The BOC Blast 430 – Asia Holidays

Asia Holidays

Key Asian locations with upcoming holidays, listed below.

China Schedule for Upcoming holidays.

Sep 18SaturdaySpecial Working DayWorking day on weekend
Sep 19SundayMid-Autumn Festival holidayNational holiday
Sep 20MondayMid-Autumn Festival holidayNational holiday
Sep 21TuesdayMid-Autumn FestivalNational holiday
Sep 26SundaySpecial Working DayWorking day on weekend
Oct 1  Friday  National DayNational holiday
Oct 2SaturdayNational Day Golden Week holidayNational holiday
Oct 3SundayNational Day Golden Week holidayNational holiday
Oct 4MondayNational Day Golden Week holidayNational holiday
Oct 5TuesdayNational Day Golden Week holidayNational holiday
Oct 6WednesdayNational Day Golden Week holidayNational holiday
Oct 7ThursdayNational Day Golden Week holidayNational holiday
Oct 9SaturdaySpecial Working DayWorking day on weekend

Taiwan Schedule for Upcoming holidays

Sep 20MondayMid-Autumn FestivalNational holiday
Sep 21TuesdayMid-Autumn FestivalNational holiday
Oct 10SundayNational DayNational holiday
Oct 11MondayNational Day observedNational holiday

Thailand Schedule for Upcoming holidays

Sep 24FridayMahidol DayNational holiday
Oct 13WednesdayAnniversary of the Death of King BhumibolNational holiday

Malaysia Schedule for Upcoming holidays

Oct 2SaturdayBirthday of the Governor of SabahState HolidaySabah
Oct 9SaturdayBirthday of the Governor of SarawakState HolidaySarawak

Indonesia Schedule for Upcoming holidays

Oct 7ThursdayNavaratriHindu Holiday
Oct 15FridayDussehraHindu Holiday
Oct 20WednesdayMaulid Nabi Muhammad (The Prophet Muhammad’s Birthday)Public Holiday

Japan Schedule for Upcoming holidays

Sep 20MondayRespect for the Aged DayNational holiday
Sep 23ThursdayAutumn EquinoxNational holiday

India Schedule for Upcoming holidays

Oct 2SaturdayMahatma Gandhi JayantiGazetted Holiday
Oct 7ThursdayFirst Day of Sharad NavratriObservance, Hinduism
Oct 11MondayFirst Day of Durga Puja FestivitiesObservance, Hinduism
Oct 12TuesdayMaha SaptamiRestricted Holiday
Oct 13WednesdayMaha AshtamiRestricted Holiday
Oct 14ThursdayMaha NavamiRestricted Holiday
Oct 15FridayDussehraGazetted Holiday
Oct 19TuesdayMilad un-Nabi/Id-e-Milad (Tentative Date)Gazetted Holiday
Oct 20WednesdayMaharishi Valmiki JayantiRestricted Holiday

DOT Brake Safety Week

Expect fewer trucks on the road, more delays and increased costs

Brake Safety Week Set for Aug. 22-28

This year’s Brake Safety Week is scheduled for Aug. 22-28. During Brake Safety Week, commercial motor vehicle inspectors emphasize the importance of brake systems by conducting inspections and removing commercial motor vehicles found to have brake-related out-of-service violations from our roadways. At the same time, many motor carriers work to educate their drivers and maintenance service providers on the importance of brake system safety.

Throughout the week, inspectors will conduct North American Standard Inspections of commercial motor vehicles, focusing on the vehicle’s brake systems and components. In addition, inspectors will compile data on brake hoses/tubing, the focus area for this year’s Brake Safety Week, to submit to the Commercial Vehicle Safety Alliance (CVSA). CVSA will report its findings later this year.

Jurisdictions devote a week to conducting commercial motor vehicle inspections, identifying brake violations and removing vehicles with out-of-service brake violations because:

Brake system and brake adjustment violations accounted for more vehicle violations than any other vehicle violation category, accounting for 38.6% of all vehicle out-of-service conditions, during last year’s three-day International Roadcheck inspection and enforcement initiative.

“Brake system” was the third most cited vehicle-related factor in fatal commercial motor vehicle and passenger vehicle crashes, according to the Federal Motor Carrier Safety Administration’s (FMCSA) latest “Large Truck and Bus Crash Facts” report.

