Logistics Hot Spots Heading into Q4

As we continue our series of updates on the supply chain crisis, we must continue to report challenges with very few bright spots. Cargo is moving, but at high prices and with significant delays. Below is a brief update on the hot spots, but please let us know if you have questions on specific trade lanes, ports, or any other logistics pain points.

European Congestion: Truck power and rail moves in Europe continue to be congested, and many areas are also experiencing equipment shortages. With congestion comes rate increases, and we are seeing European inlands (including UK and Ireland) increase in the range of 15% to 20%. Once again, be prepared for higher costs for ex-works shipments. Additionally, the port of La Spezia, Italy, suffered a cyber attack last week delaying some shipments, and high winds in Italy delayed vessels from docking.

Chile: Chile continues to suffer with “cut and run” or port omissions, primarily in the hub of San Antonio. High swells and bad weather are preventing loading and have reduced capacity for exports by 50% in the last month. The backlog is considerable for USA, Europe, and Asia, and we expect many weeks of delays until the capacity is normalized. For USWC, vessels remain heavily booked, and we are paying a premium to move cargo to West Coast ports.

NZ: The lockdown in NZ continues to impact work flow, and the vessel schedules remain erratic. Feeder ports remain problematic in terms of overbookings and delays. Nothing new for this area, but still not getting any better.

Ocean Freight Rates: Rates are continuing to increase as import volumes continue to grow and break all records for volumes. In the past weeks, there were 70 vessels waiting for berths in West Coast ports and a pile up is also happening on the East Coast. While the vessel capacity remains tight, the restrictions on the turnaround time for both vessels and containers is exacerbating the overall situation and allowing carriers further upward movement. For transatlantic cargo, increases are published into the 1,000’s, so once again, plan for additional costs in this trade.

USA Congestion:  As recently quoted in the news, many of the problems in the supply chain are in the “seams”—meaning the issues at terminals, chassis shortages, rail congestion, truck power etc. This continues to be problematic throughout the USA, and, with continued surge of import cargo, we do not expect this to get any better in the upcoming weeks. As with all other comments, this leads to increases in rates, potential for demurrage and detention, and delays in deliveries.  

FMC Action: We are continuing to monitor FMC investigations into carrier behavior. While the FMC states that they have no authority to set rates or control market levels, they have increased reporting requirements from carriers to insure proper competition. The FMC is also continuing its action on unreasonable behavior on detention and demurrage. Complaints can be sent to the FMC directly if you would like to submit a specific example.