URGENT – PORT STRIKE IN MONTREAL
Port of Montreal – TO be Shut Down by Longshoremen’s
Dear Valued Customers,
This morning at 7:00 am the Union representing the Port of Montreal Longshoremen (CUPE Local 375) gave a 72 hour strike notice to the Maritime Employers Association (MEA), which will result in all container and general cargo movements ceasing as of Monday April 26 at 7:00 am, for an indefinite period of time.
In practical terms, this is only a 6-8 hour notice, as the union members have refused to work overtime and weekends for the past 10 days, therefore the port’s operations will effectively shut down as of Friday night.
Of serious concern is the cargo remaining within the port facilities, and which may become unavailable for the duration of the shutdown, and the both truckers and the rail carriers have been using their best efforts over the course of today, as well as the last few weeks to move import containers out of the port as soon as they become available.
The only exception to this strike notice and port shut down, is services to/from Newfoundland via the Oceanex terminal, which is deemed an essential service.
ITN has joined with the Canadian International Freight Forwarders Association (CIFFA) and over thirty other trade associations and hundreds of ITN clients and other affected companies, to urge our federal government officials to take direct and immediate action to avert this labour dispute from impending the flow of cargos, which will have a disastrous impact on our already fragile Canadian economy.
Please join us in keeping the pressure on our elected officials to seek a negotiated solution to this labour problem, which will not hurt the Canadian business at this most critical time.
ITN will continue to keep you updated as further information becomes available.
Sources for this Blast come from ITN Logistics.
AVAILABLE OCEAN SPACE AND EQUIPMENT FROM ASIA TO USA IS NOW AT THE LOWEST LEVEL SINCE THE BEGINNING OF PANDEMIC
KEY FACTORS CONTRIBUTING TO THE GLOBAL SPACE PROBLEM
1. Suez Canal incident has caused massive delays, canceled sailings and increased port congestion throughout the world reducing global capacity by as much as 30% in the next two to three months.
2. Panama Canal low water levels has forced a reduction of weight capacity on vessels which lowers the volume of containers and products moving through the Panama Canal to the USA from Asia.
3. US has hit the lowest inventory levels ever reported by the Institute for Supply Management since the ISM index was established in 1997. There is now a huge push to replenish those inventories.
4. New Covid-19 Relief Package fueling spending power with a continued shift of buying goods instead of services.
PLEASE READ SUPPORTING ARTICLES BELOW:
Demand boom on collision course with ocean transport ceiling
Greg Miller, Senior Editor, Freightwaves.com / American Shipper, April 2, 2021
U.S. containerized imports show no sign of letting up as the second quarter begins. On the contrary: Consumer demand is strengthening in the wake of fiscal stimulus and falling inventories that necessitate even more restocking.
The biggest risk to Q2 container-shipping volume is not demand for goods, it’s transport supply.
Fallout from the Suez Canal accident will constrain vessel and container-equipment availability, leading to longer delays. By the end of this quarter, shoppers in America’s stores could find more bare shelves. Online shoppers could increasingly see the words “out of stock.”
Inventory restocking tailwinds
The positive data on demand keeps piling up. On Thursday, the Institute for Supply Management (ISM) Customers’ Inventories Index (SONAR: ISM.MCIN) sank to 29.9 points.
“This reading is the lowest ever reported since the sub index was established in January 1997,” said Timothy Fiore, chairman of the ISM survey committee. “For eight months in a row, [the index] has been at historically low levels.”
According to Amit Mehrotra, transportation analyst at Deutsche Bank, this falling index number “tells us there is additional runway for restocking demand as retailers shift away from just-in-time inventory.”
Mehrotra expects cargo volumes to be “stronger for longer” as a result of both inventory restocking and increased consumer confidence driven by vaccines and stimulus.
New retailer surveys at investment bank Evercore ISI paint a similarly bullish picture. As of Thursday, the Evercore retail sales survey index was at 67.5, up from an average of 47.1 in February.
Evercore ISI’s retailers pricing power survey index rose to 33.4, its highest level since December 2019. “Improving demand with lean inventory” drove the rise, said the bank.
In general, if demand outpaces inventory replenishment, import demand grows.
Bookings are still rising
FrieghtWaves’ SONAR platform features a proprietary index of shippers’ ocean bookings. Bookings are measured on a 10-day-moving-average basis in terms of twenty-foot equivalent units (TEUs) as of the scheduled date of departure. On Friday, the index for China-U.S. bookings (SONAR: IOTI.CHNUSA) hit a record high.
The nationwide index for inbound cargoes from all countries reached its highest-ever level on Wednesday.
The index also tracks bookings seven days into the future. This forward view shows that a fresh all-time high is coming next week.
The cargoes tracked by this data will not arrive at U.S. ports until late April or early May. In other words, as strained as ports are now, they face even greater pressure in the near future.
