Asia | US news digest. 19 July
What does it take to not only survive the storm of rates, congestion, and other hardships but also tame it and sail peacefully?
#MAXMODAL #multimodalnetwork #Asia #US #ports #congestion #monopoly #freightrates #logistics #rail
The new week starts with an already common phenomenon: container shipping remains extremely high and as for the ship-owning front, asset prices are surging as well. Additionally, shares of most liner operators and ship-leasing companies fell over the past three weeks minimum by 10% and 30% max, as the economic recovery is taking longer than it was expected.
Meanwhile, the debates over who or what is to blame (monopoly, high demand, price increase, etc. – underline whichever) for the constrained supply chains go on. The US Congress received a report from an industrial shipper on how rapid price increases for goods and services can be traced directly to bottlenecks in the supply chain. Joe Biden’s administration is leaning toward regulatory and legislative action to deal with the problem, while Republicans are advocating for the United States Innovation and Competition Act that establishes a supply chain resiliency program and includes emergency funds for semiconductor manufacturers.
China and South Korea have become the counterparts in the issue over Korean imposition of hefty fines on 23 liner operators, including Chinese ones, allegedly involved in collective freight price-fixing. The controversy could worsen diplomatic tensions with China, so the problem is being under expert investigation and is expected to resolve amicably.
For the US Ports of Long Beach, Los Angeles, Oakland, and Tacoma an already challenging situation tops with the rail operator Union Pacific halting its intermodal services from west coast ports to its global terminal near Chicago. The company is moving containers out of ports that were booked before the embargo, but there are no updates on the new reservations. Dwell times for containers leaving the terminal in June by on-dock rail had already increased by more than a day. In addition, shippers and consignees have been hit by high demurrage fees for containers buried at rail facilities. In the wake of these events, the National Retail Federation has called on the US Congress to upgrade the country’s supply chain using bipartisan infrastructure legislation as its guiding principle. Meanwhile, the US ports continue to demonstrate records in handling TEUs. This time New York & New Jersey has outperformed Long Beach and is about to become the second-biggest US port, behind Los Angeles.
The global character of the crisis requires global logistics that would be able to mitigate risks of future obstacles. At least this is what the governments have realized. However, there are challenges: the recognition of electronic documentation remains fragmented around the world, there is not enough interoperability of tools and standards continues to slow cargo transfer from ships to ports, and so on. Besides preaching for a greater political drive, the International Federation of Freight Forwarders Associations is also focused on sustainability. It has proposed to develop a repository of emission calculators serving as a platform on best practices.
Companies are on the lookout for alternative routes to avoid Chittagong congestion. Some Bangladeshi exporters are already sending containers to the Indian port of Krishnapatnam from where boxes are shipped to mother vessels that directly sail to Europe and America. However, this service is not a long-run solution as it is quickly getting overbooked.
As a result of Transair cargo jets crash-landing in the ocean, the Federal Aviation Administration has suspended the operating authority of Honolulu-based Rhoades Aviation. Earlier the agency notifies the company that it was moving forward with plans to rescind its ability to conduct maintenance inspections.
A big reduction in the shortage of semiconductors in the automotive manufacturing space is expected in Taiwan Semiconductor Manufacturing Company thanks to the increased production of microcontroller units. However, the surge in demand is still going to put the implemented strategy to test.
