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  • Volumes remain exceptionally high; freight demand is still far outpacing capacity. The National Retail Federation (NRF) has upgraded its August forecast for Asia-US imports for the third time this year. August 2021 TPEB imports are expected to exceed 2020 volumes by 12.6% (JOC).
  • South Vietnam is managing a recent surge in COVID-19 cases and has locked down most manufacturing in the region. Malaysia is in its third month of COVID lockdown, and other SE Asia origins including Indonesia and Thailand are also working to contain the virus. There is a significant backlog of freight to move out of the South Vietnam region, so services are still overbooked. Carriers will gradually shift some VN capacity to China in the coming weeks, following new orders that have transferred to Chinese manufacturers.
  • Despite capacity shifts, space ex China will remain extremely tight in the coming months. There are huge backlogs of freight across China, especially North China ports SHA/NGB impacted by the recent typhoon. COVID is on the rise in some regions of China (inlands points including Nanjing, Yangzhou, Zhengzhou), with impacts spilling over into port regions. Lockdowns are causing truck delays in North China port cities. The Yantian region is mostly recovered from the Q2 COVID outbreak and subsequent terminal closures and delays. COVID issues in China need to be watched closely, as the potential for more disruption looms.
  • Air freight ex China will remain very tight through the holidays. Rates may increase from current high levels if COVID issues cause more ocean shipping delays.
  • US ports, inland terminals, and airports are managing record freight volumes.
    • Over 30 vessels are at anchor off the coast of LAX/LGB once again. There are 6-7 at anchor at Oakland, an improvement over recent months, but services that have been omitting Oakland are scheduled to start calling the port again within the next 1-2 weeks. Other ports from the PNW to the gulf and east coast are similarly covered up.
    • Inland terminals are struggling to keep up with volume. The UP and BNSF have limited freight moving from west coast to Chicago in recent weeks to work through their massive backlog. Rails are limiting appointments for pick up and return of equipment due to space and worker shortages.
    • The US trucker shortage continues to keep upward pressure on inland rates. Chassis shortages are more common as well, from inland points to certain ports. Some truck lanes have seen price increases up to 100% over the last 3-6 months – a direct result of the truck market supply/demand imbalance. Truckers are booked up well in advance of cargo ready date or ETA; dispatch must be completed 4-6 weeks ahead of time to secure power.
    • US gateway airports are overwhelmed with volumes. Breakdown of cargo can take 1-2 days after arrival, and lines to get into truck receiving areas are long and congested.
  • The US Federal Maritime Commission (FMC) is reviewing several areas of concern for shippers.
    • FMC is currently auditing ocean carriers’ detention and demurrage practices.
    • FMC is requiring ocean carriers to provide justification for new US congestion charges.
    • FMC Commissioner Dye “unveiled a series of recommendations to Congress it can take to strengthen the agency’s enforcement powers by increasing anti-retaliation protections and doubling reparations to shippers affected by unlawful detention and demurrage practices.” (JOC)
    • Commissioner Dye also recommended revisions to the Shipping Act to give the FMC more authority in these areas. Further, US exporters are pushing draft legislation that would amend the Shipping Act to include protections for export cargo and development of a US vessel fleet operating in the best interest of US security and commercial needs.
    • First US shipper (MCS) lawsuit filed with FMC against ocean carriers for unfair practices, collusion.

 

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Your CVI team is here to assist you through these current market challenges. Ocean freight, air freight, domestic road/rail, and Customs Compliance – count on our dedicated professionals to care for you and your supply chain. Call us and let us show you what we can do!

 

Rachel Shames

Director, Pricing & Procurement

CV International, Inc.

 

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Rachel serves as Director, Pricing and Procurement for CVI. Her responsibilities include vendor selection, contract management and negotiation, transportation pricing, FMC compliance, and international agent network management.

Rachel began her career in international shipping with CMA-CGM America. She joined CVI in 2011, gaining experience in various departments with a focus on inside sales and marketing for the company. In 2014, Rachel assumed the role of Manager, Transportation, working on service procurement and development of client proposals. She has served in her current position since 2018.

A native of Norfolk, Virginia, Rachel earned her bachelor’s degree from the University of Michigan in 2005. She holds a Master of Business Administration with a concentration in Maritime and Supply Chain Management from Old Dominion University.

– Rachel Shames, Director, Pricing & Procurement, CVI
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