GLOBAL LOGISTICS ISSUES  

It’s Thanksgiving time in the United States.  The 4^th Thursday of November is a day for family and football.   It’s a day we should relax and not think about the continued transportation crisis in the United States and abroad.     It’s been nearly 4 months since my last update.  Has much changed since the 4^th of July?

I liken it to the movie Groundhog Day.  We wake up every day and the situation hasn’t changed much at all.   Port Congestion, Truck driver shortages, vessel space problems and high import ocean freight rates are still with us.

The mainstream media has finally caught to what is happening in our world.  We’ve been dealing with it for over a year.   Now shows like 60 Minutes and newspapers like the New York Times and Washington Post are full of articles about the supply chain bottlenecks and increases in shipping cost that is helping to fuel inflation in the United States.   As if we didn’t know already.

We still have lengthy delays on shipments coming into the United States from Asia and Europe.   The Ports of Los Angeles and Long Beach are still seeing length berthing delays and cargo pile up at the port.  The introduction of an “Excess Container Dwell Fee” effective November 29^th is essentially super demurrage that the ocean carriers will pass on to importers.      Hopefully they will never charge this fee as will just get passed on to the importer by the ocean carriers.    On the East Coast the Port of Savannah is experiencing their version of congestion with up to   20-25 container ships anchoring off shore waiting to berth at Garden City Terminal.

Ocean carriers are making record profits and providing lackluster customer service and vessels that are rarely on time.   Quarterly earnings are in the billions of dollars for many of the ocean carriers.   Instead of giving us quality customer service many of them are impossible to reach on the phone or you have to wait nearly an hour to talk to a live person.  It just makes our job harder.

I do want to give a shout out to Independent Container Line (ICL) who value schedule integrity more than any other carrier in the market.  They are rarely late into and out of their 2 USA ports of call (Chester, PA and Wilmington, NC).    Customer service from ACL (Atlantic Container Line) is consistently one of the best.

Trucking capacity is a major pain point for the entire country.    There are very few ports/inland rail ramps that are immune to the driver shortage for those truckers that pick up and delivery containers.    It’s a real crisis in nearly the whole country.     We try to utilize secondary inland locations like Worcester, MA for Northern New England destinations and Council Bluffs Iowa (Omaha) for origins/destination is that part of the country.     We try to avoid Chicago and New York if we can due to the capacity crunch in those markets.

The chassis shortage all over the United States are ports and inland rail terminals is not going away anytime soon as production delays in the United States have stalled delivery on new chassis to the second half of 2022.     In most countries around the world chassis are owned by the trucking company.  In the United States very few trucking companies have made the investment for a variety of reasons (space in their yard, cost, maintenance requirements).

Import air freight rates to the United States are still at a high level due to the lack of passenger flights worldwide.   European and American airlines should be adding passenger flights since the U.S. opened up to vaccinated travelers. There still isn’t enough belly space in passenger planes to meet the demand.

Air rates from China/Asia have climbed to record levels due to high demand for air freight.  Since ocean rates are so high many importers are using air freight.    Rates over $12.00/kg are not unusual from Shanghai to some destinations in the United States. All told it’s a daily challenge to meet the requirements of our customer and our overseas partners. We are fighting hard to deliver the service that you all need.

Hopefully the day will come in 2022 when we will wake up and it won’t be Groundhog Day. Ocean rates will drop to a more reasonable level from all origins around the world. We will see more chassis available all over the country.   We will have more drivers available to move our shipments from Point A to Point B. Ocean carriers will provide a higher level of customer service.

EUROPE TO THE UNITED STATES

Full container shipments from North Europe and the Mediterranean region are still severely overbooked to the United States.  Germany in particular is in a difficult place right now as there are container shortages, trucking capacity problems and overwhelmed terminals in Hamburg and Bremerhaven. Hapag Lloyd is the carrier that seems to taking bookings and then short shipping containers due to space issues.

We still recommend that any importer tell their suppliers to make their bookings at least 30 days in advance to secure space.  Last minute space is really impossible right now.    Be prepared for continued higher shipping costs and space issues from Europe in 2022.

We are utilizing RO/RO carriers to move cargo that may be possible to containerize on mafi trailers from Northern Europe.  Due to the computer chip shortage the RO/RO carriers have more space for static cargo since cars are not being shipped in normal volumes.

