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USA Multimodal Supply Chain Update January 2022

US Supply Chain under pressure in 2022 due to looting, bad weather and 5G rollouts.

US supply chains struggle under increasing pressure, with weather concerns and rail cargo looting exacerbating the situation. Following our previous update in December, the West Coast's congestion woes are yet to subside resulting in East Coast ports, namely New York and New Jersey, seeing increased volumes of vessels at anchor awaiting berth slots. Labour numbers are still low in the road freight sector, whilst localised rail freight restrictions have been put in place and flights are grounded.

Road Freight

A shortage of labour and equipment continues to plague North America's road freight sector, pushing prices up with various carriers as supply struggles to meet demand. Chassis availability still remains low, leading to issues in moving containers from factory to port in many key production hubs. 

The American trucking industry has lost around 6% of its workforce since the beginning of the pandemic, with stricter regulations and increased job opportunities elsewhere being deciding factors for truckers, a trend that predicts there could be a shortage of 130,000 drivers by the year 2030 (CNN). However, due to rail restrictions in areas of the US, trucks are having to replace rail in moving cargo into some ports as it is the most efficient, or only, option available.

Rail Freight

US rail hubs find themselves under mounting pressure with container dwell times increasing, or even having operations suspended entirely. Various shipping lines have either completely suspended or severely restricted their rail movements from a number of key US rail hubs, leading to dwell times upwards of 2 weeks in LA and 12 days in Detroit.

Rail freight has had to pick up the slack for West Coast to East Coast shipments as congestion in key West Coast ports remains at unmanageable levels, only adding to congestion concerns at terminals on the East Coast who are suffering high yard utilisation and overbooked vessels.

Los Angeles in particular is suffering with looters targeting railcars, breaking into train containers at the Union Pacific terminal and stealing their contents.

If you are concerned about container theft and would like to discuss freight insurance, please contact our dedicated insurance team for a free consultation.

Air Freight

The planned 5G rollout across the USA on January 19th has been postponed amidst fears of a negative impact on airlines. Many carriers have taken drastic action over safety concerns around interference with aircraft radar equipment. Even with the postponement announced, a number of airlines are reported to have made flight cancellations to routes across the US, including Emirates, Air India, Japan Airlines and All Nippon Airways.

"Significant operations disruption" in supply chains is expected, according to the group Airlines for America, whilst a letter signed by various airlines, including Atlas, FedEx and UPS, has been sent to members of government bodies insisting on immediate action asking for 5G to be implemented across America everywhere other than within the approximate 2 miles of runways at affected airports.

In response to the safety concerns over C-Band 5G, an order by the Federal Aviation Authority has been issued across the USA prohibiting poor weather flight landings when C-Band 5G networks are within an unsafe range of airport runways.

Ocean Freight

Ocean freight is still one of the worst affected area of the US supply chain, with many shipping lines and carriers having to seek alternative routing or transport methods to complete shipments due to severe levels of congestion across the West Coast. This is having a knock-on effect on some East Coast ports, whilst some shipping lines are cancelling bookings at short notice in an attempt to reduce further backlogs in the terminals. 

US warehousing is also feeling the effects, with space becoming increasingly scarce.

If you are in need of warehousing and/or fulfilment in the USA, contact us about our US hubs here.

Charleston

There is a 4-7 day wait time to berth, however yard capacity is very high at Charleston's Wando terminal with 114% utilisation.
Many vessels are overbooked due to movement of exports from the West Coast to the East Coast by rail and berthing slots are not being honoured, increasing dwell time for some vessels.

Labour shortages have been seen as a result of COVID cases in the area, slowing down productivity across the port.

Houston

The port is running with 2-day delays, however dwell times are seeing an increase with critical equipment shortages for road freight.

Weather conditions around the port are causing further delays, with thick fog affecting operations, an issue likely to remain through winter.

An increase in COVID cases has depleted labour forces across Houston's ports, whilst chassis and equipment shortages continue.

Los Angeles and Long Beach 

Severe congestion across the ports of Los Angeles and Long Beach continues, with alternatives being sought to alleviate pressure on the port's struggling infrastructure. Vessels and containers are being rerouted to other ports as well as the East Coast to avoid LA and Long Beach with the record volumes passing through showing no signs of let up.

The average time for vessels at anchorage or awaiting berth is now at 5.7 days, an improvement from Q4 2021 wait times, however the Los Angeles Harbour Commission is still looking to reduce this dramatically.

Dwell times at the Port of Los Angeles have reduced on 2021 numbers, with import cargo now sitting on dock for around 6 days, down from 11 days at its highest point.

Emergency Dwell Fee

The emergency dwell fee, that was initially approved on 29th October 2021, was supposed to begin on 17th January 2022 after multiple postponements. The implementation had then been postponed once again to 28th January 2022 due to a promising 60% decrease in ageing cargo since the October announcement. Even though the fee is yet to come into force, the Los Angeles Harbour Commission has passed a vote 5-0 to extend the programme until 29th April 2022, meaning that if and when the fee comes into action it will run until the end of April at the very earliest.

Additionally, the dwell fee structure has been amended so that rail and road cargo are met by universal timings, with the fee now beginning on the ninth day for both, allowing an additional three days for rail cargo. This comes as a result of a reduction in rail services and influx in road freight due to the timing restrictions favouring the truck-bound cargo.

Please look out for our latest updates on the dwell surcharge.

New York and New Jersey

The ports are still experiencing labour shortages, however this is expected to ease in the coming weeks. Many imports are incurring fees as they exceed the 4 day free time, sitting at the port for up to 10 days.

The number of vessels awaiting berth or at anchorage hit 12 this week (w/c 17th January), waiting anywhere between 2 to 4 days for a berth. A combination of the holidays and increased traffic moving away from the West Coast is causing a backlog, resulting in some blank sailings being scheduled.

Oakland

High volumes of vessels using the port are causing increasing delays, with Oakland seeing an 8% year to date increase in traffic from the same period in 2021.

Wait time on average is around 7 days, with equipment shortages not helping the issue.

Philadelphia

There is a 1-2 day wait time to berth, however yard capacity is very high with an influx of cargo from the West Coast.
Many vessels are overbooked due to movement of exports from the West Coast to the East Coast by rail.

 

We will continue to do our best to mitigate these concerns and keep you informed as the situation progresses.
 
For more information, please contact us here.

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