Logistics Hot Spots: Year End Congestion Continues

The global supply chain crisis remains in the news day after day. Interviews with Port officials, trucking companies, importers and consumers are part of the daily briefings along with the pandemic. These two issues are top priorities for the USA administration. Overseas, the same issues are plaguing virtually all areas with the pandemic continuing to rage and supply chain issues creating constant challenges. We expect to continue to send our weekly updates on logistics hot spots well into 2022.

Europe:  In Italy, there was a trade union strike on the 16^th resulting in a complete stoppage at Genoa VTE terminal and backlog of cargo. The strike was originally planned for 2 days, but fortunately was suspended today. However, strong winds are now affecting port operations in Genoa so this terminal will once again have cargo rollings. From Germany, we are seeing delays on movement to the ports due to railroads being completely swamped and the Rhine in a low water situation creating congestion and delays on barge movements. A national trucking strike has been announced in Spain for next Monday through Wednesday, yet to be confirmed but will certainly cause disruption if implemented. The Port of Rotterdam remains incredibly congested and delays on loading cargo received from feeder vessels continue to cause problems.  

UK:  The trucking situation in the UK remains incredibly tight and we are seeing 1-2 week delays in booking pickups. Normal transit times from continental Europe are completely disrupted. As an example, transit from Spain into the UK is normally 4 days and is currently taking as long as 6 weeks. The poor performance is directly linked to the port congestion in various UK ports as cargo is not moving smoothly in and out of the seaports. 

Precarriage/Drayage/Intermodal:  As most of you have seen, all trucking and intermodal rates have increased in the past year. In Europe, we are receiving reports that trucking costs will go up between 5 and 20 percent depending on the region. In the USA, the driver shortage continues with rates skyrocketing due to intense demand, and we expect this trend to continue into 2022. 

USA: The west coast congestion continues to be problematic. With Oakland, Seattle, and LA/LB announcing fees for extended dwell time, importers are facing the prospect of even more costs on top of the high rates and demurrage and detention issues on cargo moving via these ports. Oakland was the latest to announce fees, implemented on December 1, and labeled “extended dwell-time fee”.  The Oakland fee is structured to be levied from the 8^th day that a full import container is sitting at the terminal and the fee is $50 per day, increasing to $75 per day from day 13-17, and $100 on days 18-22, topping out at $150 per day on day 23. The port, like LA/LB has reported accelerated movement from the terminal since the announcement of the fee. The LA/LB dwell fee has been postponed multiple times, with the latest start date reported for December 20, the same day as the Oakland fees are commencing. 

On the east coast, we are seeing Savannah reinstated as a port call by various carriers for sailings from Europe during the last week of December. Congestion is still occurring in Savannah but the number of vessels waiting outside the port has dramatically reduced. Other ports on the east coast remain quite fluid, but truck power and rail movement continue to cause issues. 

US Customs: It looks like we will end the year without a vote on reinstating GSP/Generalized System of Preferences. While GSP does not affect a large volume of beverage alcohol, one example is Argentina. Some Argentinian wines are eligible for duty free treatment under GSP provisions and unfortunately importers have had to pay duty on these wines over the past year. Brokers should continue to flag eligible line items for GSP to enable retroactive refunds of duty if and when GSP is reinstated. 

USA-UK talks: Government officials from the UK and US met in Washington DC last week to discuss various issues, including the current tariffs imposed on US beverage alcohol based on the Section 232 steel and aluminum dispute. There was no resolution on this matter and we understand that further negotiations will await discussions on the Northern Ireland Border Protocol. US and UK officials have agreed to meet in early 2022. WSSA continues to work with the “Toasts not Tariffs” coalition and urge leaders to reach an agreement and remove retaliatory tariffs on products unrelated to the dispute, including beverage alcohol.  

Please reach out to WSSA for any clarification or questions on specific regions or regulations.