Maritime

October 3: Carriers Now ‘Begging for Business’ as Volumes and Rates Tumble – The Loadstar

Xeneta’s long-term XSI shipping index fell last month for the first time since January, and is likely to drop sharply in the coming months as shippers demand cheaper new contracts and mid-term rate reductions.

The modest 1.1% decline in the XSI last month “won’t be the last,” according to Xeneta CEO Patrik Berglund, who said market fundamentals suggested that the erosion of long-term contract rates would “pick up pace as the year draws to a close.”

He explained: “In short, this means the shoe is finally on the other foot when it comes to upcoming contract negotiations for Q4 and beyond. Shippers are in the ascendancy, while carriers will now be competing to lock in volumes in the face of lower global demand.”

The sharp downturn in the market in the past few weeks has seen carriers scrambling for cargo and having to tap the spot market to supplement disappointing contract volumes.

“The carriers are back on the phone again, begging for our business, and the rates are coming down all the time,” one forwarder contact told The Loadstar. “But there are a couple of lines we won’t be supporting again after the way they treated us,” he said.

Nonetheless, both spot and contract rates are still considerably higher than before the pandemic.

October 6: Transnet Declares Force Majeure at South African Ports over Strike – News 24

South Africa’s logistics utility Transnet declared force majeure at its ports on October 6, according to a document seen by Reuters, as workers began an open-ended strike over wages.

Transnet operates South Africa’s freight rail network and all the country’s ports. It said the strike action would have a profound impact on economic activity across all sectors, and it urged workers to consider the long-term consequences of the strike on themselves and the economy as a whole.

October 7: Spot Rate Carnage Could Result in More Ships Laid Up, ‘with Worse to Come’ – The Loadstar

Ocean carriers could be forced to mothball more eastbound transpacific U.S. west coast loops, and the vessels that operate them, to stop the extraordinary haemorrhaging of container spot rates, which have halved in value in the past four weeks.

According to the October 7 reading of the China-U.S. west coast component of the Freightos Baltic Index (FBX), the spot price for a 40ft plunged 20% this week, to $2,361, compared with a typical premium rate a year ago of $20,000, a two-thirds decline since May.

Ships are reported to be leaving Asia for the U.S. west coast barely three-quarters full, despite aggressive blanking by carriers, and spot rates are on track to fall through the $2,000 watershed next week.

And unless carriers take radical action to take out more capacity on the route, rates could dip below pre-pandemic levels before the start of the contract season, which will severely hobble the lines’ negotiating position.

Moreover, in the interim, BCOs sitting on contracts some four times higher than the spot market are said to be receiving ‘temporary’ rate reductions from carriers to keep their loyalty.

October 11: The Government of Canada Announces How It Will Change the Way Ports Work – Transport Canada press release

Canada’s Minister of Transport, the Honourable Omar Alghabra, announced on October 11 the completion of the Ports Modernization Review, which aims to advance the role of Canadian port authorities and optimize their current and future roles. In a constantly changing world, ports need modern and flexible tools that will allow them to respond to increasingly complex challenges. These new tools will enable ports to remain competitive, efficient and sustainable.

The minister also announced that the government intends to introduce legislative amendments in the coming months to update the way Canada’s ports are managed and operated based on the results of the Ports Modernization Review. The proposed legislative changes will achieve several key policy objectives, including:

The Government of Canada intends to update its approach to considering infrastructure investments of Canadian and international entities to ensure our ports continue to serve Canadians well into the future by remaining competitive and aligned with our economic prosperity and security.

October 11: Maritime Employers Association’s AI Project Galileo: Improved Visibility Will Help Port of Montreal Terminals Appropriately Assign Port Workers – MEA press release

The Maritime Employers Association (MEA) has launched its artificial intelligence project, Galileo, which is designed to improve the planning surrounding dispatch of the Port of Montreal workforce.

Using AI, Galileo will make it possible to accurately predict the arrival time of ships up to 21 days in advance. This is a tremendous improvement over the status quo – which allows for only 24 hours of real-time visibility – and is expected to improve the performance and increase fluidity at the Port of Montreal.

Taking into account port traffic, the weather and the quantity and type of merchandise, Galileo will propose an optimal scenario for the dispatch of the labour force that both respects collective agreements and factors in the availability of port workers in the required classifications. Terminal operators will have an additional resource at their disposal to help them make better decisions regarding their labour needs.

The MEA will share this data with other stakeholders at the port, and will advise them as to the best time of day to begin their operations.

An entire supply chain ecosystem will benefit from this improved visibility and will be able to better plan the handling of merchandise between ship, road and rail.

October 12: Shipping Lines Still Raking in Billions Despite Sinking Cargo Demand – American Shipper

There’s no shortage of schadenfreude toward shipping lines these days. After making hundreds of billions in profits during the pandemic, there is gleeful talk of their looming comeuppance – of plummeting spot rates and carriers begging for business.

But shipping lines are still pocketing billions of dollars in profits each quarter. Spot rate declines and volume reductions are still being easily offset by higher contract rates.

Recently released data from Asian carriers reveals that financial performance is still close to peak levels and has a very long way to fall before liner operators come even close to breakeven.

October 14: Evergreen Joins Compatriot Lines in Renegotiating Shipping Contract Rates – The Loadstar

Evergreen has followed its fellow Taiwanese carriers, Yang Ming and Wan Hai, in beginning to renegotiate contract terms with shippers.

The carrier’s general manager, Eric Hsieh, said: “We need to reduce the spread between the contract and the spot market.

“Currently, individual cases are discussed according to the different agreed freight rates and the customer’s needs.”

October 14: Container-Ship Logjams Off U.S. Ports Finally Easing as Imports Fall – American Shipper

The good news is that there were fewer than 100 container ships stuck waiting off North American ports on October 14. The bad news is that there were still 99 container ships offshore and the pre-COVID norm was in the single digits.

There’s still a long way to go to clear the backlog. But the current tally is now back to June levels and 35% off recent highs.

October 20: Ocean Carrier Voyage Blankings Causing Chaos and Confusion – The Loadstar

Ocean carriers are ramping up their vessel blanking programs from Asia as export demand weakens, but last-minute cancellations are causing chaos in supply chains and confusion within liner offices.

Moreover, shippers are having to navigate their way around “officially” announced blank sailings and voyages pulled just days before arrival in China and held off the loading port, in what carriers term as “slidings.”

A UK-based NVOCC said liner sailings from China had become “pot luck” and accused carriers of running “tramp services” instead.

October 20: Vancouver Congestion Remains, Montreal Facing Low Water – Inside Logistics

Congestion at the Port of Montreal has declined, but low water levels have prompted a new surcharge. And on the West Coast long wait time for vessels at the Port of Vancouver continue.

In its weekly ports update, Maersk reports on vessel wait times at North America’s major ocean ports. Vancouver is “experiencing heavy congestion,” it said.

Currently the Port of Vancouver has the longest wait times of any port on the list. Its vessels are waiting up to 28 days to unload, the liner company said. It reported Vancouver’s yard utilization at 85 percent, and average rail dwell at seven days.

However, its numbers do not reflect the port’s own report, which suggests that wait times at anchor or offshore have declined significantly. In August, the port reported average dwell times of just over 30 days. At present, it reports that number has dropped to 6.6 days.

October 27: Complaints about Carriers Stack Up at the Federal Maritime Commission – Splash

The U.S. Federal Maritime Commission is keeping busy with an increasing number of complaints from shippers.

The latest two to emerge involve Israeli carrier ZIM and Mediterranean Shipping Co. (MSC).

“The softened market – and space situation – may well cause a flurry of suits and FMC complaints to be filed,” commented Bjorn Vang Jensen, a vice president at liner consultancy Sea-Intelligence, in a post on LinkedIn last month.

“The collective, pent-up anger and PTSD in the BCO community at large now wants out, and rate reductions won’t cut it for some,” said Jensen.

October 28: Shipping Rates Are No Longer Plunging. Is ‘New Normal’ Near? – American Shipper

Ocean shipping spot rate indexes are still falling. But after months of steep declines, they’re dropping much less rapidly than before. It could be just a temporary plateau before the next leg down. Or it could be something more significant: the first sign of the market bottom, the post-pandemic “new normal.”

Different spot rate indexes publish different numbers, and critics contend that indexes don’t reflect actual rates. But the consensus is that indexes are a good indicator of the general direction of pricing. And the direction spot indexes are headed lately is more sideways than down.

 

 

Air

October 3: Airfreight Rates on Key Lanes Continue Gradual Descent in September – Air Cargo News

Airfreight rates on key trade lanes out of Asia continued to weaken in September despite the industry heading towards the peak season.

The latest figures from the Baltic Exchange Airfreight Index (BAI) show that, in September, rates from Hong Kong to North America declined by 18.5% compared with a year ago, to $7.94 per kg, and are down on the $8.33 per kg achieved in August.

The declines are noteworthy for two reasons: First, rates on the trade lane tend to increase from August to September and second, it is only the second time since February 2020 that prices on the trade have registered a year-on-year decline.

October 7: Air Cargo Peak Season Evaporates on Low Demand, High Capacity – American Shipper

It’s the time of year when retailers typically make their final push to ship goods from abroad in time for holiday shopping and freight rates are highest, but so far signs of peak season in air cargo are difficult to find. Instead, rates continue to slide as global economic clouds dampen demand and airlift supply rises with the recovery of passenger travel.

Air freight spot rates tumbled 9% year over year in September to below the 2021 level for the first time this year, reported Xeneta, an ocean and air freight rate benchmarking and data analytics firm.

The cost to ship by air lowered another 2.8% in the past week and is now 21.6% less than a year ago, according to the Baltic Air Index. A year ago, rates were up about 80% on a yearly basis.

Analysis by WorldACD, another provider of air freight data, also shows tonnage and prices slipping marginally again in the second half of September. More notable, however, is that volume is down 12% from last year despite a 6% increase in capacity. Its data also reflects a 10% decline in spot rates to an average of $3.46 per kilogram.

October 20: Airlines Fill Less Cargo Space as Consumer Spending, Trade Sag – American Shipper

Prospects for a fourth-quarter bounce in air cargo business as retailers stock up for the holidays are dim, the culmination of a gradual slowdown in shipment traffic and costs since Russia’s invasion of Ukraine in March.

And worsening macroeconomic conditions suggest the air logistics sector could face a darker 12 to 18 months after peaking a year ago. Forty-five percent of customers polled last week during a webinar hosted by logistics specialist Flexport said they intend to ship less by air in 2023.

The International Air Transport Association projected air cargo demand would grow 4% this year, after COVID supply chain disruptions sparked a 7.9% gain in 2021. Through August, overall volumes were down 5.4% and have continued their sequential slide. In September, volume as measured by chargeable weight to move shipments slipped below pre-pandemic levels for the first time, according to air freight data aggregator Xeneta.

 

 

Rail

October 4: CN Shares Plan for Winter Operations – Inside Logistics

CN has published its plan for winter operations in 2022 and 2023.

The plan sets out the measures the railway will introduce to ensure it has the capacity and resources to maintain operations in cold winter weather.

The measures introduced include adding staff and new locomotives, along with new rail cars and monitoring technology.

October 11: Large U.S. Rail Union Rejects Deal, Renewing Possibility of Strike – Transport Topics

The U.S.’s third-largest railroad union rejected a deal with employers on October 10, renewing the possibility of a strike that could cripple the economy. Both sides will return to the bargaining table before that happens.

Over half of track maintenance workers represented by the Brotherhood of Maintenance of Way Employees Division who voted opposed the five-year contract despite 24% raises and $5,000 in bonuses. Union President Tony Cardwell said the railroads didn’t do enough to address the lack of paid time off – particularly sick time – and working conditions after the major railroads eliminated nearly one-third of their jobs over the past six years.

The group that represents the railroads in negotiations emphasized that no immediate threat of a strike exists because the union agreed to keep working for now.

Four other railroad unions have approved their agreements with freight railroads including BNSF, Union Pacific, Kansas City Southern, CSX and Norfolk Southern, but all 12 unions representing 115,000 workers must ratify their contracts to prevent a strike.

October 26: Second U.S. Railroad Union Rejects Deal, Adding to Strike Worries – Transport Topics

A second railroad union rejected its deal with the major U.S. freight railroads on October 26, reflecting workers’ increasing frustration with the lack of paid sick time in the industry and adding to concerns about the possibility of a strike next month that could cripple the economy.

The Brotherhood of Railroad Signalmen said nearly 61% of the workers who voted opposed the five-year contract even though it included 24% raises and $5,000 in bonuses.

October 31: Frustrated Shippers Caught in Canadian Rail Congestion Call for Help – CIFFA Cited – The Loadstar

Predictions that congestion at rail yards in Canada’s interior would ease this month and next are not playing out so far, prompting frustrated importers and forwarders to ask for government intervention. The problems are most pronounced at rail hubs around Toronto and Montreal.

According to the Canadian International Freight Forwarders Association (CIFFA), the situation has been exacerbated by government efforts to help reduce congestion at west coast container gateways (notably Vancouver), which only served to push the problem to inland rail facilities already struggling to cope with volumes.

Now, forwarders and importers are looking to the authorities for help to fix the problem. Bruce Rodgers, executive director of CIFFA, has asked federal agencies like Transport Canada and the Canada Border Services Agency to help.

“Recent decisions by government to clear the backlog at the Pacific gateway only resulted in a worsening situation. Without foresight, decisions were made, not to work on a solution to the problem, but to shift the burden inland.”

 

 

Trucking

October 18: Driver Inc. Threat Approaching Point of No Return: CTA – Today’s Trucking

The Canadian Trucking Alliance (CTA) is warning that the labour scheme known as Driver Inc. will become the dominant business model in trucking if regulators fail to act on the issue this year.

“The industry is approaching the point of no return, as upwards of 25% of the industry is estimated to be involved in some form of the Driver Inc. scheme already,” CTA president Stephen Laskowski said in a press release.

“Without committed action by the end of the year, this model will likely become solidified as the dominant employment practice as the [federal] government moves ahead with the implementation of Bill C3 – Paid Medical Leave and other planned Labour Code reforms – which Driver Inc. companies claim do not apply to them.”

Under the Driver Inc. model, fleets sidestep employer obligations by misclassifying employees as independent contractors.

October 21: Labour Shortages, Port Delays, Housing Affordability Squeeze Trucking in Atlantic Canada – Today’s Trucking

Labour shortages, port delays and housing affordability are some of the major challenges facing the trucking industry in Atlantic Canada. This is compounded with issues like Driver Inc., not enough immigration, the upcoming 10 days of sick leave for drivers and the January 1, 2023, ELD mandate.

There are positives too, like the announced twinning of Highway 185 in Quebec.

Highlighting the backlogs in the Port of Saint John and Port of Halifax, Trevor Bent, chairman of the Atlantic Provinces Trucking Association (APTA), said wait times have skyrocketed. “The ability to get containers out has been reduced by 50%. APTA members are saying if they could move six containers out a day, it has now dropped to three.”

He called for solutions to make things more efficient, including fixing labour, scheduling and land issues.

Bent said housing shortages and affordability are a challenge when trying to attract talent to Atlantic Canada. The construction sector, trucking’s largest competitor for labour, is also looking for workers.

October 31: New U.S. Survey Finds Perils Abound for Owner-Operators – Bulk Operator

Slowing economic activity and correcting supply chains have reduced the need for capacity and are driving the outlook for rates and demand lower, leaving higher-cost carriers worried about turning profits, according to the latest Bloomberg Intelligence-Truckstop survey of owner-operators.

Pessimism among carriers has touched the pandemic lows seen more than two years ago, in the first quarter of 2020: About 33% of respondents expect load growth to decline over the next six months, the lowest reading since 1Q 2020 and significantly higher than 3Q 2021 at 9%. Many carriers raised concerns over the strength of the upcoming peak season. Refrigerator carriers were the most optimistic, with only 10% of those surveyed projecting a volume decline in the coming months.

 

 

CIFFA Advocacy, Communications, Activities

October 5: CIFFA Presents to the House Standing Committee on Transportation, Infrastructure and Communities

CIFFA presented to the House Standing Committee on Transportation, Infrastructure and Communities on October 5. Information on that presentation, including the full text of CIFFA’s remarks, is available in the Forwarder Online.

October 6: CIFFA Supports Proposed CP Logistics Park in Vancouver

CIFFA has written to the Canadian Transportation Agency (CTA) to voice support for the CP Logistics Park in Pitt Meadows, B.C. CP is seeking CTA approval to develop the project on 41 hectares of CP-owned land on the south side of CP’s existing Vancouver Intermodal Facility.

The proposed project consists of three major rail and transload components, namely:

Further details of the proposed project can be found at vancouverlogisticspark.ca.

October 9: CIFFA Statement on the National Supply Chain Task Force Final Report: Action, Collaboration, Transformation. (ACT)

CIFFA issued a statement following the release of the final report, Action. Collaboration. Transformation., of Canada’s National Supply Chain Task Force.

CIFFA’s statement highlights and champions particular points and calls to action in the report. The association looks forward to working with the Transport Minister and department, providing further input – after submitting input to the Task Force in July – as actions promoted in the report are implemented.

October 17: CIFFA Overview of Future Borders Coalition Summit

CIFFA’S Director, Policy and Communications Julia Kuzeljevich attended Future Borders Coalition Summit in Washington, D.C. on October 12 and 13.

Laura Dawson, Future Borders Coalition’s Executive Director, opened the full-day conference session on October 13 noting that between Canada and the U.S., there are very few “true disputes.” Most issues between the two countries can be resolved with consultation or discussion.

Matt Morrison, the Executive Director for the Pacific Northwest Economic Region, and the Co-Chair of the Future Borders Coalition, noted that the U.S. and Canada have the largest trade relationship.

He called for more members to come into the coalition and bring their significant user experience to the table to make the Canada-U.S. border work better.

Solomon Wong, President and CEO of InterVISTAS, who wrapped up the day of presentations, and discussed the FBC’s next steps, made note of the FBC’s latest release, a report on the digital border.

Read the full summit overview.

October 21: Message from CIFFA Executive Director Bruce Rodgers Regarding Ongoing Challenges in Doing Business in Canada

Members of CIFFA are increasingly frustrated by the ongoing challenges and rising costs of doing business in Canada.

CIFFA’s members have increasingly been asking the Secretariat office to do more to raise awareness around the issues they are facing: congestion, delays, capacity issues, inability to pick up or return containers, mounting fees for demurrage/detention, and no one to whom they can raise these issues with satisfactory results.

Our role, though not to point fingers at any party, has become a convoluted and frustrating one. While we have aimed to facilitate collaboration wherever possible, the issues are that there is no longer a supply “chain” in Canada, but supply “links,” each operating in a fragmented and siloed approach. Until there is a significant commitment to work collaboratively on “connecting these links,” in the national public interest, these issues will persist, undermining transportation and the supply chain overall.

Read the full statement.

 

 

Maritime

September 6: Vancouver Port Defers Rolling Truck Age Program to April 3, 2023 – Today’s Trucking

The Port of Vancouver will defer implementation of the Rolling Truck Age Program by a final six months to April 3, 2023, according to a letter issued by the port authority on September 3.

The program banning container-hauling trucks with model years older than 2006 in a bid to control emissions was expected to go into effect on September 15.

Transport Canada indicated during discussions that a final adjustment to the program schedule would provide additional flexibility to better enable operators to comply with requirements, the letter addressed to Truck Licensing System (TLS) participants stated.

September 7: North Sea Port Congestion at Critical Level, Hindering Global Trade – The Maritime Executive

Supply bottlenecks and congestion in container shipping are becoming more entrenched and are impacting the global exchange of goods warns the Kiel Institute for the World Economy (IFW) in its latest update on global trade.

According to its analysis, the IFW warns that congestion in container shipping is becoming entrenched at a high level. They calculated that around 11 percent of all shipped goods are currently stuck. In the anchorages observed by the Kiel Institute, congestion in the North Sea is the most serious for the first time. They reported that well over 2 percent of global freight capacity is at a standstill there and can neither be loaded nor unloaded. In the German Bight alone, 19 container ships are waiting to unload their goods.

September 8: Yang Ming ‘Under Pressure’ from Shippers Demanding Contract Rate Cuts – The Loadstar

Yang Ming COO Chang Chao-feng has admitted that, as spot rates fall, the carrier is under pressure from shippers demanding to renegotiate contract rates.

The line is believed to be the first to confirm receiving demands from shippers for lower contract fees and, on September 7, Mr. Chang said the situation had become more challenging than in mid-year.

He said: “In May, whether for shipments to Europe or the U.S., both shippers and our side were optimistic when negotiating contract rates, which were high. The sharp drop in the spot rates has caused great pressure on these contracts.

“We will discuss the contracts with our customers. At present, some still respect the spirit of the contract. We won’t take the initiative to request immediate modifications and adjustments, but we’ll make necessary adjustments, depending on the contract.”

September 13: U.S. FMC Seeks to Limit Ocean Carriers’ Leverage on Container Space – American Shipper

The Federal Maritime Commission is proposing a rule aimed at preventing ocean carriers from locking out customers from the carriers’ available vessel space.

The notice of proposed rulemaking (NPRM), expected to be published this week in the Federal Register, will give the public 30 days to comment on a provision included in the Ocean Shipping Reform Act of 2022 that prohibits ocean carriers from unreasonably refusing to deal or negotiate with respect to vessel space accommodations.

“The NPRM outlines the elements which would be necessary to establish a violation and the criteria the [FMC] would consider in assessing reasonableness if the NPRM is finalized,” the document states. “The NPRM proposes a burden-shifting regime that would allow ocean common carriers to establish why it was not unreasonable to refuse vessel space to a particular complainant.”

The proposal stems from numerous complaints by shippers as well as trends over the past two years revealing dramatic changes in the U.S. import-export balance, particularly between the U.S. and Asia. Shippers have alleged – and the FMC has documented – that carriers have been taking advantage of more lucrative import rates at the expense of reasonable rates and service provided to exporters.

September 15: Port of Quebec Longshore Workers Locked Out – Canadian Union of Public Employees press release

At noon on September 14, the Société des arrimeurs de Québec locked out 81 longshore workers at the Port of Quebec.

On August 30, longshore workers at the port voted 98.5% in favour of pressure tactics up to and including strike action and have resorted to some of them in the time since to move along the discussions at the bargaining table.

The parties have been in talks since June 2022. Discussions have bogged down over work schedules.

September 16: DCSA Digital Standards Poised to Become Globally Accepted – The Loadstar

The Digital Container Shipping Association (DCSA) has become the front-runner in setting digital standards.

Earlier this month, the European Shippers Council announced a collaboration with the DCSA to drive forward to adoption of DCSA standards. Further, Federal Maritime Commission (FMC) commissioner Carl Bentzel recently praised the DCSA as an invaluable tool for streamlining maritime transport.

DCSA standards have also seen burgeoning acceptance outside of Europe and the U.S., in the form of the recent announcement of the Maritime and Port Authority of Singapore (MPA) and the Port of Rotterdam Authority to develop the “world’s longest green and digital shipping corridor.”

September 19: Fall in Container Spot Rates ‘Much Steeper,’ ‘Less Orderly’ Than Expected – American Shipper

Shipping liner executives predicted a continued drop in spot rates during their latest quarterly calls, while offering soothing assurances to investors that the fall would be gradual. Maersk CFO Patrick Jany said it would be a “progressive erosion,” not “a one-day drop.” Matson CEO Matt Cox emphasized rates were “adjusting slowly” in an “orderly marketplace” and not “falling off a cliff.”

