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Shippers complain about unfulfilled contract space

Shippers have been turning to the FMC to seek relief in disputes with container lines and marine terminals. Three formal complaints were filed this month. Two of the complaints related to container lines intentionally refusing contract rate bookings to chase higher spot rates. Additionally, the third alleged that a Port of LB terminal charged excessive demurrage fees on a shipment in Fall 2020.

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Import surge tightens chassis pools

In February, international intermodal volume grew 8.4% out of the Pacific Northwest and 6.1% out of the Southwest month-over-month. This is a sign that carriers are more willing to let their container move inland intact. However, this has caused chassis pools to tighten in the Midwest and South Central U.S.

NVOs said that ocean carriers are willing to take IPI bookings on a spot basis. However, they are still hesitant about committing to IPI in long-term agreements. IPI is also likely to increase MoM in March according to NVOs, trucking companies, and chassis lessors.

Chassis lessors say shippers and trucking companies are still holding onto equipment too long. Marine chassis supply is tighter today than when IPI volume cratered in Q4 of last year. However, NVOs and trucking companies don’t think the situation is as dire as nine months ago.

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Carriers sweep empties from ports ahead of import wave

Concerns have been growing about another import wave. Therefore, ocean carriers are removing empty containers from ports along the U.S. West and East coasts. Sweeper ships are trying to relieve both marine terminals and motor carriers that are buckling under huge numbers of empty containers.

Since the beginning of the year, 36 unladen ships have called the ports of LA and LB to collect empties. In all of 2021, 34 unladen ships called the ports.

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Ocean & air shipments face disruption on Shanghai Covid lockdowns

Shippers in eastern China face weeks of disruption to freight movements after authorities imposed a two-stage Covid lockdown in Shanghai beginning Monday. Shanghai’s main container terminals at Yangshan and Waigaoqiao remain open. However, many depots and warehouses are shut, and trucking is severely curtailed.

Shanghai’s lockdown will shutter the world’s largest container port for the next 10 days. Additionally, the lockdown will likely lengthen vessel wait times. Maersk said that handling of air cargo already in on-airport warehouses is likely to continue, but new cargo will be affected by labor shortages and delivery delays.

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Container demand to remain high on new vessel deliveries

Global container demand will remain high as delivery of new vessels ramps up next year and owners replace aging equipment. Container demand and prices are expected to increase due to a flurry of new container ship deliveries in 2023 and 2024.

Vessels totaling about 2.1 million TEU are due for delivery next year followed by 2.3 million TEU of new capacity in 2024. In the second half of last year, prices for 20-foot dry containers neared $4,000 while 40-foot high cube boxes topped $6,500, double the price in 2020.

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Easing container, truck rates bring cold comfort to shippers

The slight easing of eastbound trans-Pacific container spot rates and U.S. truckload spot rates is dangling signs of normalization for ocean and surface transport prices. Container lines are hedging any comments on the easing of container rates and U.S. port congestion with warnings that the volume pressure isn’t letting up and port performance gains may slip again.

Asia-USWC container spot rates fell 11% by late March from Lunar New Year. However, spot rates on the eastbound trans-Pacific are up 130% from a year ago at slightly less than $10,000 per FEU.

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Savannah expansion projects receive influx of cash

The Port of Savannah will use $371 million from the GPA to grow its annual container handling capabilities from 6 million to 9.25 million TEU by 2025. The funds will be used to build more container yards, purchase more ship-to-shore cranes, and construct a private road meant to encourage the transloading of ocean containers inside the port.

The projects are a response to the 30 vessels that were anchored outside Savannah last September. The congestion caused shippers to wait for weeks for their cargo to be discharged and delivered.

The investment will ensure Savannah can weather volume surges more efficiently than it did last year. Pop-up container storage yards will remain open through 2022 because the capacity upgrades will not begin coming online until next year.

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U.S. West Coast contract talks to start May 12th

The ILWU and West Coast employers will begin new contract negotiations on May 12th. The pending negotiations come amid fears from shippers that an impasse could result in further disruption. Some cargo owners have already begun to shift their volumes to the East and Gulf coasts to avoid potential problems. The existing contract expires July 1st.

Neither the ILWU nor the PMA has spoken publicly as to what issues they view as critical in the negotiations. However, the union has publicly opposed the spread of automation on the West Coast.

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About O’Neill Logistics

O’Neill Logistics is a leading 3PL with operations in Rancho Cucamonga, CA; Savannah, GA; and Newark/Monroe, NJ. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.

O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.

Lastly, we aim to simplify your supply chain by delivering exceptional service and optimizing your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.