MARKET BRIEF | March 2021
Insights and stories for the logistics, shipping, and transportation industry.
PORT CONGESTION UPDATE
The much-discussed congestion at U.S. ports is not letting up. With so many factors contributing to it, there is no quick solution, and is something that may take much of the year to normalize. What was once mostly prevalent at the Ports of Long Beach and Los Angeles (where there could be as many as 60 ships waiting on the water), congestion has spread to other ports, such as the Pacific Northwest. Given these port conditions, any weather issues that arise — at either origin or destination points — only exacerbates the situation. Sorry, no good news here. Even longtime industry executives are expressing that they’ve never seen anything like this, and that all links in the supply chain are “stretched.” We’ll continue to monitor and report on the situation as it (hopefully) progresses.
The much-discussed congestion at U.S. ports is not letting up. With so many factors contributing to it, there is no quick solution, and is something that may take much of the year to normalize. What was once mostly prevalent at the Ports of Long Beach and Los Angeles (where there could be as many as 60 ships waiting on the water), congestion has spread to other ports, such as the Pacific Northwest. Given these port conditions, any weather issues that arise — at either origin or destination points — only exacerbates the situation. Sorry, no good news here. Even longtime industry executives are expressing that they’ve never seen anything like this, and that all links in the supply chain are “stretched.” We’ll continue to monitor and report on the situation as it (hopefully) progresses.
FULL TRUCKLOAD MARKET UPDATE
The FTL market has remained in the same position for the last few weeks. Capacity had tightened as a result of the recent winter storms. That is starting to loosen slightly, yet capacity remains very tight. The outbound tender rejection index (OTRI) is trending downward, from 27.6% to 26.3%. The outbound tender volume index (OTVI) is down 1%.
The FTL market has remained in the same position for the last few weeks. Capacity had tightened as a result of the recent winter storms. That is starting to loosen slightly, yet capacity remains very tight. The outbound tender rejection index (OTRI) is trending downward, from 27.6% to 26.3%. The outbound tender volume index (OTVI) is down 1%.
EUROPEAN REGULATORY CHANGES
The European regulatory changes are creating an obvious impact, and it’s important to understand their effect on how you do business. Between BREXIT, ICS2, and VAT de Minimis Removal, there’s a lot to unravel.
BREXIT
Now that the BREXIT “transition period” has ended, a Customs Declaration is needed for all shipments from the EU to the UK, and vice versa. Keep in mind, there are 27 member states within the European Union. Also, for goods valued up to £135, UK VAT will be collected at the point of sale, and not the point of import. This ends the previous Low Value Consignment Relief (LVCR).
Import Control System 2 (ICS2)
The goal of the ICS is to mitigate security risks and terrorist threats, especially when it comes to potential explosives hidden in consignments. As of March 2021, data must be supplied for every shipment prior to loading on a flight. This applies to flights going into the EU, Norway, or Switzerland. The shipper needs to ensure all goods are included as line items on the waybill, and that the exact shipper and receiver details are listed.
VAT de Minimis Removal
As of July 2021, all shipments going to the EU, valued below €22, will need an accurate Customs Declaration. This includes addresses and contacts for all parties involved; value of the goods, freight, and insurance costs; detailed descriptions of goods, HS codes, and country of origin; Incoterms, weight, and quantity; and the type of transaction and reason for export.
The European regulatory changes are creating an obvious impact, and it’s important to understand their effect on how you do business. Between BREXIT, ICS2, and VAT de Minimis Removal, there’s a lot to unravel.
BREXIT
Now that the BREXIT “transition period” has ended, a Customs Declaration is needed for all shipments from the EU to the UK, and vice versa. Keep in mind, there are 27 member states within the European Union. Also, for goods valued up to £135, UK VAT will be collected at the point of sale, and not the point of import. This ends the previous Low Value Consignment Relief (LVCR).
Import Control System 2 (ICS2)
The goal of the ICS is to mitigate security risks and terrorist threats, especially when it comes to potential explosives hidden in consignments. As of March 2021, data must be supplied for every shipment prior to loading on a flight. This applies to flights going into the EU, Norway, or Switzerland. The shipper needs to ensure all goods are included as line items on the waybill, and that the exact shipper and receiver details are listed.
VAT de Minimis Removal
As of July 2021, all shipments going to the EU, valued below €22, will need an accurate Customs Declaration. This includes addresses and contacts for all parties involved; value of the goods, freight, and insurance costs; detailed descriptions of goods, HS codes, and country of origin; Incoterms, weight, and quantity; and the type of transaction and reason for export.
HOPE REACHES MARS
Last year, Aeronet Worldwide was involved in transporting the United Arab Emirates’ first interplanetary spacecraft to its launching point. This Mars probe, named Hope, launched on July 19, 2020, and we’re happy to report that it reached its orbital destination on February 9. The next day, the probe sent back its first photo (see below) of the planet, which shows some clouds, four enormous mountain ranges, and the far-reaching Valles Marineris (on the right) — the largest canyon in our solar system. Hope’s mission is to spend two years (one Martian year) studying how the Mars atmosphere eroded over time, and eventually lost all liquid water on the planet’s surface.
(Image credit: MBRSC/UAE Space Agency/CU-LASP/EMM-EXI)
Last year, Aeronet Worldwide was involved in transporting the United Arab Emirates’ first interplanetary spacecraft to its launching point. This Mars probe, named Hope, launched on July 19, 2020, and we’re happy to report that it reached its orbital destination on February 9. The next day, the probe sent back its first photo (see below) of the planet, which shows some clouds, four enormous mountain ranges, and the far-reaching Valles Marineris (on the right) — the largest canyon in our solar system. Hope’s mission is to spend two years (one Martian year) studying how the Mars atmosphere eroded over time, and eventually lost all liquid water on the planet’s surface.
(Image credit: MBRSC/UAE Space Agency/CU-LASP/EMM-EXI)
For more information on Aeronet Worldwide, visit Aeronet.com.
