Canada Border Services Agency Assessment and Revenue Management Project – coming soon!

The CBSA Assessment and Revenue Management (CARM) project is a multi-year initiative that will transform the collection of duties and taxes for goods imported into Canada. Through CARM, the CBSA will modernize and streamline the process of importing commercial goods.

Benefits

Once fully implemented, CARM will:
• simplify the overall importing process.
• provide a modern interface for importing into Canada.
• give importers self-service access to their information.
• reduce the cost of importing into Canada.
• improve consistency of compliance with trade rules.

The implementation of CARM is structured in a series of releases. The Accounts Receivable Ledger (ARL) was the first phase of the CARM project. For details on ARL, consult the Commercial payments and accounts section of our website.

Read more about the CARM features and on how to prepare for the CARM initiative.

Timeline

CARM Release 0: January 2021
The existing ARL system will be moved from its current data centre configuration to the more robust SAP S4/HANA system. External users of the system will not experience any change. Importers’ Daily Notices may be delayed a few days during the implementation of Release 0 for Electronic Data Interchange (EDI) clients.

CARM Release 1: Spring 2021
Release 1 will launch the CARM Client Portal, a self-service tool to facilitate accounting and revenue management processes with the CBSA.

CARM Release 2: Spring 2022
Release 2 will expand on the functionalities of the CARM Client Portal.
Stakeholder engagement

Join the CARM GCcollab group, an online forum for the trade chain community, where members can access the latest communications materials related to CARM. To join, simply create a GCcollab account and make a request to join the CARM group.

For questions about the CARM project and/or to register for future CARM-related communications, contact CARM Engagement (cbsa.carm_engagement-engagement_de_la_gcra.asfc@cbsa-asfc.gc.ca).

CBSA has also established a Trade Chain Partner Working Group, whose members continue to receive information on the CARM project.

Link: https://www.cbsa-asfc.gc.ca/prog/carm-gcra/menu-eng.html

Vestager to examine competition in red-hot container market

By Louise Wendt Jensen, Astrid Sturlason – Published: 08.03.21 at 14:59, ShippingWatch.com

EU Competition Commissioner Margrethe Vestager now plans to scrutinize the extreme situation unfolding in the global container market together with the industry. The EU will subsequently “consider ways forward,” a spokesperson tells ShippingWatch.

Copenhagen/Brussels

The European competition authorities will now – together with the industry – examine the current conditions in the global container market. Conditions that have so far been criticized by both US and Chinese authorities.

Rising freight rates, growing container shortages and major delays have long been the consequence of a red-hot market that has seen extraordinary demand for transporting goods from Asia to Europe and the US during the coronavirus pandemic.

“We are discussing with market participants, i.e. shippers, freight forwarders, port operators, carriers, to fully understand the current circumstances, and consider ways forward,” says a spokesperson for Margrethe Vestager, EU executive vice-president and competition commissioner, in a comment to ShippingWatch.

“It seems that these price increases were caused by a combination of factors, such as fluctuating high demand, port congestion, and shortage of containers, in markets which are intertwined at worldwide level,” the spokesperson continues.

This is the first time the EU exhibits such a clear reaction to the current situation in the container market, seeing as the EU’s stance is often more tentative and based on a requirement that evidence must first be presented – at least if it concerns a possible breach of the container liners’ particularly favorable competitive conditions.

The rate boom and current customer dissatisfaction with the low service levels have already led authorities in both the US and China to speak up. The Chinese authorities last year summoned the world’s largest container lines to a meeting in which they were urged to curb rates.

The Federal Maritime Commission in the US has also upped its surveillance of the three large container alliances, under which the world’s largest container lines have organized themselves.

Criticism of liner companies

Shipping companies such as Maersk have been under scrutiny from the US authorities, which now demand monthly updates from the carriers in order to monitor the market. Previously, these updates were only given quarterly.

Maersk has – like many of its competitors – acknowledged that its service is currently substandard, but the carriers also all refer to the extraordinary circumstances created by the Covid-19 pandemic.

“We’re actually dismayed by the level of service we’re forced to provide right now,” said Maersk CCO, Vincent Clerc, recently.

“It doesn’t feel like a big high five moment right now. It feels like a moment where too many customer promises are not being delivered on and we are all hands on deck in trying to alleviate the situation,” he said.