ASIA to the UNITED STATES

Imports from all over Asia into United States are still going strong.   Space and available equipment are very difficult right now from all countries in Asia.   Rates had been over $20,000.00 per 40’ standard/HC container from some origins in Asia to the east coast of the United States.    The rates have softened some but they are expected to climb as we get closer to Chinese New Year February 1-8,2021     Ports like Xingang and Dalian in Northern China that rely on feeder vessels to marry up with mother vessels from ports like Busan or Shanghai are severely backlogged with space very hard to obtain.   If there is a Covid outbreak in any port in China it can stop that port from operating at capacity for up to 2 weeks and cause major vessel delays.

Space to the Port of Baltimore is very difficult these days.  Even though Maersk Line started a new service this fall from Vietnam and Ningbo/Shanghai direct to Baltimore the vessel size is small (around 4000 TEU’s) space is still hard to find.    Maersk and Mediterranean Shipping have a direct call to Baltimore as does Evergreen Line (with partners Zim, OOCL, Cosco and CMA CGM) however they limit space to those carriers.

This has caused us to utilize New York or Norfolk when we can’t get space to Baltimore.  Our friends at the Maryland Port Administration have been made aware of this issue and they are talking to the ocean carriers to see what they can do to add additional allocation to Baltimore.

The carriers are still charging cancellation fees of up to $1,000.00 if a confirmed booking is not used or a container misses a cut off at the port.   Be certain you have a supplier that is ready to load if a booking is made.   Space should be booked 3-4 weeks or more in advance to get the process going.

Ocean carriers are still trying to get the empty containers back to Asia at the expense of loaded exports from the United States.   Import rates from Asia are 6x higher than export rates to Asia.    We don’t see this trend changing in the near future.  Space from India to the United States is also at premium as well with rates that continue to climb.

Med Shipping did add a new service from India that will call the Port of Baltimore directly.  Even with that there is high demand and not enough space from the Indian Sub Continent to the east coast of the United States.

EXPORTS FROM THE UNITED STATES TO ASIA AND EUROPE

Container availability at inland depots is still a problem.  Vessel schedule delays are causing cut offs to change at inland depots and ports and this can add costs for shippers that have already loaded their containers but they can’t be returned to the rail terminal or port due to a change in the earliest return date.   Space to Europe and Asia for full containers is difficult.   Bookings should be made at least 3 weeks in advance.

Exports to Europe are difficult now. Hapag Lloyd is really causing problems as they are leaving cargo behind on a regular basis and splitting bookings.  Vessel schedules are in flux due to weather and port congestion.   Some carriers have stopped calling the Port of Savannah on some trade lanes due to delays there.  Space is still tight to Middle East ports in Saudi Arabia and the Persian Gulf.

PORT CONGESTION ISSUES IN THE UNITED STATES

The port congestion problem on both coasts are still happening.    This is what a lot of people are hearing about on television and on line.    Vessels are still waiting to berth for up to 2 weeks in Long Beach/Los Angeles and Oakland.   There are over 90 vessels waiting to dock in Long Beach/L.A.    It’s even impacting the Northwest ports of Seattle and Tacoma.

Terminal congestion is a major problem as it’s taking several hours for truckers to pick up or return containers to the port.  This is adding a cost to both imports and exporters when truckers have to wait for long periods to pick up or return containers.      Most main seaports on the east coast are experiencing terminal congestion though it is easing somewhat in ports like Norfolk.

Savannah has the most congestion problems on the east coast with vessel berthing delays.   This has caused some ocean carriers to omit Savannah and utilize Charleston.

The Port of Baltimore is actually in very good shape right now.  We just the steamship lines to bring their vessels here.

The Port of Philadelphia has seen a large uptick in cargo volume and that has caused a strain on truck capacity.    The Port of Boston lost its direct call from Asia when the shipping lines stopped the service due to the delays in Savannah.

The Port of Norfolk had some major delays with rail moves about 4-6 weeks ago but now containers are moving relatively quickly once discharged from the vessel.   Norfolk is a main gateway to Chicago, Louisville, Cincinnati, Columbus and Cleveland.

The Port of Miami and Port Everglades are still seeing major problems with congestion and truckers not being able to get in and out of the port due to lack of available appointments.    It’s been bad there for months.

The Port of Houston is still having congestion and also chassis problems which impacting the pick up of containers at the port.   The port is eagerly trying to woo more carriers from Asia to call on Houston and bypass the west coast.

CANADIAN PORTS

The Port of Vancouver is recovering from a massive rainstorm that caused mudslides on the main rail and truck routes going from and to the port.   The roads and rail routes have just opened up and there is a major backlog of containers at the port and vessels waiting to discharge.  Expect delays in and out of Vancouver for several weeks.