The decline may indeed be fairly steady, as opposed to the sudden, violent swings seen in bulk commodity shipping. Yet spot container rates appear to be falling more rapidly than some liner executives expected.

September 19: Rhine Water Levels in Germany Approaching Normal Depths – MarineLink

Water depths on the Rhine River in Germany have risen thanks to recent rain and are approaching normal levels after falling this summer to lows that disrupted transportation, vessel brokers and commodity traders said on September 19.

But since dry weather was forecast for much of this week, levels could fall again and the picture has not yet normalized, brokers said.

Weeks of high temperatures and scant rainfall in August lowered water levels in the river, Germany’s commercial artery, causing delays to shipping and pushing up freight costs. There were fears the disruption could knock half a percentage point off economic growth in Europe’s biggest economy this year.

September 20: Liverpool Dockers Begin Two-Week Strike After Rejecting Pay Offer – The Loadstar

Dock workers at the port of Liverpool began a two-week strike on September 20, following the breakdown of negotiations with employer Peel Ports.

Felixstowe dockers, also in a dispute over pay, will start an eight-day strike on September 27, ending on October 5.

The International Transport Workers Federation (ITF) said the action was the result of “a failure by Mersey Docks and Harbour Company (MDHC) to honour promises on pay, and profiteering.”

Dockers at both Felixstowe and Liverpool are members of Unite and have been negotiating for inflation-level pay increases with their respective employers, who claim they have made generous offers, rejecting calls to meet higher wage demands.

September 20: Maersk After Drop in Shipping Prices: ‘We Do Not Renegotiate Contracts’ – Børsen

Container freight prices have tumbled in recent weeks, prompting customers to ask carriers to review existing price agreements.

This is not an option at A.P. Moller-Maersk, which will not renegotiate agreements prematurely, the shipping and logistics group told MarketWire.

“Of course, we have an ongoing dialogue with our customers about how best to help them in relation to their logistics needs, but we do not renegotiate contracts,” Maersk said in a written response.

September 21: Wan Hai Says It May Be Open to Reducing Shipping Contract Rates ‘Short Term’ – The Loadstar

Wan Hai has become the second liner operator to acknowledge requests from shippers to reduce contract rates in the wake of falling freight rates.

Similar pressure was reportedly experienced by Yang Ming earlier this month.

Primarily an intra-Asia carrier, Taiwanese Wan Hai entered the transpacific trade in 2020 with U.S. west coast sailings, followed by east coast services last year.

At the time, transpacific rates were at historically high levels, but have since fallen below $3,500/FEU, from a peak of $17,500 last October.

A spokesperson for Wan Hai said: “Some customers did request a renegotiation of contract rates. Our response is to discuss it with them, and we may give discounts for a short period, depending on the market conditions.”

September 21: Exposed Carriers Struggling to Pay Sky-High Charter Rates – Splash

The abrupt plummet in boxship charter rates is making plenty of headlines, with warnings that some carriers are struggling to keep up with their rental payments for ships signed earlier at sky-high prices.

Classic panamax tonnage has been fixed in recent days at rates of $40,000 and $50,000 for periods of six months, according to Alphaliner, roughly half what such a vessel size could have obtained only a few weeks ago for the same durations.

September 22: Sea-Intelligence: Carriers Are Increasing Blank Sailings in October – The Maritime Executive

The major shipping lines are once again resorting to blanking sailing from their schedules as a means of controlling capacity after an extended period of deploying every available ship to meet the surge in demand. Using the guise of the upcoming Golden Week holiday tied to China’s Autumn Festival, carriers are expected to increase the number of cancelled sailings above historic norms according to the latest calculations from the analysts at Sea-Intelligence.

September 29: Union Rejects Wage Offer, Plans Broader Second Strike at Liverpool – The Maritime Executive

Union officials are planning to increase the pressure on UK ports, announcing plans for a second strike at the port of Liverpool that will encompass more of the employees of Peel Ports, operators of the container port. The announcement of a second strike at Liverpool comes five days before the first strike is due to end and, according to analysts, the timing is designed to increase disruptions to the UK’s supply chain.

Currently, nearly 600 dock workers and engineers are in the second week of a two-week strike called by the union that began on September 20. The first strike is due to end on October 2, and Unite now reports that the workers will resume the strike between October 11 and 17.

September 29: Pacific Pilotage Authority Issues Notice of Proposed Revised Service Charges – PPA notice

The Pacific Pilotage Authority issued a notice last week of its proposed revised charges.

The notice includes a description of the proposal, including justification in relation to establishing or

revising the pilotage charge, and the circumstances in which the charge will apply.

Persons interested in making representations to the Authority regarding the proposal may do so in writing no later than close of business on October 30.

 

 

Air

September 22: Air Canada Executives Target Doubling Cargo Business by 2024 – American Shipper

The man who got rid of Air Canada’s last freighter as CFO 15 years ago now says as CEO he wants to double cargo revenue – with the help of the airline’s new freighter fleet.

Decades ago, Air Canada flew Boeing 727-100, Boeing 747 Combi (passenger and cargo sections on the main deck) and DC-8 cargo jets. All were eventually removed from the fleet in the 1990s, part of an industry trend in which most passenger carriers determined the cost structure and infrastructure required didn’t justify a separate freighter division in a market with regular peaks and valleys. The cargo division continued its job using the belly space on passenger aircraft.

But Air Canada reassessed its strategy during the pandemic. Cargo became such a strong source of revenue when passenger flying mostly stopped and scores of planes – some with seats removed for extra cabin storage – were repurposed as auxiliary freighters, that Air Canada decided to capitalize on market projections for robust e-commerce shipping growth and fewer widebody passenger jets.

September 23: Boeing CEO: Promises About Clean Aviation Fuel Outpace Technology – American Shipper

Expectations for quick decarbonization of aviation are unrealistic and create pressure to invest in unproven technologies instead of mass production of sustainable aviation fuel, which will have an immediate benefit, said Boeing CEO David Calhoun.

Speaking at a recent U.S. Chamber of Commerce aerospace event, the Boeing chief questioned the speed at which governments and stakeholders are promising change when little biofuels infrastructure exists and alternative propulsion systems are still over the horizon.

“My fear is pace. A lot of potential technologies, hydrogen, including green hydrogen, get talked about, want to get funded and then lead to policy choices that try to accelerate all of that at a very fast pace: ‘You’ll be green by 2035. Every next airplane has to be hydrogen.’

“You confuse policymakers in the process,” he said.

September 26: A Lift for Belly Capacity on the Way After Hong Kong Lifts Hotel Quarantine Rule – The Loadstar

Hong Kong has scrapped its hotel quarantine rule, paving the way for extra bellyhold cargo capacity and a potential boost to the city’s ailing economy.

Previously, travellers entering Hong Kong had to quarantine at a hotel for three days, followed by four days of movement restrictions, but this has been replaced by daily testing for the first week after entering the city.

Cathay Pacific said the new measures would allow for the “strengthening of network connectivity to, from and through the Hong Kong aviation hub,” adding that it would launch 200 pairs of regional and long-haul passenger flights in October.

 

 

Rail

September 8: CN Update on Toronto-Destined Cargo over CN-Mississauga Intermodal Service Centre – CN Customs Bulletin #68

While all efforts are being made to maximize utilization of all authorized offsite depots, CN is still seeing a large number of import containers dwelling at its Toronto terminals. CN is moving Customs-cleared containers to the offsite facilities, however the volume of Customs-cleared containers is insufficient to address the congestion. As a result, CN is forced to look at alternate options to shuttle additional containers.

In consultation with federal government agencies, CN will be handling some Toronto-destined cargo over CN’s Mississauga Intermodal Service Centre (MISC) (Port 0495/sub-location 5974).

The goal is to increase the volume of imports that can depart the ports, thereby reducing the time container ships are anchored in Canadian ports. The Canada Border Services Agency (CBSA) is participating in this solution and has established processes to be followed.

CN will pre-identify containers once they depart a port in Western Canada and will notify CN’s immediate customers of the change within 24 hours of train departure. While this initiative targets containers moving from ports in Western Canada only, the solution may be extended to ports in Eastern Canada as well should the need arise.

September 12: U.S. Railroads Cut Service in Preparation for Potential Strike – Supply Chain Dive

The four largest U.S. railroads began limiting service on September 12 in preparation for a potential strike that stands to bring freight rail movement across the country to a halt.

Norfolk Southern, Union Pacific, BNSF and CSX all announced they will issue embargoes on certain shipments beginning early this week.

CSX, BNSF and Union Pacific all halted traffic of hazardous materials due to the threat of “spontaneous labour action,” according to the Association of American Railroad’s list of active embargoes.

Norfolk Southern and CSX said the embargoes were necessary to ensure that critical or even toxic freight is not left abandoned.

September 15: U.S. Railroad Strike Averted as Unions, Companies Reach Tentative Deal – Reuters

Major U.S. railroads and unions secured a tentative deal after 20 hours of intense talks brokered by the Biden administration to avert a rail shutdown that could have hit food and fuel supplies nationwide.

The tentative deal now goes to the unions to be voted on. Even if those votes fail, a rail shutdown that could have happened as soon as midnight on September 16 has been averted for several weeks due to the standard language included in such a deal.

September 23: Two Biggest U.S. Rail Unions Won’t Tally Contract Votes Until the Middle of November – Trains

The two biggest rail unions don’t expect to tally members’ votes on their tentative contract agreements with the Class I railroads until the middle of November.

The SMART-TD union that represents conductors and the Brotherhood of Locomotive Engineers and Trainmen that represents engineers both outlined ratification vote timelines this week in updates to their members.

On September 22, the BLET began a 15-day question and answer period during which general chairmen will reply to the national president’s office with any questions or clarifications regarding the tentative agreement.

“Those questions will be consolidated into a single document, and the BLET’s National Wage Team, alongside SMART-TD, will return to the bargaining table with the carriers to mutually agree upon the answers to those questions,” the BLET said.

Once the Q&A session is complete, ballots will be distributed on or around October 14, with the BLET tentatively set to tally the votes on November 17.

 

 

Trucking

September 9: Driver Inc. Enforcement to Expand – Today’s Trucking

Canada’s Labour Program has acknowledged that the Driver Inc. business model – which involves misclassifying employees as independent contractors – is “widespread.” And it’s preparing to expand related enforcement initiatives.

Much like a recent pilot project in Ontario, the national strategy will involve outreach to promote good employment practices, increase proactive inspections and continue enforcement activities with non-compliant carriers.

Carriers misclassify truck drivers as independent contractors to avoid or bypass labour laws. The end result denies employees access to things like vacation pay, overtime and termination rights under the Canada Labour Code, said the bulletin distributed by provincial trucking associations.

September 13: CN Update Regarding Valleyfield Intermodal Terminal

Further to the tariff update it sent on July 25, CN advises that Valleyfield Terminal will be closing as of September 30. CN will support all Montreal-destined traffic at its Taschereau Intermodal Terminal.

Note the following related to the Valleyfield Intermodal Terminal:

September 14: Canadian Roadcheck Inspections Ground 22.6% of Vehicles – Today’s Trucking

Canadian enforcement teams placed 22.6% of inspected vehicles out of service during the international Roadcheck blitz that was conducted May 17 to 19, compared with a 23.8% out-of-service rate in the U.S.

Teams completed 3,359 Level 1 inspections on this side of the border, placing 760 vehicles and 191 drivers out of service, the Commercial Vehicle Safety Alliance (CVSA) reports. In the U.S., there were 33,196 Level 1 inspections, with 7,912 vehicles and 2,051 drivers placed out of service.

Level 1 inspections involve 37 steps and include vehicles and drivers.

September 29: Recruitment and Retention Becomes a Costly Challenge for Trucking, U.S. Execs Say – Transport Dive

Hirschbach Motor Lines President Brad Pinchuk says the carrier’s driver hiring costs have spiked by about 2.5 times since the onset of the pandemic.

“We’re having to work harder to keep our trucks filled,” said Pinchuk. “We’re keeping them full, but we’re having to work a lot harder. We’re having to spend a lot more money.”

Retaining workers across the industry has become costlier. Driver wages per mile in the U.S. jumped 10.8% from 2020 to 2021, increasing from 56.6 cents to 62.7 cents, according to the American Transportation Research Institute’s 2022 cost of trucking report.

Bill Kretsinger, CEO of American Central Transport, said drivers are also expecting more from their employers.

 

 

CIFFA Advocacy, Communications, Activities

September 22: CIFFA Alberta Customer/Member Engagement Receptions

CIFFA held two Western Canada customer engagement receptions this week, on September 20 in Calgary and September 21 in Edmonton.

Calgary – Hyatt Place Calgary Airport, September 20

Cocktail reception and presentations

Edmonton – Renaissance Edmonton Airport Hotel, September 21

Cocktail reception, networking dinner and presentations

CIFFA thanks its Alberta-based membership and interested prospects for their attendance, support and feedback.

September 29: CIFFA Strategic Planning

On September 28 and 29, CIFFA held a strategic planning session and National Board of Directors meeting. The meetings were held in Port Credit, Ontario.

Working with Sartori Consulting, CIFFA’s strategic planning focused on governance, with a review of CIFFA’s previous plan, what worked and what didn’t, and proceeded with discussions and exercises around defining CIFFA’s strategic goals and measurements to achieve these. A multi-year plan for the focus and direction of the association will be developed following the meeting.

Maritime

August 3: Carrier Schedule Reliability Records First Year-Over-Year Improvement in More than Two Years – The Maritime Executive

After hitting a low point at the beginning of 2022, schedule reliability and delays among the container carriers are steadily improving. The market is showing the first signs that the supply chain is managing after the challenges over the past two years brought on by the pandemic and the surge in consumer demand. This progress comes after the end of lockdowns in China but despite labour strikes at ports and persistent reports of backlogs.

“Global schedule reliability seems to have broken the trend seen since the start of this year,” said Alan Murphy, CEO of Sea-Intelligence. “This also marked the first time since the start of the pandemic that schedule reliability improved year over year.”

August 4: Traffic Restrictions Cause Congestion Concerns for Carriers at Nhava Sheva – Container News

Maersk Line has reported a slowdown in truck flows in/out of India’s Nhava Sheva Port/JNPT as a result of new traffic restrictions imposed by local authorities.

“Traffic police have issued a notice on movements of heavy vehicles from Nhava Sheva CFS [container freight station]/yard,” the carrier said in a customer advisory. “Heavy vehicle movement from JNPT area is, therefore, leading to traffic congestion. All these restrictions are beyond our control and this may lead to delays.”

The carrier has called on cargo interests to plan their shipments in advance to avert cargo gate-in delays/roll-overs.

August 4: DP World: Inland Network Congestion Affecting Marine Terminals – DP World customer advisory

On August 4, DP World issued a customer advisory related to berthing delays on the West Coast due to inland network congestion, particularly in Toronto and Montreal.

As these inland terminals became congested, the supply of rail cars to the marine terminals was restricted/stopped, which has had a major impact on both DP World Prince Rupert and Vancouver.

August 9: Container Lines Are Set to Smash Year-Old Profit Record by 73% – American Journal of Transportation

The world’s biggest container lines are on course to post profits in 2022 that will top last year’s record by 73%, according to a new forecast, buoyed by logistics and labour strains that are squeezing capacity amid sustained U.S. demand for imports.

Net income this year will likely reach $256 billion based on the 11 carriers monitored by industry veteran John McCown, the founder of Blue Alpha Capital. That’s an increase of $36 billion from his prior estimate in April and roughly equivalent to the gross domestic product of Portugal. The figure last year hit an all-time high of $148 billion, according to McCown.

August 10: Historic Drought Threatens to Cripple European Trade – American Journal of Transportation

In the midst of an arid summer that is setting heat records across Europe, the continent’s rivers are evaporating.

The Rhine – a pillar of the German, Dutch and Swiss economies for centuries – is set to become virtually impassable at a key waypoint later this week, stymieing vast flows of diesel and coal. The Danube, which snakes its way 1,800 miles through central Europe to the Black Sea, is gummed up too, hampering grain and other trade.

Across Europe, transport is just one of the elements of river-based commerce that’s been upended by climate change. France’s power crisis has worsened because the Rhone and Garonne are too warm to effectively cool nuclear reactors, and Italy’s Po is too low to water rice fields and sustain clams for “pasta alle vongole.”

August 12: More Blank Sailings Likely as Spot Rates Tumble – gCaptain

Container spot rates are falling fast on all export routes from China in what should normally be the peak season for demand.

According to the August 12 reading of the Ningbo Containerized Freight Index (NCFI), all 21 of the routes it covers were trending in the red.

Alongside headlines of another tranche of record eye-watering quarterly profits posted by ocean carriers last week, there was a general acceptance from the lines that the supply/demand scales were shifting back in favour of the shipper. Both short-term prices and long-term contract rates were experiencing downward pressure.

August 12: Fall in Imports and New Cranes Ease Congestion at Chittagong Port – The Loadstar

An increase in cargo handling equipment and a decline in import cargo has seen Bangladesh’s prime seaport, Chittagong, significantly reduce both volumes and berth waiting times for vessels.

Less traffic at the ports is due in part to government constraints on the import of luxury items, following a severe fall in foreign currency reserves.

August 16: China’s Yangtze River Also Reports Falling Water Threatening Shipping – The Maritime Executive

While attention is focused on the falling water levels along the Rhine and its impact on Germany and Europe, word comes that China is facing a similar challenge along the Yangtze, the country’s longest river. China in recent years has invested heavily in the Yangtze, always one of the most important inland waterways in the country, seeking to enhance its role in both supplying inland regions and becoming an increasingly important pipeline to move exports to the major seaport at Shanghai located on the Yangtze Delta.

As southern parts of China endure historic heatwaves and drought, water levels at Hankou, a key monitoring point on the Yangtze River near Wuhan, dropped to 17.54 metres (57.5 feet) last week, which the authorities report is about six metres (20 feet) lower than the average in recent years. According to local media, citing Chinese disaster response authorities, this is the lowest level seen for this time of the year since records began in 1865.

August 17: Reefer Rates Bolstered by Congestion, Shortages and Drought in Key Regions – The Loadstar

Equipment shortages have helped prop up freight rates for reefers, even as dry container prices continue to decline.

According to Rafael Llerena, CEO of 3PL EasyFresh, reefer freight rates have remained high despite an apparent tail-off in demand on other trades.

He said: “Reefer rates have held up not only because of the higher trade leg demand, compared with dry cargo, but also as a result of a shortage of equipment. Reefer containers have to compete with high-priced laden dry containers on the return leg from Asia and are facing congestion, which slows boxes returning from the U.S.

“Moreover, non-operating reefers have been used to replace dry cargo units on certain trades over the past few months, but these are taking a long time to return to loading ports due to congestion problems, schedule reliability issues and blank sailings from Asia, delaying rotation and supply.”

August 18: Maersk Shifting Vancouver Calls Due to Congestion – Inside Logistics

Delays and congestion have promoted Maersk to alert customers to changes in its scheduled calls at the Port of Vancouver.

In a note to customers, the liner company said West Coast terminals have experienced berthing delays in recent weeks due to inland network congestion, particularly in Toronto and Montreal. As these inland terminals became congested, the supply of rail cars to the terminals was restricted/stopped.

This situation has had a detrimental impact on the terminals, which are not designed for storing containers. Despite the projected expansions in both Vancouver and Prince Rupert, the terminal throughput hasn’t increased. Maersk reported that Centerm is at 108 percent capacity, while the yard at Prince Rupert is at 110 percent.

To work around the congestion, Maersk informed customers it is aligning its TP9 sailings from Asia to match the cadence at Centerm. This means every TP9 vessel in the queue is being evaluated for possible changes to the rotation. This includes calling at Seattle first in the rotation.

It also means sending TP9 ships to Prince Rupert for discharge of all Vancouver rail cargo. These vessels include Tyndall 219N, Maersk Singapore 229N, Anna Maersk 226N and Maersk Laberinto 220N.

August 19: Carriers Ease Rates Ex-India as Demand Falls and Capacity Returns – The Loadstar

With export volumes slipping amid global demand growth woes, container lines serving Indian trades are putting new rate hike plans for the traditional peak season on the back burner.

MSC has pulled back from issuing its general rate increase (GRI) and peak season surcharge (PSS) notices this month on the India-U.S. trades, while other liners have, tactically, kept themselves out of the pricing race, thus far.

After carriers managed to hold rates at elevated levels over the past two months, new industry data suggests they have now begun to implement measurable contract/spot price reductions for Indian bookings to U.S. base ports, in order to optimize vessel space allocations for the region.

August 22: Strike at Port of Felixstowe Set to Upend Supply Chains – American Journal of Transportation

About 2,000 dockers at the Port of Felixstowe began an eight-day walkout on August 21, halting the flow of goods through the UK’s largest gateway for containerized imports and exports, which handles about a third of Britain’s total container volume and an even bigger share of direct trade with Asia.

Shipping lines plan to reroute cargo around the picket line, adding time and cost. A.P. Moller-Maersk A/S said last week that two ships will skip usual stops and unload Felixstowe-bound consignments at continental ports before sending them on when the strike ends. Another will switch to DP World Ltd.’s London Gateway, the UK’s third-busiest port.

The strike could disrupt more than $800 million in trade, according to Russell Group, a data and analytics company. Though it’s too soon to evaluate any wider hit to growth, companies are anticipating longer delivery times and higher expenses that can only hurt Britain’s inflation-ravaged economy.

August 22: The Sinking Price of Ship Fuel: Near Prewar Levels after Summer Plunge – American Shipper

It was yet another warning sign on inflation: The price of fuel for commercial ships spiked after Russia invaded Ukraine and hit all-time highs in May and June. But that trend has now reversed. The price of ship fuel plunged in July and August and is now back to roughly prewar levels.

According to Ship & Bunker, the average price for fuel known as very low sulfur fuel oil (VLSFO, sulfur content: 0.5%) at the world’s top 20 refueling hubs was $800 per ton as of August 19. That’s down 29% from the all-time high of $1,125.50 on May 14. Just before the war, VLSFO averaged around $750 per ton.

August 23: Congestion and Capacity Shortage in Europe Sees Barge Surcharges Soar 150% – The Loadstar

Barge surcharges in Europe have soared 150%, due to hinterland congestion and container transport’s need to compete with demand for coal following Russia’s decision to cut gas supplies.

Contargo announced it would be increasing an emergency surcharge of €10 per transport of full or empty containers to €25 from September 1, heaping new misery on shippers that faced a week of closures on the Rhine.

Contargo said: “As well as the massive problems in seaports, substantial bottlenecks continue to affect our services on the rail network and inland navigation.

“Container barge transport is having to compete with coal and grain transport for the short capacities. The continuing very low water levels on the Rhine and its tributaries are increasing the demand for additional tonnage and driving prices up to critical levels.”

August 25: German Ports and Workers Agree to Terms to End Three Months of Strikes – The Maritime Executive

Germany’s unionized port workers and the association representing the seaport operators agreed to terms for a new contract after one of the longest running labour disputes in Germany in decades. The tentative agreement came just three days before a cooling-off period imposed by the Hamburg Labour Court was due to expire and removes the threat of further strikes, which have been disrupting operations in all the North Sea Ports since June.

August 25: Volumes Dip at Chinese Ports Among New COVID Lockdowns – Inside Logistics

Import and export ocean shipment volume at Chinese ports over the past weeks has declined as strict COVID-19 lockdowns have returned in tourist towns.

