August 20,2024

We are now in what we call the dog days of August.    Summer holidays are ending, school is about to start, football in Europe has just begun their season and the NFL is going to start in early September.

The word of the day/week/year is disruption.  Here is the definition of disruption.

Disturbance or problems which interrupt an event, activity, or process

There seems to be a new disruption going on in global shipping every week.

• On August 12^th a container of hazardous materials blew up at the Port of Ningbo.
• Ports in India may strike August 28^th after 3 years of negotiations 
• Brazil is facing massive port congestion and a surge of exports that has driven ocean freight rates to near Covid levels.  
• The Red Sea situation has not changed and few vessels are transiting the Suez Canal and going around The Cape of Good Hope.       
• A nationwide rail strike in Canada is likely to happen beginning this Wednesday August 22^nd.   
• The biggest potential disruption Is an impending strike at nearly all U.S.A.  East Coast and Gulf Coast ports when the ILA (Int’l Longshoreman’s Association) contract expires at midnight on Sept. 30^th.      

The master contract for the ILA covers ports from Boston to Houston with few exceptions.    There hasn’t been a strike on the East Coast in over 45 years.   That may change based on what is being said by the leadership of the ILA.    The Biden Administration may have to get involved.   They have largely stayed on the sidelines so far.

Cargo handling at the ports would halt just weeks before the U.S. presidential election.  Here are statements from both sides in the negotiations:

The United States Maritime Alliance, known as USMX is ready to continue bargaining with the ILA leadership.   They state that their latest offer to longshoreman includes “industry -leading wage increases” and retains the current contract’s language on automation at the port terminals.

The ILA contends that shipping CEO’s are “taking home bonuses in the billions” and ocean carriers are raking in profits by “raising rates on their customers due to global conflicts or natural disruptions.”

The West Coast ports avoided a strike last year when they struck a deal on August 31,2023 that gave dock workers a 32% salary increase over the span of the 6-year contract.    The ILWA worked without a new contract as negotiations took place.  The ILA is looking to beat that increase for its members.  

They have stated that they will not work beyond the expiration of the contract.  Their members are preparing for a strike.   It doesn’t look good.

This is the situation in Canada.  The CIRB has made a ridiculous ruling that will greatly impact the Canadian and U.S. economies.   Here is what is happening;

With the Aug. 9 Canada Industrial Relations Board (CIRB) decision that none of the services provided by the two Canadian railways—CN and CPKC—are essential by law, no rail services are required to be maintained in the event of a work stoppage involving the Teamsters Canada Rail Conference (TCRC). The earliest possible date of a work stoppage is now Aug. 22 at 12 a.m. ET, and CN and CPKC are preparing their operations for ceased services.

In addition to the embargoes on Rail Security-Sensitive Materials (RSSM), Poison Inhalation Hazard (PIH) – Toxic Inhalation Hazard (TIH) and Time-Sensitive commodities issued on Aug. 12, CN announced a staggered schedule of embargoes for other freight handled by its network:

• All temperature-controlled intermodal traffic, effective Aug. 15. (Exact timing is dependent on origin and destination.)
• All hazmat traffic, effective Aug. 15. (Exact timing is dependent on origin and destination.)
• All intermodal traffic destined to all points in Canada from U.S. origins or U.S. interchange, effective Aug. 16 at midnight ET.
• All U.S. to U.S. Intermodal shipments will continue to move per normal operations.
• You can also find CN’s embargo schedule, as well as intermodal origin/destination timing, here.  
• “If a settlement is reached, or an arbitration process is established, we will remove embargoes and resume normal operations,” CN said in a statement.

No work stoppage planning schedule has been made available by CPKC at this time, but check the railroad’s website for updates here.

Here is the current situation in Brazil regarding congestion at the main port of Santos and at the Port of Itapoa.

An example of the situation is the BTP terminal, one of the most important in the Santos port complex.  The main terminals have been operating at close to 100% capacity for several months.

This has mainly affected export shipments, as terminals do not have sufficient windows to release appointments for truck drivers to deliver containers within the deadlines determined by maritime transport companies for shipment.

The possible consequences of this problem have been extra costs for truck drivers for not being able to deliver the loaded containers to the factories and the transfer of reserves to the next ship, as it is impossible to meet the deadlines given by the transporters.

Itapoa port terminal in the State of Santa Catarina has been facing similar congestion issues, but today it is not so critical as in Santos due to the lower volume of container handled in this port.