INLAND RAIL RAMP LOCATIONS IN THE UNITED STATES

Chicago, Detroit, Minneapolis, Kansas City, Memphis and Columbus, OH are inland terminals that have so much volume that truckers can’t keep up.     The chassis shortage has caused containers to pile up at the rail yards and a lot importers are facing heavy rail and steamship demurrage costs.    Chicago is still a major choke point in the country.  We are looking to utilize alternate rail ramps when possible to avoid these difficult locations.

TRUCKING ISSUES IN THE UNITED STATES

Container drayage problems are still problematic at most ports and rail terminals.    Truckers don’t have enough drivers to handle the continued surge in imports.   We are seeing some truckers booked out for 4-5 weeks in many locations.    Chicago still has a chronic truck capacity problem.  Kansas City, Detroit, Louisville, Memphis and Columbus are difficult.    New York is also a port experiencing a huge surge in import volume and the truckers and warehouse can’t handle the volume.

On the west coast it’s very bad in Los Angeles/Long Beach for local moves.  A lot of large importers have set up transloading centers to move their cargo inland on domestic trucks instead of waiting for the containers to arrive in inland rail locations like Chicago & Memphis.

The chassis shortage situation is also compounding the problem everywhere.      Truckers that are using chassis on a daily basis are keeping them and paying the daily costs to keep their trucks moving.

GLOBAL LOGISTICS ISSUES

There are transportation bottlenecks all over the United States and the world right now.  Vessels are arriving late and leaving late on both the east and west coast of the United States.    This is happening from/to Asia and Europe.    Vessels are also delayed from/to Asia to Europe and this is impacting available equipment in Europe for export to the United States.   Capacity to/from South America has been reduced, especially on the East Coast of South America.     Port congestion in the United States is growing and causing huge headaches and extra costs for importers and exporters alike.     Covid 19 has definitely played a role in this situation.

The supply chain is being impacting in numerous ways.  Import volumes have reached levels that have outpaced available truck capacity in most ports and inland locations.   Ports are struggling to keep up with the volume.  Export shipments are being impacted with all the vessel delays.  Cargo receiving dates at seaports and inland rail terminals are constantly changing, sometimes on a daily basis.     This leads to extra charges for exporters as the trucking company must hold an already loaded container until the vessel opens for receiving.  There are extra charges for yard storage and daily chassis fees.

WEST COAST USA PORT CONGESTION ISSUES

The problem that grabs the most attention right now is the port congestion in Long Beach and Los Angeles.    Surging imports from Asia (mostly China) into the west coast along with labor shortages at the pier due to Covid 19 cases have created a situation unseen for nearly 20 years.     Vessels are stuck for up to 2 weeks waiting to discharge their import containers and load export containers.  On a given day there can be anywhere from 30-40 container ships at anchor awaiting a berth in either Long Beach or Los Angeles.    These are huge vessels carrying thousands of containers per ship.

The two Southern California ports are the first port of call for most vessels arriving from Asia to the United States that do not sail directly to the Northwest.    The delays in the import arrival create a ripple effect both at the port of arrival and in the interior of the country.   It also has a negative effect on exports from the United States to Asia.    Only in the past 2 weeks has a carrier announced that they will bypass the ports of LB/LA and discharge first in Oakland.      CMA CGM made that announcement as the frustration with the delays caused them to rethink their port rotation.

EAST COAST USA PORT CONGESTION ISSUES

On the East Coast there is serious port congestion at the Port of New York.    Not as many ships are at anchor however there is a surge of imports from Asia and Europe.   Terminal congestion and a truck driver shortage has created significant problems there.   Truckers are charging congestions surcharges at some of the terminals at the Port of New York.     There are serious rail delays for inbound cargo that discharge in New York and are destined for inland cities like Chicago, Kansas City, Minneapolis, Columbus, Cleveland and Pittsburgh.

The Port of Baltimore is seeing few congestions issues other than when vessels bunch up and discharge back to back.    The port has extended gate hours when necessary to alleviate congestion.   When vessels delay it creates a space issue as loaded export containers are still sitting on the terminal and that creates congestion inside the terminal.

There are no issues at the Port of Boston.   Their volume has increased from Asia but they don’t have that many vessels calling the port directly so it rarely has the congestion issues that other ports have on the East Coast.

The Ports of Norfolk and Savannah have gained the most volume from Asia due the number of distribution centers that are in close proximity to the port.    Even with the increased volume the ports are not feeling the congestion issues that New York is having.

We haven’t heard too many reports of any major congestion issues at the Port of Charleston, Jacksonville, Port Everglades or Miami.