Brake-related violations accounted for eight out of the top 20 vehicle violations in 2020, according to FMCSA’s Motor Carrier Management Information System.

During last year’s Brake Safety Week, 12% of the 43,565 commercial motor vehicles inspected were placed out of service for brake-related violations.

The dates for Brake Safety Week are shared in advance to remind motor carriers, drivers and commercial motor vehicle mechanics/technicians to proactively check and service their vehicles to ensure every commercial motor vehicle traveling on our roadways is safe, mechanically fit and compliant. Recent research has shown that announcing enforcement campaigns ahead of time improves overall compliance better than surprise enforcement campaigns and for longer periods after the event.

August, the month of CVSA’s Brake Safety Week, is also Brake Safety Awareness Month. Law enforcement agencies will work to educate commercial motor vehicle drivers, motor carriers, mechanics, owner-operators and others on the importance of proper brake maintenance, operation and performance through outreach, education and awareness campaigns.

Source cvsa.org

New COVID Procedures at Shanghai (PVG) Airport

Please be advised that Shanghai Pudong International Airport (PVG) has implemented new COVID-19 measures, as below:

Under the new 7+7+7 or 14+7+7 measures, terminal workers at PVG are required to:

  • work 7 or 14 days in the terminal
  • complete a 7-day quarantine in a hotel
  • complete another 7-day quarantine at home

This arrangement is expected to cause a shortage in manpower that may result in the following:

  • Frequent short- or off-loading
  • Shortage of staffing
  • Longer terminal handling time
  • More flight cancellations and shortage of import and export capacity
  • Increase in airfreight rates
  • Some suspension of trucking, causing major backlogs
  • Embargoes for seafood and perishable items
  • Screening and disinfecting of some freight

BOC will continue to monitor and advise, as these requirements and restrictions change.

Ningbo terminal shutdown fuels fears of China port congestion spread

Greg Knowler, Senior Europe Editor, and Keith Wallis, Special Correspondent | Aug 11, 2021 12:56PM EDT

The Wednesday closing of a Ningbo container terminal after a worker tested positive for COVID-19 is raising the specter of a Chinese port meltdown, given officials’ aggressive effort to contain the pandemic and pre-existing vessel congestion in Ningbo and nearby Shanghai.

The Ningbo Meidong Container Terminal, also referred to as Meishan terminal, suspended operations 3:30 a.m. local time after a worker for an undisclosed carrier tested positive on Tuesday, according to Reuters. The risk is that as congestion builds at Ningbo, China’s second-largest container port, it will spread to other ports, as happened when Yantian International Container Terminals (YICT) partially shut down for four weeks from late May, congesting neighboring marine terminals in Southern China.

As of Wednesday, there were 28 container ships at berth and anchored in Ningbo, totaling 186,749 TEU in capacity, according to AIS Live, a sister product of JOC.com within IHS Markit. There are 113 container ships totaling approximately 417,000 TEU in capacity at the Port of Shanghai, the world’s busiest cargo gateway.

Chinese efforts to combat COVID-19 infections have also spread to air cargo, with SEKO Logistics reporting freighter flights to and from Europe and the US have been suspended until the end of August.

“The main issue is if Meishan is closed for some days or one week, there will be a big impact at the other terminals, too,” Mauricio Fisch, director of Ocean Express, a Brazilian forwarder, told JOC.com.

Hapag-Lloyd, Cosco Shipping, OOCL, and Evergreen call at the Meidong terminal, while Maersk, MSC, CMA CGM, Ocean Network Express, HMM, SITC, PIL, and Yang Ming call at the Beilun or Daxie terminals in the Ningbo-Zhoushan port complex that have not been impacted.

“With this sudden suspension, we expect a delay in planned sailings that might affect your cargo planning,” a spokesman for Hapag-Lloyd told customers in an advisory issued Wednesday.

The spokesman said Hapag-Lloyd has three services that call at Meidong — AN1, AN2, JCS — and that the terminal has suspended all container services, meaning vehicles and personnel are no longer permitted entry.

Disrupting an ‘already overstrained’ supply chain

Several carriers including Maersk have told JOC.com that their warehouses in the port’s free trade zone have been forced to close with the suspension of terminal operations.