EUROPE TO THE UNITED STATES

Space has tightened up the United States in anticipation of the strike by the ILA at the end of September.

Rates have climbed and carriers will try to take advantage of the situation.   Some carriers have reduced the vessel size to the USA and redeployed them to Asia- Europe trade.    

ASIA to the UNITED STATES

Imports from Asia are very strong and have been for the last 4 months.    The possible strike along with additional tariffs for some commodities from China have led to a surge of cargo.    Ocean rates have tripled since earlier in the year.   Rates have stabilized over the last 2 weeks but they are still at the highest levels seen since Covid times.    West Coast ports will see more cargo due to the potential strike on the east coast and this will lead to rail delays from all west coast ports. 

The low water issue at the Panama Canal has improved a lot and the canal is nearly back to normal vessel transits per day.   This is a welcome relief after months of fewer daily transits through the Canal.

EXPORT FROM THE UNITED STATES

Ocean export volume from the United States is stronger now and space is tight to some regions of the world.   This is especially true to the Middle East due to the Red Sea situation.  

Empty container availability at inland rail depots is still problematic in some locations.  Chicago has deficits in available 40’ HC containers for many carriers.  Container availability is dependent on import shipments arriving at inland locations.  Ocean carriers rarely, if ever reposition empty containers to inland locations.

RO/RO carriers are accepting more and more static cargo to load on their vessels.   This is a turnaround from earlier in the year when they had no space available.          

PORT CONGESTION N THE UNITED STATES

New York seems to be the port on the east coast that is experiencing congestion.   Some truckers are charging congestion surcharges.  West Coast ports are likely to see a surge of containers due to the potential strike at the end of September. The upcoming rail strike in Canada has led to cargo diversion to U.S. west coast ports.We are grateful for all the support we receive from around the USA and around the world.  This is especially true during the period when the Port of Baltimore was closed due to the Key Bridge accident.

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

Be safe!

Jim Shapiro, Director

Thunderbolt Director Jim Shapiro attended the 12th Annual Summit of the Project Cargo Network (PCN) that took place at The Royal Cliff Hotel in Pattaya, Thailand, from November 12th to 14th. 185 people from 60 countries attended the meeting. PCN knows how to organize a great meeting. Thanks to Rachel, Judith and the Team in London for putting together a great 3 days in Pattaya.

It was a great time starting with  golf at the Chee Chan Golf Resort on Sunday. The dinner and fireworks Sunday night were fantastic. Thanks Patrik Eckert for sponsoring the festivities. Our meetings on Monday got underway with our CEO Rachel Crawford opening the conference meetings with an update on the network and then handing out the awards from the survey that was sent to all the members.

Thunderbolt Global Logistics was given the Regional Award for The Americas as voted by the members of the network. We are once again honored and humbled that our network partners think so highly of our company. Our team in Baltimore always strives to take care of our overseas partners. This award validated their hard work.

Congratulations to the members that won for their regions and the network member of the year. Well done! Our network is a really strong one with so many fantastic people and companies in it. It’s a people business and meetings like this reinforce that belief.

Attendees really enjoyed all the one to one meetings and evening activities. New relationships were started and it was great catching up with people we have dealt with for many years. We are grateful to all the members that take care of our shipments in their respective countries. Thunderbolt Global will continue to take good of their shipments as well in the USA.

We are looking forward to seeing everyone in Cyprus next October.

Thunderbolt Global Logistics Director Jim Shapiro attended the 11th Annual Meeting of PCN (Project Cargo Network) from Nov. 27-29,2022 in Dubai. There were over 185 CEO’s and Senior Managers from 95 countries. He had a great time seeing old friends he hadn’t seen in 3 years and making new ones that I met while at the meeting.

“I was very humbled when President/C.E.O. Rachel Crawford announced in her opening remarks that Thunderbolt Global Logistics was named International Member of the year for 2022. It’s gratifying to receive an award based on as survey of the members of the network. I can’t thank them enough. We’ll keep doing our best to assist them. We’ll keep asking them to help us when needed.

I am very proud of our team in Baltimore as this award is because of them. We have a great staff of hard working professionals.”  Said Shapiro after receiving the honor.