IMPACT ON CARGO MOVING BY RAIL TO/FROM THE MIDWEST

Inland rail depots in Chicago, Kansas City, St. Louis, Memphis, Louisville, Cincinnati and Columbus are seeing a surge of imports as well.  There are rail delays both from the west coast and east coast to these areas.     In some cases, it’s taking 14-21 days for a container to move by rail from Southern California ports to the Midwest and 7-14 days or more from New York to the Midwest.    The rail delays are not as acute in the Northwest ports of Seattle and Tacoma.    Ports in Canada (Vancouver & Prince Rupert) that handle containers destined to the Midwest also have delays but nothing near what we have in Southern California.

From the East Coast the ports of Norfolk, Charleston and Savannah are not experiencing delays longer than 3-5 days at this time.   Norfolk is a major gateway to/from the Midwest.   Rail service is to Chicago, Detroit, Louisville, Cincinnati, Columbus and Cleveland are best served from Norfolk compared to New York.   From Europe the Canadian gateways of Halifax and Montreal are not experiencing abnormal delays to the Midwest.

For export cargo the delays have caused empty container shortages at many inland depots in the United States.  Equipment availability is very limited in many locations in the Midwest.     It’s a real problem for exports as some inland terminal locations have no available empty containers.  The delays also impact the earliest return date at the rail ramp.   When vessels delay at the port the ocean carriers then delay the earliest return date to the rail ramp.

IMPACT ON OCEAN FREIGHT RATES

This surge in demand for import cargo has resulted in a nearly fourfold increase in ocean rates from Asia to the United States.    This has also raised the cost of LCL (Less than Containerload) rates as well.  Space is not available from China and most other ports in Taiwan, Malaysia, Vietnam, Thailand, Singapore and Philippines unless an importer wants to pay a premium of up to $ 3,000.00 per container.    It’s especially difficult right now with Chinese New Year coming at the end of the week.   It should get a little better after Chinese New Year.   The ocean carriers are blanking sailings to reduce congestion in Southern California.  A blank sailing is essentially a carrier skipping a call at a given port or the entire voyage.     The hope is that the backlog in Southern California will clear up to a more manageable level by the end of March.

Right now a steamship line would rather take an empty container back to China in order to get it turned around and exported back to the USA or Europe for 8 times the rate they get for an export from the USA to Asia.   They won’t admit it but that’s the reality.   They aren’t enthusiastic about carrying export cargo back to Asia.    Exporters and freight forwarders are protesting loudly to the ocean carriers and Federal Maritime Commission.

NEW FREIGHT SURCHARGES

Ocean carriers are charging equipment imbalance surcharges of up to $200.00 or more from some European origins  to the United States due to shortages of containers in Europe.       Importers should tell their suppliers to book at least 3 weeks in advance to secure space and equipment.     We are monitoring this situation very closely.

USA CONTAINER TRUCKING ISSUES

This leads us to the container trucking problems right now in the United States.    There are major capacity issues in most ports/inland rail terminals in the United States.     We must issue delivery instructions to our truckers at least 2-3 weeks in advance for import shipments and 10-14 days or more for export shipments.    It’s extremely difficult in New York, Chicago and Long Beach/Los Angeles.     Most other ports or inland depots require 7-10 days advance notice to secure a truck.     We are adding more truckers that can help us pick up and deliver containers for our customers and overseas agents.   We are also looking at using flat bed and step deck trucks when possible.

For instance, in New York most truckers are booked out at least 14-21 days or more.   The snowstorm last week made it even worse.   In Long Beach/Los Angeles it’s practically impossible to find any available truck capacity to pick up or deliver containers one month in advance.   It’s at least 7-10 days in most other ports and inland rail terminals around the country.  It’s a very challenging time.

Flatbed trucking is also seeing a capacity crunch around the country which is leading to increased rates.

It’s not as acute as it is for containers but there are issues.    Heavy haul capacity is still available though we expect to see it tighten up as the year progresses.

AIR FREIGHT

Air freight rates continue to be on the high side from all worldwide destinations.

Rates are at their peak now from China due to Chinese New Year CNY) on Feb. 12^th.

The rates should ease up some after CNY as there isn’t the surge in masks or other Personal Protective Equipment (PPE) that we had last year.

Passenger flight capacity is limited due to reduced flights.    Until Covid 19 restrictions are eased up there will not be an increase in passenger flights.     This is especially true from/to Europe and to the Middle East.

WHAT CAN YOU DO?

Try to forecast, and plan ahead for expected delays.  Make your suppliers and customers aware of potential delays.  Please note that this is a global logistics issue that does not seem to have an end in sight at this time.   If you have an export shipment contact us weeks in advance not days in advance of the ready to ship date.    For an import shipment tell your suppliers to book early not matter what the shipment size is going to be.   All shipments are impacted by this problem.