The main trade focus of Meidong terminal is the Asia-Europe and trans-Pacific trades, but all terminals in eastern China are congested, with Kuehne + Nagel advising customers that average waiting time for a berth is currently two to three days.

Container terminals in eastern China — already working at full stretch with no slowdown in demand from the US and Europe — were further disrupted by typhoon In-fa, which swept through the region two weeks ago, suspending port operations and leading to vessel and container bottlenecks. The closing of the Meidong terminal piles further delays on the already congested ocean logistics chain.

Alphaliner noted in its latest weekly newsletter that the container shipping market has been operating at 100 percent utilization levels throughout much of the year. This has left supply chains “massively overstrained” and even minor operational problems could quickly spiral out of control and have massive knock-on effects, the analyst said.

According to Alphaliner, the Yangtze River estuary and Hangzhou Bay ports of Shanghai and Ningbo-Zhoushan have seen the worst congestion, but the Pearl River Delta port of Yantian also has numerous ships waiting for a berthing slot.

“Almost worse than the current delays in Chinese ports are the overarching fears of another major lockdown in China, which would cause utter chaos in the already overstrained supply chains,” Alphaliner warned.

Josh Brazil, vice president of marketing at ocean freight visibility provider project44, shares those concerns. “The fact that ships remain delayed and now COVID-19 variant outbreaks in major Chinese manufacturing hubs are on the rise indicates there may be far-reaching down-stream consequences going into Black Friday and holiday shopping seasons,” Brazil said in a statement.

Shipping and research consultancy Drewry warned earlier this month that port congestion, logjams, and higher freight rates would be a recurring theme until the first half of next year if outbreaks of new infections dilute the workforce of terminals in key locations across the globe.

Forwarders and carriers are closely watching developments at the Ningbo-Zhoushan port complex, keenly aware of the almost complete shutdown of YICT, one of the busiest terminals in the world, after a May 27 COVID-19 outbreak. Scores of vessels omitted the port of Shenzhen and a huge bottleneck of containers quickly stacked up during four weeks of severe congestion. Full operations at YICT only resumed June 23.

China-U.S. container shipping rates sail past $20,000 to record

By Roslan Khasawneh and Muyu Xu of Reuters

SINGAPORE/BEIJING (Reuters) – Container shipping rates from China to the United States have scaled fresh highs well above $20,000 per 40-foot box as rising retailer orders ahead of the peak U.S. shopping season add strain to global supply chains. The acceleration in Delta-variant COVID-19 outbreaks in several counties has slowed global container turnaround rates. Typhoons off China’s busy southern coast in late July and this week have also contributed to the crisis gripping the world’s most important method for moving everything from gym equipment and furniture to car parts and electronics.”These factors have turned global container shipping into a highly disrupted, under-supplied seller’s market, in which shipping companies can charge four to ten times the normal price to move cargoes,” Philip Damas, Managing Director at maritime consultancy firm Drewry, said. “We have not seen this in shipping for more than 30 years,” he said, adding he expected the “extreme rates” to last until Chinese New Year in 2022.

RATE HIKES

The spot price per container on the China-U.S. East coast route – one of the world’s busiest container lanes – has climbed over 500% from a year ago to $20,804 this week, freight-tracking firm Freightos said. The cost from China to the U.S. west coast is a little below $20,000, while the latest China-Europe rate is nearly $14,000, Freightos’ data shows. Ding Li, president of China’s port association, told Reuters the spike followed a rebound in COVID-19 cases in other countries, which has slowed turnover at some major foreign ports to around 7-8 days. The surging container rates have fed through to higher charter rates for container vessels, which has forced shipping firms to prioritise service on the most lucrative routes. “Ships can only be profitably operated in the trades where freight rates are higher, and that is why capacity is shifting mostly to the U.S.,” said Tan Hua Joo, executive consultant at research consultancy Alphaliner. Some shippers have reduced volumes in less profitable routes, such as the transatlantic and intra-Asia, said Damas. “This means that rates on the latter are now increasing fast.”

