely have seen more ship traffic move from the West Coast to East Coast ports as importers wanted to avoid the long lines in California and the potential of a coast-wide longshoremen strike. This shift was reflected in the line of vessels piled up outside of Savannah, Houston and even New York / New Jersey this summer.
This took pressure off the trans-pacific corridor allowing ocean carriers to increase schedule reliability which is good for global shipping in general.
However, unless you are importing from Asia directly, this trend doesn’t reflect the reality of shipping for US wines, beer and spirits importers. Compared to Europe and Asia in general, US container ports are still far behind in terms of vessel schedule reliability.
Any port delays throw all the inbound and outbound cargo flows out of synch – leaving overloaded terminals, strained chassis, trucker, rail networks, and piles of containers outside of warehouses or in temp facilities until warehouse appointments are available.
We’re headed into the highest season of consumer goods spending with the approaching holidays. Even if they are slightly slower in retail forecasts, we can still expect to see congestion and delays throughout the rest of the year.
For the latest update on vessel wait times, port updates and trade lane information, see the link at the bottom or here at the port updates page.
You can also find the September Ocean Freight Market Update for August on DHL’s website here.
Port of New York / New Jersey introduces long-dwelling container fee
The Port of New York and New Jersey has announced a container fee on any long-dwelling import or export containers starting in September to put pressure on carriers to collect empty containers to make room for the higher volume of imports coming in.
The $100 Container Imbalance Fee will be applied on a quarterly basis to ocean carriers, although we expect carriers will pass along any additional costs through to shippers. The fee is published on the Port Authority website tariff page.
Capacity to store and receive empty containers has been a massive frustration for shippers and truckers at the Port of New York / New Jersey for some time, but is worsened with the high summer volumes. The terminals are at capacity and are blaming ocean carriers for not loading enough empties to free up more space.
Truckers cannot re-use chassis equipment to pick up a new load when there is no place that will take the empty return. PNCT and Global terminals are extremely congested already and cannot process all arriving trucks on a daily basis. APM terminal has limited appointments for pick up and terminations.
With increased volumes this summer as cargo has shifted from West Coast, shippers can expect to see additional charges and delays as providers cannot get into terminals to pick up before the last free day.
The situation has become so untenable that industry groups pressured Federal Maritime Commission (FMC) Chairmain Maffei to visit the port and address concerns with carriers. Read about that visit in this article from the American Journal of Transportation.
Port Terminals eliminating free time for weekends at New York / New Jersey and Long Beach
Effective this month, the Port of Long Beach will no longer consider weekends “free time” for demurrage fees. Weekend days will apply towards total free time for receiving and delivery. You can find the port announcement here.
The Port of New York Maher terminal will be following suit, updating their tariff to remove the weekend free time exemption starting September 23, 2022. The tariff is posted on the terminal website here.
Note that ocean carriers often set their own free time rules which can vary from the port terminals. Most carriers post them on their websites directly
Update on UK Port and Rail Strikes
The Unite union at the Port of Liverpool is planning to strike as of 6AM on Monday September 19th through 6AM Monday October 3rd, 2022. However news reports are citing that the two week walkout will be put on hold should the Queen’s funeral be held that day.
UK rail strikes planned for September as well will be cancelled to respect the period of public mourning.
USA Rail Update
The cooling off period mandated by the Presidential Emergency Board (PEB) that was created to avert a rail strike will come to an end mid September if an agreement is not reached.
Over the Labor Day holiday railroad unions released a joint statement with their plans to bring forward a tentative agreement before that date in effort to prevent a strike. Read the statement here.
US West Coast Port Labor Update – Potential Security Local Strike in Southern California
Longshoremen work continues while negotiations continue on a new master contract; however, a local union representing the security guards at the Ports of Los Angeles and Long Beach (ILWU Local 26) authorized a potential strike, but no date has been set according to media reports.
This local union has been in contract negotiations for three years and is separate from the master contract covering longshore labor at US West Coast ports. We will continue to update on the situation as any potential picketing at the ports can impact operations at ports.
For more information on impact to active or upcoming orders, please reach out to your representative to discuss your shipping concerns.
Supply chain outlook and port updates