Maersk CEO Søren Skou has set a stated target of bringing the company’s reliability up to between 85 and 95 percent as early as 2021. In January this year, this figure sat at 46.3 percent for Maersk’s ships against 76.4 percent in January last year.

Criticism from US agriculture

In the US, associations like the Agriculture Transportation Coalition and transport associations such as HTA have voiced their opinions. Just last week, Global Shippers’ Forum also voiced its criticism.

In a new review, GSF criticized shipping companies for continuing to provide poor service while cashing in record-level rates.

The industry association’s quarterly survey, conducted by MDS Transmodal, examines eight key performance indicators (KPIs).

“Importers and exporters around the world are paying record high shipping rates but receiving appalling levels of service reliability,” asserts Global Shippers’ Forum in the review.

Difficult for shippers to resolve

Organizations the European Association for Forwarding, Transport, Logistics and Customs Services (CLECAT) and European Shippers’ Council (ESC) have previously urged the European Commission to take action against the container lines, which they believe to be taking advantage of their special position and special competition exemption.

But so far, this has not been possible.

Because in order to do something, the two associations must either submit a formal, well-founded complaint about the competitive conditions or wait for the EU to, at some point, begin their evaluation of the so-called Block Exemption Regulation (BER).

BER is a special competition regulation that allows the container majors to coordinate their efforts through alliances such as, for example, Maersk and MSC’s 2M alliance. With the alliances, container lines are able to coordinate their networks and utilize space aboard each others’ vessels, if their market share is lower than 30 percent, that is.

Derailment Impacting Intermodal Operations in Southern California

BNSF RAILWAY, BNSF.com | March 04, 2021 

BNSF experienced a derailment yesterday afternoon at Ludlow, Calif., approximately 60 miles east of Barstow. As this incident occurred on the Southern Transcon, our primary route between Southern California and the Midwest, rail operations have been significantly impacted. Both main line tracks in this location are currently out of service.

Engineering crews and equipment were quickly deployed to the scene. The first main track is currently estimated to reopen this evening, with the second main line back in service early tomorrow morning. With the high volume of intermodal traffic to/from California, customers with shipments designated to move through this corridor should expect delays until operations have fully normalized.
Gate allocations are being utilized at our Southern California intermodal facilities to ease congestion due to elevated inventories and car supply issues. Limiting gate activity will help expedite the pace of our recovery efforts once the affected main line tracks reopen.
As always, we remind customers that prompt pick-up of shipments will help improve traffic flows, reduce lot congestion and provide the space needed for processing inbound freight as expeditiously as possible. BNSF has multiple tools available for customers to track their shipments.
We appreciate your cooperation and quick response as we work together to rebalance equipment flows. Our operating teams remain focused on safely restoring service to the level you expect from us.

Vaccinations for LALB and Severe Weather Affects Rail

Lots of news coming out today in the world of transportation. 800 longshoremen in the ports of Los Angeles and Long Beach have received their first COVID-19 vaccinations. This will significantly help to reduce potential service reductions due to labor disruptions. Hopefully more states throughout the United States will follow suit and vaccinate their port and transportation workers.

With the severe weather that is affecting the majority of the country the Union Pacific Railroad will be closing most of their intermodal network due to snow and icy conditions. These conditions have affected transportation the Pacific Northwest, Midwest and as far south as Texas.

BOC will continue to monitor these stories and all those that affect global trade.

Severe Cold Weather Impacts Train Lengths

We would like to update you on the severe cold weather conditions that we are currently experiencing in some parts of the network impacting trains length in the following corridors:

• Prince George/Kamloops to Edmonton: Tier 2 currently in effect
• Edmonton to Jasper: Tier 2 currently in effect
• Edmonton to Winnipeg: Tier 2 currently in effect
• Winnipeg to Toronto: Tier 2 currently in effect
• Winnipeg to Superior: Tier 2 currently in effect

Due to these extreme temperatures we reduced train lengths in accordance with our winter operations plan. Based on forecasts, we expect that Tier restrictions will remain in effect intermittently across the network during the month of February. We are actively monitoring traffic and will be in direct contact with customers with shipments at risk of delay.

For a daily snapshot of the current weather conditions across the CN network, our Winter Situation Report is now available on cn.ca. It is updated daily at 09:30 (ET). Severe cold and high snowfall present challenging conditions to safe railway operations, primarily to our braking system. As part of CN’s winter preparedness and train operating plan, when temperatures fall below -25C, to ensure safe train operations, trains length is restricted, resulting in longer transit times.