NO RESPITE

The rate surge is the latest reflection of disruptions since COVID-19 slammed the brakes on the global economy in early 2020 and triggered huge changes to the flows of goods and healthcare equipment around the world. “Every time you think you’ve come to an equilibrium, something happens that allows shipping lines to increase the price,” said Jason Chiang, Director at Ocean Shipping Consultants, noting the Suez canal blockage https://www.reuters.com/world/asia-pacific/how-giant-container-ship-is-blocking-suez-canal-2021-03-25 in March had played a major role in allowing firms to hike rates. “There are new orders for shipping capacity, equal to almost 20% of existing capacity, but they will only come online in 2023, so we will not see any serious increase in supply for two years,” Chiang added.

(Reporting by Roslan Khasawneh in Singapore and Muyu Xu in Beijing. Editing by Gavin Maguire and Barbara Lewis)

Severe Limitations on Intermodal Freight moving to Inland USA Points

Most steamship lines have severely limited the intermodal freight they will accept, to move from the US Coasts to Inland Interior US points.

•        ONE is now nearly completely stopping IPI bookings.

•        OOCL/CMA-CGM stopped accepting most IPI bookings.

•        HMM/Yang Ming/Cosco, and Evergreen, have stopped taking almost all IPI bookings.

•        MSC is still accepting some bookings, but has increased the inland fee significantly, when they

do accept a booking.

Most steamship lines have not issued formal letters like ONE has; they simply are refusing to take these bookings.

BOC Customer Advisory

Transpacific faces challenges impacting all of supply chain

Dear Valued Customers,

With this advisory, BOC aims to provide you as our valued customer with the most relevant and up-to-date information to help you navigate this period of heightened volatility.

Key Notes:

  • Shanghai and Yantian port operations are starting to experience increased congestion challenges as peak season volume pressure ramps up. Both ports are now experiencing 5-6-day delays on average.
  • Equipment Availability in Asia is now at critical levels in several locations with the situation being most dire in both Vietnam and Indonesia, while South China also remains stressed. In Vietnam, the ongoing congestion challenges in Vung Tau it set to deteriorate even further as the region sees a spike in COVID-19 cases. With further lockdowns now introduced, this could very well be the source of the next major supply chain disruption headline in the coming days.
  • Ports of Los Angeles and Long Beach improving but still heavily congested. We have 10-15 vessels at anchorage awaiting a berth. All large vessels are limited to 4 gangs and are experiencing extended port stays by on average 3-4 days.
  • Port of Oakland vessel wait times have improved to an average of 7-10 days. The heavy congestion, however, has forced shipping lines to limit or omit their scheduled calls. All vessels have been limited to 2 gangs per shift due to continued labor constraints in meeting the high-volume demand.
  • Port Yard Utilization at Seattle remains at capacity (120%), with labor restrictions also kept in place pending yard availability improvements. In Prince Rupert, the situation remains pressed with yard operations at 106% to capacity while in Vancouver, the situation is expected to deteriorate over the coming days due to the rail service disruptions brought on by the Lytton wildfires in Canada.
  • Truck Capacity and Chassis Availability are in short supply across select locations. The situation is most critical across the Mid-West, Southeast, and Newark. 

Trending Themes:

Yantian Terminal Operations Recovery at a Tipping Point

The situation in Yantian continues to improve with terminal operations slowly returning to normal levels, but as peak volume flows begin to ramp up, the recovery may well be put to test. Vessel wait times that had recovered to within a day have now crept back up to the 5-6-day range. While yard density remains at manageable levels, the challenge from here is largely centered around the clearance of what can only be described as a significant backlog of cargo sitting at customer’s facilities or on factory floors.

There are three factors at play that need to come together in order to resolve the issue. The first and likely most pressing is in the availability of equipment. As many vessels were forced to omit the port during the peak of the COVID outbreak, opportunities to reposition empties into the area were as a result limited. Today we are seeing a shortage of 40’/40HC/45’ in South China. While we are actively working on repositioning containers into the area, customers are asked to where possible substitute their equipment with 20’ containers to alleviate the pressure. The second factor is in the available carrier capacity. While the possibility of introducing additional vessels into the network remains limited, as an alternative we are instead over-allocating space to Yantian cargo on existing vessel calls to help clear the backlog. The final piece to the puzzle is dependent on the continued normalization of operations at the South China ports. Daily truck quotas for laden container return continue to increase but with vessel wait times once again creeping up, this poses a serious risk to the overall recovery.

