Newsletter – June 9, 2021
AIR FREIGHT UPDATES
North American retailers turn to airfreight as sales soar
The North American retail industry has increased its use of airfreight to meet rising demand and respond to supply chain bottlenecks as sales look set to continue to increase.
In first-quarter results calls, a series of companies outlined the supply chain issues that had faced so far this year and how they had turned to airfreight to mitigate delays and capitalize on rising demand. Read more here.
Cargo handlers move to airport suburbs to escape O’Hare congestion
Ground service providers drowning in shipments delivered by airlines are responding to massive gridlock at Chicago O’Hare by permanently relocating some warehouse operations outside the property to increase capacity in what could increasingly become a model at major U.S. airports that haven’t prioritized investment in cargo facilities. Read more here.
Brands turn to air cargo as inventory delays continue
Supply chain issues in Q1 led brands including Levi Strauss, Lands’ End and PVH to increase their reliance on expedited freight to ensure products are in stock, according to recent earnings calls.
“We have had to increase our airfreight,” said Levi Strauss’ Executive Vice President and CFO Harmit Singh. Lands’ End President and CFO James Gooch struck a similar tone. “We are certainly seeing challenges like everybody else,” Gooch said, adding that expediting shipments was “adding a little bit of cost.” Read more here.
OCEAN FREIGHT UPDATES
American ports press Congress for significant and sustained infrastructure investment
The American Association of Port Authorities (AAPA) has urged Congress to make a substantial investment in ports as part of the Biden administration’s American Jobs Plan.
“The consequences of decades-long under-investment in maritime infrastructure are playing out in real time in the form of supply chain disruptions and delays that have been exacerbated by the pandemic,” said Chris Connor, AAPA president and CEO, in a statement. “Current disruptions will diminish over time, but with global trade volumes forecasted to increase, now is the time for significant and sustained federal investment in a stronger and more resilient port infrastructure.” Read more here.
Wan Hai to launch new service to US east coast
Taiwan-based Wan Hai Lines, best known for its intra-Asia activities, is expanding its network by launching a new weekly service between Asia and the east coast of the US branded as AA7.
The service will be operated by 10 container vessels with a capacity of 2,800 tea to 4,000 teu. Read more here.
CANADA BUSINESS – GOVERNMENT UPDATES
Canada Looks To Ease 14 Day Quarantine For Vaccinated Travelers
Canada is eyeing a relaxation of its international border restrictions, with fully vaccinated travelers top of the queue. Canada’s borders have been closed to most travelers since 2020, including travelers from the neighboring USA. But with vaccination rates increasing, Canadian government officials are indicating these rules may soon change. Read more here.
Lion Electric building battery plant at Mirabel
The Lion Electric Company is building its EV battery manufacturing plant and innovation centre at the YMX International Aerocity in Mirabel, Quebec.
The facility will be located adjacent to Montreal-Mirabel International Airport (ADM) on a 1.6 million square foot property, with development planned to begin in June 2021. The facility will cost about $185 million. Read more here.
INTERNATIONAL BUSINESS – GOVERNMENT UPDATES
Myanmar military coup and Covid combine to threaten shippers and forwarders
Garment manufacturers are considering whether to leave Myanmar, creating an uncertain future for domestic freight forwarders.
Human rights groups claim the military has killed over 800 protesters since seizing power four months ago, and with civil disobedience still active, there’s little prospect of a political resolution.
According to a report by the Garment Group of EuroCham Myanmar, the crisis has created safety, logistical and banking challenges for all businesses and employees. Read more here (login required).
US recovers $2.3M of ransom paid to Colonial Pipeline hackers
The U.S. Department of Justice has seized $2.3 million worth of Bitcoin paid to the hackers behind the cyberattack that led to the shutdown of Colonial Pipeline in May, federal officials announced on Monday.
The FBI recovered 63.7 bitcoins that had been paid to members of the DarkSide ransomware gang after a federal judge signed a seizure order. Read more here.
UK’s customs brokers warned over delayed declaration scheme
The UK’s customs brokers are being warned to be very careful accepting business from traders that took advantaged of the Delayed Declaration scheme set up to help firms adjust to new ways of working following Brexit.
The scheme was set up following the end of the Brexit transition period to give businesses importing into the UK up to 175 days to complete their customs declarations, with the first of those due on June 25. Read more here.
Biden to investigate transportation supply/demand ‘mismatches’
The Biden administration plans to investigate transportation supply-demand imbalances in response to a 100-day review of four key product supply chains.
The White House issued a report on Tuesday following the review that began earlier this year in which the administration assessed vulnerabilities for semiconductor manufacturing and advanced packaging, large capacity batteries such as those used in electric vehicles, critical minerals and materials, and pharmaceuticals and advanced pharmaceutical ingredients. Read more here.