FourKites reports its data show that, as several large Chinese cities have been rolling out stringent lockdown policies, volume at the Port of Shanghai has started to decrease since the peak in mid-July, down 18 percent since then.

The 14-day average ocean shipment volume is now down 11 percent compared with March 12th (the day before lockdowns went into effect) and down two percent week-over-week for shipments tracked by FourKites.

August 26: Crews Strike Seaspan’s Tugboat Operations at B.C. Ports – The Maritime Executive

The captains and other crew members aboard Seaspan’s tugboats that operate in the ports of British Columbia walked off their jobs on August 25, striking after their union failed to reach a new collective bargaining agreement with Seaspan.

The strike could impact operations at the Port of Vancouver, which has already been experiencing congestion and delays due to the increased container volumes, as well as a shortage of trucks and congestion on Canada’s rail lines.

August 29: Port of Vancouver Operations Update – provided by Port of Vancouver

The Canadian Merchant Service Guild (CMSG) commenced legal strike action against Seaspan effective August 25. Seaspan has been in direct contact with its contracted customers.

The Vancouver Fraser Port Authority is responsible for maintaining the safety and efficiency of navigation through the Port of Vancouver.

Labour action has affected the berthing, leaving berth or bunkering of four cruise ships and two bulk vessels. Activities with respect to these vessels have been resolved.

The port authority continues to work with multiple parties, including Transport Canada, toward swift resolution of operational delays.

August 30: COVID Lockdowns Return to Key Chinese Port Cities – Splash

COVID lockdowns are ticking up in China again, with neighbourhoods in key port cities such as Shenzhen and Dalian forced back home this week, and mass testing underway at other important maritime gateways including Tianjin.

There is no letup in the government’s zero-COVID policy, which has stretched global supply chains a great deal this year. The difference now is that, while outbreaks have been getting more widespread in the last fortnight, lockdowns are pursued neighbourhood by neighbourhood rather than city-wide, and quarantine times have been cut back since the middle of June, according to analysis from research firm Gavekal Dragonomics.

Nevertheless, the quickening spread of the omicron variant has some analysts concerned.

At a news conference on August 29, Shenzhen officials said the latest outbreak is mainly driven by new subvariant Omicron BF.15, which they said is more transmittable and harder to detect.

August 30: Northern Europe Port Congestion Eases as Demand Falls and Strikes and Holidays End – The Loadstar

A combination of improved labour availability due to the end of the school holidays and a reduction in Asian imports has eased congestion at North Europe’s container hubs.

A wage settlement last week at German ports is also expected to relieve the high yard density at Hamburg’s box terminals in the coming weeks.

According to new weekly data produced by supply chain intelligence company eeSea for the port of Rotterdam, congestion at the Dutch gateway and neighbouring Antwerp has declined significantly in the past few weeks.

 

 

Air

August 3: Air Canada Cargo Steps Up to 777F League as North America’s Only Combi-Carrier – The Loadstar

Air Canada Cargo has taken the next step in the expansion of its cargo business with an order for two 777-200 freighters to join the fleet in 2024.

The decision to go for factory-built freighters rather than convert passenger 777s was largely driven by the opportunity to get slots on the Boeing production line and have the aircraft available for service sooner, said Jason Berry, VP, Cargo.

At the same time, the investment reflects the outlook of the airline’s top management on the opportunities in the cargo business, he said. For a long time freighters had been anathema to the AC boardroom.

AC is in the middle of a rapid build-up of its maindeck capacity. It has two B767-300 freighters in operation and will take delivery of two more before the end of the year. These, along with three more, including two factory-built 767-300Fs, will bring the fleet to seven all-cargo aircraft by the end of next year.

August 4: Taiwan Flights Disrupted as China Shows Anger at Pelosi Visit – Inside Logistics

Taiwan canceled airline flights on August 4 as China fired missiles near the self-ruled island in retaliation for a top American lawmaker’s visit, adding to the risk of disruptions in the flow of Taiwanese-made processor chips needed by global telecom and auto industries.

China ordered ships and planes to avoid military drills that encircled Taiwan, which the mainland’s ruling Communist Party claims as part of its territory. The Hong Kong newspaper The South China Morning Post called the drills an “effective Taiwan blockade.”

August 19: Global Air Cargo Tonnage and Prices Continue Decline – Air Cargo Week

Global air cargo flown tonnages and prices continued their gradual decline in the first two weeks of August after volumes staged a brief and partial recovery in the second half of July, the latest figures from WorldACD Market Data reveal.

Looking at week 32, worldwide chargeable weight decreased 5% compared with the previous week, and the average worldwide rate decreased slightly, based on the more than 350,000 weekly transactions covered by WorldACD’s data and analysis of the main international air cargo lanes.

August 25: Edmonton International Airport Sets Up Logistics Beachhead for U.S. E-Commerce – American Shipper

At first blush Edmonton seems an unlikely destination for international air shipments bound for online shoppers in the United States.

Following some promising trial runs with e-commerce providers, Edmonton International Airport is banking on its geographic location along circumpolar routes, congestion-free facilities and Canada’s trade-friendly customs rules to advance a multibillion-dollar air logistics village and become a major cargo hub.

“Planes that typically would have stopped at another point [are using] Edmonton not just as a place to stop and get gas, but actually the ending point. And then we’re transporting the goods, by air, by road or by rail into parts of the U.S.,” said Myron Keehn, the airport’s vice president of air service and business development. “We’re seeing dramatic cargo growth because companies are realizing the efficiencies of actually using Edmonton as their jumping off point into the U.S. and then conversely, back into Asia or the Middle East.”

 

 

Rail

August 8: STB Says ‘Train Noise’ Would Be Only Negative Environmental Impact of CP-KCS Merger – Transport Topics

The Surface Transportation Board’s Office of Environmental Analysis determined the only potential adverse impacts of Canadian Pacific’s proposed merger with Kansas City Southern would be train noise, according to the STB’s draft environmental impact statement (EIS) released August 5. All other impacts were described as negligible, minor and/or temporary.

STB announced its findings as part of a 357-page document, which details its research into potential impacts caused by the proposed merger, including freight and passenger rail safety, grade-crossing safety, grade-crossing delay, truck-to-rail diversion, traffic at intermodal facilities, noise and vibration, air quality and climate change, energy, cultural resources, hazardous materials release sites, biological resources, water resources, environmental justice and other cumulative impacts.

Now that STB has announced its findings, its Office of Environmental Analysis is providing a 45-day public comment period beginning August 12 and ending September 26 to weigh in on the draft EIS.

August 15: STB Chairman ‘Not Optimistic’ about Pace of Rail Service Improvement in U.S. – FreightWaves

Surface Transportation Board Chairman Marty Oberman expressed doubt that the four major U.S. Class I railroads could ramp up rail service and reach the service targets they laid out by December.

In response to deteriorating service metrics, the STB in June required Union Pacific, BNSF, CSX and Norfolk Southern to resubmit plans detailing how they expect to improve rail service through the end of the year.

“I have to say that, if you look at the regular reporting metrics we’re getting, they are a long way from their six-month targets and we’re about halfway through that six-month period. So I’m not optimistic about the pace at which rail service can recover,” Oberman said on August 12.

August 30: Impasse in Labour Talks Continues as Possible U.S. Freight Rail Strike Looms – FreightWaves

The remaining unions that are still negotiating with the freight railroads on a new labour contract are grappling over wages and benefits, while a union coalition’s survey points to broad potential support for a strike.

Three unions – the Transportation Communications Union/International Association of Machinists, Brotherhood of Railway Carmen and International Association of Machinists and Aerospace Workers – last week reached a tentative agreement with the railways. Those unions, which represent nearly 11% of the more than 144,000 rail union members seeking a new contract, are now sending that agreement to their members for ratification.

Per the Railway Labor Act, the remaining unions would be able to legally stage a work stoppage or strike after a cooling-off period ends on September 16. That date is a month after the Presidential Emergency Board, a three-person independent panel appointed by President Joe Biden, gave the unions and the railroads a 124-page report with recommendations on how to resolve the contract negotiations impasse.

 

 

Trucking

August 2: Natural Gas Truck Sales Increase, But More Focus on Electrification – Today’s Trucking

Natural gas truck sales in the U.S. and Canada rose 11% year to date through May, according to ACT Research.

When it comes to the broader alternative-fueled-truck market, Steve Tam, VP at ACT Research, said: “We’re seeing an overall increase in electric charging stations, both existing and planned, but a continuing decline of total natural gas stations, particularly those planned for the future. That said, we still see articles about natural gas use in transportation, as well as discussions about hydrogen fuel cells and investments, but the overwhelming amount of trade industry headlines continues to focus on electric commercial vehicle development.”

August 4: Vancouver Port Truckers Delay Labour Action – Today’s Trucking

Truck drivers have decided to delay labour action at the Port of Vancouver for a few weeks after holding talks with port officials on July 30.

The Vancouver Fraser Port Authority said that officials met with representatives from the United Truckers Association (UTA) and Surrey Centre MP Randeep Sarai to hear the UTA’s perspective on operational challenges.

“No changes have been made to the Rolling Truck Age Program, which will go into effect on September 15, 2022, as previously announced. As of now, there are 15 trucks that will age out of the program on that date,” a port authority spokesperson said.

August 11: Trucking Execs See Volatile Demand as Retailers Cut Inventory – Transport Dive

U.S. trucking industry leaders are reporting mixed demand for services as retail inventories pile up with easing consumer demand.

While companies such as Landstar and Marten reported record Q2 revenue, some executives have also noted pockets of softening demand or even described future conditions as volatile and unpredictable. Many carriers are slowing, if not entirely stopping, hiring, after reporting labour shortages just months ago.

August 17: Autonomous Trucks Will Do Jobs Human Drivers Don’t Like, Panel Says – Today’s Trucking

As human drivers step back from longhaul and middle-mile work, autonomous trucks could help fill less-desirable roles.

Some might say this is going to take jobs away from drivers, but this is not so, says Stephan Olsen, Paccar’s general sales manager, fleet & specialty markets. Truckers want to be home every night and are seeking first- and last-mile jobs, he adds. Letting them choose jobs that offer more family time will keep them in an industry that is facing a truck driver shortage.

Let the machines do jobs that humans don’t want to do, he said.

August 24: PRPA Completes Fairview-Ridley Connector Corridor Project – PRPA press release

The Prince Rupert Port Authority’s (PRPA) Fairview-Ridley Connector Corridor has formally opened. Testing on the route got underway in mid-August, with container truck traffic beginning to travel to the newly opened southern gate at DP World-Prince Rupert Fairview Container Terminal, and the Corridor is set to be fully operational on August 29.

August 25: Truckers to Be Granted Access to Express Entry Programs, CTA Says – Today’s Trucking

Truck drivers will soon be eligible for participation in Express Entry Programs, Minister of Immigration, Refugees and Citizenship Sean Fraser has confirmed in correspondence to the Canadian Trucking Alliance (CTA).

“In light of an acute labour shortage and a strained supply chain, this is very welcomed news for our industry and by extension the Canadian economy,” said Jonathan Blackham, CTA director of public affairs.

“CTA has been calling on the Government of Canada to help address our sector’s growing labour shortages by working with our industry to improve access to immigration channels. This announcement is very timely and absolutely welcomed by the trucking industry.”

Express Entry is an online system that is used to manage immigration applications from skilled workers and is specifically designed for skilled immigrants who want to settle in Canada permanently.

August 31: ‘Race to the Bottom’ in Truckload Contract Rates Sets In – FreightWaves

Pressure is being let out of global freight markets as demand falls and lower volumes in a variety of modes are more easily handled by the capacity and infrastructure built up during the last two years of the COVID-19 pandemic.

Transportation rates in several modes, including truckload and ocean container, are falling as demand deteriorates and capacity loosens.

The softness started with American consumer demand, which has been wobbling and running out of momentum as the effects from fiscal stimulus faded and inflation took hold in the economy. Two quarters of negative GDP growth – coupled with very high import levels – depressed the demand for transportation capacity and caused trucking spot rates to plummet.

 

 

CIFFA Advocacy, Communications, Activities

August 8: Message from CIFFA Executive Director Bruce Rodgers Regarding Supply Chain Challenges – The Forwarder Online

Over the past few weeks, CIFFA’s Secretariat office has seen increased concerns with the ongoing challenges of the supply chain. Members are asking for help and guidance to deal with rising/additional costs, significant delays and an overall lack of information.

CIFFA has also been contacted by government officials at both the federal and provincial levels, seeking short-term solutions to the present situation. Our message has been both consistent and clear: There are no short-term wins in this situation.

Government awareness and interaction should have occurred several years ago. Many projects that remain tied up in bureaucratic red tape would have lessened the burden felt by many today. The Port of Vancouver’s Roberts Bank Terminal 2 expansion project and CN’s Milton Logistics Hub are two examples.

The situation, as most are aware, is both complex and complicated, one that involves many different stakeholders.

 

Maritime

July 3: California Ports Piling Up Again: Too Many Containers Sitting Too Long – American Shipper

At the height of last year’s “will Christmas be canceled?” supply chain freak-out, the ports of Los Angeles and Long Beach – with the Biden administration’s backing – proposed a highly controversial fee on import containers that sat too long in terminal yards.

The mere threat of this fee, announced on October 25 for implementation on November 15, seemed to initially chase more boxes out the gates, as designed. Every week since then, like clockwork, the ports have cited progress and announced that the fee enforcement would be postponed until the following week.

Now, the container dwell numbers are getting worse and becoming increasingly hard to sugarcoat.

July 4: Boxport Congestion Spreads Across the Globe Again – Splash

Boxport congestion is growing across multiple continents. Clarksons’ containership port congestion index shows that, as of June 30, 36.2% of the global fleet was at port, up from 31.5% in the pre-pandemic years from 2016 to 2019, with Clarksons observing in its latest weekly report that congestion on the U.S. east coast has recently risen to near-record levels.

An operational update from German carrier Hapag-Lloyd, issued on July 1, highlighted the myriad congestion issues facing carriers and shippers around the world.

Across key Chinese ports such as Ningbo, Shenzhen and Hong Kong, terminals are under pressure with yard and berth congestion thanks to ongoing COVID measures and the typhoon season.

At other key Asian ports, yard density is reported hitting 80% in Singapore and is higher still, at 85%, at South Korea’s top port, Busan.

July 4: Market Questions Peak Season Scale as Consumer Sentiment Drops – Hellenic Shipping News

Container freight market participants are looking with unease toward peak import season and beyond as booking inquiries for U.S. imports remain under pressure amid rising inflation and a weak economic outlook.

Trans-Pacific volumes and booking inquiries edged down further in the final weeks of the second quarter as shipowners reported lower vessel utilization out of Asian loading gateways. One shipowner source noted that “spot market space is ample out of China.”

In-kind freight on the North Asia-North America run has been under pressure during Q2 as pockets of vessel space have opened up. North Asia-to-West Coast North America slid 10% during Q2, coinciding with a dip in volumes brought on by extensive lockdowns in and around Shanghai, which began to unwind June 1.

But despite easing restrictions in Asia, volumes have failed to rebound to meet prior expectations, while consumer appetite appears to have waned in the U.S., and large retailers have been heard cutting back orders amid an abundance of inventory.

July 5: Average Global D&D Charges Fall, but Are Still Four Times Higher in the U.S. – The Loadstar

Average global demurrage and detention (D&D) charges have fallen this year, but remain around 12% higher than before the pandemic, according to a new survey by online equipment trading and leasing platform Container xChange.

However, the average is skewed by huge D&D fees imposed on shippers in the U.S.

Container xChange collected more than 20,000 data points from publicly available sources, which were then compared against D&D fees imposed on customers by carriers.

According to its findings the global average D&D charge levied by carriers two weeks after containers were discharged (the free time) increased by 38% last year to $868 per container, from $586 in 2020.

So far this year, the average D&D fee has eased to $664 per container.

July 7: Roberts Bank Terminal 2: Project Update and Next Steps

On March 15, the Impact Assessment Agency of Canada (IAAC) concluded a public comment period on the Vancouver Fraser Port Authority’s information request response and on the draft conditions for the project.

VFPA has provided a final submission to IAAC in several parts that shows how topics raised during the public comment period will be addressed:

Next steps in the project development

IAAC is reviewing submissions received during the public comment period to develop recommendations and final conditions for the Minister of Environment and Climate Change. The minister will then determine whether the project has significant adverse environmental effects and, if so, will refer the decision to cabinet.

The VFPA is hopeful that a decision will be made this year. In the meantime, the port continues to prepare for procurement, a Fisheries Act Authorization and other required permits, as well as ongoing consultation with Indigenous groups, to quickly advance the project if a positive decision is made.

July 7: Win Streak Continues: Container Lines Just Posted More Record Results – American Shipper

Ocean carriers are still posting record or near-record results. Several Asian liner companies have just released preliminary revenues and profits for Q2 2022, as well as monthly operating data through June.

Despite pessimistic sentiment on stocks, the numbers are still huge.

July 8: There’s Over $40 Billion in Cargo on Container Ships Waiting Offshore North America – American Shipper

Anchorages continue to fill with waiting container ships off East and Gulf Coast ports, where vessel queues have now far outgrown those off the West Coast. Along all three coasts combined, the number of waiting container vessels remains exceptionally high.

There were 125 container ships waiting off North American ports on July 8, according to an analysis of ship-tracking data from MarineTraffic and queue numbers from California.

Container ships waiting off U.S. and British Columbia ports had a combined capacity of 1,037,164 twenty-foot equivalent units.

July 13: More Than 3,000 Trucks Wait at Bangladesh’s Chittagong Port to Unload Exports – The Loadstar

Some 3,300 trucks, laden with export cargo, are waiting at the gates of the 19 off docks in Chittagong to unload goods, while some 9,300 TEU export-ready containers are awaiting vessel designation for shipment.

A seven-day suspension of trucks from highways was imposed in order to facilitate the movement of public buses and other vehicles for people leaving cities to celebrate Eid ul Azha.

The Bangladesh Inland Container Depot Association (BICDA) said they were forced to stop receiving cargo from July 6, after several thousand trucks arrived at the port.

The association said that, before shutting down factories for holidays, cargo owners sent all emergency and non-emergency shipments to the depots at once, creating congestion at the gates.

July 14: U.S. Feds Give Shippers New Power to Dispute Ocean Carrier Charges – American Shipper

New guidance issued by federal regulators aimed at fighting unreasonable ocean carrier charges is short on detail but long on historic importance, according to a U.S. exporter group.

The advisory enacts provisions of the Ocean Shipping Reform Act of 2022 (OSRA), signed into law last month, by providing a simplified process for container carrier customers who want the Federal Maritime Commission to investigate their complaints.

“Today is a landmark moment in the history of the Federal Maritime Commission and the U.S. shipping public,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), in a statement. “The provisions in OSRA calling for informal processes to facilitate effective FMC enforcement are perfectly implemented in the Commission’s Industry Advisory today.”

The one-page advisory outlines steps for filing charge complaints against the carriers. Among the steps are identifying the carrier and the alleged violation, submitting documentation, confirming that the disputed charge was incurred after the June 16 enactment of OSRA, and submitting all the materials in one email, if possible, to the FMC.

July 20: Low Water on Rhine Threatens Repeat of 2018 – gCaptain

Low water levels in the Rhine River may have a similar impact on German economic output as they did in 2018, according to Berenberg, a European private bank.

That was the last year in which the river, a key waterway that’s critical for moving coal, car parts, food and thousands of other goods, experienced a “dry year,” economist Salomon Fiedler said in a report to clients.

Citing analysis by the Kiel Institute, he said that, in a month in which water levels are below the 78-centimetre (31-inch) threshold every day, German industrial production is “about 1% lower than in a month with no low-water days.” Delayed effects in the following month brings the overall impact to about 1.5%.

July 22: ‘Lines Banging on Our Door’ as Spot Rates Tumble and Peak Season Disappoints – The Loadstar

Container spot rates from Asia to Europe and the U.S. are coming under increased pressure, as the peak season appears “muted” at best.

Freight rates from China fell this week on 19 of the 21 routes covered by the Ningbo Containerized Freight Index (NCFI), with its China-Europe and China-U.S. components in particular dragged down by “insufficient volume.”

The NCFI commentary said most carriers had been obliged to discount as spot rates “continue to decline.”

Spot rates for North Europe fell to $9,092 per 40ft this week, according to Drewry’s WCI index, although the CEO of a UK forwarder said recently it had been offered a rate of $7,000 per 40ft through August.

“They were not interested a month ago, but now the carriers are banging our door down for business again,” he said.

July 28: Staff Strike Set to Hit Felixstowe in August – Seatrade Maritime News

Dockworkers at the UK’s largest container port voted in favour of strike action over a pay dispute.

The Unite union reported that 92% of workers voted in favour of industrial action on an 81% turnout. The vote comes after the Felixstowe Dock and Railway Company offered staff a 5% pay increase while the Retail Price Index (RPI) – a measure of inflation – stood at 11.9%. The latest pay offer adds to an increase last year of 1.4%, again below inflation.

July 28: Record Container Ship Traffic Jam as Backlog Continues to Build – American Shipper

If you only look at Los Angeles and Long Beach – the largest container import gateway in America – you’d think shipping congestion has drastically dropped. The number of ships waiting there has fallen to 26 from a high of 109 in January. But in fact, North American port congestion has just re-entered record territory. The offshore traffic jam is once again as bad as it’s ever been.

In January and February, when North American congestion previously peaked, there were just under 150 container vessels waiting off the coastlines. Two-thirds were in the Los Angeles/Long Beach queue.

As of July 28, there were 153, the majority off East and Gulf Coast ports. Whereas the earlier West Coast pileup was centralized, highly publicized and relatively easy to track, the current ship queue is more widely dispersed and attracting less attention.

 

 

Air

July 6: Air Canada Bans Pets from Travelling in Cargo Hold Until Mid-September – CBC News

Air Canada has stopped accepting new requests for pets to travel in the baggage compartment of its flights until September 12, as major airports around the country face travel delays, flight cancellations and logistical challenges.

Small animals will still be allowed in the cabins of most flights, provided they can lie down in a carrier under the seat in front of the passenger.

July 22: Airfreight Rates Out of Asia Take a Dive as Demand from the West is ‘Subdued’ – The Loadstar

Asian forwarders are reporting a large drop in airfreight rates, but don’t believe this is the end of elevated prices, nor a significant fall-off in demand.

One Southeast Asian forwarder said: “The demand for airfreight to Europe and the U.S. is looking a bit subdued. However, we note that, this time last year, it wasn’t too strong either. Coupled with the fact that there is substantially more capacity this year, I wouldn’t say demand has dropped drastically.”

 

 

Rail

July 5: CN Update: IBEW Agrees to Binding Arbitration, Ending Strike

The International Brotherhood of Electrical Workers (IBEW), which represents approximately 750 employees in Canada, has agreed to binding arbitration with CN, ending its strike effective 00:01 EDT on July 5.

July 8: Railroad Bottleneck at Busiest U.S. West Coast Ports Reaches Inflection Point – CNBC

60% of all long-dwell containers at the Port of Los Angeles are rail-bound.

Container wait for rail is a little over 8 days for the ports of Los Angeles and Long Beach.

East Coast ports, including the Port of Norfolk, Port of Savannah, and the Port of New York and New Jersey, are seeing more shipping activity as a result.

July 14: Congestion Hits Rail Flows from Canada’s Ports as Boxes Begin to Pile Up – The Loadstar

Rail flows from ports to the Canadian metropolises of Toronto and Montreal are stuck in low gear, with no end of the congestion in sight.