Empty Equipment Stock in North America is Rising Once Again

The container equipment stock status across North America continues to ebb and flow as supply chain disruptions make repositioning efforts incredibly complex and challenging. While the initial drop in volume brought on by the Yantian disruption had allowed the teams the opportunity to clear out some of the excess stock, the slide sailings that followed had the opposite effect as empties sat awaiting vessel arrivals for repositioning back to Asia. Now with the peak surge, severe congestion in select areas are contributing to slower empty returns. This is not only hurting exporters as chassis availability becomes limited but it’s also causing vessels to return to light or underutilized thus exacerbating the equipment shortage in Asia.

To help combat this shortage we have introduced both Extra Loaders and Gap Loaders to help normalize the network and to move surplus empties back to Asia. Our success is still heavily dependent on customer’s support in turning empty containers back as quickly as possible, particularly in the Pacific Southwest where the situation is most pressed. Also, worth noting as the Wildfires in British Columbia persists, given the dangers, rail providers are prioritizing containment operations rather than container movement. As a result, we expect to see equipment shortages across the West Coast with inland stocks set to rise in the coming weeks.

Trucking Capacity Continues to Tighten in Select Locations

Click above picture to view larger image

Truck capacity and chassis availability remain a major concern in several locations across North America. The primary challenge in the Northeast is in the limited availability of chassis in the Newark area due to an increase in cargo dwell time. In the Gulf area, Dallas is experiencing reduced truck capacity for long-haul moves while Houston is struggling with both truck and chassis availability. This continues to impact imports departing from Bayport, Barbours CT, and BNSF Pearland as well as exports originating in Houston and West Texas. Mobile and New Orleans are also experiencing reduced truck capacity, with some providers now fully booked through to the end of July.

In the South Atlantic, volumes in Memphis is once again surging, the I-40 bridge closure is still causing capacity issues into west Memphis as drivers are either declining the load or charging a premium for doing so. The bridge is still on schedule to be opened by end of July. In Atlanta, the chassis shortage continues to cause major delays for import rail cargo out of Fairburn. While in the Midwest area we are seeing chassis shortages across the region. As cargo dwell time continues to rise, it is proving to be extremely difficult to source truck or chassis capacity for exports out of Chicago.  

Draft of bill reveals scope of US shipping act overhaul effort

Peter Tirschwell | Jul 18, 2021 4:09PM EDT

A fast-moving effort led by agricultural exporters and their allies in Congress to hold ocean carriers accountable for grievances arising from and predating the pandemic has yielded a sweeping draft bipartisan overhaul of US shipping law that sources say is likely to be introduced before the August recess begins in a few weeks.

Though there is no guarantee the bill will pass in its current draft form, the initial salvo by Rep. John Garamendi, D-Ca, dubbed the Ocean Shipping Reform Act of 2021, would take US shipping law in a starkly different direction, reversing the deregulatory trajectory of the most recent shipping law rewrites in 1984 and 1998 in placing a heavy regulatory burden on ocean carriers and strengthening the oversight role of the Federal Maritime Commission (FMC).

The bill draft, seen by JOC.com, would make it much more difficult for container lines to refuse to carry export cargo or prioritize repositioning of empties at the expense of ports And the bill, addressing a longstanding shipper grievance, would prohibit carriers from collecting detention and demurrage fees in cases when “obstacles to cargo retrieval or return of equipment are…beyond the control of the invoiced or contracting party.”

In addition, it would go further than current law in barring unreasonable denial of service by a carrier, saying a carrier “may not…fail to furnish or cause a contractor to fail to furnish the facilities and instrumentalities needed to perform the transportation services, including containers.”

A draft of a US bill to rewrite the Shipping Act envisions a major expanse of regulatory powers to the Federal Maritime Commission

The bill when introduced will be bitterly opposed by container lines, which have been arguing that issues shippers are facing obtaining space and equipment arise from once in a lifetime circumstances: end-to-end capacity being overwhelmed by the pandemic and its impact on consumer purchasing and productivity across the shipping network. “Normalized demand, not regulation, will solve supply chain delays,” the World Shipping Council, representing container lines, said on July 6. Those views were echoed by FMC Chairman Daniel Maffei who told a June 15 House hearing, “The primary reason for the congestion, high prices, and lack of reliability is that demand for cargo shipping has outstripped the supply.”

