Supply Chain & Logistics Update

As General Stephen Lyons said in yesterday’s NY/NJ Port Industry Day, “We are now in a recovery period” in the supply chain. “In the near term it is all about tackling congestion at terminals.” We are all in agreement on this, and it’s not just terminals at US ports that are suffering from congestion, but many others around the globe. We will continue to work on our members’ behalf to keep you informed of the top issues impacting supply chain, and fight for your interests as we work through this global supply chain crisis. Below is a brief on the latest logistics issues and hot spots around the world.

USA Rail Strike: The deadline of the “cooling off period” enacted by the Presidential Emergency Board compromise is approaching, and time is running out for unions and railroads to reach an agreement on negotiations. Many railroads have reached tentative agreements, but two of the major ones are still negotiating. As the cooling off period ends at 12:01am September 16^th, time is of the essence to find a solution. Currently, a railroad strike looks likely with over 60,000 rail workers preparing to go on strike as soon as this Friday. In preparation of the strike, many railroads have stopped accepting shipments of hazardous or security-sensitive cargo to ensure it is not abandoned on the rail should a work stoppage occur. Additionally, railroads may stop accepting intermodal cargo and temperature controlled cargo is no longer being accepted by most railroads as of midnight Wednesday due to potential inability to monitor and refuel to keep reefers running. The situation is very fluid right now, and we expect further announcements today. We, of course, will update as we get news.

In a market that is already feeling the pressure of congestion and delays, a rail strike will only increase issues with congestion and make transportation of cargo to and from ports more difficult. We will continue to monitor this issue and provide updates.

UK Strikes: The Port of Liverpool has announced that services will be suspended next Monday, September 19^th, as an act of respect to the late Queen Elizabeth II’s state funeral service, which will take place in London. Airspace restrictions will also be in place across London due to the funeral. Additionally, the union workers at the Port of Liverpool rejected the port’s most recent pay offer and will begin strike action Monday, September 19^th through October 3^rd. Port Directors and union officials will continue to work together to find a solution during this time, but please plan for delays for cargo departing the area.

A similar situation is taking place at the Port of Felixstowe – the UK’s busiest container port – in that union workers have not accepted the port’s payment offer. Union workers maintain that the pay rise is still short of the inflation rate, and thus will not agree to the offer. Furthermore, they are planning a walkout from September 27^th to October 5^th. Both parties will continue to work on a solution, but, as with Liverpool, please plan for extended delays and potentially cost increases for any cargo departing the UK.

Germany Trucker Shortage: Germany continues to battle with a shortage of truckers, making it difficult to deliver cargo to/from the ports. Currently, demand for cargo transport far exceeds the number of truck drivers on the road, creating backlogs and delays in getting cargo to port. Additionally, with low water levels on the Rhine, alternative transportation by barge is also limited. If you have cargo coming out of Germany, please increase your lead time and plan for potential cost increases for cargo pickups.

MSC Changes to Flexis: MSC has announced recent changes to their Flexi Tank requirements, which all shippers must adhere to going forward. Below are the new requirements, effective immediately:

Effective immediately, MSC will require clients to provide the information below prior to the confirmation of Flexi tanks. Failure to inform when flexitanks are used at the time of booking may result in additional expenses, including but not limited to storage, demurrage, and re-handling of containers, on shippers’ account.

1. Name of the FLX manufacturer, the exact FLX type and a copy of the COA Flexitank certificate of compliance.
2. Cargo description and a valid Safety Data Sheet of the substance to be shipped.
3. Cargo weight, VGM and ullage declaration. The FLX max allowed volume is 24,000 liters or max mass of 24,000 kilograms, whatever comes first.
4. No hazardous cargo is allowed in flexitanks.

If you have any questions about these new regulations, feel free to reach out or contact your freight forwarder for clarification.