Drought-Induced Constraints Continue at the Panama Canal
On August 16, 2023, the Panama Canal Authority extended transit restrictions for vessels traveling through the Canal until September 2, capping the number of authorized ships per day at 32. These limitations, initially imposed due to this year’s delayed rainy season in Panama, have led to fewer vessels lining up in the drought-stricken waterway. Current measures include restricting vessel size and maintaining a suspension of additional transit slots.
The extended constraints at the Canal could exert more pressure on the price of consumer goods, according to maritime industry experts. Delays and additional fees contribute to rising shipping costs, potentially impacting the overall market. The Canal plays a critical role in transporting goods from Asia to the United States, especially during peak selling seasons. Moreover, the restrictions are affecting both old and new locks, limiting the daily reservations and access to passage slots for various-sized vessels. Even with the ongoing drought measures, the authority has noted that demand remains high, indicating the Canal’s sustained competitiveness.
Sources:
https://gcaptain.com/panama-canal-extends-transit-restrictions-caused-by-drought/
Port of Long Beach Faces Shipping Decline, Forecasts Moderate Season Ahead
In July 2023, trade activity at the Port of Long Beach experienced a significant drop, with cargo volumes falling by over a quarter. The port moved a total of 578,249 twenty-foot equivalent units (TEUs), a decline of 26.4% from the previous year. Adjusted routes, filled warehouses, and a shift in consumer behavior contributed to this decrease.
The port’s recent performance signifies a trend towards pre-pandemic levels, aligning more closely with the figures from 2019. This local decrease contrasts with nationwide expectations, where container imports are predicted to reach a near-yearly high as preparations are underway for the winter holidays.
Sources:
https://gcaptain.com/port-of-long-beach-expects-modest-peak-shipping-season/
Western Canadian Ports Recover After Dockworker Strikes
The ports of Vancouver and Prince Rupert in Western Canada are working to clear container backlogs related to intermittent dockworker strikes last month. On July 13, the ship, rail, and trucking operations in the region were resumed, and conditions are starting to normalize in mid-August.
This return to normalcy follows the union members’ acceptance of a third agreement, which had been negotiated by the International Longshore and Warehouse Union Canada and British Columbia Maritime Employers. The decision alleviates the region’s cargo flow and may relieve pressure on ports during the upcoming peak season.
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Port Houston Adopts Portchain Technology for Streamlined Vessel Coordination
Port Houston has begun to leverage Portchain Connect, a technology platform that enhances coordination regarding vessel arrival times with ocean carrier customers. This recent move follows South Carolina Ports in Charleston, making Houston the second U.S. operating port to adopt this technology. The tool, first tested in January 2022, focuses on improving aspects like berth planning without targeting any specific market category. It signifies a strategic alignment with Port Houston’s goals to boost efficiency and resilience.
Portchain Connect’s integration with Port Houston will provide real-time updates directly from carrier systems, enhancing the alignment of vessel schedules with terminal berth plans. It will also allow for rapid notifications of berth schedule changes, improving the accuracy of data transfer.
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Yellow’s Assets Await Sale in Historic Redistribution
Prospective buyers are examining more than 150 truck terminals belonging to the now-defunct trucking company Yellow. Though the exact timing of the sale remains uncertain, Yellow seeks to offload these properties along with its fleet of trucks and trailers.
When Yellow’s assets are finally sold, it will mark the largest redistribution of LTL (Less Than Truckload) assets in U.S. trucking history. This massive sale may provide opportunities for others in the trucking industry to expand their networks and capabilities.
Sources:
https://www.joc.com/article/potential-buyers-look-pounce-yellow-assets-sale_20230816.html
U.S. Container Imports Surge, But Predicted to Decline
Containerized imports into the U.S. are forecasted to surpass 2 million TEU (Twenty-Foot Equivalent Units) this month, a notable increase since last October. The National Retail Federation and maritime consultancy Hackett Associates project this growth to be temporary, with volumes dipping below this threshold for the rest of the year.
Though these figures mark a decrease from last year’s levels, they show improvement over recent months. The fluctuating volumes are attributed to retailers working through existing inventory, and while current spending growth has slowed, experts predict a smooth shipping season ahead without disruption from congestion or labor disputes.
Sources:
https://theloadstar.com/us-container-imports-still-on-the-decline-but-the-slope-is-easing/
Shifts in Shipping: Blanked Sailings Becoming Normal
Blanked sailings, or scheduled sailings that are canceled, have become an ordinary part of the shipping business on key east-west container trade routes, as suggested by a recent report from Alphaliner. Data from June and July reveals that 10.8% of regular sailings in certain regions were voided. In addition, data from other sources shows an upward trend in blanked sailings across the transpacific region in recent months.
This trend has implications for capacity management and freight rates in the industry. Limiting capacity through blanked sailings may alleviate pressure on spot freight rates, and there are expectations that the practice will continue until demand returns. The reduction in sailings affects year-on-year capacity, with a drop of 17% in effective deployed capacity in 2023 compared to last year. However, the situation is complex, and understanding the underlying numbers is crucial for strategic decisions, as the actual capacity drop is only 2.4%, according to certain analyses.
Sources:
https://splash247.com/blanked-sailings-now-part-of-normal-shipping-business-life/
Labor Disruptions and Strike Threats: The Current Unrest in the U.S. Supply Chain
The summer of 2023 is seeing significant unrest in the U.S. supply chain due to labor conflicts. Disputes between unions and their employers have disrupted ports on the West Coast of both Canada and the U.S.. The conflicts have affected container backlogs, provoked carrier shifts, and led to calls for quick resolutions and government mediation. A key factor on these conflicts is the workers’ demand for better pay, benefits, and protections, which they believe are commensurate with their sacrifices during the pandemic and current economic pressures. Automation and its role in the future of the supply chain has also been an important factor in the conflicts.
The tumultuous state of labor relations has created challenges in the supply chain that have dramatically affected many industries. Disruptive events like strikes or even the threat of them have caused container backlogs, notably at Canada’s major ports, and pushed businesses to reinforce their supply chain contingency plans. The interruptions at U.S. West Coast ports during contract negotiations and the strike activities in July led to a surge in import dwell times. To mitigate these disruptions, some businesses have adjusted by diverting cargo to alternate ports, especially in the U.S. Gulf and East Coast, and investing in technology to analyze different scenarios. While recent agreements have eased the situation, whether these are a long-term solution or a temporary respite remains to be seen.
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