Trans-Pacific trade crashes into max-capacity ceiling

Voyages canceled as volume and congestion overwhelm capacity

Greg Miller, Senior EditorGreg Miller, Senior Editor
Excerpted from www.FreightWaves.com, 1/27/21

It’s official: Container volumes in the Asia-U.S. trans-Pacific trade have hit their limit. Massive port congestion in the ports of Los Angeles and Long Beach is forcing ocean carriers to take extreme measures. Sailings are now being “blanked” (canceled) not because of lack of demand, but because of lack of tonnage as ships are stuck awaiting berths.

When ships fall behind schedule due to long waits in port, carriers normally add “recovery vessels” to take their place and keep weekly services going. There are no recovery vessels left. According to Hapag-Lloyd, “as our fleets are fully deployed and stretched beyond capacity, this is regretfully currently not an option.”

As a result, Hapag-Lloyd has blanked 19 sailings in February. “It is important to emphasize that vessels will not be idling at any time and we will perform as many voyages as possible,” stressed the carrier. Hapag-Lloyd is a member of THE Alliance along with Ocean Network Express (ONE), Yang Ming and HMM.

‘Need-to-get-back-on-schedule blanks’

“Schedule reliability is horrible,” said Simon Sundboell, founder of eeSea, a company that analyzes ship schedules. “These are not ‘pull-out-capacity blanks.’ These are ‘need-to-get-back-on-schedule blanks,’” Sundboell told American Shipper.

Carriers usually blank sailings at this time of year due to lower exports during the Chinese New Year (CNY) holiday. Carriers initially opted to keep CNY sailings largely intact in order to clear the export pileup at Chinese ports. But the congestion in Los Angeles and Long Beach is leaving carriers short of ships. That means the pileup in Asia will take even longer to clear.

(eeSea) data as of Wednesday reveals an 11% dip in Asia-U.S. sailings in February versus January. This is despite continued high cargo demand.

Seaintelligence Consulting CEO Lars Jensen explained, “When you have all the vessels stuck waiting outside ports, they cannot make the return journey so they cannot start the sailing they were supposed to do. The blank sailings now are not a choice. They are an operational necessity.”

No letup in San Pedro Bay traffic jam

At any given time since the beginning of this year, there have been around 30 container ships stuck waiting at anchorages in San Pedro Bay offshore of the ports of Los Angeles and Long Beach.

The situation has not improved at all. According to the Marine Exchange of Southern California, there were 33 container ships at anchorages and 26 at berths on Wednesday. Including all ship types, there were 55 vessels at anchorages — a new record, with all Los Angeles/Long Beach anchorages full and all contingency anchorages off Huntington also full.

On Monday, many of those vessels had to leave anchorage and go to sea due to extreme storm conditions. Winds gusted to 55 mph and swells reached 15 feet. Marine Exchange Executive Director Kip Louttit exclaimed that he “could not recall a more complex situation with this many vessels and this bad a wind and sea condition for such a sustained period of time.”

Port congestion is being caused by high inbound volumes combined with surging COVID cases among dockworkers. A spokesperson for the ILWU dockworkers union told American Shipper that number of its members testing positive had risen to 803 as of Monday, up 16% from 694 as of Jan. 17.

“They can’t service the ships fast enough, which has led to waiting times of 10-14 days or even more, depending on the terminal,” said Nerijus Poskus, global head of ocean freight. “As of last week, there were almost 300,000 TEUs [twenty-foot equivalent units] waiting to get offloaded,” Poskus added.
Jensen put it another way. “It is the equivalent of pulling five full trans-Pacific services out of action as long as you have these waiting times,” he said. “The impact is massive.”

Deteriorating reliability, rising rolls

As previously reported by American Shipper, global schedule reliability has collapsed to around 50% versus normal levels of 70%-80%. Getting a box delivered on time is no better than a coin toss. In reality, the chance is much worse. Schedule reliability data doesn’t take into account blank sailings. Nor does it take into account cargo that is “rolled” — pushed off to a subsequent voyage.

Data on cargo rolls by the world’s top liners at the world’s top ports is compiled by Ocean Insights. According to Ocean Insights data released last week, the share of shipments that did not sail aboard their originally scheduled vessels rose to 37% in December. That’s up sharply from 29% in July and 25% in December 2019.

One importer moving goods from China via Los Angeles wrote to American Shipper: “We’re seeing over 60 days of additional transit time now. The entire process used to take 28 days. Now containers shipped in November have still not reached their final destination.”