Boxes have piled up at the ports of Vancouver and Prince Rupert, as it takes longer to move them off the docks to urban centres in the east. On July 12, three out of four container facilities at the port of Vancouver (Centerm, Deltaport and Fraser Valley Docks) showed box dwell times in excess of seven days.

For the rail carriers, the port’s website indicated dwell times of more than seven days at three of the four facilities served by Canadian National (CN) and one of the three Canadian Pacific (CP) sites.

This is the result of problems in the interior, notably clogged up rail facilities in the Toronto area and Montreal.

 

 

Trucking

July 2: Port of Vancouver Truckers Poised to Withdraw Service over Environmental Mandate that Forces Some to Buy New Trucks – Vancouver Sun

The United Truckers Association voted on July 1 in favour of job action against a recent Port of Vancouver directive that forbids operators from driving vehicles more than 12 years old.

Gagan Singh, spokesperson for the association, said that 639 of the 1,000 members voted to withdraw service, with no votes against.

Singh said the next step is “to consult with our directors and we will talk to the unions about the (job action) date, should we consider it.” Meetings are planned for July 5.

The truckers are upset about the Rolling Truck Age Program, which is set to begin on September 15 and will impact about 20 percent of the 1,800 trucks that haul containers to and from the ports in a bid to reduce emissions.

The union has said 360 drivers will need to buy a new or lightly used truck, which can cost more than $200,000.

“These costly measures will put extreme financial burden on container truckers amid the highest rates of inflation and unaffordability in a generation,” said Singh.

July 4: Fleets Filling Seats with Flexible Work for Truck Drivers – Today’s Trucking

A bird in the hand is said to be worth two in the bush, but two birds in a bush might be even more valuable if you can get them to work for you. Consider fleets that are realizing the benefits to offering part-time flexible work to drivers who don’t want full-time positions. Two part-timers can be even more productive than one full-timer.

For rookies, one of the toughest aspects of trucking is adjusting to time away from home. Ask any fleet recruiter or driving school and they will agree that a lot of potential candidates wash out within a year because of family pressures related to time away.

As they age, many truck drivers also want to slow down a little, maybe work locally or regionally rather than longhaul. If these drivers can’t find some way to make a job work for them, they head for the door.

July 6: ELD Enforcement Coming January 2023 – Canadian Trucking Alliance press release

There will be no more delays in enforcement of the electronic logging device (ELD) mandate for federally regulated carriers, authorities confirm to the Canadian Trucking Alliance. The mandate will take effect on January 1, 2023.

CTA has been advised by the Canadian Council of Motor Transport Administrators that the provinces and territories are firmly committed to enforcing the ELD mandate in January 2023 and no announcements on further delays are expected. If a particular jurisdiction is not able to enforce the rule in January, all others that are ready will proceed with enforcement at that time.

July 11: Feds Announce New Incentives for Medium- and Heavy-Duty Zero-Emission Vehicles Program – Canadian Trucking Alliance press release

Minister of Transport Omar Alghabra announced on July 11 the Government of Canada will be introducing a medium- and heavy-duty zero-emission vehicles (iMHZEV) incentive program, which will provide approximately 50% of the cost difference between traditional diesel vehicle and a zero-emission alternative to assist trucking fleets in reducing their carbon footprint.

Businesses will have the option to purchase or lease new vehicles under the iMHZEV program, with a maximum of 10 incentives or $1 million available per calendar year. The incentive will be applied at the point-of-sale by the dealership or other authorized sellers such as original equipment manufacturers and/or vehicle finishers/distributors.

July 21: CRA Announces New Initiative Aimed at PSBs and Driver Inc. – Canadian Trucking Alliance press release

The Canada Revenue Agency (CRA) recently released a bulletin outlining efforts to increase oversight on personal services businesses (PSBs) – a technical tax term for what many in the trucking industry believe is used as cover for companies who are engaged in the illicit practices as part of the Driver Inc. scheme.

At its core, the Driver Inc. is a tax evasion practice whereby truck drivers, who would normally be considered employees, are purposefully misclassified – either by choice, force or manipulation – as independent contractors or PSBs through the company they work for. This allows the carrier to avoid paying payroll taxes such as the employer portion for Employment Insurance (EI) while also allowing them to pocket the savings when it comes to paying drivers overtime, vacation pay, paid sick days, etc. It is also often used to shed Workers’ Compensation costs (premiums), which are paid by the employer to cover lost wages for workers who are injured on the job like falling at a workplace or an accident on the road.

In its PSB bulletin, CRA outlines tax implications for PSBs and provides examples of Driver Inc.-type arrangements. In addition to releasing these educational materials, the CRA has announced a targeted enforcement pilot against misclassified PSBs in certain sectors like trucking.

July 27: Canada’s Spot Market Beginning to Normalize: Loadlink – Today’s Trucking

Canada’s spot market saw an influx of capacity amid softening freight demand in June, according to Loadlink Technologies.

The shift signals a return to normalization. Spot market loads fell 23% from record May volumes, but remained 7% higher year over year.

Outbound freight to the U.S. dropped 53% from May, but remained up 21% from last June. Inbound cross-border loads fell 34% from May and were down 6% year over year. Domestic loads dipped 21% from May, but remained 25% stronger year over year.

 

 

CIFFA Advocacy, Communications, Activities

July 8: Letter to CIFFA from Federal Transport Minister

The Honourable Omar Alghabra, Canada’s Minister of Transport, has responded to a letter from CIFFA. He said: “I recognize the important work being advanced by CIFFA and its contribution towards the supply chain efficiency and the vital transportation links between shippers, receivers, and end customers,” and has invited CIFFA to participate in coming sectoral and regional roundtables. 

July 12: CIFFA Membership Survey Results Are In

Twenty-five percent of member companies participated in CIFFA’s recent membership satisfaction survey.

Highlights of the survey are as follows:

July 20: CIFFA’s Canadian Young Logistics Professional of the Year Wins Americas Contest

Congratulations to Karina Daniela Perez Perez, who has won the Americas Region competition in the 2022 Young Logistics Professionals Award competition.

Karina was selected by CIFFA in January as the Canadian Young Logistics Professional of the Year, after a review of her industry experience and a written dissertation demonstrating her technical knowledge.

Next, as the Americas regional winner, Karina will compete at the FIATA World Congress, where she will present her dissertations to the Award Steering Committee that will subsequently announce the global 2022 Young Logistics Professional of the Year.

Karina’s dissertations illustrate the transportation of two key products for the Canadian economy, the challenges that freight forwarders must overcome to successfully deliver goods, and the resiliency of the supply chain with a focus on sustainability.

Karina currently works at DSV Air & Sea in the ocean exports department.

July 20: CIFFA Consults with National Supply Chain Task Force

On July 19, CIFFA’s Executive Director Bruce Rodgers and Director, Policy and Communications Julia Kuzeljevich consulted with the Secretariat to the National Supply Chain Task Force, appointed by the federal government and mandated with the task of producing a report on the state of Canada’s supply chain by end of September 2022.

The National Supply Chain Task Force is chaired by Louise Yako and Jean Gattuso, who were appointed by the Minister of Transport, the Honourable Omar Alghabra, “to lead a task force of diverse industry experts to recommend government and industry actions designed to increase competition, access, resiliency, redundancy, efficiency, and investment in both the domestic and international linkages of our transportation system and supply chains, as well as examine ways to reduce congestion and improve levels of service.”

CIFFA provided input as to member concerns about supply chain fluidity issues, chokepoints, and possible contingencies, short- and longer-term solutions.

CIFFA will also provide a written submission to the Task Force.

Maritime

June 1: North European Box Ports at Capacity Even Before Peak Season Starts – The Loadstar

With a wave of import containers expected from Shanghai’s reopening and peak season just around the corner, North Europe’s box port hubs, worryingly, remain severely congested.

Huge stacks of empty containers and hundreds of export boxes have built up at the major North European hubs as carriers blanked a third of their advertised sailings during the recent two-month Shanghai lockdowns.

Moreover, the ports have used much of their off-dock overflow capacity for the long-term storage of thousands of customs-blocked Russia-destined containers.

June 6: Shippers Have Lost Up to $10 Billion from Delayed Ships During the Pandemic – Splash

The dire schedule reliability among container lines, whereby 70% of ships arrive late, has led to billions of dollars being squandered during the pandemic, a new study from Copenhagen-based Sea-Intelligence shows.

The record delays caused by vessels not arriving on time leads to having to hold inventory longer than usual. Holding inventory for a longer period is equivalent to a financial loss, and a model created by Sea-Intelligence based on the actual delays of cargo at sea shows a loss of some US$5 billion to $10 billion.

To carry out the study, Sea-Intelligence took the underlying detailed reliability measurements at a trade lane level and combined this with the detailed regional volume flows from Container Trade Statistics (CTS). The analysis focused only on deepsea cargo and not intra-regional cargo. The next step was to use the underlying data to calculate the number of TEU-days lost due to late arrivals. While the pre-pandemic baseline saw an average of 8 million TEU-days lost each month, this spiked dramatically during the COVID era, hitting a peak in January this year of 70 million TEU-days. The most recent statistics available – for March – show there was still a remarkable 57 million TEU-days lost.

June 6: Shanghai Port Waiting Times Returning to Normal after COVID Lockdowns – gCaptain

Port congestion at Shanghai, home to the world’s busiest port, is returning to normal levels as the city emerges from its two-month COVID-19 lockdown.

This is according to new data from VesselsValue.com that analyzed average waiting times across vessel types. As a whole, average waiting times for tankers, bulkers and containers at Shanghai have shortened to 28 hours, just an hour longer than the top of the range for this time of year over the past three years. This is down from peak average waiting times of 66 hours in late April at the height the lockdown.

June 10: ‘Outrageous’ Box Lines ‘Need to Be Aware Their Day is Coming’, Says U.S. – The Loadstar

On June 9, President Biden tweeted: “One of the reasons prices have gone up is because a handful of companies who control the market have raised shipping prices by as much as 1,000%. It’s outrageous – and I’m calling on Congress to crack down on them.” The first shot has been fired, and the language is strengthening.

A spokesperson for Senator Klobuchar, who is working on a bill, added: “The ocean shipping companies need to be aware that their day is coming, that their ability to manipulate the market – to purposefully, for their own economic benefit, for their profitability, to really screw American exporters – is over, and that I’m not backing away from this issue.”

June 10: ‘No Standout Outcome’ from IMO’s Latest Greenhouse Gas Talks – The Maritime Executive

At the IMO Marine Environment Protection Committee’s 78th meeting (MEPC 78), little forward movement was observed on shipping’s climate ambitions, though a majority of delegates supported the concept of bringing IMO greenhouse gas targets in line with the Paris Climate Agreement.

“The meeting was not planned as a key decision-making point for agreement/adoption of any of the items under IMO’s Reduction of GHG Emissions from Ships work,” reported University Maritime Advisory Services (UMAS) in a sum-up briefing. “It is therefore not necessarily surprising that there is no standout outcome. The positive from the meeting is that discussions on ambition/measures remain on track for clarity at MEPC 80 (summer 2023).”

June 13: Under-Pressure German Ports Brace for More Strikes as Pay Talks Fail – The Loadstar

Shipping lines serving North Europe’s third-biggest container port, Hamburg, are bracing for further industrial action after wage talks were aborted on the weekend.

Negotiations between German port employers and dockworkers trade union ver.di ended without a result on June 11 after 10 hours. The union described a revised offer from the Central Association of German Seaport Companies (ZDS) as “inadequate.”

June 13: DP World Saint John Makes Significant Investment to Better Enable the Flow of Trade – Port Saint John press release

DP World is making a technology and asset investment in the DP World Saint John multipurpose container terminal to enhance and modernize operations, allowing the terminal to provide a wider variety of logistics services, from transloading to warehousing and beyond.

Cargo volumes have been steadily increasing and more growth is expected as additional logistics and supply chain solutions are added.

Highlights of the terminal technology and asset investment include:

June 13: South Korean Military Moving Containers due to Truckers’ Strike – The Maritime Executive

Members of the South Korean military were called out to drive tractor-trailer trucks in an effort to keep containers moving as talks in the week-old truckers’ strike broke down. Government and industry are calling on the truckers to return to work as reports grow over the impact on South Korea’s economy, manufacturing and ports.

The military, working with the Ministry of Transport, assigned members to begin driving the trucks. According to a report on Reuters, some 100 cargo trucks being driven by the military are being used to move containers in and out of the major ports.

June 14: Ocean Shipping Reform Act Headed to President Biden’s Desk after Passing House – gCaptain

The U.S. House of Representatives has voted 369 to 42 to pass the Senate’s version of the bipartisan Ocean Shipping Reform Act, designed to give the government’s shipping competition commission greater authority to help U.S. exporters. President Biden has indicated he is eager to sign the bill into law.

The bill gives the Federal Maritime Commission greater authority to regulate certain ocean carrier practices and to promote the growth and development of U.S. exports “through a maritime system that is transparent, efficient, and fair.”

June 14: ILWU, PMA Say They Are Not Preparing for a Longshore Strike or Lockout – Supply Chain Dive

The two parties involved in West Coast port labour talks issued a joint statement saying that, while talks are likely to last beyond their contract’s expiration on July 1, cargo operations will continue.

“Neither party is preparing for a strike or a lockout,” according to the update on contract negotiations from the Pacific Maritime Association and International Longshore and Warehouse Union.

June 20: Empty Container Boxes Stuck at Rotterdam May Stoke Asia Shortage – American Journal of Transportation

Empty container boxes crucial for Asia’s exporters are getting stuck in the port of Rotterdam as a growing backlog of undelivered goods at Europe’s export hub forces ocean carriers to prioritize shipments of filled boxes.

The Dutch port has faced an onslaught of both goods and empty boxes offloaded from other European maritime operations, shipping experts said. This has coincided with carriers reducing the number of vessel trips from the continent to China after Shanghai authorities locked down the city in March, they said.

June 23: Asia-U.S. Container Shipping Rates Are Flashing Two Bearish Signals – American Shipper

Trans-Pacific spot container shipping rates have crossed two bearish thresholds. It depends on which indexes you believe, but according to Drewry’s, spot freight rates are now below where they were at this time last year, and according to Xeneta’s, spot rates are now below current contract rates.

June 28: Shippers to Pay the Penalty as ONE Becomes First to Apply Overweight Charge – The Loadstar

Asia-Europe ocean carriers are cracking down on rogue shippers who incorrectly declare westbound booking container weights and make last-minute verified gross mass (VGM) amendments.

Misdeclared booking weights can cause the weight allocations of individual alliance partners to be exceeded, ships to shut out cargo, contracts to underperform and revenue to be lost.

For instance, Japanese carrier ONE said a weight discrepancy fee would be applicable from July 1 for bookings accepted on or after that date.

 

 

Air

June 19: IATA Launches IATA CO2 Connect in Support of Industry Sustainability Commitment – IATA press release

The International Air Transport Association (IATA) has launched IATA CO2 Connect, an online tool that provides the most accurate CO2 emission calculations for any given commercial passenger flight. IATA CO2 Connect responds to the growing demand for CO2 data transparency linked to airline-specific and actual fuel burn information and load factors. This sets it apart from theoretical data models on the market today.

IATA CO2 Connect can help companies access relevant CO2 emissions data per routing. The tool also permits the consolidation of data for reporting purposes.

IATA CO2 Connect utilizes the newly developed CO2 Calculation Methodology, adopted by IATA’s Passenger Service Conference in March this year. This was conceived by leading partners from 20 airlines and major aircraft manufacturers, in consultation with international standard-setting bodies and logistics services providers.

June 20: Forwarders Must Prepare for Airfreight Volume Crunch, Says Airforwarders Association – Air Cargo News

Better communication is key to managing an oncoming air cargo capacity crunch in the U.S. caused by worsening ocean freight capacity issues.

The forecast surge in demand for U.S. air cargo capacity will be largely driven by a lack of sailings with ocean suppliers, but air cargo forwarders must “learn to be adaptable” in the current climate of already-constrained airfreight capacity, said Brandon Fried, executive director, Airforwarders Association.

Although global air cargo capacity is increasing, Fried said that the U.S. capacity crunch will be driven by a perfect storm of cancelled China-to-U.S. sailings, congestion at U.S. airports, limited warehouse space, the labour shortage and rising inflation.

 

 

Rail

June 7: Congestion Concerns Rise amid Severe Labour Shortages on U.S. Railroads – The Loadstar

CSX is turning away business. The Class I rail company is struggling to meet demand, acknowledged CEO Jim Foote. He blamed the problems on shortages in manpower, saying that the company has struggled to recruit sufficient staff.

He said that CSX is missing out on “lots of business.”

This is ominous news as ports, forwarders and importers are bracing for the expected surge in traffic from China after the end of the lockdown in Shanghai. Rail capacity was one of the bottlenecks in the congestion of 2021, and everybody is anxious to avoid a repeat of that experience.

Port authorities are concerned that rail problems could undermine progress on the marine side in clearing backlogs and getting ready for the anticipated spike in traffic. The NWSA has attributed the longer box dwell times to shortages of rail cars, locomotives and crews. Gene Seroka, executive director of the port of Los Angeles, commented that the port could clear out the rail containers at its terminals within two weeks if Union Pacific and BNSF were up to their capacity.

June 16: Update from CP Rail on Terminal Fluidity – Montreal and Toronto

In messaging CIFFA obtained from CP on the evening of June 16, the railway provided an update on its terminal fluidity at Montreal and Toronto terminals, where CP was “metering empties through Montreal and Toronto gates in order to alleviate congestion and ensure fluidity through terminals.”

CP indicated that as of the morning of June 16, gates in Toronto were back to normal operations, and the same will be in effect in Montreal as of Friday morning, June 17.

CP said it will continue to monitor terminal congestion, to ensure fluidity is maintained, and that drivers can be serviced in a timely manner.

June 20: CN Maintains Normal Rail Operations across Canada as IBEW Strikes

CN announced that normal rail operations continue safely as it has implemented its operational contingency plan during the strike by IBEW. The plan allows the company to maintain a normal level of safe rail operations across Canada and serve its customers for as long as required.

June 23: U.S. Brotherhood of Locomotive Engineers and Trainmen to Hold Strike Authorization Vote – Railway Age

Preparations are under way for the U.S. Brotherhood of Locomotive Engineers and Trainmen (BLET) to poll members, who the union stresses “have been without a contract raise for nearly three years,” to authorize a strike in the event “one becomes necessary to attain the organization’s national bargaining tools,” National President Dennis R. Pierce announced on June 22.

On June 17, the National Mediation Board released the BLET and all other rail labour unions from mediation with rail carriers, triggering a 30-day cooling off period, which expires at 12:01 AM Eastern Daylight Time on July 18. Unless President Biden appoints a Presidential Emergency Board (PEB) pursuant to Section 10 of the Railway Labor Act, self-help is available to parties, BLET says. A PEB would halt any strike or lockout by the parties and would investigate and issue a report and recommendations concerning the dispute.

Pierce added that conducting a strike vote does not necessarily mean a strike will occur.

June 29: CP Announces Ratification of Three New Labour Agreements – CP press release

Canadian Pacific announced yesterday that three collective bargaining agreements have been ratified by employees of CP’s Dakota, Minnesota & Eastern (DM&E) South; Central Maine & Quebec (CMQ) U.S. and Central Maine & Quebec Canada subsidiaries.

The agreements provide higher hourly wages for all employees. They affect a total of approximately 430 employees represented by United Steel Workers Local 1976 on the CMQ Canada, SMART Transportation Division representing all employees on the CMQ U.S. and the Brotherhood of Locomotive Engineers and Trainmen representing all train and engine employees on the DM&E South.

 

 

Trucking

June 15: Rolling Truck Age Program at Port of Vancouver to Launch on September 15 – Port of Vancouver press release

The Vancouver Fraser Port Authority announced that its Rolling Truck Age Program will go into effect on September 15.

Following additional engagement with TLS participants, associations and other industry stakeholders in early 2022, the port authority shifted from a 10-year rolling truck age to a 12-year rolling truck age, which will still achieve program objectives and benefits while balancing feedback and the commercial interests of industry.

According to the port, about 80% of the 1,800 vehicles serving the port are already compliant with the new requirements, including 150 trucks that have come into service since the port authority began additional engagement over the last few months.

June 17: Labour Minister Takes on Driver Inc. in House of Commons – Canadian Trucking Alliance press release

Canadian Labour Minister Seamus O’Regan issued the federal government’s strongest statement yet against the trucking industry misclassification scheme known as Driver Inc.

Speaking in the House of Commons, the Minister stated that Driver Inc. “deprives workers of their basic rights” and assured Canadians that Ottawa will begin cracking down on the illegitimate business model. “Where non-compliance is found, we will take action – including through orders, fines and even prosecutions,” he stated.

The statements are welcomed by the Canadian Trucking Alliance (CTA), which for years has urged governments and regulatory agencies at all levels across the country to put an end to what industry and the Toronto Star have have called a “billion-dollar scam” based on rampant tax avoidance, labour abuse and “shoddy” safety practices by unscrupulous carriers.

June 21: Truckers to Vote on Work Stoppage over Vancouver Port’s ‘Penalizing’ Rolling Age Program – Global News

More than 1,000 members of British Columbia’s United Truckers Association are planning to vote on a “work stoppage” next month over incoming regulations at the Port of Vancouver.

On September 15, the Vancouver Fraser Port Authority’s revised Rolling Truck Age Program takes effect, banning diesel-powered trucks more than 12 years old from accessing the port.

Gagan Singh, spokesperson for the United Truckers Association, said the program will wreak havoc on supply chains and force some truckers who can’t afford to replace their vehicles out of a job.

Maritime

May 4: Top Sea Polluters Beg for Climate Rules that No Rival Can Avoid – American Journal of Transportation

The ocean shipping industry, among the world’s biggest polluters, is asking a key regulator to overhaul its emissions directives so that all carriers are working off the same rulebook as they make the expensive changes needed to cut output of harmful carbons.

With roughly 90% of global trade transported by sea, the industry emits more carbon annually than Germany and the Netherlands combined. And if shipping were a country, it would be the world’s sixth-biggest greenhouse-gas emitter, according to the World Economic Forum.

The World Shipping Council, whose members operate 90% of global container-carrying capacity, want the International Maritime Organization to revisit its greenhouse-gas-emission regulations.

The WSC, whose members include A.P. Moller-Maersk A/S, Cosco Shipping Holdings Co. and MSC Mediterranean Shipping Co., is asking for “global, enforcible multilateral regulation to avoid the race to the bottom,” said Jan Hoffmann, head of trade logistics at the UN Conference on Trade and Development. “They don’t really mind that level of regulation as long as it’s the same for everybody.”

May 6: New Monitoring Requirements Give FMC More Insight into Alliance Carrier Operations – Splash

The three global ocean carrier alliances – 2M, Ocean and THE – and each of their member companies will now be required to provide enhanced pricing and capacity information, providing the U.S. Federal Maritime Commission (FMC) with uniform data to use in assessing ocean carrier behaviour and marketplace competitiveness.

The newly mandated information will provide the commission’s Bureau of Trade Analysis with insight into pricing of individual trade lanes and by container and service type. It will also provide more immediate information regarding the capacity-management decisions of ocean carriers and the alliances.

May 6: Container Shortage Forecast in Europe – WorldCargo News

Europe is facing container shortages as a result of two macro-level disruptions, the lockdowns in China and the Russia-Ukraine war, reports Container xChange.

