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.”
Wildfires Affect Western Canada and Rail Operations
British Columbia Wildfire impact on service
Dear Valued Customer,
We would like to update you on the situation in Western Canada in relation to the wildfires in the Lytton, BC area which has impacted the key access route towards the ports in Vancouver.
Transportation modes impacted: Both CN and CP Rail were granted access to the rail tracks to determine the necessary steps to resume safe rail operations. They are currently assessing the damage and estimating the time needed for repair.
CP Railways update:
- One line belonging to CP has been opened and CP is restarting the operations and trains following through the area at reduced speed.
- Westbound export in-gate embargo is in place requiring truckers to report to problem area to clear through Remote Operations Center (ROC). Embargo holds are being actively worked out by CP to ensure terminals accept containers in line with trains ramp-up.
CN railway update:
CN is currently working on directing traffic via alternative routes either by using the CP line on a co-production agreement or by collaboration with BNSF via different gateway. At this time an embargo has been issued on traffic going Westbound and Eastbound.
As mentioned on yesterday’s update, it is anticipated that regular flow in and out of port of Vancouver will be impacted for at least one week. We will see increased congestion at terminals and expect vessel delays.
We are working closely with different stakeholders to understand the impacts of the delays on terminal operations and to develop a contingency plan.
Impact to Maersk operations: Our offices are open and working – and not impacted since most of our staff are working from home. Our warehouses are open and working.
Your business is important to us and we pledge to keep you fully informed as more details become available.
Should you have any questions on the situation, please feel free to contact your local Maersk professional.
Your Maersk Team
Notice to Customers
Pacific North West (PNW) Services Update
Dear Valued Customers,
Further to previous advisory, we would like to update you on the operational situation related to the wild fires in Lytton, BC area. CN Rail is working with local authorities to inspect the area, assess the damages and time needed for repairs and resuming operations. In the meantime, CN has moved some traffic by utilizing CP lines’ networks with limited capacity and will continue to plan rail movements whenever possible.
In terms of terminal operations, currently there are two ZP8/ZP9 vessels in Vancouver and pending operations.
- ZP8: Santa Ines (JK6 V.8N) is tentatively scheduled to start operations in Centerm terminal on July 9 local time.
- ZP9: Maersk Lins (YE4 V.10N) at Deltaport terminal is pending operations as she is not only affected by the wild fires but also a Covid case. Her operations start time is to be updated.
Thank you for your attention and understanding on this matter. We will continue to keep you posted of any further developments.
ZIM Integrated Shipping Services Ltd
Aluminum License Requirements, Updated
A Rule by the International Trade Administration on 05/21/2021
Please note the CBP Cargo System Messaging Service (CSMS) concerning the June 28, 2021 Aluminum License requirement.
Key requirements that the IOR is required to report include:
• Country of Largest Smelt
• Country of Second Largest Smelt
• Country of Most Recent Cast
The CSMS provides the websites that have all the requirements and offer virtual demonstrations: https://www.trade.gov/updates-aluminum-import-licensing. Look for Registering for a Virtual Demo under Calendar of Updates.
AIM prepared a schedule of upcoming virtual demos. New demos may be announced here as they become available. Please be advised that registration for these demos will close 30 minutes before the demo start time. Here are the types of virtual demos planned, and the dates on which you can attend them:
Getting Started with the AIM License System
Thursday, January 7th, 2021 @ 1:00 PM EST – Completed
Thursday, January 14th, 2021 @ 10:30 AM EST – Completed
Thursday, January 21st, 2021 @ 3:00 PM EST– Completed
4. Wednesday, June 23rd, 2021 @ 2:00 PM EST
5. Monday, June 28th, 2021 @ 2:00 PM EST
E-mail firstname.lastname@example.org to register for an AIM License System demo and specify the number for the virtual demo you would like to attend (e.g. 3,4, and 5). Each demo will cover the same material.
Cargo Systems Messaging Service
CSMS #48350723 – ALUMINUM IMPORT MONITORING AND ANALYSIS SYSTEM (AIM): STAY OF REGULATIONS AND DELAY OF COMPLIANCE DATE
This message contains important information regarding the U.S. Department of Commerce’s new Aluminum Import License program.
Commerce has published a notice in the Federal Register responding to public comments about the AIM system and confirming that compliance with the rule “Aluminum Import Monitoring and Analysis System” will be required on June 28, 2021. See Aluminum Import Monitoring and Analysis System: Effective Date and Response to Comments, 86 FR 27513 (May 21, 2021) available at https://www.federalregister.gov/documents/2021/05/21/2021-10747/aluminum-import-monitoring-and-analysis-system-effective-date-and-response-to-comments.
Consequently, brokers and importers are notified that imports of most aluminum products will require an aluminum import license for each entry beginning on Monday, June 28, 2021. Please see the list of aluminum products subject to the new licensing requirement at: https://www.trade.gov/aluminum-products-hts-codes. The aluminum import license number obtained from Commerce for each shipment, as well as the License Type Code (28), must be reported on the corresponding entry summary or electronic equivalent in ACE.