Add it all up and U.S. consumers should see escalating shortages of goods on the shelves. That, in turn, should fuel import demand even further into 2021.

Light at the end of the tunnel?

One of the central drivers of today’s capacity crunch is a shortfall of containers. Or rather, a shortfall of containers positioned in the right place.

But there are some glimmers of hope. Data on container-equipment availability is tracked by the Container x-Change Container Availability Index. Availability of 40-foot high cubes (40HCs) remains extremely low. But availability of 20-foot dry cargo (20DC) and 40-foot standard dry cargo (40DC) units improved markedly this month.

An index level below 0.5 is considered a shortage. In the third week of January, the index in Shanghai for 20DCs was up to 0.34 and for 40DCs to 0.37. The index for 40HCs was still a very low 0.11.

Getting back to normal

Jensen expressed confidence that the container-equipment challenge will be resolved fairly soon. Chinese factories have been busy churning out new boxes.

“What’s happening now is exactly the same scenario we saw in 2010 after the financial crisis. If you look at 2010, they went on a building spree. It took about three months from when the problem arose to when it was resolved. If we put that in the context we have now, this should be resolved by Chinese New Year.

“The wild card this time around is the port congestion because that ties up a significant part of the ability to reposition the empty containers back into balance. That could delay things somewhat,” acknowledged Jensen.

As more containers are manufactured, liners should simultaneously work to get sailings back on schedule. “It appears the carriers plan to use the post-Chinese New Year period to get their vessels back on schedule,” said Jensen. “If that works out and if we get the port congestion sorted out — which is a big if — we could get back to normal levels [of service reliability] within a few months. But that’s the optimistic view.”

Hapag-Lloyd believes that container demand will remain high for the next six months

Excerpted from ShippingWatch.com, January 26, 2021

Uffe Østergaard, president of Hapag-Lloyd America, describes 2020 in the container industry as hectic, surprising and challenging. He expects the demand will remain high for another half year.

Hapag-Lloyd America President Uffe Østergaard projects that the container market will remain strong during the first six months of 2021, following a 2020 that was filled with an unexpected and huge boom in demand.

In contrast to other shipping markets, the container market has seen a boom in demand in 2020.

Østergaard explains that this has resulted in a hectic time for him and his employees and that there has been a lot of pressure on everyone to handle the situation, especially in terms of dealing with bottlenecks and delays – and thus their customers turning their phones red-hot with inquiries about their containers’ whereabouts.

“So that’s unexpected, in the sense that when we started on the Corona journey, in the early part of last year, we thought that the whole shipping business would drop significantly, which it did, but only for a short term. So since the summer, it’s been very hectic, trying to sort of catch up and, and deliver the goods wherever we can,” he says.

The US and, above all, the West Coast has become a symbol of the red-hot container market. As of this week, Østergaard confirms that there are still about 30 container ships anchored off Long Beach waiting for berths.

That number is similar to previous numbers that have been reported during the first weeks of January. On the 12th of this month, congestion at Long Beach counted 31 ships at anchor and 29 at berth, ShippingWatch reported. There were also 18 ships on their way to the port, which were expected to arrive within three days of the 12th.

“For the longest time, I said that I would expect that the market would come down after Chinese New Year. But that does not look to be the case right now. Both because the demand continues to be high in many of the major trades. And also because a lot of the bottlenecks still continue to linger, whether that’s in the terminals, where ships are waiting for days or weeks to get a berth, whether it’s equipment availability or truck availability, which is a big issue in North America.”

He adds that there are still plenty of discussions about additional stimulus plans, meaning more money pumped into societies both in Europe and the US. He believes that this will spur more demand, as people still cannot travel or go out and do activities, such as eating out, like they used to.

“A lot of that money will be sort of channeled into more spending. So, I think we definitely, first half of this year continue to see quite strong demand and continued supply chain challenges. With the delays and additional costs and so forth,” he says.

In addition, it looks like the contracts for 2021 are “starting to follow the common line so that the very low contract rates of 2020 are now being adjusted to the new reality.”

Hectic market, hectic home offices

Despite technology and remote working proving to be useful and a way of working going forward, even past pandemic life, Østergaard says it requires a different approach in communicating compared to when everyone is in the same place.

It puts more pressure on managers to be more proactive in sharing information and also being more active in checking in on everyone’s well-being and status at home.

