Wednesday March 2, 2022 11:OOam – 11:45pm (PST)
Alternative Gateways as Options Amid Continuing Disruption
With continuing congestion affecting major US container gateways, many shippers have turned their attention to alternative ports such as Boston, Jaxport, Philadelphia,and others that are not experiencing vessel backups and excessive numbers of containers on the yard, impacting productivity and flow. But questions persist about smaller ports’ ability to provide the necessary end-to-end infrastructure to support supply chains such as truck and chassis capacity and proximity to distribution centers. Boston, for example, cites the dredging of Boston Harbor to 47 feet, building its new Berth 1O with 3,300 feet of linear berth space, and three new ship-to-shore cranes able to accommodate 14,000 TEU vessels. Jaxport this summer will complete a $484 million project to deepen its channel to 47 feet, and construction is underway on $200 million in berth and terminal improvements at the SSA Jacksonville Container Terminal at Blount lsland, while Ceres Terminals is investing an additional $15 million to modernize the port’s Dames Point facility. At Philadelphia, $1 billion in port-related infrastructure improvements is completed or underway,and truck turn times of under 50 minutes are typical for a dual move. In this TPM case study, representatives of the ports and customers will discuss how the ports can be seen as viable alternatives for shippers looking to diversify ports of entry.
Michael Angell Associate Editor, Northeast and Gulf, JOC, Maritime & Trade, IHS Markit
Patrick Fay Co-founder , President BOC lnternational
Lauren Gleason Deputy Port Director, Business Development Massachusetts Port Authority
Debb Minskey Operations Developer IKEA
Robert Peek Director and General Manager, Business Development Jaxport
Sean Mahoney Director of Marketing PhilaPort
The BOC Blast 441 – How Russian Invasion could influence rates and services of air, ocean and land transportation:
How Russian Invasion could influence rates and services of air, ocean and land transportation:
1. Increasing fuel/BAF costs
2. Higher Insurance War time surcharges
3. Sanctions on Russia will lead to more cyber attacks.
Cyber attacks will likely go after critical infrastructure and logistic service providers, ie, ocean shipping lines, air carriers, rails, ports, trucking companies, terminals, freight forwarders, NVO’s, etc. If these critical infrastructures and service providers are disrupted, we could see crippling outcomes that will challenge supply chains.
4. Importers will likely try to continue to try to grow inventories to prepare for potential disruption. This pressure to increase inventory will keep the throttle on demand and high prices.
Please reach out to your BOC Representative to discuss options we have to help.
The BOC Blast 440 – Søren Skou warns of new logistics chaos: “If it ends in strike, then it all shuts down”
Søren Skou warns of new logistics chaos: “If it ends in strike, then it all shuts down”
A.P. Møller-Maersk watches a looming US labor conflict closely, which may worsen bottlenecks at the country’s key ports and stir up problems in the entire supply chain.
BY NIKLAS KRIGSLUND
(Excerpted from ShippingWatch.com)
Just as the world catches a glimpse of an end to the coronavirus pandemic’s logistical chaos, A.P. Møller-Maersk warns that a new challenge threatens to disrupt supply chains and keep freight rates high.
This summer, dock workers on the US west coast are up for a new labor agreement. If negotiations break down, it may result in new, serious bottlenecks that may exceed the problems which culminated towards the end of 2021.
“There is no doubt that it’s not going to be easy negotiations, and a lot is at stake,” says A.P. Møller-Maersk CEO Søren Skou, furthermore pointing out that the agreement covers all ports on the west coast.
“If it ends in strike, then it all shuts down,” predicts the top exec of the Danish group, which operates the largest terminal in Los Angeles through its port company, APM Terminals.
Bottlenecks at the two key ports Long Beach and Los Angeles are the paramount reason why it’s still very expensive and difficult to buy freight space onboard container vessels.
Therefore, the consequences of a labor conflict and new traffic congestions will quickly spread to the entire supply chain and ultimately affect Danish companies and their customers.
“When ships can’t unload in the US, then they can’t go back to China to be refilled. That will extend the delivery time and increase prices. That goes for Danish companies and customers as well,” says Nordea Group Chief Economist Helge J. Pedersen.
“A continuation of high transportation prices will also increase the pressure from inflation and limit the world economy upswing,” he adds.