Read Paul Abbott’s article in the Nov-Dec 2021 issue of AJOT:  Planning, innovation help meet challenges in shipment of project, breakbulk cargos

View the article.  (Right hand page)

GLOBAL LOGISTICS ISSUES
The definition of chaos is “Complete disorder and confusion”. This is the state of the global logistics world right now. It seems that every couple of weeks a new event happens that causes a hiccup in global shipping. From the Ever Given blocking the Suez Canal for 6 days to a Covid outbreak in the Port of Yantian in China we are faced with events that impact the entire supply chain.

We still have lengthy delays on shipments coming into the United States from Asia and Europe. Capacity from/to the East Coast of South America to the United States are running full on the northbound leg. It’s very hard to get space from Brazil. Empty containers are in short supply in Asia, Europe and South America, especially in Brazil. In the United States there are pockets of containers shortages in inland depots but the more chronic problem is a lack of chassis available at ports and inland rail terminals. Containers are sitting in stacks in places like Chicago for weeks waiting for an available chassis. On top of that, demurrage and detention are being assessed and importers are paying tens of thousands of dollars in charges. It’s a very serious problem that has to be solved by the ocean carriers and chassis suppliers.

Container terminals are congested and problems exist with returning empty containers at some ports. New York is in a very bad state right now as truckers in some cases are not being allowed to return empty containers to the container yards or off-site locations as they are full.

Import air freight rates to the United States are still at a high level due to the lack of passenger flights worldwide. There is hope as the world recovers from Covid and more people travel. Airlines are adding passenger flights especially to/from Europe. There still isn’t enough belly space in passenger planes to meet the demand

EUROPE TO THE UNITED STATES
Full container shipments from North Europe and the Mediterranean region are severely overbooked to the United States. It still can take up to 30 days to get space from most European countries. 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. Even LCL shipments are impacted as consolidators have a limit on the number of pallets they are willing to accept per booking.

Rate increases are planned for July of up to $1,000.00 per container and they will most likely continue to rise further in August. Even though some factories in Europe close during July and August there appears to be no letup in demand for space on vessels. There doesn’t seem to be any indication that this is going to change anytime soon. There still isn’t enough capacity to keep up with the demand. A lot of cargo that would normally move in containers or flat racks are moving on mafi trailers on RO/RO carriers like Wallenius Wilhelmsen, K-Line and Hoegh Lines. It’s a creative way to get the cargo moving.

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 from Europe.

ASIA to the UNITED STATES
Imports from all over Asia into United States have not let up. Space and available equipment are very difficult right now from all countries in Asia. Rates are in excess of $14,000.00 per 40’ standard/HC container from some origins in Asia to the east coast of the United States. The rates are still climbing to to the West Coast and inland locations like Chicago, Kansas City and St. Louis. 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.

Ocean carriers are charging “premium rates” which can be $5,000.00 or more above the current market rate in order to get space on a vessel. The carriers are also 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.

Space still needs to be booked 3-4 weeks or more in advance to get the process going. We are actually entering the “Peak Season” for imports from China as holiday merchandise typically ship from June – October. Space and equipment will become even more scarce and rates will continue to rise. I’m told that rates into Canada are exceeding $20,000.00 per container from China. That could happen to the United States too.

The Covid outbreak at the Port of Yantian spilled over to the Port of Nansha and reduced operating capacity to 30%. Vessels have skipped their port calls adding further congestion. Yantian is now back at full capacity but has a major backlog of cargo rotation.

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. The greedy ocean carriers are making a fortune yet their customer service is still terrible for the most part.

Space from India to the United States is at a premium as well with rates rising every 15 days. 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. We are seeing carriers charge export container demurrage. Rates are going up, especially to Asia but not nearly at the level of import rates.

Exports to Europe are difficult now. We are seeing delays with some carriers to North Europe and the Mediterranean region (Italy/Spain in particular) of up to 1 month. Space is tight to Middle East ports in Saudi Arabia and the Persian Gulf. The rates have not really risen compared to the import side but the space problem has persisted.

PORT CONGESTION ISSUES IN THE UNITED STATES
The port congestion problem on both coasts are still happening. Vessels are still waiting to berth for several days in Long Beach/Los Angeles and Oakland. It’s even impacting the Northwest ports of Seattle and Tacoma. New York, Savannah and Miami have congestion problems and it will probably continue as volume of imports increase further this summer/fall. The current heat wave in the northwest is impacting terminal production and causing slowdowns.

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.

The Port of Baltimore is actually in very good shape right now. The port will extend gate hours when necessary to alleviate congestion. Truck capacity is not nearly as difficult compared to ports like New York and Savannah.