Hamburg-based Container xChange reports that, while the shortage of containers is persistent, port throughput has also decreased.

“The ports of Antwerp and Rotterdam handled a lower volume of containers in the first quarter of 2022 as compared to the same period last year. The containers meant for the ports in Europe are now piling up at the ports in China (due to the lockdowns), potentially causing greater chaos in the coming weeks or even months,” said Christian Roeloffs, CEO of Container xChange. “If the lockdowns persist, the throughput volumes will be further impacted in the coming months for these ports in Europe.”

May 10: Carriers Blank More Sailings as China’s COVID Lockdowns Continue – gCaptain

Ocean carrier alliances are preparing to blank more than a third of their sailings from Asia over the coming weeks in response to a reduction in export freight, according to the latest report from Project44.

The blanking strategies by the alliances to mitigate the impact of the COVID lockdowns in China will further extend cargo lead times, particularly to North Europe.

The supply chain platform’s data shows that between weeks 17 to 23, THE Alliance will blank 33% of its scheduled sailings from Asia, the Ocean Alliance will void 37%, while the 2M alliance will cancel 39% of its headhaul voyages.

May 17: Global Container Shipping the Worst for 50 Years Reports Drewry – Automotive Logistics

A continuous deterioration in the accuracy of transit and arrival times in global container shipping means the sector is in the worst state it has been in for 50 years, according to Drewry Shipping Consultants.

The situation is not expected to start improving until the first half of 2023 and that is having an impact on the automotive industry at a time of wider supply chain uncertainty.

May 19: FMC Receives Fact Finding 29 Final Recommendations and Intermodal Equipment Report – FMC news item

U.S. FMC Commissioner Rebecca Dye presented her final report of Fact Finding 29, “International Ocean Transportation Supply Chain Engagement,” a two-year investigation she is bringing to conclusion. Commissioner Dye said she identified two major concerns of importers and exporters: the high cost of shipping cargo, and excessive demurrage and detention charges.

Based on her work, Commissioner Dye concluded that, though high by historical standards, freight rates reflected market forces of supply and demand in a supply chain challenged by the COVID-19 pandemic and an unprecedented surge in consumer demand. As to detention and demurrage, Commissioner Dye highlighted the Interpretive Rule of the Commission and how it is being enforced to address unreasonable detention and demurrage practices.

To help address these, and other identified issues, Commissioner Dye unveiled 12 new recommendations for the Commission to consider.

May 23: Single Window for Ship Data Exchange to Become Mandatory – IMO news item

The International Maritime Organization’s (IMO) Facilitation Committee has adopted amendments to the Facilitation Convention that will make the single window for data exchange mandatory in ports around the world, marking a significant step in the acceleration of digitalization in shipping.

The Facilitation Convention was adopted in 1965 and contains standards and recommended practices and rules for simplifying formalities, documentary requirements and procedures on ships’ arrival, stay and departure. The Convention has been updated continuously, embracing digitalization and automation for procedures.

The amendments adopted at the Facilitation Committee session are expected to enter into force on January 1, 2024.

May 25: Government of Canada Invests in Two Projects to Increase the Supply Chain Efficiency for Canadian Shippers in New Brunswick – Port Saint John press release

The Government of Canada will invest more than $42 million for two new projects under the National Trade Corridors Fund. These projects will help improve supply chain efficiency for Canadian shippers in Saint John and McAdam, New Brunswick.

The Government of Canada will contribute:

May 27: Shanghai Reports Increased Throughput as Lockdowns Ease – The Maritime Executive

Container operations at the port of Shanghai are on the rebound. While many districts in the city continue to have reduced restrictions, Chinese officials are reporting that the port has nearly returned to productivity levels before the lockdowns that began at the end of March. The major shipping lines are similarly reporting levels of progress, expecting that further restrictions will be relaxed by the end of the current month.

Chinese officials highlighted that throughput at Shanghai has rebounded, they said, to 95 percent of normal and the level of activity before the lockdowns. This compares with April, when they reported volumes were down to around 100,000 TEU dally, a decrease by at least 35 percent from normal capacity. Many private estimates put the figure lower, at close to 50 percent of normal capacity.

They are now also reporting that trucking volumes have rebounded to approximately 90 percent of capacity. However, many of the firms operating in the port continue to report a lack of trucking capacity. The health restrictions requiring truckers to have negative test results and limiting their entry into the port area if they have been in infected zones remain in place.

May 27: ‘Bullwhip’ Ready to Crack, as Spot Rates Get a Boost and Shanghai Reopens – The Loadstar

With Shanghai on the cusp of unlocking its manufacturing and unshackling frustrated container exports, spot rates from Asia are set to increase in the coming weeks.

However, the rate spikes could be short lived if some reports of cancelled orders prove to be linked to weakening consumer demand in Europe and the U.S.

May 28: Ships Divert to India as Sri Lanka Crisis Slows Colombo Port – gCaptain

Sri Lanka’s political turmoil is prompting some shipping lines to detour to Indian ports instead of calling at Colombo, one of the key supply chain hubs in Asia.

Political protests and a lack of fuel have slowed the number of trucks available to transport containers of textiles and other goods between Colombo’s terminals and supply chains, according to freight forwarders and analysts. That’s created a growing backlog of boxes at the port that shipping companies want to avoid, they said.

May 31: Long-Term Contracted Ocean Freight Rates Set ‘Staggering’ New Records – Splash

All bets are off – liner shipping will now make improved profits over 2021’s record earnings, even in the unlikely event that there is seismic crash in spot earnings in the remaining seven months of the year.

May saw the highest monthly increase in long-term contracted ocean freight rates since Oslo-based Xeneta started tracking these shipments, as the cost of locking in container shipments soared by 30.1%. The unprecedented hike, revealed in the latest Xeneta Shipping Index (XSI) public indices for the contract market, means that long-term rates are now 150.6% up year on year. In 2022 alone, costs have climbed by 55%.

“This is a staggering development,” commented Xeneta CEO Patrik Berglund. “Just last month we were looking at an 11% rise and questioning how such continued gains were possible. Now we see a monthly increase of almost a third blowing the previous XSI records out the water.”

 

 

Air

May 4: Airport Congestion Masks Softening in Trans-Atlantic Air Cargo – American Shipper

The cargo holds of aircraft flying between Europe and North America are less full than a month ago as the number of passenger flights swells and shipping demand softens, but supply chain friction and high jet fuel prices are artificially propping up freight rates in a declining market, according to logistics experts.

Cargo owners could enjoy considerable pricing relief in the months ahead if airport constraints get better, said Niall van de Wouw, co-founder and managing director of analytics firm Clive Data Services.

Clive’s analysis shows the dynamic load factor, which essentially measures aircraft capacity utilization as a function of both volume and weight, has fallen below 80% for the first time in two years. Total air cargo capacity increased by 15% in the last week of March from the previous week as airlines step up summer schedules to meet pent-up travel demand following the COVID crisis.

May 5: Airfreight Rates Soften as Bellies Bounce Back on the Atlantic – The Loadstar

The start of May has seen a softening of the air freight market – with customers on long-term contracts paying more than the spot rate, as belly bounces back.

For the first time post-pandemic, since the end of March, capacity over the transatlantic is higher than pre-pandemic levels.

This extra capacity has led to the lowest dynamic load factors since the first half of January on western Europe to North America.

Other tradelanes have seen higher load factors, driven by constrained capacity rather than high demand.

May 18: Air France-KLM and CMA CGM Sign Strategic Partnership in Global Air Cargo – Cargo Trends

Air France-KLM Group and the CMA CGM Group announced that they have signed a long-term strategic partnership in the air cargo market. This partnership will see both parties combine their complementary cargo networks, full freighter capacity and dedicated services.

The agreement will have an initial duration of 10 years. Air France-KLM and CMA CGM will join and exclusively operate the full-freighter aircraft capacity of the respective airlines consisting initially of a fleet of 10 full-freighter aircraft, and an additional combined 12 aircraft on order.

 

 

Rail

May 30: Access Upgrades Complete from Burnaby Rail Corridor to North Shore Port Terminals – Burnaby Now

Improvements to the Burnaby rail corridor to better access the North Shore port terminals are completed.

CN, the Vancouver Fraser Port Authority and the City of Burnaby say the finished upgrades have cut commutes in half for trains waiting in Burnaby for the tunnel to vent.

Roughly 65 percent of rail traffic through Burnaby goes to the North Shore, and the improvements will result in more trains per hour delivering export goods to port terminals and will reduce idling.

May 31: Canadian Pacific Announces Multi-Year Agreement with CMA CGM – CP press release

Canadian Pacific has announced a new multi-year agreement with CMA CGM Group. CP will become CMA CGM’s primary rail provider in Canada, servicing the ports of Vancouver, Montreal and Saint John.

 

 

Trucking

May 2: Canada Further Delays GHG Standards for Trailers – Today’s Trucking

Canada’s federal government is once again delaying plans to apply greenhouse gas emissions (GHG) standards to trailers, in the face of challenges to companion rules in the U.S.

The fourth interim order on the subject will suspend the standards by up to one additional year, said Stephane Couroux, director of the transportation division at Environment and Climate Change Canada’s Environmental Protection Branch.

“During the period that the fourth interim order will be in effect, the department will undertake further consultations with key stakeholders, continue to monitor the situation closely in the U.S. following the Court of Appeals decision to rescind the trailer standards established by the U.S. EPA and NHTSA, and continue to assess the impacts for Canada,” Couroux said in a related notice.

“This will help inform the path forward on whether to amend or implement the trailer standards in Canada for model year 2023.”

May 3: Shippers Turn to Trucking for Help Meeting Carbon Reduction Goals – Transport Topics

As large corporations make bold pledges to achieve carbon neutrality in the coming decades, they are increasingly looking at their supply chains as an opportunity to make progress toward those goals.

In addition to asking motor carriers the usual questions about reliable service, safety and pricing, many large shippers are raising the issue of environmental sustainability and carbon emission reductions, said Matt McLelland, vice president of sustainability at Covenant Logistics.

Trucking companies must be aware of this shift and should begin preparing for it, he said.

Freight transportation emissions will become an increasingly important focal point for large corporations that are targeting carbon neutrality by 2050 or even 2040.

“Every molecule of carbon that your truck puts out belongs to their carbon footprint,” McLelland said.

May 12: Trucking Continues to See Robust M&A Market – Transport Topics

Trucking and logistics continue to see strong merger and acquisition activity, a trend that goes back more than a year

The deal market has stayed active amid a confluence of factors that are motivating buyers and sellers. They include high valuations for motor carriers and expectations interest rates are poised to rise.

The Tenney Group CEO Spencer Tenney noted sellers are motivated because the high valuations may normalize down the line. That includes equipment costs, which have been favourable for valuing businesses in the current market because of shortages. Buyers are also motivated to get deals done now because of interest rates.

May 13: Freight Volumes Down as Chances of Freight Recession Rise – Commercial Carrier Journal

U.S. freight volumes fell in April from March and the year-ago period, according to the Cass Transportation Index April 2022 report. With more difficult comparisons in the next few months as global supply chain disruptions are set to intensify, Cass predicts more softness is on the horizon.

The shipments component of the Cass Freight Index fell 0.5% year-over-year, following a 0.6% year-over-year increase in March. Shipments also fell 2.6% from March, which was 0.9% below the normal seasonal pattern.

Freight was slowing even before the war in Ukraine began, Cass noted, but the effects of the additional surge of inflation and recent interest rate increases have slowed freight even more.

May 22: A Major Cause of Inflation May Have Peaked; That’s Good News for Consumers but Bad News for Trucking Companies – FreightWaves

Note these statistics:

According to Bank of America’s biweekly survey of shippers, trucking freight rates are set for an even larger pullback. This is bad news for trucking companies but good news on the inflation front.

 

 

CIFFA Advocacy, Communications, Activities

May 30: CIFFA to Attend Hill Day in Ottawa

CIFFA’s Director of Policy and Communications Julia Kuzeljevich will be attending in-person Parliament Hill Days in Ottawa, on May 30 and 31.

This two-day event will feature a parliamentary reception in the evening on Monday, and a full day of dedicated meetings with parliamentarians and government officials on Tuesday.

The event was organized by the Canadian Chamber of Commerce for its Transportation and Infrastructure Committee members. CIFFA is a member of this committee, as well as the International Affairs Committee of the Chamber.

 

Maritime

April 6: ‘Outlandish’ Emissions Claims by Liner Giants Ridiculed on Social Media – The Loadstar

In a LinkedIn post, Lars Jensen, CEO of Vespucci Maritime, noted “wild discrepancies” between the emissions-per-box claims of alliance partners Evergreen, CMA CGM, Cosco and OOCL.

“If you book with any of these, the cargo will go on the exact same vessel on the exact same routing,” said Jensen.

However, claimed per-box emissions on a route between New York and Shanghai at CMA CGM varied between 1370 kg and 1779 kg of CO2, depending on the route taken; Evergreen claimed between 809 kg and 839 kg; OOCL claimed 692 kg; and, by far the most outlandish claim, was that by Cosco, of between 437 kg and 533 kg of CO2 depending on the service chosen.

“Four carriers. Four different methodologies. Four very different results,” said Jensen.

His observation has potentially troubling implications for shippers, for whom emissions data increasingly plays a role in their decision-making.

April 8: More Blank Sailings as Spot Rates Tumble and China’s Lockdowns Take Their Toll – The Loadstar

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.

But rates could spike again when the flood gates reopen for the delayed orders.

“It’s almost like a traffic jam,” said Container xChange CEO Christian Roeloffs. “Some people have now stepped on the brakes really heavily and this will lead to a significant build up in demand for freight services, which will be unleashed once the factories reopen.

“And when demand is back, carriers will again not have enough equipment on the ground, as not enough containers went into China during the lockdowns. So that will push up prices again,” he added.

April 11: Shanghai Port Runs Out of Space for Refrigerated Containers – American Shipper

Container vessel operators are preparing to divert refrigerated containers destined for Shanghai to other ports because the area to plug into electric power is full of cargo that trucks can’t retrieve in the face of a citywide COVID lockdown.

The notices to customers are the latest manifestation of how the strict restrictions on movement within the city are impacting imports and exports through the world’s largest container port and Pudong International Airport.

Authorities in Shanghai have sealed off the entire city for nearly two weeks. Over the weekend a record 23,000 COVID cases per day were counted. More than 90% of trucks supporting import and export deliveries are out of action because of the restrictions. The slow pickup of cargo has resulted in long container dwell times, leaving less room to place arriving import boxes. Decreased terminal efficiency is forcing dozens of container vessels to wait at anchor for berth space, while others skip the port altogether.

April 11: Part of Felixstowe Terminal Collapses – Container News

Part of terminal 6 at the Port of Felixstowe, the United Kingdom’s busiest container port, collapsed on April 10.

Port operations are expected to face a period of disruption.

April 13: Floods Knock Out South Africa’s Largest Port – Splash

Torrential rain – the worst experienced in more than six decades – has knocked out operations at South Africa’s largest port, Durban.

Some parts of KwaZulu-Natal province recorded as much as 300 mm of rain within 24 hours earlier this week with many deaths reported and severe damage to road and rail links.

An update from Danish carrier Maersk stated that depot and warehouse operations have been suspended, and there is no access to the Durban terminal because of “significant damage” to an access road.

April 16: Maersk Stops Bookings of Meat and Fish into Shanghai – gCaptain

AP Moller-Maersk A/S has stopped bookings to ship refrigerated containers into Shanghai as a strict COVID lockdown stalls the trucking of meat and seafood from the port into the city.

Containers are piling up at the port of Shanghai due to supply chain disruptions caused by the lockdown, Ocean Network Express said in an advisory to customers on April 14. The port is running out of electric plug slots to keep refrigerated containers cool, while trucking remains limited and terminals are congested, the container shipping line said.

That has prompted Maersk to stop all new deliveries of refrigerated goods and some hazardous cargoes into Shanghai until further notice, the company said. The company is waiving charges for customers to change the destination of their frozen goods already sailing to Shanghai.

April 19: Durban Port Functional after Flood Devastation – MarineLink

South Africa’s major port of Durban, where operations were disrupted by severe flooding last week, is now functional and a backlog of thousands of containers will be cleared within five to six days, the public enterprises minister said on April 19.

The floods caused extensive damage to roads leading to Durban port, one of the busiest shipping terminals in Africa and a key hub for exports.

April 20: 1 in 5 Containerships Globally Are Stuck Waiting Outside Congested Ports – gCaptain

The number of containerships waiting outside of congested ports has risen sharply in recent months, with 20% of all containerships trading globally now stuck in backups, according to maritime data intelligence firm Windward.

Widespread COVID-19 lockdowns in China have heavily impacted congestion outside the country’s ports, with the number of waiting ships nearly doubling since lockdowns first went into place – climbing from 206 in February to 506 in April.

Looking at the global picture, between April 12 and 13, there were 1,826 containerships waiting outside of ports around the world, representing approximately 20% of the global fleet, Windward data shows.

April 20: Expedited Shipping Lanes Gain Momentum as Congestion Persists – Supply Chain Dive

Shippers are increasingly using expedited shipping lanes to mitigate supply chain disruptions at ports, several executives confirmed in emails with Supply Chain Dive.

Hapag-Lloyd said in a statement the ocean carrier is trying to meet “a trend to faster services.”

Sovos Brands CFO Chris Hall recently touted the strategy to investors. “We have and will continue to pay for accelerated lanes,” Hall said.

April 22: Carriers Roll Out More Blank Sailings in a Bid to Underpin Slide in Spot Rates – The Loadstar

The 2M alliance is preparing to blank three Asia-North Europe sailings next month, as export demand from China plummets and container spot rates come under increased pressure.

2M partners MSC and Maersk have cancelled their Griffin/AE55 loop for the first week of May and will void two voyages of their key Shogun/AE1 service in the following weeks.

MSC attributed the cancelled headhaul voyages to “the ongoing market situation” and said bookings would be accommodated on “alternative services.”

The blankings by the 2M and two other alliances are seen as a bid to halt the slide in rates as cargo bookings from China have tanked, due to COVID lockdowns and intermodal restrictions.

April 25: Hapag-Lloyd Fined by FMC after Levying ‘Wilful’ and ‘Erroneous’ D&D Charges – The Loadstar

German carrier Hapag-Lloyd has been ordered to pay $822,220 in civil penalties for 14 violations of the U.S. Shipping Act.

An FMC investigation found it incorrectly applied detention and demurrage (D&D) charges to 11 containers handled by California drayage firm Golden State Logistics (GSL).

The D&D charges levied to GSL amounted to $10,135, but the FMC’s Bureau of Enforcement (BOE), which Hapag-Lloyd had unsuccessfully claimed had no jurisdiction over the case, said the penalties were punitive in nature as the carrier had “knowingly and wilfully” applied the D&D charges despite GSL being unable to return the containers.

April 26: Vancouver Fraser Port Authority Postpones Gateway Infrastructure Fee 2022

The period for accepting submissions on GIF2022 ended on April 15. To allow sufficient time to review and address concerns raised by stakeholders, the VFPA has postponed implementation of the fee.

Details respecting the timing of a new effective date for implementation of the proposed GIF2022 will be available in the near future.

April 26: Despite Rising Risks, Shipping Lines on Track for Another Record Year – American Shipper

The year is almost a third over, and with each passing month, shipping lines look increasingly likely to pocket even more cash in 2022 than in record-trouncing 2021.

New data and commentary released on April 26 by ocean carrier Maersk, freight forwarder Kuehne+Nagel and consultancy Drewry highlight just how profitable this year is looking for ocean carriers – and how expensive it’s looking for importers.

 

 

Air

April 6: Hong Kong Banning Flights at Fastest Rate Since January – American Journal of Transportation

Less than a week after Hong Kong rolled back some of the world’s strictest inbound travel curbs, at least six airlines have had routes banned.

Singapore Airlines Ltd., Emirates, Cathay Pacific Airways Ltd., Qatar Airways QCSC, Korean Air Lines Co. and Malaysia Airlines were slapped with week-long bans this month after breaching Hong Kong’s so-called circuit-breaker mechanism. A stoppage can be meted out if three or more COVID-19 cases are found on the same flight, or if there’s one confirmed infection and another non-compliant passenger.

April 19: Cargo Diversions from Shanghai Start to Clog Up Other Major Chinese Airports – The Loadstar

Air freight diverted from lockdown-hit Shanghai Pudong Airport (PVG) is clogging up China’s other major airports, causing a shortage of pallets for exports.

Forwarders have singled out Zhengzhou Airport (CGO), in the central Henan province, as the hardest hit, given the large amount of cargo diverted there from Shanghai.

April 25: U.S. Airlines Substituting Buses for Planes as Pilot Shortage Persists – American Journal of Transportation

U.S. airlines are facing a pilot shortage that’s complicating efforts to ramp up flights, forcing them to step up training programs, recruit foreign pilots and even replace planes with buses.

The industry needs to hire an average of 14,500 new pilots each year until 2030, according to U.S. federal labour statistics. But carriers say there’s no way they can bring on that many due to long lag times for credentialing. Worse, experts say the staffing bottleneck is unlikely to end anytime soon.

“The pilot shortage for the industry is real and most airlines are simply not going to be able to realize their capacity plans because there simply aren’t enough pilots, at least not for the next five-plus years,” Scott Kirby, chief executive officer of United Airlines Holdings Inc. said this week.

April 25: Russian Takeover of Foreign-Owned Aircraft Portends Higher Lease Rates – American Shipper

Air Lease Corp. disclosed on April 22 it is writing off $802.4 million for leased aircraft trapped in Russia it doesn’t expect to recover following Western sanctions against the country for the invasion of Ukraine.

The broader significance of the impairment charge is that “lessors are going to treat country risk differently than they had in the past and will charge airlines accordingly,” Cowen equity analyst Helane Becker said in a client note. “We expect lease rates to trend higher.”

 

 

Rail

April 6: The Montreal Port Authority and Canadian National Reach an Agreement in Principle to Develop the Rail Component of the Port of Montreal’s Contrecœur Expansion – MPA press release

The Montreal Port Authority (MPA) and Canadian National Railway (CN) have reached an agreement to integrate rail transport at the MPA’s new container terminal in Contrecœur.

The CN rail line is already in place in the area covered by the Port of Montreal’s expansion in Contrecœur. In addition to establishing an efficient intermodal service, the partnership aims to ensure close cooperation between CN, the MPA and the private partner that will be selected to design, build, finance, operate and maintain the future terminal, following a procurement process led by the MPA.

April 28: New CEO Spells Out Priorities for Canadian National – Trains

New CEO Tracy Robinson likes what she sees at Canadian National.

Robinson spent her first two months at CN traveling the system and getting to know the operating team, as well as meeting with the railway’s customers and investors.

Robinson, who was an executive for eight years at Calgary-based pipeline company TC Energy following a 27-year career at Canadian Pacific, spelled out her priorities for CN during her first public comments as chief executive.

First, CN will run a scheduled railroad “with a laser focus on velocity,” which will improve service and produce more efficient use of assets such as locomotives, cars, and crews.

Second, Robinson says, “we will curate our book of business to better fit our network and leverage our strengths.”

Third, the railway will tighten coordination between operations and marketing to ensure the railway has the capacity to deliver on its commitments to customers.

And fourth, CN will continue to invest for growth and efficiency.

 

 

Trucking

April 6: Trucking Industry Will Be in Trouble if Demand Drops to Pre-COVID Levels – FreightWaves

Trucking spot rates are way up, but so are operating expenses. What does this mean for carriers?