Interest group the Confederation of Danish Industry (DI) also keeps an eye on the situation on the US west coast. General manager of DI’s US office Louis Funder assesses that a conflict will first and foremost affect the many Danish companies dependent on bringing goods in and out of the country.
“It will typically be production companies, which gather their goods in the US before sending them out to their US customers. I’ve also spoken to a large Danish wine importer, who has had difficulties bringing wine out of the country. So actually, it goes both ways when there are problems,” says Funder. Right now, 56 ships able to accommodate 450,000 containers are waiting outside Long Beach and Los Angeles.
When congestion was at its worst shortly before Christmas, 85 vessels were queued up, according to figures by analyst firm VesselsValue.
A strike will put even further pressure on the ports, which are already short on dock workers, truck drivers and storage space to handle the significant increase in US purchasing of Chinese goods during the pandemic.
“Therefore, any protracted strike action could conceivably cause queue numbers to spike even higher than the previous peak,” states Vivek Srivastava, senior trade analyst at VesselsValue.
It is dock workers’ union the International Longshore and Warehouse Union (ILWU) and major carriers and port companies’ organization the Pacific Maritime Association (PMA) that are negotiating a deal.
The current labor agreement was extended last year and expires in July. It applies to 29 ports and covers wages and work conditions, among other things. The biggest issue, however, is expected to be the automation of ports, which the workers are fundamentally skeptical towards.
In November 2021, PMA tried to renew the current deal for another year in order to avoid a conflict at a time when supply chains are highly vulnerable, but the attempt was rejected by the workers.
They feel that they ought to be rewarded for their effort during the pandemic during which they have struggled as never before and fought Covid contamination, while carriers such as Maersk have reeled in historic amounts of money.
In an editorial in the latest issue of ILWU’s member magazine, The Dispatcher, fronts are drawn up sharply.
“It’s time to decide which side we’re on: That of the foreign shipping companies that are profiteering from the pandemic, or that of US farmers, manufacturers, dockworkers and truckers who deserve to earn a family wage,” writes ILWU Coast Committeeman Frank Ponce De Leon.
A.P. Møller-Maersk operates the largest container terminal in Los Angeles and has been hit by protests before. In 2012, the administrative staff were unhappy because they felt that their work was being increasingly outsourced.
Previous negotiations also show that it usually has been extremely difficult to reach an agreement, and that political interference is often needed in order to land a deal and avoid ports halting operations.
In 2002, employers started a lockout lasting for ten days. And in 2014-2015, work progressed at a very slow pace for four months, while negotiations took place. Both times, the governments at the time under, respectively, George W. Bush and Barack Obama had to step in for the situation to be solved.
The current negotiations will begin properly in April and will be followed closely this time again by the US president, in this case Joe Biden, who has a major focus on putting the rogue inflation to a halt, which, according to major bank UBS, can be traced back to freight prices to a certain extent.
Correcting poor reliability will take container lines at least eight months
Once carrier reliability starts recovering, it will take up to nine months to return to a normal level, writes Sea-Intelligence. But there are no indications that the situation is about to improve.
BY DANIEL LOGAN (excerpted from shippingwatch.com)
It will take container lines eight to nine months to get their schedule reliability back on track after more than two years with the Covid pandemic and chaotic supply chains.
That’s the assessment of Sea-Intelligence, which posits the situation with major bottlenecks on the US west coast in 2015 as a comparable scenario for examining the industry’s current outlook.
”As the 2015 problem was resolved in 6-7 months, this means an average reduction in excess delay of 1.25-1.46 days per month,” writes Sea-Intelligence.
”If the current port and hinterland system manages the same speed of recovery this time, it means that the current delays will take 8-9 months to resolve.”
In December 2021, 10.1 percent of the ships on the stretch from Asia to the US west coast arrived on time, while the figure for February 2015 came to 12.6 percent. At the same time, the analyst firm estimates that ships in December 2021 on average arrived 11.5 days late compared to a pre-pandemic baseline, while the number for February 2015 is 8.7 days.
If the recovery had begun in December 2021, from where the latest data are gathered, the container sector would in this scenario return to normal in August or September this year, Sea-Intelligence assesses.
Realistically, however, it will take a while longer as there are no signs that carrier reliability has improved going into February. Meanwhile, there’s also the catch that the problems in 2015 exclusively affected the US west coast.
”Now it is a global challenge, and the problem also include inland logistics issues,” writes Sea-Intelligence.