In California’s San Pedro Bay, off the ports of Los Angeles and Long Beach, there were 32 container ships at anchor on Thursday. That’s back up above the average of 30.5 container ships per day that have been at anchor since the beginning of the year.
Meanwhile, up in Northern California, ship-position data showed 14 ships at anchor off Oakland on Friday. Anchorage levels there have been in double digits since February.
Suez Canal fallout is coming
The Suez Canal accident is putting more pressure on an already strained global system. The number of ships waiting to transit the canal peaked last Monday, at 367.
About 80-90 ships have transited per day since the Ever Given was refloated, according to Leth Agencies. Prior to the accident, there were 52.7 per day (year to date).
But even as transits surge, more ships keep arriving. As of Saturday, there were still 156 ships at anchor awaiting passage through the Suez Canal. That’s about three times as many as normal.
After container ships transit the canal northbound, they head to Europe or the East Coast. “What’s going to happen is we’re definitely going to see bunching at European ports,” said Nathan Strang, global head of ocean freight at freight forwarder Flexport, during a webinar presented by Flexport on Wednesday. “Bunching” refers to too many ships arriving at once, creating congestion.
“There may be reduced time in port to try to recover those schedules. That’s going to lead to export cargo and equipment being left behind,” said Strang. He added that “there’s going to be delays for Europe and East Coast services.”
‘Curveball’ to prolong situation
Strang also speculated that carriers could “blank” (cancel) sailings on other routes so they could switch more ships to Asia-Europe services to counteract the accident fallout. “Carriers may start blanking trans-Pacific and trans-Atlantic routes to recover on the more lucrative Far East [to Europe] route,” he said.
Anders Schulze, Flexport’s global head of ocean freight, predicted that the Suez Canal accident would lead to “a capacity reduction across the board, both in terms of vessel capacity and [container] equipment. There will be a domino effect in terms of vessels and equipment getting back to Asia.”
The disruption at the Suez Canal and congestion at European ports will limit the number of empty containers transported back to Asia. This, in turn, will reduce the number of empty containers available to stuff with Chinese exports bound for the U.S. on trans-Pacific routes.
“The equipment situation was already somewhat critical,” said Schulze. “We were just seeing a light at the end of the tunnel with equipment availability and now this curveball will prolong the situation.”
Further compounding challenges for shippers, at least one carrier — Maersk — has temporarily halted short-term bookings in the wake of the Suez Canal accident. As of Friday, Maersk’s short-term bookings from Asia to both North Europe and North America remained suspended until further notice.
Add it all up — rising consumer demand, very low inventories, a halt to some bookings, voyage delays, vessel and container capacity curbed by Suez Canal fallout — and it’s a recipe for more bare shelves at American stores.
Ever Given’s Owner Files Suit and Declares General Average
BY THE MARITIME EXECUTIVE 04-01-2021 06:00:00
The owner of the boxship Ever Given has filed suit against operator Evergreen in connection with the vessel’s grounding in the Suez Canal on March 23, according to UK outlet The Lawyer. The details of the filing are not public, but the defendants include Evergreen and all other parties who may claim damages in connection with the incident.
The Panama-flagged Ever Given is owned by Panama-based Luster Maritime, a subsidiary of Japanese shipowner Shoei Kisen Kaisha. She is chartered to Taiwanese carrier Evergreen, with ship management by Japanese firm Higaki Sangyo Kaisha and technical management by the Hong Kong division of BSM.
As the shipowner, Shoei Kisen Kaisha is widely expected to bear the brunt of damage claims from shippers and shipping interests. Egypt alone believes it is owed at least $1 billion in compensation for the six-day shutdown and the cost of the refloat effort, Suez Canal Authority chairman Osama Rabie told reporters Wednesday. He did not specify who should be liable to pay the damages, but he emphasized that Egyptian responders “saved [the shipowner] so much by rescuing the ship without any major damage or losses.”
“We could agree on a certain compensation, or it goes to court,” Rabie said. “If they decide to go to court, then the ship should be held.”
Shoei Kisen Kaisha has declared general average in connection with the disaster, indicating that it will impose a bond requirement on cargo interests before releasing containers from the ship. Richard Hogg Lindley has been appointed as the GA adjuster, according to The Loadstar.
GA charges are typically assessed as a percentage of the value of the cargo, and in the case of massive losses – like the catastrophic fire on the Maersk Honam – shippers may be asked to pay GA and salvage bonds exceeding half the value of their cargoes. No cargo has been damaged in connection with this incident, but the bonds may be used to recover the cost of the refloat effort.
For its part, Evergreen believes that as the charterer it has “very low” exposure to financial risk from the grounding, president Eric Hsieh told Taiwanese reporters on Thursday. “Our risk exposure from the Ever Given incident is very low – even if there are damages, it will be covered by insurance,” Hsieh said. “Evergreen is free of responsibility from cargo delays [under the terms of carriage].”