Since the pandemic began, the number of dispatchable trucks in the for-hire trucking market (trucks with a driver and available to haul a load) is up approximately 10%. Since trucking rates are contingent upon the balance of supply and demand, if volumes were to drop back to pre-pandemic levels (with far more capacity in the market), rates would collapse.

But even more worrisome is that the operating expenses of carriers are at much higher levels than before COVID. FreightWaves estimates that operating expenses for nearly all carriers have surged by as much as $0.38 per mile over pre-COVID levels. This calculation includes only maintenance, insurance and fuel costs.

The calculation does not include driver wages or equipment purchase/finance, which could nearly double the increased amount of operating expenses.

If a trucking fleet were to start up today with an employee driver, its operating cash expenses would be as much as $0.72 per mile higher than a trucking fleet that was started in 2019.

April 9: Commercial Border Crossings in El Paso Slow to Snail’s Pace after Texas Steps Up Security – Reuters

Hundreds of commercial trucks waited in an hours-long line on April 9 to cross the border from the Mexican city of Ciudad Juarez into El Paso after Texas Governor Gregg Abbott ordered state troopers to step up inspections of north-bound vehicles.

The commercial border crossings between Ciudad Juarez and El Paso slowed to a snail’s pace after Abbott directed the Department of Public Safety on April 6 to begin conducting “enhanced safety inspections” of vehicles at the international ports of entry into Texas.

Abbott’s order cited “cartels that smuggle illicit contraband and people across our southern border” as the reason for the stepped-up measures.

April 12: Trucker Protests Expand at U.S.-Mexico Border over Lengthy Wait Times – Reuters

Mexican truck drivers blockaded bridges at the U.S. border for a second day on April 12 to protest an order by the Texas governor meant to increase safety inspections that has snarled traffic and led business groups to warn of supply chain disruptions.

Mexico’s government said in a statement it “rejects” the inspections imposed by Texas, estimating that two-thirds of normal trade was being held up and costing “significant revenue” for both U.S. and Mexican businesses.

April 15: Texas Moves to Ease Border Gridlock Over ‘Sense of Urgency’ – Transport Topics

The logjam of trucks at the U.S.-Mexico border finally began breaking April 14 after nearly a week as Texas Gov. Greg Abbott eased off his latest dramatic action over immigration that has gridlocked some of the world’s busiest trade ports and taken a mounting economic toll.

“There is a sense of urgency now to reach deals that did not exist before,” Abbott said.

The Republican governor, who for days has allowed commercial trucks to back up for miles into Mexico after requiring them to stop for additional inspections in Texas, lifted that order for bridges in El Paso and other cities after announcing a new security agreement with the neighbouring Mexican states of Chihuahua and Coahulia.

Inspection orders remain in other parts along Texas’ 1,200-mile border, including the busy Rio Grande Valley, but Mexican trade leaders were optimistic those would also end soon.

April 27: New StatsCan Data Highlights Demographic Crisis Underpinning Truck Driver Shortage – Canadian Trucking Alliance

Canada faces record retirements from an aging labour force at a time of record high job vacancies and historically low unemployment, reports Stats Canada.

No industry is feeling the complications of this demographic crisis more than the trucking industry, which, already in the midst of a severe labour shortage, has the oldest workforce in Canada, says the Canadian Trucking Alliance.

 

 

CIFFA Advocacy, Communications, Activities

April 12: CIFFA Participates in Ontario Ministry of Transportation Freight Advisory Committee

CIFFA participated in the Freight Advisory Committee that assisted the Ontario Ministry of Transportation in developing a transportation plan for the Greater Golden Horseshoe (GGH) over the past couple of years.

The province released Connecting the GGH: A Transportation Plan for the Greater Golden Horseshoe on March 10. The plan sets out a path forward for a regional transportation network to 2051 to meet the region’s transportation needs, and demands that will come with forecast population and employment growth.

The 2051 vision includes infrastructure, service improvements and policies organized under four inter-related themes:

April 20: Minister of Transport Response to CIFFA Letter on CP Rail Strike

On April 20, CIFFA received a response regarding a March 11 letter to the Transport Minister, among other ministers, regarding a possible work stoppage at CP Rail, and any implications on supply chain fluidity. In his response, the Minister of Transport, the Hon. Omar Alghabra, indicated that safety is his top priority. “This was true during the disruption of CP rail service and remains the case now. I can also assure you that the safe, timely and efficient movement of goods is of the utmost importance to the Government of Canada,” he said.

April 21: Alberta Minister of Agriculture Replies to CIFFA Letter Regarding Prospect of Rail Service Interruption at CP Rail

On March 4, CIFFA wrote to the Honourable Nate Horner, Alberta’s Minister of Agriculture, Forestry and Rural Economic Development, to express, on behalf of 20,000 employees working in the freight forwarding industry, alarm at the prospect of a rail service interruption at CP Rail.

Minister Horner replied on April 21. His email message included the following:

Thank you for your March 4, 2022 email regarding Canadian Pacific Railway (CP) labour action and the challenges this posed for supply chains. I share your concern for all businesses across Canada that depend on CP as part of the transportation supply chain network.

The implications of a CP work stoppage and the need to find an amicable solution between CP and the Teamsters Canada Rail Conference (TCRC) required an immediate solution. As you stated, a slowdown or stoppage of CP rail would negatively affect stressed supply chains and undermine the competitiveness of Canadian export industries that depend on CP to get their products to market.

The Premier and the Government of Alberta addressed the CP labour action with the federal government. We also worked with our provincial and territorial counterparts to impress upon the federal government the severe impact that a CP strike would have on our provincial economies and the transportation supply chains our local businesses depend on.

As you know, CP and TCRC have agreed to binding arbitration. The Premier and the Government of Alberta are pleased with this decision and welcomed the return of normal operations at CP. We are continuing to monitor the situation and at this time are not aware of any long-term impacts for Alberta.

April 25: Canada’s Supply Chains, Fragile at the Best of Times, Are Now Broken: House Transport Committee Hearing on the State of Canada’s Supply Chains, Including ‘Most Compelling’ Testimony from CIFFA – National Post

The House of Commons Transport Committee heard last week from witnesses on the state of Canada’s supply chains. The consensus among experts at the committee is that they are in a terrible state and contribute to rising costs for consumers.

The most compelling testimony came from the Canadian International Freight Forwarders Association’s Bruce Rodgers and Julia Kuzeljevich, whose members appear to be bearing the brunt of the capacity problems.

Kuzeljevich said that it takes 22 days for a ship to travel the 10,000 kilometres between Hong Kong and Vancouver, only to then have to wait an average of four weeks to find a berth, according to logistics company Maersk’s data. Yard congestion at the port is 120 percent, compared with an optimal level of 80 percent. The port’s own data confirm that things are backed up: Container import rail footage (a measure of the train backlog) was 407,953 feet on March 22, compared with around 100,000 feet in October last year.

There was a two-day strike by CP employees at the port in the days leading up to March 22, but Rodgers pointed out that Canada’s supply chains are fragile at the best of times “and broken when anything disrupts them. We have had a lot of significant disruptions over the past two years.”

The efficiency of the system is not helped by burdensome regulation. Rodgers said the Canada Border Services Agency made efforts to reduce inspection delays during the pandemic, but freight forwarders still face “nightmarish” challenges. He offered the example of one importer whose container was identified for CBSA inspection on Oct. 23. The one-day inspection took place on Dec. 2 and the container was released by customs on Jan. 4 – a 73-day process that cost the importer US$8,730.

April 26: CIFFA Joins UN Global Compact

On the recommendation of our Sustainability Committee, CIFFA applied to participate in the UN Global Compact, the world’s largest corporate sustainability initiative. CIFFA was accepted as a non-business signatory.

In applying to join, CIFFA committed to implement the Ten Principles of the UN Global Compact, participate in the activities of the initiative where feasible and submit a report every two years on engagement activities.

To fulfill our commitment to the UNGC, CIFFA will do what we can to internalize UNGC principles in our strategies, policies and operations. We will endeavour to provide information from the Compact to members to enable you to develop meaningful corporate sustainability goals and best practices. Depending on member interest, we will consider developing tools and resources for Canadian freight forwarders looking to up their sustainability initiatives; organizing workshops on relevant topics; and advocating to governments on key issues.

The UNGC website, www.unglobalcompact.org, offers a library of guidance documents and tools, as well as a link to Global Compact Network Canada, at www.globalcompact.ca, where you’ll find local resources, events and newsletters.

April 26: CIFFA Appears as Witness before House of Commons Standing Committee on Transport, Infrastructure and Communities

On April 25, CIFFA’s Bruce Rodgers and Julia Kuzeljevich appeared before the House of Commons Standing Committee on Transport, Infrastructure and Communities (TRAN).

Read CIFFA’s speaking notes.

CIFFA responded to committee questions related to the state of the supply chain in Canada, reasons for issues, labour and infrastructure concerns, and the need for a national supply chain strategy.

The full list of witnesses for the April 25 session is:

Maritime

March 1: Carriers Suspend Bookings to and from Russia

Hapag-Lloyd, ONE, Maersk – The Loadstar

CMA CGM – corporate news

MSC –customer advisory

March 1: Biden Takes on Ocean Shipping as FMC Sees Market Setting Rates – American Journal of Transportation

President Joe Biden is taking on the concentrated market power of ocean shipping companies, although officials at the agency overseeing the industry indicated they lack both the jurisdiction and, for now, any evidence of wrongdoing.

The White House said Biden will call on Congress at his State of the Union to address the immunity that shipping alliances have from antitrust scrutiny under current law. The Federal Maritime Commission will join with the Department of Justice in a new initiative announced on February 28, to push for competition in ocean freight transportation.

“Many shippers really want us to do something about the rapid inflation of rates and decline in reliability in the ocean freight system,” said FMC Chairman Daniel Maffei.

The FMC could take legal action against carriers “if the rapid inflation of rates is due to some kind of artificial limitation on the supply of cargo space,” Maffei said. “But even after we’ve increased the reporting requirements and deepened our analysis, so far we have found no evidence of anything like that that’s actionable and furthermore neither has the European Union or China.”

“We will continue to scrutinize and keep looking, but so far we’re seeing the opposite. We’re actually seeing that the carriers are adding capacity, and in fact increase number of ships, overall,” Maffei said.

March 1: Canada Bans All Russian Ships From its Ports and Waterways – The Maritime Executive

The government of Canada is banning Russian shipping from Canadian ports, adding to the growing list of penalties targeted at Russian commerce in response to the invasion of Ukraine.

In an announcement on March 1, three Canadian ministers announced that Russian-owned or registered ships and fishing vessels will be prohibited from entering Canada’s ports and internal waters. In keeping with UNCLOS’ provisions for freedom of navigation and innocent passage, the measure does not cover Canada’s territorial seas. The ban will take effect later in the week as part of a broader package of sanctions.

March 3: U.S. House Panels Open Price-Gouging Probe of Major Ocean Carriers – American Shipper

Two U.S. congressional oversight panels have opened an investigation of three major ocean carriers, alleging that their dramatic rate hikes charged to shippers may have fueled inflation.

Leaders of the Select Subcommittee on the Coronavirus Crisis and the Subcommittee on Economic and Consumer Policy – which operate under the House Committee on Oversight and Reform – sent letters on March 2 to the heads of Maersk, CMA CGM and Hapag-Lloyd requesting information about their container rate increases and reports over the past year of exorbitant fees and surcharges.

The carriers are among 10 foreign-owned container ship operators controlling nearly 85% of the world’s container capacity, the committees stated. Using this market power, the 10 carriers “appear to have raised shipping rates in 2021 far more than any increase in costs,” resulting in $150 billion in annual profits, or nine times greater than 2020.

“Affordable shipping rates are critical to ensuring that small and medium-sized business owners can continue to make a living and provide goods and services to consumers at reasonable prices,” wrote the committees’ chairmen, James Clyburn, D-S.C., and Raja Krishnamoorthi, D-Ill.

“We are deeply concerned that [Maersk, CMA CGM and Hapag-Lloyd] may have engaged in predatory business practices during the pandemic, making scores of essential goods needlessly expensive for consumers and small businesses.”

March 4: Maersk Update on Halifax Port Omissions – customer advisory

Maersk provided the following update on the multiple Halifax port omissions it has experienced since end of quarter 4, 2021:

The operational environment has been extremely challenging and has impacted vessel proforma schedules due to numerous reasons, including, but not limited to:

We understand that we had no vessel calling Halifax since Feb. 12 with the omission of Maersk Penang 204W/206E, EM Kea 207W/209E, our operations team is working collaboratively to reinstate the Halifax port call for Maersk Patras 205W/207E expected in Halifax March 13, 2022 to control the gap of service with an aim of minimum fortnightly calls to Halifax during the upcoming weeks.

March 7: Port of Halifax to Get New On-Site Container Examination Facility – Government of Canada press release

The Government of Canada and the Halifax Port Authority announced on March 7 their joint investment in a new container examination facility within the Port of Halifax. The new facility will replace the existing off-site facility, significantly reducing inspection turn-around times, reducing port congestion, and improving the efficiency, safety, security and operations for the Canada Border Services Agency.

The Government of Canada will invest $7 million in the project under the National Trade Corridors Fund and Halifax Port Authority will contribute $8 million.

March 7: CMA CGM to Provide Concessions to SMEs – The Loadstar

CMA CGM pledged some exclusive space on its vessels to small and medium-sized shippers.

CMA CGM Group chairman and CEO Rodolphe Saadé acknowledged that “persistent tensions on global logistics chains” had been “particularly challenging for SMEs.”

He said: “We have decided to allocate dedicated capacity onboard our vessels to SMEs in the markets where tensions are highest (Europe, North America) at a negotiated rate, usually only available with much larger volume commitments.”

CMA CGM also said it was extending its freeze on spot rate increases until June 30.

March 10: Crews Start Abandoning Ships in Ukraine – gCaptain

Some shipowners have begun to ask crew to abandon their ships stuck off the coast of Ukraine, as Russia’s invasion of its neighbour reached the end of its second week.

Ukraine’s ports closed on February 24, when Russian troops began their incursion. At least five out of 140 ships stuck in the country’s waters have been hit by explosions, killing a Bangladeshi seafarer.

As intense fighting and shelling continues across cities in Ukraine, ship owners are grappling with dwindling food supplies and the possibility of a protracted war, according to people with knowledge of ships in the area. That’s forcing some owners to ask their crew to abandon vessels, they said.

More than 1,000 seafarers are estimated to be on ships stranded in Ukraine, some with cargo still onboard. The vessels, which include tankers, bulkers, cargo ships and a container vessel, aren’t able to leave because there aren’t harbour pilots to guide them out amid danger from missiles and underwater mines.

March 14: Competing Proposals at Vancouver Port Raise Environmental Concerns – Inside Logistics

The plan to build a new shipping container terminal the size of nearly 144 football fields at Roberts Bank has sparked a rival proposal along with concerns for endangered orcas and the salmon they depend on.

A review panel has been tasked with examining an alternative proposal to increase capacity at the port by Global Container Terminals.

March 14: Container Rates Climb on China Lockdowns – gCaptain

The number of container ships waiting off Qingdao, one of China’s biggest ports, is continuing to rise as the country doubles down on its COVID Zero policy, adding more delays to a strained global supply chain.

About 72 vessels were spotted off Qingdao port in Shandong on March 14, almost double the amount at the end of February, according to shipping data compiled by Bloomberg. The increased delays there and in other parts of China are expected to push up freight rates.

March 18: With Spot Rates Falling, Carriers Blank More Sailings and Plan Surcharges – The Loadstar

Container spot rates continued their decline across most Chinese export routes, prompting ocean carriers to blank more sailings.

The Ningbo Containerized Freight Index (NCFI) on March 18 recorded falls on all but five of the 21 routes covered by its composite index, shedding a further 1.7%, to 3,613.9 points.

March 24: European and American Terminals Brace for Whiplash Effect from Latest China COVID Outages – Splash

Terminals in Europe and North America have been told to brace for another whiplash effect from delayed shipments out of southern China.

Kuehne+Nagel’s Global Disruption Indicator, which tallies the cumulative TEU waiting time in days based on container vessel capacity (e.g., a vessel with a 10,000-TEU capacity waiting 12 days equals 120,000 TEU waiting days (TWD)), shows the TWD at Hong Kong and Shenzhen, where COVID cases have hampered port productivity dramatically this month, at 1.5 million days as of March 23, versus around 500,000 days two months ago.

Otto Schact, executive vice president of sea logistics at Kuehne+Nagel, warned that these delayed vessels will cause problems at their destination ports in the coming weeks. “The increased TWD will have an effect on lead times, inventory,” Schact warned.

March 28: Shanghai Goes into Lockdown – Splash

On March 27, China announced Shanghai would enter a staggered lockdown, starting on March 28, marking the biggest city-wide lockdown in the People’s Republic since the COVID outbreak began more than two years ago.

For shipping, congestion at the port – already very high – is expected to increase in the coming days, while overseas, terminals in Europe and North America will have to brace for an even larger whiplash effect when the city regains normal productivity – and comes as global supply chains absorb the fallout from a seven-day lockdown in Shenzhen to the south earlier this month.

The authorities have decided to split Shanghai in half using the Huangpu River for the new two-part lockdown. Pudong, the eastern part of the city, is in lockdown from Monday through to Friday as mass testing gets underway, while the western area, Puxi, will lock down between April 1 and 5.

March 29: Maersk Warns Shanghai COVID Lockdown Will Increase Shipping Costs Further – gCaptain

Maersk said the Shanghai lockdown will severely hurt trucking services and increase transport costs, as China’s intensifying efforts to fight the spread of COVID-19 further rattle global supply chains.

While it has kept its airports and deepwater port open, the city has imposed stringent movement curbs, barring unapproved vehicles from streets and telling millions of people not to leave their homes.

“Trucking service in and out (of) Shanghai will be severely impacted by 30% due to a full lockdown on Shanghai’s Pudong and Puxi areas in turn until 5th April,” Maersk said in an advisory on March 28.

“Consequently, there will be longer delivery time and a possible rise in transport costs such as detour fee and highway fee.”

 

 

Air

March 1: Ukraine Crisis Creates Logistics Headaches for Air Cargo, Airlines – American Shipper

Airspace restrictions from the economic war between the West and Russia over the invasion of Ukraine is adding logistical complexity and cost for the air cargo sector and passenger airlines still coping with COVID-related ups and downs in business activity. The conflict is also driving up the price of fuel, which represents a quarter or more of airlines’ cost base.

The European Union, Canada, the United Kingdom, and Baltic and Nordic states in recent days have barred all Russian-owned, -registered and -controlled aircraft from overflights of their territories. Russia has responded, banning three dozen airlines from its airspace.

The new rules will require carriers to take more circuitous routes to avoid airspace around Russia, as well as Ukraine, Belarus and Moldova, to avoid the possibility of accidental missile strikes.

Routes over Russia between Asia and Europe are optimal for many airlines in terms of the shortest flying time and fuel consumption. Swinging north, or more likely, south through the Middle East and up into Southern Europe will be less efficient but can be done by many carriers without too much difficulty, according to air logistics professionals.

Some airlines are cancelling flights because of the additional transit times while they figure out how to adjust to the new circumstances.

March 4: Long Flights, Grounded Fleets: How the War in Ukraine Could Alter Heavy Airfreight Capacity – Supply Chain Dive

Airspace restrictions due to the war in Ukraine could further limit options for shippers looking to transport large cargo.

Canada, the U.S. and the European Union have closed their airspace to aircraft from Russia. These restrictions add further pressure to an already tight airfreight market.

“The destruction / grounding of the world’s Antonov fleet will render oversized project cargo shipping by air impossible, imposing major costs and delays on a huge range of industries, most notably the energy sector,” Flexport CEO Ryan Petersen said on Twitter.

March 8: Hong Kong Air Cargo Hit by Massive Reduction in Trucking from Mainland – The Loadstar

The southern China air freight market has changed “dramatically” as COVID rages in Hong Kong, severely impacting the local trucking market to and from the mainland.

Forwarders estimate there is a 70% cut in truck capacity, further diminishing Hong Kong’s air export market.

“Cross-border trucking has been impacted a lot, mainly due to truckers being found positive with Omicron, reducing manpower by 70% in this area,” said one forwarder.

March 10: U.S. Airlines Begin to Cut Flying as They Grapple with Fuel Costs – American Journal of Transportation

U.S. airlines have begun paring flight plans due to soaring fuel prices, underscoring the speed at which Russia’s attack on Ukraine has upended the industry and jeopardized a hoped-for rebound this year.

The industry concern is that exorbitant gasoline prices could sap consumers’ spending power and lead to slower demand for vacations and other leisure pursuits. Higher prices also raise costs for airlines, making it difficult to maintain profits if they can’t pass the expenses along to customers.

March 11: China Looking to Divert Flights from Shanghai as COVID Surges – American Journal of Transportation

China has discussed diverting international flights away from Shanghai to other cities, as the financial centre’s growing omicron outbreak puts pressure on quarantine hotels and isolation facilities, according to people familiar with the matter.

The country’s aviation authority asked airlines to nominate alternative ports of arrival for Shanghai flights, the people said. Passenger routes from Hong Kong won’t be affected, they said.

Officials cited stretched capacity at the quarantine hotels all travelers into China are required to isolate in, and concerns that space may be needed if the outbreak in Shanghai worsens. China isolates all virus cases, including those in the community, as part of its COVID Zero policy.

The diversion may last for as long as six weeks, and could come into force as soon as mid-March, though it is still under consideration, according to one of the people.

March 21: WestJet Cargo and the GTA Group Announce Partnership to Better Serve Canada’s Express Cargo Market – press release

WestJet Cargo and the GTA Group have announced a long-term partnership that will support the expansion and growth of domestic cargo opportunities for both businesses. Beginning in 2022, WestJet Cargo will partner with the GTA Group to increase shipping capacity using four dedicated 737-800NG freighters operated by WestJet, to fulfill overnight express cargo service out of WestJet’s Toronto hub.

“WestJet Cargo will bring customers new competitive options, and together with GTA we will disrupt the industry, providing more air freight capacity to domestic cargo customers who depend on reliable and on-time performance,” said Charles Duncan, Executive Vice-President, Cargo.

March 28: WestJet Making Final Preparations to Deploy Modified 737-800s for Freight Customers – American Shipper

Canadian shippers with express delivery needs will have more air cargo capacity to choose from this summer when WestJet launches its stand-alone freighter division.

WestJet plans to take delivery in Calgary of its first used Boeing 737-800 aircraft converted for cabin cargo within a week and have two aircraft in revenue service by July 1 or sooner, said Charles Duncan, executive vice president of cargo.

Operating from a base at Toronto Pearson International Airport, WestJet Cargo intends to start with limited charter work, transition to regular, scheduled flights between major cities within Canada and eventually blend in ad hoc charters and transborder flying to the U.S. and Caribbean, especially on weekends and other off-peak periods, he explained.

March 29: Cargo Airlines Cancel Flights as Shanghai Enforces COVID Lockdown – American Shipper

The staggered lockdown of Shanghai to contain the biggest wave of COVID-19 since the early days of the pandemic is quickly crimping the movement of air cargo.

City officials shut down the eastern half of the city on March 28 through April 1 and told people on the western side to quarantine at home or compounds from April 1 to 5 while they conduct mass testing. With no public transport and people stuck at home, manpower shortages are hindering manufacturing and logistics activity. Many factories and warehouses have closed, getting goods to and from local airports is difficult because few trucks are available and airports have limited staff to handle cargo, according to logistics companies operating in China.

