Month in Review – June 2022

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:

• Two super-post-Panamax quay cranes (capable of reaching 21 rows wide)
• Over a dozen additional reach stackers
• Additional internal transfer vehicles
• Additional container trailers
• Technology solutions that include an upgrade to the terminal operating system, a new truck gate system, and enterprise-wide financial management systems

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.