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

Dear Valued Customer,

Section 301 Tariffs from China go into effect today, Friday July 6,2018.

Following a Memorandum from President Trump, on August 18, 2017, the U.S. Trade Representative (USTR) initiated an investigation under Section 301 of the Trade Act of 1974 into the government of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.

Following USTR’s Section 301 investigation, President Trump announced in March that the United States will impose tariffs on approximately $50 billion worth of Chinese imports and take other actions in response to China’s policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises. These policies bolster China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as “Made in China 2025.” 

In June President Trump announced that the tariffs would go into effect Friday July 6^th.

That day has arrived and an additional 25% tariff will now go into effect on 818 Chinese Products. There are 284 additional products scheduled to be impacted by the additional 25% tariff but no date has been announced for the implementation on those products.

The first list comprises 818 products with a total import value of $34 billion, down from the 1,300 goods valued at $50 billion that had originally been proposed. A large percentage of the items on this list are from HTSUS Chapters 84, 85, 87, 88, and 90, such as engines and motors; construction, drilling, and agricultural machinery; machines for working minerals, glass, rubber, or plastic; rail locomotives and rolling stock; motor vehicles and motorcycles; helicopters and airplanes; and testing, measuring, and diagnostic instruments and devices.

The second list comprises 284 tariff lines with a total import value of about $16 billion. Many of these products are also classified in Chapters 84, 85, 87, and 90, but various products in chapters 27, 34, 38, 39, 70, 73, 76, and 89 are also included. Affected goods include plastics and plastic products; industrial machinery; machinery for working stone, ceramics, concrete, wood, hard rubber or plastic, and glass; cargo containers; tractors; and optical fibers.

We will continue to monitor the actions of the U.S. Government.  An all out trade war is imminent as China will impose similar tariffs on products that are exported from the United States, particularly in the agricultural sector. 

Thank you!

Sincerely,

Jim Shapiro/Stu Tobin

Thunderbolt Global Logistics LLC

https://thunderboltglobal.com/

410-633-2722