Newsletter – February 26, 2021

  • Newsletter – February 26, 2021


    Ocean carriers hold all the cards in contract talks with shippers
    It’s annual-contract negotiation season for U.S. importers — and the hand they’ve been dealt couldn’t be worse. The deck is heavily stacked in ocean carriers’ favor.
    Incredibly, Asia-West Coast spot rates are now nearing a base rate of $5,000 per forty-foot equivalent unit (FEU), not including a few thousand dollars of extra charges slapped on top. There’s talk that spot rates could stay strong until Q4, if not 2022. Read more here.

    Buoyant ocean carriers set to roll out peak season surcharges months early
    Asia-North Europe container spot rates eased back slightly this week, as carriers ‘hoovered up’ stockpiled cargo accumulated before Chinese New Year.
    However, rates from Asia to the US increased again. Read more here (login required).

    Congress will have to control ‘damaging’ detention and demurrage charges by law
    One the largest US shipper associations, the Agriculture Transportation Coalition (AgTC) has renewed its criticism of demurrage and detention (D&D) charges and called for the Federal Maritime Commission to control it.
    In a letter to US president Joe Biden on Wednesday, the organisation said shipping lines and terminals had ignored guidelines set out in the FMC’s interpretative rule developed last year by FMC commissioner Rebecca Dye. Read more here (login required).


    Crocs: Redundancy in ocean freight contracts takes priority over cost
    Dive Brief:
    Crocs is working to prioritize redundancy in its next round of ocean service contracts, Mary McNelly, the company’s director of global logistics, said in a panel discussion at TPM 2021 on Thursday.
    McNelly said Crocs cut one of its lower-volume partners early in the pandemic, because it did not think demand would be high enough to fulfill the minimum quantity commitment in the contract. But the turbulent year ended with Crocs experiencing high levels of consumer demand. McNelly noted that the brand was “actually not far above” its original MQC for the year, but much of it was shifted to the back half of the year. Read more here.

    US perishables delayed at China customs while others pass muster
    US perishables delayed at China customs while others pass muster
    CHINA’s testing of American perishable food imports for Covid contamination is delaying customs clearance for up to two weeks, reports IHS Media.
    “Covid-caused closures and slowdowns at key northern Chinese seafood processing ports, notably Dalian and Qingdao, continue to add costs for producers and complicate the process of getting seafood to market,” said a McKinley Research report commissioned by the Alaska Seafood Marketing Institute. Read more here.

    Medically Necessary: Delaying second doses would reshape the vaccine supply chain
    The debate: Some scientists argue the U.S. should delay second doses of COVID-19 vaccines and instead give them to people who haven’t received a shot yet, hopefully providing some protection to a greater number of people.
    Preliminary data from the U.K. and Israel suggest a single dose of Pfizer’s vaccine provides good, but not perfect, protection from COVID-19. This strategy hasn’t been tested in randomized, controlled trials, so there’s lots of uncertainty. Read more here.

    NRF retail sales forecast says ‘Party on, freight markets’
    Retail sales are expected to grow this year between 6.5% and 8.2%, amounting to more than $4.33 trillion, according to the National Retail Federation’s annual sales forecast released Wednesday.
    Preliminary results indicate retail sales grew 6.7% in 2020, despite the challenges from the global health crisis. That total nearly doubles the NRF original forecast of 3.5% prior to the pandemic and was driven by sky-high online demand that totaled 22% of all spending by year’s end. This year, the NRF forecasts online sales to maintain a pressing pace between 18% and 23% growth over last year to hit $1 trillion for the first time. Read more here.

    Shippers, beware of cross-border insurance gaps
    Recent trends show that U.S.-international trade is going south — to Mexico that is.

    The ongoing trade war between the United States and China — and its resulting tariffs — have put Mexico on the map for nearshoring manufacturing operations. This, coupled with COVID-19-related disruptions hindering trans-Pacific trade, has led many to consider setting up shop closer to home.
    Cross-border freight opportunities abound, as close to $2 billion in trade flows across the U.S.-Mexico border every day. But these rewards aren’t without risk. Read more here.

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