We are not hearing of any major issues at the Port of Philadelphia or Boston. Service is limited at each port, especially to/from Europe and Asia.

The Port of Norfolk is seeing much higher volume and truckers there are backed up to 2 -3 weeks.
A lot of containers move inland by rail from Norfolk. Containers are moving without much of a delay by rail from Norfolk to interior locations like Louisville, Columbus, Chicago, St. Louis and Kansas City.
Hopefully that trend will continue.

The Port of Savannah has seen their volume of containerized imports go up dramatically. There are berthing delays in Savannah partly due to the fact that it is a river port and the tides dictate when vessels can travel up and discharge at Garden City Terminal.

The Port of Miami and Port Everglades are now seeing major problems with congestion and truckers not being able to get in and out of the port due to lack of available appointments.

The Port of Houston is having congestion and also chassis problems which impacting the pick up of containers at the port.

CANADIAN PORTS
The labor problems at the Port of Montreal have been settled for now however there are delays from Montreal to inland rail destinations in the United States. The same holds true at the Port of Halifax.
A lot of cargo to/from the U.S. Midwest arrive at Canadian ports and go by rail to U.S. inland depots.
There are delays for cargo moving by rail from the Ports of Vancouver and Prince Rupert on the west coast of Canada to the U.S. Midwest locations in Minneapolis, Chicago and Detroit.

INLAND RAIL RAMP LOCATIONS IN THE UNITED STATES
Chicago, Minneapolis, Kansas City, Memphis and Columbus, OH are inland terminals that have so much volume that truckers can’t keep up. Chicago is a huge consumer market and the other locations are major distribution centers for large retailers. Delays in containers coming off the train and either being grounded or mounted on chassis are happening in places like Chicago, Minneapolis, Memphis and Kansas City. Some rail terminals in Chicago are severely congested and have a chronic shortage of chassis.
Chicago, Memphis and Minneapolis have been having container shortages for export shipments.

TRUCKING ISSUES IN THE UNITED STATES
Container drayage problems are getting worse in many ports. Truckers don’t have enough drivers to handle the surge in imports. We are seeing some truckers booked out until in August in New York, Savannah and Charleston. Chicago has a chronic truck capacity problem. Kansas City, Minneapolis, Memphis and Columbus are difficult. Miami and Port Everglades are now seeing problems with available truck capacity. Many owner operators are still on the sidelines due to Covid 19. As unemployment benefits run out that may bring back some of the drivers. The Port of Baltimore is in good shape and there is available truck capacity.

The chassis situation is also compounding the problem. We are told that in Chicago Wal-Mart has taken thousands of chassis off the street and are sitting at their distribution center. They are using containers as short-term storage due to space problems at their distribution center. Truckers that are using chassis on a daily basis are keeping them and paying the daily costs to keep their trucks moving.

Flatbed and step deck trucks are in short supply in many locations. Norfolk in particular is really difficult right now as is Savannah. We are seeing a capacity crunch around the country. We are still seeing rates rising seemingly on a weekly basis, especially for flat bed trucks. The demand still far exceeds the supply of available trucks. Heavy haul capacity is starting to tighten up. Multi-axle trucks are seeing an increase in volume and that will put a squeeze on rates and availability. Summer construction is also causing permit delays for oversize cargo.

WHAT DO WE RECOMMEND
Continue to plan ahead for expected delays. The chaos will not stop anytime soon. This may last into 2022. Be prepared to pay more for freight charges for international and domestic freight. Tell your suppliers and customers to be aware of potential delays. For import shipments tell your suppliers to book 4 weeks in advance. Space will remain tight through the summer and fall. We hope it will let up some in the July/August in some European countries due to factory shut downs for summer vacation and maintenance. We need at least 2-3 weeks notice for any export shipment to check available space and truck capacity.
If you are importing from Brazil your suppliers need to book at least 4-5 weeks in advance and even with that there is a problem with empty containers being available at the time of shipment.

WHAT IS THUNDERBOLT GLOBAL LOGISTICS DOING?
Our dedicated team of professionals are working tirelessly to keep the cargo moving. It’s not easy and it’s taking longer to handle each transaction but we are getting the job done.

We did reopen our office on May 3rd and are working in a hybrid manner. It’s great to see some members of our team in person. There is no substitute for direct human contact.

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

Jim Shapiro
Director