The new licensing system is available at https://www.trade.gov/aluminum and is currently open for account registration and license applications. Importers, brokers, and other license applicants will need to register for an account in order to apply for a license. The Trade is advised to plan accordingly and obtain any licenses needed for entry in advance of June 28, 2021, from the Commerce website. The new aluminum license system will use the same platform as the licensing system for the Steel Import Monitoring and Analysis (SIMA) System, therefore users with an existing steel license account do not need to create new accounts.
Commerce previously published a final rule concerning the aluminum license. See Aluminum Import Monitoring and Analysis System, 85 FR 83804 (December 23, 2020) available at https://www.federalregister.gov/documents/2020/12/23/2020-28166/aluminum-import-monitoring-and-analysis-system. This final rule details the new system, including license requirements and the platform for the license application.
To assist the Trade with using the Commerce portal to register new accounts and complete license applications, Commerce has developed a series of instructional videos, users guides, FAQs, and virtual demonstrations. For more information and to sign up for a virtual demonstration, please visit: https://www.trade.gov/updates-aluminum-import-licensing. Should you have questions, please contact the Commerce aluminum licensing team at: email@example.com.
NOTICE TO CUSTOMER
Port of Yantian Closure
26 May 2021
Dear Valued Customer,
The Port of Yantian stopped taking in loaded containers as berth congestion deteriorates and as local health authorities tighten their anti- virus measures within the port facilities.
The restriction will be implemented from 2200 hrs local time on May 25 to 2359 hrs on May 27. The restriction will only be partly lifted for export boxes with expected vessel arrival at the port within the next four days.
Pickups of import or empty containers is allowed during this period.
We expect the Yantian port congestion to persist for some time and are working on contingency plans and service recovery.
ZIM Transpacific Business Unit
Re: YICT (Yantian International Container Terminal) – Outbound Cargo Receiving Arrangement
Dear Valued customers,
This is to share that upon YICT terminal’s information: Due to increasingly serious update in shipping schedules, the storage yard in Yantian Port has a very high density, which seriously affects the efficiency of terminal operations and also causes traffic congestion around the port area. In order to improve the above problems, Yantian International decided to:
- During the period from 22:00 on 25th May to 23:59 on 27th May, export heavy containers will not be accepted into the gate; during this period, import heavy containers and empty containers will maintain normal operation. 5 月 25 日 22:00 至 5 月 27 日 23:59 期间，不接收出口重柜入闸；在此期间，提进口重柜及空柜维持正常操作。
- From 00:00 on 28th May, the acceptance of heavy containers will resume, and only ETA-4 (that is, the export heavy containers within four days before the expected arrival date of the ship) will be accepted. This measure will be implemented from 28th May to 3rd June. 5 月 28 日 00:00 时起, 恢复接收重柜，只接收 ETA-4（即船舶预计到港日期前四天内）的出口重柜，此措 施实施时间为 5 月 28 日至 6 月 3 日。
Please well check the latest arrival date via below link before gate in, or you could check with terminal on the acceptance date upon the necessity.
关于船舶最新到达盐田国际码头日期，请通过以下 “易物流盐田” 网站做查询参考，或可联系盐田国际码头核查可接收重柜的日期。
Using this opportunity, we would like to express our sincere appreciation for your continual support. Please do not hesitate to contact us if we could be of any assistance.
MSC (HK) Ltd.
As Agent for Mediterranean Shipping Company S.A.
82 Trans-Pacific Blank Sailings for May & June 2021 & Cyclone Tautkee effecting Indian Ports
|Loading Branch||Updated (Date)||Carrier||Alliance||Destination Region||Service String||Gateway||Slip Vessel ETD||ETD Week|
|Hong Kong||12/May/21||CMA||Ocean Alliance||Americas||DAS||PSW||05/May/21||2021_18|
|Ningbo||13/May/21||CMA||Ocean Alliance||Americas||HANGZHOU BAY BRIDGE||PNW||11/May/21||2021_19|
|Ningbo||13/May/21||ONE||The Alliance||Americas||NEW EC6||PNW||23/May/21||2021_20|
|Shanghai||20/May/21||WANHAI||Non – Alliance||Americas||AA5||PSW||27/May/21||2021_21|
Cyclone Tautkae effect on Indian Ports
- The port was nonfunctional for 72 hours all Import vessel operation was suspended.
- The Ports (JNPT/Mundra/Hazira) has suspended vessel berthing at Nhava Sheva port waiting for landfall of cyclone Tauktae by Saturday evening, and suggested ships at berth to cruise out.
- Pipavav Terminal has severely affected due to Cyclone Tauktae.
- Currently there is no electricity in the terminal and the rail connectivity has been totally stopped.
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].”
Suez Canal Update
Suez Canal to be re-opened soon – no more deviations via Cape of Good Hope
Hapag Lloyd reporting:
The vessel EVER GIVEN has refloated in the early morning and will be towed to Great Bitter Lake for inspection. Towage operations for the vessel should commence very soon during high tide. Damaged area of the canal will be inspected and repaired if necessary.
We expect transits to start later this evening. It is still not clear if any vessels might be prioritized for passage. Current backlog should be cleared within four days.
We currently do not know the exact ETA of our affected vessels, but we will do our utmost to optimize the rotations in order to minimize potential bottlenecks at ports and terminals.
Please be assured that we are tirelessly working 24/7 to keep the impact on our customers as low as possible. We will keep you regularly updated about the further developments.