Others will point out the bill’s implicit prioritizing of exports over imports. Ocean carriers’ refusal to carry certain export cargoes over the past year can be seen both as an effort to free up capacity for import cargoes moving at several times the freight rate of export cargos, helping carriers achieve record profits, but also an effort to ensure capacity for consumer products, including many necessarily consumer staples, that dominate import volumes.

But none of that is slowing down the momentum for legislation on Capitol Hill, which was hardly hurt by the Biden administration including shipping in its July 9 executive order on competition, pointing out ocean carrier consolidation and their foreign ownership and urging the FMC to enforce existing prohibitions of unjust and unreasonable practices in detention and demurrage. Nor does the reform effort face the gauntlet of powerful US-flag carriers that earlier shipping act revisions had to accommodate, leading to consensus on issues like confidential contracting; today’s container shipping industry is dominated by carriers based in Europe and Asia, including China, who in the current environment find themselves with few allies in Washington. If the reform movement results in legislation being passed and signed that will happen despite the adamant opposition of the carriers.

Provisions relating to exports, detention and demurrage and provision of equipment stand out as key areas of reform as proposed in the draft bill, observers point out.

“The changes include greater authority to the Federal Maritime Commission to effectively address and enforce penalties against violators for unjust and unreasonable detention and demurrage charges and the issue of neglected US exports due to the container shortage,” according to an analysis of the draft bill by the law firm Venable. “Common carriers are also explicitly prohibited from conduct and practices deemed unreasonable in terms of equipment availability (i.e., containers and chassis).”

Bolstering “common carriage” responsibilities

In the area of exports, an ocean carrier “may not,” according to the draft bill “unreasonably decline export cargo bookings if such cargo can be loaded safely and timely.” If the bill becomes law, “unreasonable” in this sense will surely be subject to interpretation but overall it will leave carriers with less leeway to reject export loads.

And that’s the point: The overall purpose of the draft law, according to the language, is “to support the growth and development of United States Exports,” blunt wording that would replace the wording of current US shipping law, which, reflecting deregulatory intent, is to “promote the growth and development of United States exports through competitive and efficient ocean transportation and by placing a greater reliance on the marketplace.”

Focusing on detention and demurrage, a longstanding grievance of shippers, an ocean carrier may not “invoice any party for detention or demurrage charges,” when those charges are primarily revenue generating and don’t exist for the primary purpose of promoting the smooth flow of equipment.

The draft law would bar a carrier from invoicing any party for detention or demurrage charges, unless it is accompanied by an “accurate certification” that such charges comply with the findings of the May 2020 FMC interpretative rule. Among the key findings of that rule are that “Importers, exporters, intermediaries, and truckers should not be penalized by demurrage and detention practices when circumstances are such that they cannot retrieve containers from, or return containers to, marine terminals.”

The re-regulatory intent of the draft bill is made clear in the opening line of 63-pages of text. The draft bill eliminates the words “with a minimum of government intervention and regulatory costs” from the current wording that the purpose of US shipping law is “to establish a nondiscriminatory regulatory process for the common carriage of goods by water in the foreign commerce of the United States with a minimum of government intervention and regulatory costs.”

The members of Congress behind the re-regulatory push, who are allies of agricultural interests, made clear their frustrations with carriers at a June 15 hearing of subcommittee of the House Transportation and Infrastructure Committee.

“We have a problem in which the shipping industry is able to discriminate against American exporters, plain and simple,” Garamendi said. “It may be because they can make a heck of a lot more money sending containers empty, rather than allowing them to be here long enough to be loaded up with American exports. It is a serious problem.”

The law requires the FMC within 60 days following passage of the law to initiate a rulemaking to enshrine the intent of the law in regulation. The rulemaking “shall address the unreasonableness of ocean common carriers prioritizing the shipment of empty containers while excluding, limiting, or otherwise reducing the shipment of full, loaded containers when such containers are readily available to be shipped and the… vessel has the weight and space capacity available to carry such containers if loaded in a safe and timely manner,” the draft bill says.

No mention is made of whether or not the cargo is profitable for the carrier, a point carriers are likely to make in saying that it’s unfair, and possibility unconstitutional, to require a private company to accept unprofitable business.