Both Shanghai Pudong airport and Shanghai Hongqiao city airport are running, but with very limited capacity and mostly for passenger flights.

 

 

Rail

March 16: CP Issues 72-Hour Notice to Lock Out TCRC-Train & Engine Employees – press release

Canadian Pacific Railway has issued 72-hour notice to the Teamsters Canada Rail Conference (TCRC)-Train & Engine of its plan to lock out employees at 00:01 ET on March 20, if the union leadership and the company are unable to come to a negotiated settlement or agree to binding arbitration.

“For the sake of our employees, our customers, the supply chain we serve and the Canadian economy that is trying to recover from multiple disruptions, we simply cannot prolong for weeks or months the uncertainty associated with a potential labour disruption,” said Keith Creel, CP President and CEO. “The world has never needed Canada’s resources and an efficient transportation system to deliver them more than it does today. Delaying resolution would only make things worse. We take this action with a view to bringing this uncertainty to an end.”

Over the past week, CP and the TCRC leadership have been meeting daily with federal mediators to reach a new negotiated collective agreement in hopes of avoiding a labour disruption. Despite those talks, the two sides’ positions remain far apart.

March 20: CP Canadian Network Shutdown

On March 17, the Teamsters Canada Rail Conference (TCRC)-Train & Engine provided CP with its 72-hour strike notice to be effective 00:01 ET on Sunday, March 20. CP had previously issued notice to the TCRC of its plan to lock out employees at 00:01 ET on March 20, if the union leadership and the company were unable to come to a negotiated settlement or agree to binding arbitration.

An embargo application for shipments routing to and from CP Canadian locations is in place effective 00:01 Sunday, March 20. This embargo applies to:

CP has issued a notice of force majeure related to the shutdown.

March 21: Canadian Pacific and TCRC-T&E Reach Agreement to Enter into Binding Arbitration and Return to Work

Canadian Pacific Railway and the Teamsters Canada Rail Conference (TCRC) – Train and Engine Negotiating Committee have agreed to enter into binding arbitration.

“This agreement enables us to return to work effective noon Tuesday local time to resume our essential services for our customers and the North American supply chain,” said CP President and CEO Keith Creel.

CP will immediately begin working with customers to resume normal train operations across Canada as soon as possible.

 

 

Trucking

March 7: CTA and PMTC Have Opposing Views on Delay of ELD Mandate

Canadian Trucking Alliance – CTA Expresses Concern with Government Moving Goalposts on ELD Enforcement

The Canadian Council of Motor Transport Administrators (CCMTA) announced a delay in enforcement of the ELD mandate from June 2022 to January 2023.

The Canadian Trucking Alliance (CTA) is very disappointed by this announcement and has reasonable doubts that the new January date is certain, from a national perspective, based on the lack of legislative preparedness of four jurisdictions.

To enforce the federal mandate, each jurisdiction needs to have its own law on the books. Currently, four provinces are still without the required legislation or regulations in place to successfully transition their industries to ELDs – British Columbia, Quebec, Nova Scotia and Newfoundland.

Waiting for all jurisdictions to be ready, whenever that may be, in the name of ‘national unity’ is not in best interest of public safety or the trucking industry, which has already made the proper investments to comply with the ELD mandate. The vast majority of federally regulated fleets already have ELD technology in their fleets and the three certification bodies approved by Transport Canada and the Standards Council of Canada have qualified multiple ELD offerings, totaling 22 devices from 15 individual ELD vendors.

“There should be no more moving the goalposts on dates and no more delays. The time to finally start this important safety regime is past due,” said CTA president Stephen Laskowski.

Private Motor Truck Council of Canada – PMTC’s Position on CCMTA Federal ELD Enforcement Timelines Announcement

The PMTC is in favour of the delay of full enforcement of the ELD mandate. While we have always been in full support of the ELD regulation, the continued issues with a lack of approved devices have continued to plague the mandate, and although we now have 22 approved, industry has not been provided enough of a runway to select a device of their choice and implement it into their fleet in time for the June 12th deadline. We are also waiting for a PKI vendor and system to be announced by Transport Canada that allows for ELD data to be transferred securely from the device to enforcement personnel, as well as enforcement protocols, training and how the regulation will be enforced uniformly between jurisdictions.

This final delay provides enough time for industry to select a new approved device, or transition from their current device, in time to comply with the mandate, as well as provide enough time for regulators to address some of the issues mentioned. I suspect this will be the last delay in full enforcement we can expect to see, and carriers should ensure they are fully prepared to comply by January of 2023.

March 16: Canada’s Trucking Spot Market Continues Record-Setting Load Growth – Today’s Trucking

Canada’s spot market continues to offer an abundance of loads, “with no signs of slowing down any time soon,” according to Loadlink Technologies.

February volumes were up 171% year over year, and even beat January’s record highs by 21%.

Truck capacity tightened, with a truck-to-load ratio of 0.63, a 76% decline from last February’s 2.61 trucks per load. Single-day load volumes reached an all-time high in February, Loadlink reported, noting there was a heavy strain on inbound capacity.

March 31: B.C. In-Transit Process

On November 14th, 2021, British Columbia was subject to an unprecedented “atmospheric river,” which resulted in flooding and mass wasting events in various parts of the province. Through collaboration with partners from U.S. Customs and Border Protection (CBP) and other government departments and agencies in the U.S. and in Canada, the Canada Border Services Agency (CBSA) implemented a domestic in-transit emergency protocol to support the supply chain and emergency goods needing to move through the U.S. to reach destinations in Canada due to road closures in B.C.

The U.S. and Canada exercised a facilitative approach to these movements to ensure expedited availability of these goods during the emergency. The objective remained facilitative while not compromising safety and security for over 4,500 passages. As of December 21, 2021, all of the major routes into B.C. were restored and traffic resumed.

Based on consultations with trade chain partners and U.S. CBP counterparts, the temporary measures developed expire as of March 31 at 12:01 am PDT.

 

 

CIFFA Advocacy, Communications, Activities

March 4: CIFFA Sends Letter Regarding Prospect of Rail Service Interruption at CP Rail to Relevant Federal and Provincial Ministers

On March 4, CIFFA sent a letter – on behalf of the 20,000 employees working in Canada’s freight forwarding industry – to express alarm at the prospect of a rail service interruption at CP Rail, indicating that a significant disruption in rail services would be a catastrophic additional blow while supply chains remain severely impacted by COVID-19 and the resulting chaos in marine and tertiary transport.

March 11: 32 Business Associations, Including CIFFA, Write to Federal Ministers, Urging the Government’s ‘Full Attention’ on CP/Teamsters Negotiations

Thirty-two Canadian business organizations sent a letter on March 11 to Canada’s Ministers of Labour; Transport; Innovation, Science and Industry; International Trade, Export Promotion, Small Business and Economic Development; Agriculture and Agri-Food; and Natural Resources, urging the federal government to “do what is best for Canada’s economy and facilitate a negotiation between CP and the Teamsters Canada Rail Conference.

“While we support the right to collective bargaining,” they said, “this issue requires the government’s full attention to preserve jobs and protect Canada’s economy.”

March 21: Response from Employment and Social Development Canada to CIFFA Letter Regarding CP–TCRC Collective Bargaining

In response to a letter from CIFFA about the potential work stoppage at CP, Gary Robertson, Assistant Deputy Minister, Compliance, Operations and Program Development – Labour Program at Employment and Social Development, sent the following email message.

On behalf of the Honourable Seamus O’Regan Jr., Minister of Labour, I am responding to your correspondence about collective bargaining between the Canadian Pacific Railway and the Teamsters Canada Rail Conference.

Thank you for writing. Please be assured that the Government of Canada recognizes the importance of the Canadian Pacific Railway to Canadians and businesses. Federal mediators have been appointed and are assisting the parties in their negotiations. The Government of Canada cannot comment further at this time.

Maritime

February 3: Bipartisan Ocean Shipping Overhaul Introduced in U.S. Senate – BNN Bloomberg

The first major update of U.S. international ocean-shipping laws in more than two decades was introduced in the Senate on February 3, a significant step toward passage after passing the House with bipartisan support in December.

Republican Senator John Thune of South Dakota and Democratic Senator Amy Klobuchar of Minnesota introduced the Ocean Shipping Reform Act Thursday, which they say will ease the problem of agricultural exports sitting at ports while ocean carriers return to Asia with empty containers.

“Congestion at ports and increased shipping costs pose unique challenges for U.S. exporters, who have seen the price of shipping containers increase four-fold in just two years. Meanwhile, ocean carriers have reported record profits,” Klobuchar said in a statement.

The House version of the bill, sponsored by California Democrat John Garamendi and North Dakota Republican Dusty Johnson, was approved by an overwhelming majority in December.

February 7: Price of Ship Fuel Surging, Poised to Eclipse All-Time High – American Shipper

It should come as no surprise: Just as you’re paying a lot more for gasoline at the pump, ship operators are paying a lot more for marine fuel. In fact, average marine fuel prices are rising even faster than landside fuel prices. They’re now just a few dollars shy of all-time highs, with a new record seemingly imminent.

That’s bad news for shipowners, and to the extent fuel cost is passed on, bad news for cargo shippers, and, ultimately, those who buy imported goods.

The majority of cargo ships burn 0.5% sulfur fuel known as very low sulfur fuel oil (VLSFO). As of February 4, Ship & Bunker estimated that the average VLSFO price at the top 20 bunker ports had risen to $731.50 per ton, up 55% year on year. The national average gasoline price rose 40% over the same period, according to AAA.

February 9: Maersk Forfeits More Freight Forwarder Business to Pursue Long-Term Deals – American Shipper

Maersk executives on February 9 revealed new details on the carrier’s burgeoning long-term contract business.

Ocean carriers have traditionally split business down the middle: around half short-term spot deals, half long-term contracts. Maersk continues to separate itself from the pack, focusing on more long-term contracts of ever-longer durations.

The proportion of Maersk’s long-haul volumes covered by long-term contracts jumped from 50% in 2020 to 65% in 2021. This year, the share will rise to 70%.

On previous quarterly calls, A.P. Moller-Maersk CEO Soren Skou has referred to a rising share of multiyear contracts, for terms of up to three years. On Wednesday’s call, there was talk of contracts lasting up to a decade.

February 15: Vancouver Fraser Port Authority Gateway Infrastructure Fee 2022 (GIF2022) – Notice of Fee Implementation

The Vancouver Fraser Port Authority Board of Directors has approved proposed fee amendments that will take effect on May 1.

Anyone interested in making a written representation to the VFPA on the subject of the proposed fee may do so prior to April 15.

February 15: MSC, Maersk End Transpacific Cooperation with SM Line – Offshore Energy

The 2M Alliance partners, Maersk and Mediterranean Shipping Company (MSC), have ended their strategic cooperation with South Korean shipping company SM Line on the transpacific route.

“The slot swapping agreement between SM LINE and the 2M alliance partners on Asia to USA West Coast services will end with effect from May 8, 2022,” said MSC. “Consequently, MSC will cease the slot agreement with SM Line commercialized by MSC as the Rose service.”

The company added that current services covered by MSC, and those of the 2M network, will offer alternative coverage.

February 17: Forwarders Look to Shipper-Owned Containers to Boost Reliability – The Loadstar

With the pressure on equipment capacity showing no sign of abating, freight forwarders are increasingly turning to “shipper-owned containers (SOCs)” to minimize the risk associated with port congestion and potential penalties, amid COVID-induced supply chain dysfunction.

A study by Container xChange, a digital platform for equipment management, has found that the level of the top 50 forwarders accepting SOC requests had risen sequentially from 6% in 2019 to 18% in 2021, a three-fold change.

SOCs are the units typically placed by a shipper with the container line for cargo booked by them directly, or through a forwarding agent. These boxes come in the form of outright ownerships or leased arrangements.

February 21: Empty Container Avalanche Predicted to Cause Chaos Later This Year – Splash

When global supply chains snap back to some form of normality – widely tipped to be in the second half of the year – transport operators will have to brace for a new headache, with an avalanche of empty containers predicted to cause some chaos.

The delays in the supply chain during the pandemic have led to the need for additional containers to be used. When the supply chain normalizes, this will potentially create a pile of 3.5 million TEU of empty containers from the transpacific alone, according to a new report from Denmark’s Sea-Intelligence.

February 22: Ransomware Attack Hits Jawaharlal Nehru Port Container Terminal – The Loadstar

A suspected ransomware attack has knocked out the management information system at Jawaharlal Nehru Port Container Terminal (JNPCT), one of five marine facilities in India’s top container gateway of JNPT (also known as Nhava Sheva).

The attack was detected on February 21.

JNPT has not issued any official updates on the source and type of the attack, but JNPCT had one of its scheduled vessels divert to a nearby terminal after it abruptly stopped accepting vessels alongside.

The other private terminals at JNPT are operating normally, according to port sources.

February 22: Omicron Ripping Through Cargo Ships May Exacerbate Shipping Woes – BNN Bloomberg

Omicron is ripping through cargo ships, raising concerns that a surge in cases, coupled with China’s tightened quarantine requirements for vessels, could delay supply chain stabilization for the shipping industry.

COVID outbreaks are hitting ships globally, with cases increasing “exponentially,” said Francesco Gargiulo, CEO of the International Maritime Employers’ Council Ltd. Anglo-Eastern Univan Group, which has an active crew of about 16,000, is seeing infections on five to seven vessels a month compared with only one or two a month last year, the company said. Meanwhile, Wilhelmsen Ship Management Ltd. has had infections on four of its ships since January after less than a dozen vessels were struck with COVID in all of 2021, said Carl Schou, CEO at the ship manager.

February 24: Prince Rupert Port Seeking to Double Capacity Through the Addition of a Second Container Terminal – PRPA press release

DP World and the Prince Rupert Port Authority have entered into a two-year agreement to assess the feasibility of a new container terminal project in Prince Rupert. The potential project would add up to 2 million twenty-foot equivalent units (TEUs) of annual capacity to the Port of Prince Rupert, significantly increasing Canadian trade capacity with critical Asia-Pacific markets, with considerable potential employment and economic impacts that will bolster the western Canadian economy.

The proposed terminal represents the continued advancement of the Prince Rupert Port Authority’s container terminal master plan done in 2019, which outlined the potential for an additional container terminal, south of the existing Fairview Terminal. With this agreement, DP World and the Prince Rupert Port Authority will begin various studies on the proposed site, with a key focus on steps required to minimize environmental and community impact, improve the resilience of Canadian supply chains, and ensure the project’s full integration into the Port’s intermodal ecosystem.

February 25: Shippers Prepare as Ukraine Crisis Prompts Emergency Fuel Surcharges – The Loadstar

Shippers are bracing for a raft of emergency bunker surcharges from ocean carriers, as oil prices hit eight-year highs.

Following Russia’s invasion of Ukraine, the price of crude oil has soared to its highest level since 2014, to more than $105 a barrel, with analysts predicting $130 within weeks.

Meanwhile, Rotterdam-sourced low-sulphur fuel oil (LSFO) spiked on February 24 by more than $30, to $731.50 a ton, a 40% increase since December.

The Loadstar understands an emergency BAF was being considered by carriers before the events of this week, but according to a carrier source, the “die is now cast” on surcharge hikes.

“Many of our contracts have a BAF calculator built in, but for our spot and short-term deals, we have no option but to try to recover as much of the extra cost as possible,” he said.

February 28: Suez Canal Tolls Rise – Container News

Egypt’s Suez Canal Authority announced on February 27 that it will increase canal tolls by up to 10% for laden and ballast vessels.

The toll increase is effective from March 1, according to the Suez Canal Authority, which said the decision is “in line with the significant growth in global trade, the improvement of ships’ economics, the Suez Canal waterway development and the enhancement of the transit service.”

February 28: Barge Delays on Northern European Waterways Surge to Highest Peak in Years – The Loadstar

Congestion along Antwerp and Rotterdam’s inland waterways has surged to its highest peak in several years, leaving users stranded.

Wait times at Antwerp more than doubled over the past week, from 44 hours to 94, according to the latest figures from Contargo, while congestion at Rotterdam was up by more than 50%, to 128 hours.

 

 

Air

February 5: COVID-19 Cases among Staff, CNY Holiday Lead to Cargo Being Stuck at Singapore’s Changi Airport – The Straits Times

A triple whammy of COVID-19 infections among airport staff, a surge in shipments and the Chinese New Year holiday have led to severe delays in the processing of cargo at the usually efficient Changi Airport terminals.

Containers that usually take hours to process have been taking days for the past two weeks, freight forwarders said.

In a statement on February 5, a spokesman for Sats, the airport’s chief ground handler for airfreight, confirmed the build-up of cargo.

“Sats has deployed additional manpower from other parts of its operations to alleviate the situation and 70 percent of the backlog has already been cleared,” the spokesman said, adding that cargo import operations are expected to return to normal by February 8.

Ships waiting for urgent parts brought in by airfreight are also marooned at Singapore’s ports, while others are staying behind schedule to receive their shipments.

February 28: Air Canada Will Add 3 Freighters in 2022 to Diversify, Maintain Cargo Growth – Supply Chain Dive

The COVID-19 pandemic cratered air travel demand, and airlines are still struggling to climb back to their pre-pandemic passenger activity levels. Cargo operations, meanwhile, have been a bright spot for the industry, including Air Canada.

The airline operated 10,217 cargo-only flights in 2021, more than double the 4,235 it operated the year before, according to its financial results. Passenger travel remains Air Canada’s larger source of revenue, but YoY passenger revenue growth (3%) was easily outpaced by its cargo business (63%) in 2021.

The use of converted passenger aircraft, which have seats removed from the passenger cabin to free up cargo space, buoyed these results. Air Canada plans to have all converted aircraft back in passenger configuration by the end of 2022, Executive VP and CFO Amos Kazzaz said.

However, the airline still expects to benefit from increased air cargo demand through the use of its new dedicated freighters. Air Canada is also investing $16 million to bolster its cold chain handling capabilities at its Toronto Pearson International Airport cargo facility.

 

 

Rail

February 23: Chicago Suburbs Protest Planned CP-KCS Merger – FreightWaves

Eight Chicago suburbs are seeking to prevent the merger between Canadian Pacific and Kansas City Southern from happening, saying that the additional traffic coming from the merger would create more gridlock from blocked crossings and could cause environmental harm to their communities.

Local officials say they will collectively file their objections with the Surface Transportation Board next Monday. Their communities run along the Milwaukee District West line of Chicago commuter rail service Metra, which operates on tracks that are part of CP’s Elgin subdivision.

Shareholders of CP and KCS approved the $31 billion deal in December, and the merger is now before STB for review.

 

 

Trucking

February 1: Kenney Calls for Calm at Alberta Border Blockade after Some Protesters Breach Police Barriers – CBC News

Officials are calling for cooler heads to prevail after a trucker blockade – which began on January 29 at the Canada-U.S. border in southern Alberta – grew violent on February 1.

“This kind of conduct is totally unacceptable,” said Premier Jason Kenney.

The protest of trucks lined up in front of the border checkpoint has halted all traffic. The Coutts crossing is the primary conduit for an estimated $6 billion in exports from Alberta to the United States, according to the premier.

The demonstration is tied to an ongoing, nationwide protest over federal rules for unvaccinated or partially vaccinated truckers entering Canada from the U.S. The rules took effect Jan. 15.

Kenney said about 100 individuals are preventing thousands of truckers from doing their job of delivering food, goods and medicine to Albertans and Canadians, emphasizing that blocking a key piece of infrastructure is against the law.

February 3: Breakthrough in Alberta Border Blockade, Lanes Open in Both Directions – CTV News

There has been a breakthrough to resolve the impasse at a protest blockade at the United States border in southern Alberta.

Chad Williamson, a lawyer representing truckers blocking access to the border crossing at Coutts, Alta., says they have spoken with Mounties and agreed to open some blocked lanes.

Williamson says the protesters are starting to feel they have been heard, “but this isn’t over.”

Trucks and other vehicles have begun clearing two lanes – one going north and one going south.

“This is a sign of optimism,” said Cpl. Curtis Peters of the Alberta RCMP, “but is not an end to the police presence here.” Work is continuing to clear the road completely, he said.

February 5: No End in Sight to Ottawa Protests, Not Enough Resources, Says Police Chief – CBC News

Ottawa’s chief of police says he does not have enough resources to end the turbulent protests launched in the nation’s capital more than a week ago – nor can he say when they might come to an end.

“We need an additional surge of resources,” Chief Peter Sloly said Saturday, even though every available Ottawa Police Service (OPS) officer is on active duty and hundreds of other law-enforcement officials have come to help.

More than 7,000 demonstrators came into the downtown on February 5, according to police, and 500 heavy trucks still remain in the so-called “red zone.”

February 8: Second Day of Ambassador Bridge Protest Halts Vehicles from Leaving Michigan, Limits Windsor to U.S. Traffic – CBC News

People protesting pandemic restrictions and lockdowns are preventing vehicles from using the Ambassador Bridge for a second day, with traffic halted from Michigan to Windsor, Ont., and limiting traffic to the U.S.

The bridge is one of the busiest international land border crossings in Canada and a major route for transport trucks.

On February 8, protest cars and trucks are lining Windsor’s Huron Church Road, the main road connecting Highway 401 to the bridge. Police are asking people to avoid the area, which has been clogged since the afternoon of February 7.

February 9: Canada Border Protests Start Halting Detroit Auto Plant Production – NBC News

Traffic over the Ambassador Bridge has come to a virtual halt. Only a small number of trucks moved from Canada to Michigan on February 9. The situation at the Blue Water Bridge connecting Sarnia, Ontario, to Port Huron, Michigan, isn’t much better, with reported delays of at least 4½ hours.

The Chrysler Pacifica minivan plant became the first direct casualty. Officials with global automaker Stellantis temporarily halted production at the factory because it doesn’t have enough parts. Ford became the second manufacturer to take steps to deal with parts shortages.

“While we continue to ship our current engine inventory to support our U.S. plants, we are running our plants at a reduced schedule today in Oakville [Ontario] and our Windsor engine plant is down,” Ford said in a statement.

General Motors, Detroit’s largest automaker, confirmed late on February 9 that it had temporarily cut the second shift at a plant in Lansing, Michigan producing SUVS for the Buick, Chevrolet and GMC brands. Toyota also shut down production at three of its plants in Ontario due to parts shortages from the trucker blockade.

It could be a matter of hours before other automakers, domestic and foreign, have to take steps at assembly and parts plants within hours of the two bridge crossings.

February 13: Police Break Up Remaining Protest at Windsor’s Ambassador Bridge – CBC News

Officers from multiple police forces advanced on February 13 to clear out the remaining protesters and break up a days-long occupation near the Ambassador Bridge border crossing in Windsor, Ont.

Windsor Mayor Drew Dilkens said that, once police have the situation fully under control, the plan will move to figuring out how to properly reopen the roadway to the bridge.

A spokesperson for the Canada Border Services Agency said it was “working collaboratively with law enforcement partners to restore normal border operations at affected ports of entry as quickly as possible.”

February 14: Federal Government Invokes Emergencies Act for First Time Ever in Response to Protests, Blockades – CBC News

Prime Minister Justin Trudeau says he’s invoking the Emergencies Act for the first time in Canada’s history to give the federal government temporary powers to handle ongoing blockades and protests against pandemic restrictions.

