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Week 5 Freight and Customs Updates

February 2nd, 2022

Based on China’s large role in global trade, ongoing COVID outbreaks, and their zero-COVID strategy, there appears to be a perfect storm in play. This is according to the head of global shipping and ports equity research at HSBC. He’s calling the current state of the Asia supply chain “lean”– and not in a good way. That’s because it allows for “little margin of error.” And as we all know, what happens in China can have ripple effects that are felt globally.

Meanwhile, like a virus, port congestion is spreading across the US. While congestion has been most problematic along the west coast, the east coast is now seeing much of the same—indicating things are getting worse, not better.

Things are definitely getting worse for intermodal rail services along the West Coast, as service in Vancouver deteriorates further. Canada’s largest port is facing a double whammy—excessive dwell times for rail containers and a surge in imports. This is on top of an already strained system thanks to severe storms that severed British Columbian rail networks in November. Storms and floods are further disrupting over-the-road trucking.

Speaking of a surge in imports, the numbers are in for the volume that moved through the Ports of Los Angeles and Long Beach. Collectively, the two ports handle about 40% of all inbound US imports. It shouldn’t come as any surprise that both set new annual records. The Port of Los Angeles saw an increase of 13% over 2020 and broke the previous record set in 2018. The Port of Long Beach reported a 15.7% increase over 2020.

Finally, reliability in the liner schedule—sank. From a reliability score of just under 80% in 2019, it dropped to the low 60s in 2020, hit about 35% in 2021. Unfortunately, it doesn’t seem that there will be any sort of bounce back in the near future. According to a Sea-Intelligence report, “schedule reliability will likely remain poor into 2022 as well.” Ironically, rate prices soar as reliability dives.

For the rest of these stories check out the article highlights below.

Disruptions in China can lead to ‘ripple-effects’ across global supply chain, says HSBC

Disruptions in China can lead to ‘ripple-effects’ across global supply chain, says HSBC

China’s zero-Covid restrictions will impact global supply chain recovery as any small disruption in the country will likely lead to “ripple effects” across the world, according to the head of shipping at HSBC.

Port Congestion Spreads Across More U.S. Import Gateways

Port Congestion Spreads Across More U.S. Import Gateways

Port congestion is spreading across the country, threatening to extend shipping delays and drive up costs for importers seeking to get around the bottlenecks at Southern California’s big gateway complex.

Vancouver rail service struggling ahead of new import surge

Vancouver rail service struggling ahead of new import surge

Intermodal rail service in Vancouver continued to deteriorate this week, with excessive rail container dwell times now a major factor contributing to the port congestion that has remained stubbornly high over the past two months as devastating rain and snow storms hammered British Columbia’s surface infrastructure.

Port of Los Angeles and Port of Long Beach each set new volume records in 2021

Port of Los Angeles and Port of Long Beach each set new volume records in 2021

Total 2021 POLA volume—at 10,677,609 TEU (Twenty-Foot Equivalent Units)—increased 1,464,213 TEU, or 15.89%, annually, topping 2020 by 13%, and setting a new annual record, too, topping the previous high set in 2018. POLB reported that calendar year 2021 volume—at 9,384,368 TEU—was up 15.7% annually, setting a new annual record, topping the previous record of more than 8.11 million TEU set in 2020.

Liner schedule reliability falls off a cliff

Liner schedule reliability falls off a cliff

The severe drop in containership punctuality during the pandemic has been brought into sharp relief via a new report from Copenhagen-based consultants, Sea Intelligence.

2022-02-01T12:43:11+00:00February 2nd, 2022|Shipping News|
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