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Week 15 Freight and Customs Updates

April 13th, 2022

Despite national and local governments trying to convince us that life is heading back to normal, there are indicators everywhere that this might not be the case. And, what’s happening in China isn’t staying in China—at least in terms of the supply chain. Lockdowns have impacted manufacturing, leading to blank sailings from the lack of cargo. The problems will likely beget more problems, too. This is because the lack of containers entering China during the lockdown will exacerbate the existing shortage of equipment once things open up again.

Operators are worried they’ll again face the chaos of those early days, as Chinese lockdowns are lifted. Adding to closed factories, China is currently facing a shortage of truck drivers, all of which has led to a drop in volume of 26% for goods shipped from Shanghai by sea, and a drop of 19% of goods leaving the port by truck. Unfortunately, when things rebound, further disruption is expected.

Moving north to Russia, their now months-long invasion of Ukraine has meant the cancelation of many flights to the area. And unfortunately for the air cargo industry, both countries are home to fleets specializing in extra-large cargo. Echoing the sentiments above about returning to the early days of the pandemic, this is exactly what’s happening with capacity being cut so drastically.

February saw a drop of 15% in global container volume over January, but industry analysts don’t agree on the cause. While some feel that it’s an indication of a drop in demand thanks to an economic contraction, others point to a loss in vessel capacity thanks to worsening port congestion. A comparison to pre-pandemic volumes indicates an increase in demand of 23%.

Finally, on the US West Coast, the ports of Los Angeles and Long Beach have once again delayed the implementation of their Container Dwell Fee, which was initially approved in late October 2021. Fees would be levied against ocean carriers for every container moved by truck that had a dwell time of nine or more days or containers with a dwell time of three or more days that were moved by rail.

For more on these stories, check out the article highlights below.

More blank sailings as spot rates tumble and China's lockdowns take their toll

More blank sailings as spot rates tumble and China's lockdowns take their toll

There is a distinct feeling of déjà vu about the current lockdowns in China, with spot rates declining as carriers scramble for export cargo from shuttered manufacturing.

Shanghai’s lockdown is making the supply chain look like 2020 again

Shanghai’s lockdown is making the supply chain look like 2020 again

The supply chain crisis that has dominated logistics for much of the pandemic started with a lull. In the first half of 2020, factories closed, shipping rates slumped, empty containers were stranded at ports, and humming ocean trade was replaced by blank sailings—when a shipping company decides it’s not worth it to sail a ship on a scheduled route.

Tracking the air cargo industry's response to Russia's war on Ukraine

Tracking the air cargo industry's response to Russia's war on Ukraine

Russia’s invasion of Ukraine has added another obstacle for air cargo-reliant supply chains already challenged by climbing rates and limited capacity.

Sharp drop in February container volumes draws mixed analysis

Sharp drop in February container volumes draws mixed analysis

Global container volume fell 15 percent in February from January, but analysts and forwarders are divided on whether the data signals a sharper contraction ahead or shows that global port congestion is vacuuming up capacity.

POLA, POLB again push back consideration of container dwell fee to April 15

POLA, POLB again push back consideration of container dwell fee to April 15

Going back to when the fee was initially rolled out on October 25, POLA and POLB said that the ports have seen a cumulative 49% decline in the amount of aging cargo on their docks, a tally which has trended up going back to the initial announcement of this fee.

2022-04-12T19:38:11+00:00April 13th, 2022|Shipping News|
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