MARKET BRIEF | May 2021
A BRIEF look at what’s happening in the logistics and shipping industry.
OCEAN SHIPPING UPDATE
Europe & Asia
The past Suez Canal obstruction by the Ever Given, coupled with the industry-wide congestion issues, has resulted in a 24% loss of capacity from the East to the West Coast. While congestion at European ports has been less severe following the release of the Suez backlog, there are still downstream negative effects felt by supply chains in Europe and Southeast Asia.
Japan
On a more optimistic note, Japan’s Port of Yokohama was recognized as the world’s most efficient box facility, per World Bank and the data firm IHS Markit. On average, it takes just over a minute to load or unload a container. Asian container ports are actually the most efficient in the world, as they occupy most of the global top 50 ranking slots.
New York-New Jersey
Port terminals in New York and New Jersey are planning to increase their container handling capacity in an effort to reduce trucker wait time. Added ship-to-shore cranes and yard equipment will allow for quicker retrieval of containers, and faster gates for truckers.
Europe & Asia
The past Suez Canal obstruction by the Ever Given, coupled with the industry-wide congestion issues, has resulted in a 24% loss of capacity from the East to the West Coast. While congestion at European ports has been less severe following the release of the Suez backlog, there are still downstream negative effects felt by supply chains in Europe and Southeast Asia.
Japan
On a more optimistic note, Japan’s Port of Yokohama was recognized as the world’s most efficient box facility, per World Bank and the data firm IHS Markit. On average, it takes just over a minute to load or unload a container. Asian container ports are actually the most efficient in the world, as they occupy most of the global top 50 ranking slots.
New York-New Jersey
Port terminals in New York and New Jersey are planning to increase their container handling capacity in an effort to reduce trucker wait time. Added ship-to-shore cranes and yard equipment will allow for quicker retrieval of containers, and faster gates for truckers.
FULL TRUCKLOAD MARKET UPDATE
During the first week of May, tender volumes fell about 1.1%, which is an expected result of Roadcheck 2021. Capacity remains tight. Rates and load-to-post ratios rose 13.4% for dry vans. The Outbound Tender Rejection index is currently at 24.36%. This number may continue to trend downward, as contracted rates continue to hover above the spot market. (The lower that number drops, the more stable the spot market will be.) Reefer rejection rates also continue to fall, and the flatbed market is hot, hitting an all-time high with a $3.05 per mile national average.
During the first week of May, tender volumes fell about 1.1%, which is an expected result of Roadcheck 2021. Capacity remains tight. Rates and load-to-post ratios rose 13.4% for dry vans. The Outbound Tender Rejection index is currently at 24.36%. This number may continue to trend downward, as contracted rates continue to hover above the spot market. (The lower that number drops, the more stable the spot market will be.) Reefer rejection rates also continue to fall, and the flatbed market is hot, hitting an all-time high with a $3.05 per mile national average.
AERONET SPOTLIGHT: E.V. CHARGING LOGISTICS
Have you ever heard of the term “Other Government Agency,” or “OGA”? Those are permanent, or semi-permanent, Federal organizations established by the government, and they’re responsible for oversight and administration of a specific function. Examples of these organizations are the Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA). Such agencies have authority to stop shipments — partnering with the U.S. Customs and Border Protection (CPB) — to ensure that goods entering into our country adhere to the laws and standards in place. Because of this “partnering,” OGAs are becoming knowns as “Partner Government Agencies” (PGAs).
Inspections done by the CBP can be costly, and they may have a way of accumulating, especially if multiple OGAs are involved. For instance, a shipment that’s identified as needing additional inspection could be moved to an off-site facility. The associated costs for trucking, labor, devanning, x-rays, etc. can add up. You might be saying to yourself, “That’s nice, but my cargo won’t need inspection.” Well, your shipment might not fall into this category, but if your cargo is co-loaded or consolidated with other shipments that need inspection, yours will be held up, as well. Worse yet, you will be liable for a portion of the cost, even if your cargo is not what triggered the inspection.
Elements of the shipment, such as shipper, importer, tariff number, or country of origin, are all taken into consideration when the CBP calls for an inspection. If you’re a first-time importer, expect your initial few shipments to be inspected, as the CBP establishes your credibility. Also, having past issues of non-compliance, such as marking or labeling issues, can also red-flag you for repeated inspections. The bottom line is that you don’t want to hear from your Customs broker that your shipment is on a “manifest hold.”
For more clarification on this process, or to be connected with a Customs broker who can answer your specific questions, please contact your Aeronet Worldwide representative, or send us an email.
Have you ever heard of the term “Other Government Agency,” or “OGA”? Those are permanent, or semi-permanent, Federal organizations established by the government, and they’re responsible for oversight and administration of a specific function. Examples of these organizations are the Food and Drug Administration (FDA) and the United States Department of Agriculture (USDA). Such agencies have authority to stop shipments — partnering with the U.S. Customs and Border Protection (CPB) — to ensure that goods entering into our country adhere to the laws and standards in place. Because of this “partnering,” OGAs are becoming knowns as “Partner Government Agencies” (PGAs).
Inspections done by the CBP can be costly, and they may have a way of accumulating, especially if multiple OGAs are involved. For instance, a shipment that’s identified as needing additional inspection could be moved to an off-site facility. The associated costs for trucking, labor, devanning, x-rays, etc. can add up. You might be saying to yourself, “That’s nice, but my cargo won’t need inspection.” Well, your shipment might not fall into this category, but if your cargo is co-loaded or consolidated with other shipments that need inspection, yours will be held up, as well. Worse yet, you will be liable for a portion of the cost, even if your cargo is not what triggered the inspection.
Elements of the shipment, such as shipper, importer, tariff number, or country of origin, are all taken into consideration when the CBP calls for an inspection. If you’re a first-time importer, expect your initial few shipments to be inspected, as the CBP establishes your credibility. Also, having past issues of non-compliance, such as marking or labeling issues, can also red-flag you for repeated inspections. The bottom line is that you don’t want to hear from your Customs broker that your shipment is on a “manifest hold.”
For more clarification on this process, or to be connected with a Customs broker who can answer your specific questions, please contact your Aeronet Worldwide representative, or send us an email.
For more information on Aeronet Worldwide, visit Aeronet.com.