“It is now clear that there are serious challenges to law enforcement’s ability to effectively enforce the law,” said Trudeau.

“It is no longer a lawful protest at a disagreement over government policy. It is now an illegal occupation. It’s time for people to go home.”

Trudeau said the measures will be geographically targeted and “reasonable and proportionate to the threats they are meant to address.”

The unprecedented deployment of the Emergencies Act gives police more tools to restore order in places where public assemblies constitute illegal and dangerous activities, such as blockades and occupations, he said. Trudeau said the act also will enable the RCMP to enforce municipal bylaws and provincial offences where required.

February 14: Trucking Rates Between U.S., Canada Soar on Trade Blockade – Bloomberg

The trucker blockade at the U.S.-Canada border has ended but efforts to tally the economic costs are still under way.

The disruptions added costs to already-elevated charges for freight between the U.S. and its largest trading partner. According to data from Truckstop.com, spot market rates for flatbed, refrigerated and van categories rose between January 2 and February 5 for all loads going to and from Canada.

February 15: Canada’s Spot Market Load Volumes ‘Literally Off the Charts’ – Today’s Trucking

Canada’s spot market is so strong, freight volumes are off the charts, according to Loadlink Technologies, which had to adjust its reporting charts to accurately reflect January volumes.

Loads surged 154% year over year, marking the best January on record by an additional 14%. Shipments from Canada to the U.S. were nearly three times higher than a year ago.

Meanwhile capacity is tight, with just 0.93 trucks posted per load.

“Combining the current truck shortage with the huge surge in loads only compounds the capacity constraints,” says Claudia Milicevic, president of Loadlink Technologies. “Truck-to-load ratios are even lower than the record low capacity crunch that temporarily ensued following the electronic logging device (ELD) mandate in the U.S. close to five years ago.”

February 23: MTO Grounds Trucking Businesses Involved in Illegal Occupation in Ottawa – Today’s Trucking

The Ontario Ministry of Transportation has effectively shut down 39 trucking businesses in the wake of a crackdown on so-called Freedom Convoy protesters.

The ministry confirmed that 12 suspension and seizure orders were issued to Ontario-based large truck operators involved in the protests, suspending their operating authority throughout Canada, and issuing an order to seize all the plates registered to them.

Twenty-seven seizure orders were issued to large truck operators from outside the province, banning them from operating any commercial motor vehicle in Ontario.

The names of the sanctioned businesses, as well as the number of affected trucks, were not revealed.

 

 

CIFFA Advocacy, Communications, Activities

February 1: CIFFA Issues Paper: 10 Best Cybersecurity Practices in 2022 – CIFFA’s Resources webpage

CIFFA’s Technology Committee has issued a guide for Canadian freight forwarders, 10 Best Cybersecurity Practices in 2022.

The committee drew on the expertise of several members, as well as significant research, to compile this top 10 list. Members that put some or all of these practices in place should significantly increase their cybersecurity.

Maritime

January 4: Ningbo Lockdown Measures Tightened – Splash

A notice from Ningbo Customs has detailed a business emergency response mechanism with changes to some customs clearance and inspection operations in locked-down Beilun district, an area of the city that houses some of the busiest container terminals.

Freight forwarder Shapiro reported that a container depot that is located in the lockdown area has suspended operations.

The port’s average daily container throughput is more than holding up thus far. From January 1 to 3. daily throughput exceeded 97,000 TEU, up 8.5% year-on-year.

“The heightened restrictions could result in production disruptions, including short-term delivery and order fulfillment delays, at factories in the affected areas of Beilun District. Processing delays and shipping disruptions are possible at the Ningbo Port; however, officials have issued passes for permitted truck drivers to enter closed locations and designated ‘greenways’ for container vehicles to access the port area,” an update from risk management consultants Crisis24 stated.

January 5: FMC Stepping Up Its Scrutiny of Liner Shipping – gCaptain

In an end-2021 flurry of activity, the U.S. Federal Maritime Commission (FMC) issued Orders of Investigation into both the Ocean Network Express (ONE) and Wan Hai Lines. In each case, a written response is required within 25 days.

Hearings will be held within six months, presided over by an Administrative Law Judge who has the power to impose monetary penalties, if a violation of the law is found to have occurred.

The investigation into ONE stems from a late-2020 inquiry into carriers’ practices regarding bills of lading. An NVOCC not listed on the bills of lading arranged for a shipment of lumber cargo from Brazil to Houston. For unspecified reasons, the cargo sat on the dock in Houston from November 2018 into January 2019, and it seems that ONE then charged detention to the NVOCC and brought a lawsuit in Federal District Court in an effort to collect it. The FMC investigation will look closely at “privity” on bills of lading.

The investigation into Wan Hai will look into practices of carriers concerning the return of empty containers, and detention charges when the boxes are not turned back to the carriers. According to the FMC’s complaint, Wan Hai charged cargo interests for detention nearly two dozen times during the spring of 2021, when the jammed-up terminals at southern California ports were unable to accept returns of containers.

January 6: UK Freight Forwarding Association Lashes Liner Conduct – Splash

The British International Freight Association (BIFA) has written to the UK government asking it to investigate the state of competition within the current container shipping market, the latest in a wave of liner complaints sent to governments around the world during a period of record earnings for carriers and the poorest schedule reliability in the history of containerization.

The UK’s main trade association for freight forwarding and logistics companies says that its members are concerned that certain practices undertaken by the principal container shipping lines, as well as easements and exemptions provided to them under competition law, are distorting the operations of the free market to the detriment of international trade.

January 7: New Year Brings New All-Time High for Shipping’s Epic Traffic Jam – American Shipper

The holiday rush may be over, but the offshore traffic jam of container ships is still getting worse, and the volume of inventory on the water is still increasing.

As 2022 begins, import volumes remain very strong ahead of China’s Lunar New Year holiday, concerns are mounting about omicron-induced dockworker shortages at U.S. terminals, and the number of container ships waiting for berths in Southern California has – yet again – hit a new high.

January 7: Shenzhen on Alert as More COVID-19 Cases Crop Up – Splash

China’s whac-a-mole approach to containing COVID-19 is seeing restrictions rushed in at many more important hubs across the country as the nation struggles to contain more contagious variants spreading.

Two COVID-19 cases in Shenzhen have seen local authorities usher in travel bans, making it difficult to leave the city, with more mass testing underway in the city’s Longgang district. Trucker availability at the key southern Chinese box port is likely to be hit by this latest outbreak.

January 7: Trucker Snarl in East China Hits Ningbo’s Container Shipping – American Journal of Transportation

A suspension of trucking services in several parts of East China’s Zhejiang province has slowed the transportation of manufactured goods and commodities through one of the world’s most important ports.

There are strict controls on trucks moving goods to or from the Beilun district in Ningbo after the discovery of several cases of COVID-19 in the area, shipping line A.P. Moller-Maersk A/S said in a Thursday customer advisory. This suspension, along with restrictions on truckers in some areas in and around Zhejiang, has halted operations at some yards and warehouses at Ningbo port.

January 13: Shipping Congestion Is Growing at Shanghai Port – Yahoo Finance

Ships looking to avoid COVID-induced delays in China are making a beeline for Shanghai, causing growing congestion at the world’s biggest container port.

Shipping firms are making the switch to avoid delays at nearby Ningbo, which suspended some trucking services near that port after an outbreak of COVID-19, according to freight forwarders and experts. Ships are also rerouting to Xiamen in the south.

Those diversions are adding to the new wave of congestion facing China’s ports as an increasing number of cities deal with virus outbreaks. The strict testing of workers and truckers ahead of the Lunar New Year holiday at the end of this month is further stressing already strained supply chains.

January 18: Lines Hit with Collusion Charges in South Korea – Splash

In a landmark ruling that will be watched carefully by other jurisdictions around the world, South Korean authorities slapped fines on 23 containerlines, claiming they had been colluding together to keep rates high on certain intra-Asian tradelanes over a 15-year period.

A total of US$81 million in fines were levied against lines including HMM, Evergreen, Wan Hai, Cosco, OOCL, Heung-A, SM Line and Korea Marine Transport Co.

January 19: Maersk Space Ban: ‘A Dark Future’ for Small Forwarders – The Loadstar

Small freight forwarders fear for their survival following Maersk’s decision to offer them only its Maersk Spot product.

Larger forwarders have secured long-term contracts with other lines, but smaller forwarders are unable to follow suit.

“With Maersk, you can get spot rates only, which means you cannot plan a shipment, and we small players can never find a space with Maersk,” said one European company.

“The spot quote has a very short validity; it can expire on the same day if Maersk runs out of space, and it is not valid on the next vessel. How can we work in a such way?”

January 20: Forwarders Fear ‘Shut-Out’ as Other Major Lines Emulate Maersk Strategy – The Loadstar

Increasing numbers of forwarders claim they are being “shut out” by shipping lines that appear to be focusing on very large forwarders and BCOs. There is suspicion that several European carriers are looking at a similar approach to that of Maersk.

“We’re getting the feeling and feedback from individual sources that this is the case,” one U.S. forwarder executive said.

He said none of the shipping lines had made a clear statement that it intended to leave out forwarders in the future, but problems with bookings – being told that there is no available space, or elevated pricing that renders a shipment unviable – had raised suspicions.

Another forwarder said: “We are facing up to the fact that the Maersk decision is the first step for shipping lines. “The problem we are facing is that the carriers are offering big players … long-term contracts with special conditions, and that strategy is immediately impacting smaller and mid-size forwarders worldwide, because those kind of contracts are not within our reach.

“Those contracts are dealt with at the headquarters of the big players, dealing with big volumes and dismissing our local volumes.”

January 21: Forwarders Have to Turn Away Large New Customers Thanks to Capacity Squeeze – The Loadstar

Some mid-size forwarders are rejecting new larger customers, having been forced to adapt their business model to accommodate the contract ban from Maersk and the reluctance of other shipping lines to offer much capacity.

Maersk’s move to restrict them to its Spot product only is said to have left some “4m TEU looking for a new home,” according to one source.

One medium-size forwarder said it was forced to adapt quickly to the new status quo after “Maersk outlined its intentions fairly clearly, so we started talking to other carriers.”

It added: “But it has pushed the market. Until now most of us have searched for new business with sizeable volumes. But now, with the long-term contracts, it’s quite stagnant. We won’t look for new business because there isn’t the capacity.”

January 21: Yantian Restricts Container Entry to Ease Overflow – Splash

With containers overflowing in and out of its borders, the operators of Yantian terminal, the largest port facility in Shenzhen, have from January 21 ruled that full containers can only be trucked in four days before vessels are due to berth.

Shenzhen, the world’s fourth largest container port, is suffering from severe congestion just ahead of the Lunar New Year holidays, exacerbated by recent COVID-19 outbreaks that have seen parts of the city forced into lockdown. Ships arriving at Yantian are currently having to wait around one week for a berth space.

January 21: Asia-U.S. West Coast Spot Rates Spike Ahead of Chinese New Year – gCaptain

Container spot rates from Asia to the U.S. west coast spiked last week, ahead of the Chinese New Year holiday on February 1.

Drewry’s WCI U.S. west coast component put on 5%, to $11,197 per 40ft, while the Freightos Baltic Index (FBX), which includes an element of premium fees, gained 3.5%, to $15,139.

For the U.S. east coast, there were mixed messages from the spot indices, with the WCI up 2% on the week, to $13,987 per 40ft, in contrast to the FBX reading, which declined 2.5%, to $17,023.

In a customer advisory, Maersk said there could be enough labour available to keep production ticking over during the CNY holiday and thus would not be reducing services in the immediate post-CNY period.

January 27: Halifax Port Authority to Undertake 3-Year Pier A-1 Infilling Project – press release

The Halifax Port Authority (HPA) is preparing to begin infilling the basin between Piers A-1 and B at Ocean Terminals located at the Port of Halifax. This project is expected to start in May 2022.

To prepare for the project, Pier A-1, including Shed 33 and Shed 34, as well as the pier rail sidings, will no longer be available for access to general cargo operations beginning in May. The port is working with common port users to provide them with available options so they can transition to other available areas within the Port of Halifax and minimize the impact on their business. There is alternate terminal and shed space available at Ocean Terminals and Richmond Terminals.

The infilling is expected to take approximately three years to complete and will create an additional 3.2 hectares (approximately 8 acres) of yard space. The project will occur within the existing footprint of industrial cargo operations.

A Fisheries Act Authorization was granted in 2018 by Fisheries and Oceans Canada, and habitat offsetting will be implemented. Two hundred and sixty artificial reefs, also known as reef balls, will be installed as a method of marine environmental remediation.

The completed project is expected to improve overall efficiency and safety, and lead to more environmentally sustainable operations overall.

January 27: Schedule Reliability Dropped to Record Low at the End of 2021 – The Maritime Executive

Schedule reliability among the major container shipping lines hit a new low at the end of 2021 with the expectation being that, with continuing port congestion, there is unlikely to be a significant improvement.

New data from Sea-Intelligence shows that containerships’ ability to maintain published schedules reached the lowest level in the decade the analytics and advisory service has been tracking the industry.

“Schedule reliability dropped again, this time by 1.2 percentage points month over month to 32 percent, the lowest-ever global schedule reliability since Sea-Intelligence started the measurement in 2011,” notes Alan Murphy, CEO of Sea-Intelligence. “On a year-over-year level, schedule reliability was 12.5 percentage points lower.”

January 31: Long-Term Rate Increases Losing Momentum as Carriers Seek to Lock in BCOs – The Loadstar

There are signs that the exponential rise in long-term liner contract rates is losing steam after 14 consecutive months.

Ocean and air freight rate benchmarking platform Xeneta’s XSI long-term contract rate index fell 3.6% this month, following a decline of over 4% recorded in December.

The XSI decline could be a blip, but it could reflect carrier aspirations of signing up shippers to long-term deals.

 

Air

January 4: Flights Cancelled at Xi’an, with Worse to Come as Chinese New Year and Olympics Loom – The Loadstar

China’s ninth-busiest airport for cargo is still facing large numbers of flight cancellations following an outbreak of COVID in the city of Xi’an.

The government imposed a strict lockdown in mid-December and has since cut off most transport to the city.

The next eight weeks are expected to see some significant disruption in China: Not only will its “zero-COVID” policy lead to local restrictions, but with both the new year holiday and Beijing Olympics at the start of next month, the government is expected to crack down on transport. Forwarders said they expect few charter flights to be approved and restrictions on other flights, in particular into the capital.

January 21: 5G Doomsday Crisis Averted, Say FAA And Airlines – Forbes

Fears that the U.S. 5G rollout would cause widespread disruption to air travel have dissipated, with a collective sigh of relief from both the government’s aviation agency and airlines.

The Federal Aviation Authority (FAA) has approved 78% of the U.S. commercial aircraft fleet to perform low-visibility landings at airports where wireless companies deployed 5G in the C-band. The 13 cleared altimeters are found on a variety of commercial aircraft, including eight Boeing and eight Airbus models, as well as some Embraer 170 and 190 regional jets.

“The good news is we now have what should have been going on for quite some time, which is the manufacturers, the telecoms, the government agencies all sharing information that they need to make sure that this can be rolled out in a way that all Americans get 5G and all Americans know that their flights aren’t going to be impacted by that 5G,” said American Airlines CEO Doug Parker.

“It’s taken a while to get to the right spot, but I feel like we’re in the right spot,” Parker said. “I don’t think you’re going to see any material disruption going forward because of this.”

 

Rail

January 26: CN Names Robinson Its Next Top Exec, Reaches Agreement with TCI – Progressive Railroading

CN has announced Tracy Robinson will become its next president, CEO and a board member on February 28.

Robinson’s appointment follows the previously announced retirement of Jean-Jacques Ruest as president and CEO. Ruest will depart CN’s board on February 28, but remain at the railroad as an adviser until March 31 to ensure a seamless transition, CN officials said in a press release.

Robinson will join CN from TC Energy, where she is executive vice president, president of Canadian Natural Gas Pipelines and president of Coastal GasLink. Prior to TC Energy, Robinson spent almost three decades at Canadian Pacific. She has 35 years of operational management, strategy development and project execution experience to drive growth and profitability.

CN also announced it has reached a resolution agreement with CIFF Capital and TCI Fund Management (collectively TCI) that calls for CN and TCI to mutually agree on the appointment of two independent directors before CN’s 2022 annual general meeting. TCI agreed to withdraw its requisition for a special meeting of shareholders and to support the election of all CN director nominees at the 2022 and 2023 annual meetings.

 

Trucking

January 4: B.C. Flood Recovery Continues, but It’s Hardly Trucking as Usual – Today’s Trucking

Weeks after severe flooding wreaked havoc on B.C.’s road and rail network, round-the-clock repairs are bringing a sense of stability to carriers that haul freight in the province. As for normalcy, that’s something else entirely.

A lack of predictability remains the big problem, says Dave Earle, president and CEO of the B.C. Trucking Association (BCTA). “It’s getting better. It is one thing if you know a route is going to take you twice as long as before. The problem is, when you don’t know how long the route is going to take, it is awfully difficult to plan.”

Even when the timelines stabilize, the extra hours can upend traditional schedules and trip planning activities. A commercial run from the Fraser Valley to Kelowna used to take about six hours, so a rounder could be completed in a day. Now that takes 12 hours to do, the driver must overnight in the truck, and it takes 12 hours to return. “Instead of doing two loads in 12 hours, you are doing two in 36. It’s taking a lot longer,” Earle says.

January 7: CBSA and CBP Joint Updated Emergency Protocols in Response to Flood Situation in British Columbia, Canada

The CBSA and CBP issued on January 7 an update to the B.C. flood emergency protocols.

January 17: Port of Vancouver’s Ban on Trucks More Than 10 Years Old Delayed – Splash

After industry outcry, Canada’s Port of Vancouver has decided to postpone its Rolling Truck Age Program that was supposed to take effect on February 1. Trucks more than 10 years old will continue for an unspecified period to be admitted to the port.

“We have recently heard some concerns about our program start date from industry and Transport Canada, and we recognize that the pandemic, recent flooding, and on-going global supply chain issues may have created some short-term challenges for people looking to buy compliant trucks,” said Vancouver Fraser Port Authority VP Duncan Wilson.

“We are thus postponing our program start date slightly, to provide some additional time and engagement opportunities for industry, and to hopefully mitigate some of those challenges.”

January 18: B.C. Highways Continue to Reopen – Today’s Trucking

The Coquihalla Highway reopened to regular vehicle traffic between Hope and Merritt, B.C., on January 19.

Travel times between Hope and Merritt can be expected to take about 45 minutes longer than usual, due to reduced speed limits and temporary repairs that are in place, the Ministry of Transportation and Infrastructure warns.

The province is also lifting weight restrictions on Hwy. 99 between Pemberton and Lillooet, but is warning commercial truckers to avoid the route if possible, especially if they lack winter driving experience.

January 19: Vaccine Mandate or Not, U.S.-Canada Cross-Border Freight Rates Poised to Rise – FreightWaves

Since January 15, U.S. truckers who are unvaccinated or partially vaccinated against COVID-19 have been barred from crossing into Canada. A similar mandate is expected to hit Canadian drivers at the U.S. border on January 22. Already, the mandates are being blamed for a jump in rates.

But cross-border freight pricing was already poised to increase significantly by necessity. Increasing demand for consumer goods and tight capacity have collided with higher costs and a scarce supply of drivers and equipment.

Spot rates in January across multiple U.S.-Canada lanes have been 10% to 20% higher than a year ago, according to freight brokers. The big unknown: How many drivers will leave cross-border freight in response to the mandates and to what extent that will push rates higher.

January 23: ‘Freedom Convoy’ of Truckers Opposing Vaccine Mandate Leaves Metro Vancouver for Ottawa – Global News

Hundreds of B.C. truckers took to the road Sunday kicking off what they called a “freedom convoy” to Ottawa in protest of the federal government’s COVID-19 vaccine mandate for cross-border truckers.

Scores of big rigs gathered in pre-dawn fog in Delta before rolling out, and will be joined by groups from Vancouver Island and communities in the B.C. Interior as they make their way east.

January 24: B.C.’s Highway 1 Reopens Through Fraser Canyon – Today’s Trucking

Highway 1 through the Fraser Canyon, a major route connecting the Lower Mainland to B.C.’s Interior and North, opened to all vehicle traffic at noon on January 24, marking another milestone in British Columbia’s recovery from November’s flooding.

Depending on the destination, drivers travelling Highway 1 through the Fraser Canyon should plan for delays of up to two hours or more. This is due to ongoing repairs, an at-grade train crossing and sections of single-lane alternating traffic, which includes a temporary single-lane bridge at Jackass Mountain and Nicomen River crossing.

January 31: Alberta Premier Says Massive Blockade Preventing Access to U.S. Border ‘Must End’ – CBC News

Alberta Premier Jason Kenney is calling for a massive vehicle blockade preventing access to the Canada-U.S. border crossing to end, saying it is causing “significant inconvenience for lawful motorists.”

Truckers and motorists travelling to and from the United States from southern Alberta have been caught up in gridlock as an extremely large blockade of vehicles tied to an ongoing nationwide protest over COVID-19 public health measures continues to jam border traffic.

Vehicles have been blockading the highway from south of Lethbridge, Alta., to the Canada-U.S. border crossing in the village of Coutts since Saturday afternoon. That means that traffic to and from the border crossing has largely come to a standstill.

 

CIFFA Advocacy, Communications, Activities

January 26: Force Competition in Our Marine Sector: CIFFA’s Executive Director Bruce Rodgers on Why Canada’s Competition Laws Need More Bite

On January 31st, the federal government will convene a summit to discuss supply chain frustrations with a wide variety of participants.  Despite the odds against rapid success, it’s a welcome effort.

The stubborn supply chain mess affects virtually every consumer and community. And although the problems are certainly international, there are things that can be done right here in Canada, to improve the situation.

Ottawa has been tiptoeing along a very narrow line: trying to be seen as active on the problem, while avoiding any expectation that the government could craft a “solution” that solves all the problems. Presumably political advisers were telling the Cabinet, “You touch it, you’ll own it.”

But south of the border the U.S. President took an aggressive tack, travelling to a California port and personally urging railroads, truckers and ports to take extraordinary measures. By Christmas the White House was touting evidence the situation was improving.

January 31: CIFFA Participates in National Supply Chain Summit

The 3+ hour Summit, during which participants presented their industry and sector-specific concerns and comments, was led by the federal Transport Minister, the Honourable Omar Alghabra, and included presentations by the Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, Annie Koutrakis, Parliamentary Secretary to the Minister of Transport, the Hon. Carla Qualtrough, the Minister of Employment, Workforce Development and Disability Inclusion, the Hon. François-Philippe Champagne, Minister of Innovation, Science and Industry, and the Hon. Marie-Claude Bibeau, Minister of Agriculture and Agri-Food.

Overarching themes and discussion points included the following:

In his closing comments, Minister Alghabra said, “I hear you and I have been hearing you for awhile and that is the reason why we ended up doing this summit.”

He thanked participants and noted that industry needs to continue to be involved in this discussion. As next steps, he announced that there would be a focus on more regional and sectoral roundtables in the coming weeks.

As well, he announced the government will create a task force made up of industry leaders who will provide advice to Minister Alghabra about next steps.

The Minister is hoping for a comprehensive action plan, including both immediate and short-term, as well as longer-term, strategies by summer.

Minister Alghabra reaffirmed the government’s commitment to maintaining this dialogue, and said the role of industry is valued not only with respect to dealing with supply chains but also with aim to improve our collective economic future.

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