“Dealing with frustrated customers and still maintaining your morale when you spend many hours listening to customers complaining about where’s my container, where’s my document? Where’s this? Where’s that? Why are you not doing this? Why are you not doing that? While you’re still trying to do your best, but simply because of external issues, you can’t get all the answers in time, that wears people down for sure,” the president for Hapag-Lloyd America says.

According to The Journal of Commerce, one has to wind back time to 2004 to find similar numbers of port congestion.

Østergaard says the company looks to come out of 2020 with a “sizable profit”, which he definitely did not expect at the onset of the pandemic last year.

COVID-19 Surge Could Shut Down Major California Ports

State officials worry possible labor shortages could occur if too many dock workers get sick, which would create a severe slowdown of the multibillion-dollar industry, and are urging workers to get vaccinated.

MARGOT ROOSEVELT, LOS ANGELES TIMES   |   JANUARY 20, 2021   |  ANALYSIS

(TNS) — Nearly 700 dockworkers at the twin ports of Los Angeles and Long Beach have contracted COVID-19 and hundreds more have taken virus-related leaves, raising fears of a severe slowdown in the region’s multibillion-dollar logistics economy.

A growing longshore worker infection rate, which parallels the surge of the virus across California, is exacerbating a massive snarl at the two ports due to a pandemic-induced surge in imports of general goods. Port executives, union leaders and elected officials are mounting an urgent campaign to initiate dockworker vaccinations, fearing that a labor shortage could force terminal shutdowns.

“We’ve got more cargo than we do skilled labor,” said Eugene Seroka, executive director of the Los Angeles port, in an interview. “We are told 1,800 workers are not going on the job due to COVID right now. That can [include] those who are isolating through contact tracing or awaiting test results. Or maybe [those who] fear … going on the job when a lot of people are sick.”

Workplaces across California, from behemoth warehouses to neighborhood businesses, face soaring coronavirus cases while trying to stay afloat amid continually seesawing restrictions. As the pandemic has worsened, containing the virus has become more difficult, especially among the L.A. region’s essential workers — who include dockworkers as well as grocery store clerks and nurses.

In the first months of the pandemic, container volume at the Port of Los Angeles plunged nearly 19 percent, but in the second half of 2020 it rose nearly 50 percent. “We’re not buying airplane tickets or going to ballgames and movies,” Seroka said. “We’re spending money on retail goods.”

That has led to a backlog at the ports that is now colliding with a COVID crisis. On Tuesday, 45 vessels were anchored outside the twin ports waiting to unload, part of a months-long bottleneck not seen since a work slowdown six years ago.

“Without immediate action, terminals at the largest port complex in America may face the very real danger of terminal shutdowns,” Rep. Nanette Diaz Barragan (D- San Pedro) and Rep. Alan Lowenthal (D- Long Beach) wrote to California and Los Angeles County health officials on Jan. 15. “This would be disastrous not only for the communities of the South Bay, but also the entire nation which relies upon the vital flow of goods through these ports.”

The warning from the two members of Congress came days after Los Angeles Mayor Eric Garcetti, Long Beach Mayor Robert Garcia and other local officials wrote Gov. Gavin Newsom and Mark Ghaly, California’s health and human services secretary, urging them to speed up the vaccination of Southern California’s 15,000 dockworkers “as soon as possible.”

The ports, they wrote, “are deemed critical infrastructure for national security purposes and medical supplies for the pandemic.” Pandemic equipment imports from Asia, including masks, sanitizer and ventilators for hospitals and other businesses across the nation, flow mostly through the Los Angeles and Long Beach complex.

Seroka, the port director, said private logistics companies, the state’s port directors and officials with the International Longshore and Warehouse Union “have worked every angle possible” since December to get help with testing and vaccinating dockworkers. “We haven’t seen a longshore worker get a vaccine yet.”

Last week, Newsom announced vaccinations would open to Californians 65 years and older. Los Angeles County officials this week said they would make COVID-19 vaccine appointments available to residents 65 and older beginning Thursday. But the county has yet to receive enough doses to meet the demand.

So far, Los Angeles County vaccinations are limited to healthcare workers, first responders and residents and staff in skilled nursing facilities. About 450,000 healthcare workers still need to be vaccinated and the next phase of vaccinations will not begin until those workers have received their shots — probably not until early February.

Port executives, union leaders and local elected officials want dockworkers to be next in line for vaccines after medical and other front-line workers.