WHAT IS THUNDERBOLT GLOBAL DOING?

All of us at Thunderbolt Global Logistics are working diligently to keep the cargo moving without delays.   Some delays are out of our control.    We will strive to keep our customers and overseas partners updated on their shipments.

All of our employees are currently working remotely due to Covid 19.   We hope to be back in the office in some hybrid manner in March.

Please contact us if you have any questions or need more information.

Jim Shapiro
Director
Thunderbolt Global Logistics

Jim Shapiro, Founder & Owner of Thunderbolt Logistics was interviewed  in Project Cargo Weekly.  An excerpt is below, and a link to the full article.

THUNDERBOLT GLOBAL LOGISTICS – BALTIMORE, USA
October 22, 2020 Interviews, Project Freight Forwarding, USA

Interview with Mr. Jim Shapiro, Owner

First of all, Jim can you explain to our readers about the choice of company name? Why did you choose the name Thunderbolt? When was the company started, and is it owned by you?

We use January 16, 2008 as our starting date as this was the date when we received our Ocean Transportation Intermediary (OTI) license from the Federal Maritime Commission. There were three of us at the time, and we shared space with another freight forwarder who were friends of mine and they gave us free rent. Without them, it would have been harder to get the company going. It was several months before the financial crisis in late 2008. Thankfully, the crisis really didn’t impact us very much.

The company was started with my childhood friend Stu Tobin. We both grew up just outside of Boston. He and I had known each other since we were 12 & 11 years old, respectively. I was more involved commercially, and Stu handled all the administration. I had been in the industry 23 years when we started the company. I had worked for only one company prior to starting Thunderbolt. I learned so much from them over my first 23 years.

We chose the name Thunderbolt Global Logistics for a reason that not many people around the world may understand.  Stu and I wanted to name the company in a way that would make us both smile when we answered the phone.     We were both fans of the 1930’s comedy team, The Three Stooges. [Editor’s note: Anyone not familiar with this famous comedy trio, can click on this link to learn more.]  In one episode, called Playing the Ponies, they trade their restaurant for a nag of a horse called Thunderbolt.  He ended up winning the big race.  That’s where we got our name.  I also like thoroughbred horse racing.   Baltimore is famous for a horse race called The Preakness Stakes. This race, run on the third Saturday in May (except this year due to Covid 19), is the second jewel of the Triple Crown for 3-year-old horses .  That’s why we have a horse as part of our logo.

Whenever we have hired someone, we have them watch the Three Stooges episode on Day 1, so they know where the name came from.  We call it our “training video”.  Stu retired in early January 2020 and sold his 50% interest to me.  I am now the sole owner of the company.

There are a lot of logistics providers in the US and even more so on the East Coast.  What makes you stand out?

Our approach is to make the experience of working with Thunderbolt an easy one.  We want our clients and overseas partners to feel that it’s not difficult working with us.  We have always had a flat organizational structure, so decisions can be made quickly.   No red tape, no corporate B.S.  We don’t need 6 signatures to get approval to do something.  If it needs to get done, we get it done.   We are a relationship-driven company.   Personal relationships mean so much to us which is why I have traveled overseas a lot since we started the company.

We only have one office, but we have a national footprint due to our infrastructure.  We have asset and non-asset based truckers that we work with all over the United States.  We have warehouses that we work with in all ports and in most major cities in the interior of the country.  We have great relationships with the terminal operators and port officials in most of the East Coast and Gulf Coast ports.  We try to be as creative as possible in finding solutions for our customers and overseas partners.

CLICK TO VIEW THE FULL ARTICLE ON PROJECT CARGO 

Thunderbolt Global Logistics is very concerned about the health and welfare of our excellent staff and their families.

At this time we are working from our office. This could change quickly depending on the situation in Baltimore City and the State of Maryland. All of our staff have the ability to telecommute from home. We are taking all necessary steps so that we have no disruption in service. If we all have to telecommute, we have done this previously when we have had bad weather and will work in the same manner if the need arises.

We have instituted a policy of no office visitors, no attending industry events, no overseas travel. We are following guidelines of the Center for Disease Control. We will continue to monitor their updates.

Our goal is to keep our staff safe and cargo moving without disruption. Our service level will not suffer if we have to work remotely. Hopefully the steps local, state and national government are taking will mitigate the spread of the virus.

We hope everyone we work with is safe and remains virus free.

Sincerely,
Jim Shapiro

Thunderbolt Global Logistics LLC

jim@thunderboltglobal.com
thunderboltglobal.com
410-633-2722