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Supply Chain Updates

Supply Chain Update – October 20

By October 20th, 2023No Comments7 min read

Canada Boosts Port Capacity with Montreal Terminal Project

The Government of Canada recently disclosed a substantial commitment of CAD $150 million to initiate the construction of a new container terminal at the Port of Montreal in Contrecoeur, Québec. This move is a segment of the National Trade Corridors Fund strategy, with aspirations to bolster the efficiency and consistency of the nation’s transport framework and fortify its supply chains. This venture will notably expand the Port of Montreal’s container throughput, adding up to 1.15 million TEUs annually. The blueprint encompasses a lengthy dock, a rail linkage to existing tracks, roadway access, and essential operational infrastructures. This development aims to elevate the Port’s capacity by a significant 55%, generating an estimated CAD $140 million yearly. Transport Minister Pablo Rodriguez emphasized the project’s significance in fortifying Canada’s supply chain, alluding to past supply challenges during the pandemic. The National Trade Corridors Fund, responsible for backing the initiative, holds an allocation of CAD $4.6 billion over a decade to enrich Canada’s trade routes.

Sources:

gcaptain.com

Delays at Israeli Ports

Israeli ports, notably at the Ashdod and Haifa terminals, have seen increased backlogs of ships due to the ongoing situation in the region. The Ashkelon port, in proximity to areas affected by the recent events, has been temporarily closed. The Ashdod port remains operational but with specific limitations, especially concerning the transport of hazardous materials, leading to extended transit times.

The shipping and maritime sectors are feeling the direct impact of these delays. An evident rise in waiting ships surrounds the ports, with numerous cargo, container, and dry bulk vessels currently stationed at Ashdod. Concurrently, several laden dry bulk ships await their turn off Haifa. Haifa’s port has taken on additional responsibilities, ensuring continuous operations and even accommodating cargo usually destined for Ashdod. As a result of the ongoing events, marine war insurance rates have seen a notable increase. While Ashdod and Haifa ports manage a modest percentage of global container throughput, any escalation in the situation could potentially affect significant shipping routes in the area, including pivotal points like the Suez Canal and the Strait of Hormuz.

Sources:

gcaptain.com

West Coast Ports Regain Momentum After Labor Issues Resolved

Recent data reveals a positive shift for West Coast ports, as their share of U.S. imports from Asia began to rise after hitting a low point in July. September saw a continuation of this upward trend, which began in August and is anticipated to maintain its course into the upcoming year. The boost in activity can be attributed to the resolution of labor issues that persisted for over a year. It was only in August that these issues were addressed by the International Longshore and Warehouse Union, promoting stability and fostering trust among global trading partners.

Sources:

joc.com

Shifts in Freight Landscape Challenge Forwarders

There’s a noticeable change in the world of cargo, with goods increasingly moving from air to sea. This trend, coupled with a consistent reduction in shipment sizes, was highlighted in a recent event organized by a notable logistics software group in Barcelona. This transition is not without its challenges. Forwarding specialists now find themselves adapting to more frequent quote requests due to smaller shipment sizes. Additionally, the demand for cargo tracking is rising, even though these smaller shipments tend to have lower profit margins. The broader logistics industry watches closely as these adjustments unfold.

Sources:

joc.com

Rhine River Shipping Costs Spike

Shipping fuel costs on the Rhine River have surged recently due to decreasing water levels, which limit how much barges can carry. On Thursday, water levels at the Kaub section, near Frankfurt, dropped to their lowest for the season since 2018, registering at 67 centimeters or about 26 inches. The Rhine, originating in the Swiss Alps, is crucial for various industries in Switzerland, Germany, and the Netherlands. Reduced water depths, especially around Kaub, impact several sectors, driving up transportation costs. However, there’s an expectation that water levels will rise soon, potentially reaching over 90 centimeters by the weekend.

Sources:

gcaptain.comhttps://gcaptain.com/rhine-barge-rates-soar-as-chokepoint-water-level-at-seasonal-low/

Intermodal Volume Trends: A September Overview

In September, the Intermodal Association of North America (IANA) reported a continued decrease in intermodal volumes. This decline marked a rate of 1.8%, showcasing a gradual improvement compared to the more significant drops in the preceding months of August and July. These numbers come in parallel with the annual U.S. rail carload and intermodal volumes displaying an upward trend in the week concluding October 7. Focusing on the segments, domestic containers rose by 7.8% annually, reaching over 700,000 units. This is an optimistic trajectory from August’s 1.8% increase. Meanwhile, trailers faced a 21.9% reduction, tallying at roughly 52,000 units. Overall, domestic equipment (encompassing trailers and domestic containers) experienced a 5.1% annual drop, standing at over 755,000 units. International containers saw a decrease of 8.3% annually. Broadly, current market conditions pose challenges with increased competition and external factors dampening the regular movement of goods. However, the latter half of 2023 hints at potential improvements, with more stable port operations and enhanced rail network efficiencies playing a role.

Sources:

logisticsmgmt.com

Strong September for Port of Long Beach

In September, the Port of Long Beach experienced a significant uptick in its operations, setting a new record for its busiest September to date. Driven by a surge in consumer demand for festive season products and a newly approved labor agreement between dockworkers and management, the Port witnessed an 11.8% jump in cargo handling compared to the previous year. This surge also exceeded the prior record, established in 2020, by a notable 78,849 TEUs. Although the Port has been seeing its first monthly year-over-year growth in cargo movement in over a year, the dynamics within the categories showed varied results. Import volumes showcased robust growth, with a 19.3% rise. However, there was a drop in export volumes by 10.3%. Furthermore, there was an increase in empty containers being processed through the Port. On a broader scale, this year’s cargo volume levels have been consistently exceeding the 2020 and 2021 numbers, signifying the strengthened resilience and adaptability of the Port of Long Beach to manage growing demands.

Sources:

gcaptain.com

Ship Charter Rates Soar Amidst Peak Season

Ship charter rates have seen a significant climb in recent times, especially during the peak shipping season. This surge is attributable to the escalating demands across the globe. Many industry experts predict that this upward trajectory will not wane soon, primarily due to the tightness in the available ship supply. In particular, vessels with capacities between 3,000 and 8,000 TEU are experiencing heightened rates. However, larger vessels over 10,000 TEU have not been left out, with their charter rates observing noticeable increases. There’s anticipation that as the demand for shipping remains robust, these higher rates will persist, posing challenges for shippers, forwarders, and carriers alike.

Sources:

joc.com