The Los Angeles County health department did not respond to a request for comment on plans to vaccinate dockworkers.

Longshore workers report infections through a joint portal operated by the ILWU and the Pacific Maritime Assn., which represents terminal employers. According to the ILWU, of the 694 dockworkers reporting COVID-19 infections as of Jan. 17, 12 have died. In a letter this week to the maritime association, three presidents of Southern California ILWU locals said a single terminal, Fenix Marine Services, out of the twin ports’ 12 terminals has reported an outbreak since the beginning of the pandemic, involving 15 workers.

Under Los Angeles County regulations, if a workplace has three or more confirmed COVID-19 cases in 14 days, the employer must immediately notify the county public health department, the letter noted. “This is not being done by terminal operators at the San Pedro Bay port complex,” the representatives wrote. “The vast majority of terminal operators are failing to report at all.”

James McKenna, president and chief executive of the maritime association, said: “There’s probably a chance that [terminals] have underreported.” After receiving the letter, he added, his group “reiterated with them they need to report on an ongoing basis and a timely basis.”

McKenna disputed the number of dockworkers currently idled by the pandemic, saying that the total of 1,800 cited by the ILWU, port executives and elected officials represents a total for all California ports and includes workers on leave for other illnesses.

According to the union, the positivity rate, which measures the prevalence of infections when compared with the number of tests, is 65 percent for the Port of Los Angeles and 71 percent for the Long Beach port. But McKenna said those percentages are unreliable because workers with negative tests may not be entering their information in the portal.

Neither Seroka nor Mario Cordero, executive director of the Port of Long Beach, said they expect any imminent shutdown of port terminals. “But I don’t want to wait until it’s too late and then say, ‘Now we’ve got to shut this thing down,'” Seroka said. “We got to keep it rolling.”

In an interview, Cordero endorsed the congressional letter’s urgency. “If we don’t do something fast,” he said, “we are jeopardizing the fluidity of the movement of cargo.”

Link: https://www.governing.com/work/COVID-19-Surge-Could-Shut-Down-Major-California-Ports.html

Inside California’s colossal container-ship traffic jam

www.freightwaves.com , Greg Miller, Senior Editor, Wednesday, January 13, 2021

Over 30 container ships are anchored in San Pedro Bay off Los Angeles and Long Beach.

In the movie “Falling Down,” the character played by Michael Douglas is stranded in a Los Angeles traffic jam. He abandons his car, starts walking with briefcase in hand and ultimately has a mental breakdown. Cargo shippers trying to get their containers through the ports of Los Angeles and Long Beach can relate. The pileup of container ships offshore in San Pedro Bay and the congestion onshore at the terminals have reached epic proportions.

The situation could get even more maddening in the weeks ahead.

32 container ships at anchor

American Shipper interviewed Kip Louttit, executive director of the Marine Exchange of Southern California, to get the latest on ships in San Pedro Bay.

He reported that as of midday Wednesday, 91 ships were in port: 46 at berth and 45 at anchor. Of those, there were 56 container ships: 24 at berth and 32 at anchor. Between Wednesday and Saturday, 19 more container ships will arrive, with the same number due to depart.

There were a few more container ships at anchor on Friday —37 in total. Yet Louttit said “there has been no significant change between the first of January and today.”

Louttit confirmed that ships have effectively filled all of the usable anchorages off Los Angeles and Long Beach. Ships have also taken six of the 10 contingency anchorages off Huntington, the next town south.

If all the anchorages and contingency anchorages fill up, ships will be placed in so-called “drift boxes” in deeper water. These are actually circles not boxes. Unlike ships at anchorages in shallower water, ships in drift boxes would not anchor, they’d drift. “When you drift out of the circle, which has a radius of 2 miles, you start your engine and go back to the middle of the circle,” explained Louttit.

Historical perspective on traffic jam

Given the drift-box option, container ships are not about to hit any kind of maximum capacity offshore of California. Nor is there a higher safety risk. “There are a lot of ships, but they’re all very carefully watched and managed,” affirmed Louttit.

The significance of so many anchored ships is what they reveal about the extent of the logistics logjam on shore. The most recent comparable anchorage level occurred during the labor dispute between the International Longshore and Warehouse Union (ILWU) and their employers in 2014-15.

“On March 14, 2015, there were 28 container ships at anchor. We’ve blown through that record,” said Louttit. The all-time record for ships at anchorage off California occurred in 2004 during a rail staffing shortage.