Ocean carriers will argue that legislation that addresses problems arising out of a once in a lifetime crisis like a pandemic is an overreaction — exporters were rarely heard to complain about rates or capacity pre-pandemic when overcapacity dominated the market. But the same argument doesn’t hold true for detention and demurrage, where complaints were already loud and consistent years before the pandemic hit.

COVID-19 flares up long-standing grievances

Interest by the FMC in the issue goes back as far as 2014 when it held a series of port forums where the issue surfaced as a “palpable” concern of shippers, according to the agency. A formal fact-finding inquiry launched in 2018 (Fact Finding 28), which led to initial and finalized interpretive rules in 2019 and 2020 respectively failed, in the eyes of shippers, to end practices of unfair detention and demurrage billing. That led the National Industrial Transportation League in May to take the unusual step of proposing changes to the Shipping Act.

Issuance of the FMC’s initial interpretative rule in 2019, which ocean carriers opposed, “followed years of complaints from U.S. importers, exporters, transportation intermediaries, and drayage truckers that ocean carrier and marine terminal operator demurrage and detention practices unfairly penalized shippers, intermediaries, and truckers for circumstances outside their control,” according to the FMC.

FMC commissioners such as Rebecca Dye oppose changes to detention and demurrage legislation, saying the agency is able to regulate the industry using its existing powers. The FMC recently began proactively investigating carriers for detention and demurrage violations without waiting for formal complaints to be filed by shippers, which are rarely made due to shipper fears over retaliation; even though retaliation is illegal under current shipping law and carriers vehemently deny that they retaliate against shippers who bring complaints.

But through the shipping act rewrite Congress could give the agency far greater power and purview — even if some commissioners individually urge legislators against enlarging the FMC’s role. In a twist on the old adage, if the industry can’t solve its own problems, the government will at least try.

Union Pacific suspends inbound international container shipments to Chicago for a week

By Bill Stephens | July 14, 2021, www.trains.com

Embargo will allow railroad to address backlog at Global IV facility

OMAHA, Neb. – In the latest pandemic-related disruption, Union Pacific has told customers it will halt all shipments of international containers from West Coast ports to its Global IV terminal in Chicago for up to a week.

The embargo, scheduled to begin on Sunday night, will help the railroad clear a container backlog at Global IV. The terminal is clogged largely due to reasons beyond the railroad’s control. Labor shortages and pandemic-related restrictions have slowed unloading and loading of containers at customer facilities. That has led to a shortage of chassis and drayage capacity during a period of high demand.

Other railroads, including BNSF Railway and Norfolk Southern, also have taken steps at various times this year to limit inbound volume at congested terminals in Memphis, Chicago, and elsewhere on their systems.

Intermodal analyst Larry Gross says UP’s move will create massive backups at West Coast ports, which are already busy as retailers are looking to keep up with consumer demand and aim to restock depleted inventories at their warehouses and store shelves.

As many as 40,000 twenty-foot equivalent units — or TEUs, the standard measure of international containers — will be stuck at West Coast ports over the next week due to the UP embargo, Gross says. That’s equivalent to 50 double-stack trains, each with 200 wells and a capacity for 800 TEU.

“The biggest issue seems to be a shortage of pool chassis to support normal operations at this wheeled terminal,” Gross says of the congestion at Global IV. “But I’m told that if a drayman shows up at Global IV with their own chassis to pick up a grounded box, they can’t get the box loaded.”

In a service advisory issued today, steamship line HMM told customers to expect delays to containers that are on ships or already on docks at West Coast ports. “There will be some restrictions on new bookings from Asia to Chicago destinations in order to clean up any already in-transit cargoes,” the HMM advisory says.

“As the U.S. intermodal supply chain continues to be stressed with U.S. West Coast terminal congestion, we will continue to closely monitor the circumstances of other inland rail ramps, as well,” HMM says.

UP, in a service advisory two weeks ago, adjusted its container storage charges amid parking congestion at the terminal.

“The international intermodal supply chain continues to experience congestion related to high demand and constrained capacity, particularly drayage and warehouse operations in major markets,” UP said in a July 1 advisory. “Union Pacific has strived to maximize container shipments between ports and inland ramps, but available parking space at Chicago’s Global 4 ramp has been consumed due to slow outbound drayage processing.”

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