MARKET BRIEF | September 2021
A BRIEF look at what’s happening in the logistics and shipping industry.
CARRIERS & HAZARDOUS CARGO
Ocean carriers that are still accepting hazardous cargo in consolidated containers increased their surcharges for that service. Other carriers have suspended any such hazardous bookings entirely. This includes any bookings through their alliance partners. Additionally, some carriers may be limiting, or prohibiting, the acceptance of certain classes of hazardous materials. This is all adding to the situation of increased costs of handling dangerous goods in the United States, whether by ocean, truck, or even rail. In many parts of the U.S., there is a drastic shortage of drayage and trucking companies that are capable of handling dangerous materials. This is mostly due to the limited number of drivers that certified in this area.
I.L.A. REFUSING AUTOMATED VESSELS
Members of the International Longshoremen’s Association (ILA) have established that they will not service automated containers ships at U.S. East and Gulf Coast ports. This is alignment with the union’s stance on robotic technology in response to automation projects gaining popularity around the world. Any autonomous ships calling on ports under the ILA’s jurisdiction, “won’t be unloaded or loaded by ILA members.” Even though there are no autonomous vehicles scheduled to call on the U.S., the ILA is taking a stance in hopes that the International Dockworkers Council will do the same. The ILA said they would continue to negotiate against the use of automation technology at maritime terminals when the union’s current master contract expires in 2024.
LACK OF CONTAINER CAPACITY DRIVING UP RATES
The record backup of vessels waiting outside of the Ports of Long Beach and Los Angeles has resulted in record increases in spot rates. Despite the multiple causes for gridlock, the loss of effective capacity when ships sit for extended periods outside of ports, leading to containers not picked up and returned quickly enough, is driving spot rates in excess of $30,000 per container to the U.S. West Coast, as well as high demurrage and detention costs, and ever lengthening transit times. Many in the industry believe it will be well into 2022 before this situation starts to resolve.
EFFECTS OF HURRICANE IDA
Due to Hurricane Ida, trucking volumes have dropped the past couple of weeks, as freight got rerouted, and shipments cancelled. Loads were down for dry vans (-7.7%), flatbeds (-2.3%), and reefers (-4.1%). Naturally, this has led to increased rates. With recovery from the hurricane underway, there has been pressure on the surrounding markets, such as Dallas and Houston.
Ocean carriers that are still accepting hazardous cargo in consolidated containers increased their surcharges for that service. Other carriers have suspended any such hazardous bookings entirely. This includes any bookings through their alliance partners. Additionally, some carriers may be limiting, or prohibiting, the acceptance of certain classes of hazardous materials. This is all adding to the situation of increased costs of handling dangerous goods in the United States, whether by ocean, truck, or even rail. In many parts of the U.S., there is a drastic shortage of drayage and trucking companies that are capable of handling dangerous materials. This is mostly due to the limited number of drivers that certified in this area.
I.L.A. REFUSING AUTOMATED VESSELS
Members of the International Longshoremen’s Association (ILA) have established that they will not service automated containers ships at U.S. East and Gulf Coast ports. This is alignment with the union’s stance on robotic technology in response to automation projects gaining popularity around the world. Any autonomous ships calling on ports under the ILA’s jurisdiction, “won’t be unloaded or loaded by ILA members.” Even though there are no autonomous vehicles scheduled to call on the U.S., the ILA is taking a stance in hopes that the International Dockworkers Council will do the same. The ILA said they would continue to negotiate against the use of automation technology at maritime terminals when the union’s current master contract expires in 2024.
LACK OF CONTAINER CAPACITY DRIVING UP RATES
The record backup of vessels waiting outside of the Ports of Long Beach and Los Angeles has resulted in record increases in spot rates. Despite the multiple causes for gridlock, the loss of effective capacity when ships sit for extended periods outside of ports, leading to containers not picked up and returned quickly enough, is driving spot rates in excess of $30,000 per container to the U.S. West Coast, as well as high demurrage and detention costs, and ever lengthening transit times. Many in the industry believe it will be well into 2022 before this situation starts to resolve.
EFFECTS OF HURRICANE IDA
Due to Hurricane Ida, trucking volumes have dropped the past couple of weeks, as freight got rerouted, and shipments cancelled. Loads were down for dry vans (-7.7%), flatbeds (-2.3%), and reefers (-4.1%). Naturally, this has led to increased rates. With recovery from the hurricane underway, there has been pressure on the surrounding markets, such as Dallas and Houston.
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