“Normally, if you want a baseline, there’d be a dozen and rarely are they container ships,” he said.

Signal still flashing red

The Marine Exchange does not look past the coming four days’ arrivals. But there are other ways to see what’s headed this way across the Pacific.

It takes two to three weeks for containers to cross the ocean from China to California. The Port of Los Angeles developed The Signal, a daily digital tool powered by Port Optimizer, to indicate what’s en route. The system uses manifest data from nine of the top 10 carriers calling in Los Angeles.

The Signal data updated on Wednesday showed no letup in sight. Imports are expected to rise from 143,776 twenty-foot equivalent units (TEUs) this week to 157,763 TEUs next week to 182,953 TEUs the week of Jan. 24-30.

Importantly, the data does not solely include TEUs arriving in a particular week. It also includes TEUs arriving in prior weeks that the port expects to handle in the stated week.

Consequently, the data provides an indirect indicator of how much cargo is getting delayed. For example, on Monday, Jan. 4, The Signal indicated the port would handle 165,000 TEUs that week. But by Friday, Jan. 8, the assessment for that same week had plunged to 99,785 TEUs — implying that over 65,000 TEUs were pushed to the following week (i.e., this week). This pattern also suggests that the forecast for 182,953 TEUs the week of Jan. 24-30 will ultimately be revised downward.

Congestion causes

In an alert to customers this week, carrier Hapag-Lloyd reported, “All terminals [at Los Angeles/Long Beach] continue to be congested due to the spike in import volumes and [this] is expected to last until February.

“Terminals are working with limited labor and split shifts,” it said, asserting that this is related to COVID. “This labor shortage affects all terminals’ TAT [turnaround time] for truckers, inter-terminal transfers and the number of daily appointments available for gate transactions and delays our vessel operations.”

As a result of “lack of terminal space” to service vessels, “there is a constant switching of terminals that must be kept in mind” given that containers are ending up “in the wrong terminal,” said Hapag-Lloyd. 

Congestion woes are now spreading well beyond California ports, confirmed Hapag-Lloyd. The carrier reported “heavy congestion” in Canada and “berth congestion at Maher Terminal and APM Terminals [in the Port of New York and New Jersey] impacting all services with delays of several days being experienced upon arrival.”

Little relief ahead

Liner companies traditionally cancel numerous sailings during the Chinese New Year period to account for decreased Chinese exports. If they did so in 2021, it would allow U.S. terminals time to clear some of the inbound congestion. Unfortunately for terminals, liners are opting against canceling sailings during the Chinese holiday period next month.

Ports could also see congestion relief if U.S. consumer demand slowed. However, that does not appear to be happening.

Analysts believe the “blue sweep” scenario — with Democrats winning the presidency as well as both houses of Congress — will spur $1 trillion-$2 trillion in new stimulus during the first half of this year.

Investment bank Evercore ISI predicted, “Additional checks will reach consumers at a time when unemployment is lower [than during the 2020 stimulus round], mobility has significantly improved, the overall willingness to spend of the general public is up significantly, confidence levels are higher, housing is strong and the savings rate is still extremely high. That is a set-up for a consumer boom.”

CSMS #45244051 – GUIDANCE: Generalized System of Preferences (GSP) Expires effective, December 31, 2020

This notice is to inform the Trade that the Generalized System of Preferences (GSP), special program indicator (SPI) “A,” “A+,” and “A*”, will expire on December 31, 2020 if no Congressional legislation is passed to renew the program.

Until further notice, GSP eligible goods entered or withdrawn from warehouse need to pay “General” (column 1) duty rates effective, January 1, 2021, 12:00 am.

U.S. Customs and Border Protection (CBP) encourages importers to continue to flag GSP eligible importations with SPI “A” during the lapse, starting January 1, 2021.

Importers may not file SPI “A” without paying duties. CBP has programming in place that, in the event that GSP is renewed with a retroactive refund clause, will allow CBP to automate the duty refund process.

CBP will continue to allow post-importation GSP claims made via post summary correction (PSC) and protest (19 USC 1514, 19 CFR 174) subsequent to the expiration of GSP, for importations made while GSP was still in effect. CBP will not allow post-importation GSP claims made via PSC or protest subsequent to the expiration of GSP, for importations made subsequent to expiration.

Should you have any questions regarding this notice, please contact the Trade Agreement Branch at FTA@cbp.dhs.gov