California Ports Resorting to Fines to Ease Shipping Backlog

New Incentives to Remove Congestion

Ports across the globe have been dealing with backlogs and delays to the global supply chain from the beginning of the Covid-19 pandemic in March 2020. Since then, local, national, and international governments have been exploring every option available to them to lessen the shipping backlog at crucial choke points.

Port Congestion Leads to Supply Chain Crisis

Beginning November 1st UPDATE 11/16/21: Fees will now begin 11/22, fines may be issued to unmoved cargo containers off the ports of Los Angeles and Long Beach, California. The dozens of unmoved containers have caused weeks worth of supply chain issues nationwide, preventing businesses from receiving the products they need. This jam is partially caused by a lack of warehouse workers and truck drivers available to pick up the goods from the containers. However, even once the goods are picked up, more issues such as storage and property damage become present. Since there are no workers available to transport the goods from the cargo containers, Los Angeles and Long Beach neighborhoods are being used as storage, crowding residential streets with trucks that can cause damage to the homes of Californians.

Local Government Steps In

The Board of Harbor Commissioners for both Los Angeles and Long Beach approved the Container Excess Dwell Fee, and new fines will be set in place in hopes of stimulating the supply chain. Prior to this port congestion, containers typically remained at the terminals for about four days, but recently almost half of these containers have been left for nine or more days. Last week, there were 153 anchored ships stalled at the ports, with more than 100 of these being large container ships holding millions of dollars worth of toys, clothing, electronics, and furniture. This causes issues nationwide because around 40% of shipping containers entering the U.S. come through the Los Angeles and Long Beach ports.

Container Excess Dwell Fee to Help Open Ports

For the next 90 days, containers full of goods to be moved by truck are allowed to sit at the ports for nine days until fines occur, meanwhile containers designated to be moved by rail will have six days to be moved. On each day over the allotted limit, a $100 fine per container may be issued, with an additional $100 fee per day that the container remains at the port. President Biden announced a plan to keep the Port of Los Angeles in operation for 24 hours a day in an effort to alleviate the port’s congestion before major holidays like Black Friday and Christmas, even considering deploying the National Guard to expedite the process. A multi-billion dollar loan agreement was also reached last week to help improve the infrastructure at the ports.

How SiShips Gives You The Advantage

Sheltered International combines expertise with state of the art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

Biden Administration Aims to Correct Supply Chain Delays

Most of the attention of the global supply chain throughout the Covid-19 pandemic has been on the port congestion seen in China, however, as the holiday season draws closer, the focus is shifting towards backlogs in the United States, especially in the Southern California ports of Long Beach and Los Angeles. The congestion at American ports has reached such a critical point that President Biden’s Supply Chain Task Force, initiated in June as a temporary stopgap, has directed the Port of Los Angeles to move to 24/7 operations. In addition to a night shift being implemented at the port, President Biden announced Walmart, FedEx, UPS, Samsung, Home Depot and Target will be adding shifts in order to help decrease the backlog.

The Biden Administration is working with a Supply Chain Task Force and floating the possibility of invoking the Defense Production Act to ease port congestion. Photo Credit: Rene Deanda

Trucking companies are hiring foreign nationals and lowering age minimums to combat staffing shortages. Photo Credit: Mat Napo

Blockages in Southern California Ports

It is not hard to see the effects the current port congestion is having across the country—from an inability to stock products on store shelves to an increase in average delivery times. Some experts even forecast that goods currently on ships will not reach stores by Black Friday on November 26^th. The exact cause of these delays is impossible to pinpoint, simply because there are so many places where the supply chain has broken down. Examples worldwide include the power crunch in China and re-emergence of Covid-19 as a threat in Asia.

The problems continue in the United States; as of October 7^th, 60 ships are waiting in open water to enter the Ports of Los Angeles and Long Beach. This led, in part, to the Biden Administration’s decision to institute a night shift at the Southern California ports. This strategic decision goes farther than an attempt to increase hours, because ports and trucks can operate more officially, by avoiding standard traffic, while working overnight and during off-hours.

Shortage of Long Haul Truckers

As the Biden Administration attempts to alleviate some of the pressure at the ports, they are finding themselves on the receiving end of pushback from the long haul trucking industry. For years now, the supply of truckers has been on the downswing, with employers lobbying to lower the minimum age for interstate drivers from 21 to 18 and attempting to source drivers from amongst foreign nationals. When factoring in hesitation from trucking unions at the potential of a vaccine mandate, there simply are not enough truckers to staff three shifts round the clock.

The delays continue through every single aspect of the supply chain with a shortage of trucks. Administration officials have floated the possibility of using the Defense Production Act in order to combat the shortage of OEM chips and other parts necessary to build more trucks.

A Global Solution Required

Despite the effort and attention to supply chain issues by the Biden Administration, it is clear that they alone will not be able to solve the problem overnight. This is a global issue, not one faced by the United States alone, but it does appear that global companies, such as the aforementioned Walmart and Samsung, are working to alleviate the supply chain issues. This does not come a moment too soon, as consumer prices are rising at a time of the year when stores generate a third of their annual revenue.

How SiShips Gives You The Advantage

Sheltered International is here to help guide you through unprecedented upheavals in the global shipping market. With our unique combination of technology and shipping expertise, Sheltered International is dedicated to transparency and designed to put control in the hands of the shipper. We will always find the most efficient way to transport your product, saving you time and money.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

Perfect Storm of Circumstances Decimates China’s Energy Grid

Extreme weather, an increased demand for energy and strict limits imposed by the government on coal usage are leading to rolling blackouts throughout Northeast China and the rest of the country.

The timing is inauspicious for a global supply chain already stretched dangerously thin, especially as we enter the peak shipping season and year-end holidays for European and American markets.

Why Is There A Power Crunch?

Over the summer, factories in ten Chinese provinces have cut output or closed temporarily, following government-imposed power cuts to curb carbon emissions. Those provinces affected include Jiangsu, Guangdong and Zheijang, which are home to plants that produce steel, plastics, chemicals and textiles. These provinces are also the location of the busiest ports in the world, such as Ningbo and Guangzhou, which had already suffered backlogs related to Covid-19 within the past few months.

Also, due to the efforts to curb carbon emissions, mines have been instructed to harvest less coal, which as led to a nearly doubling in the price of coal since this time only one year ago. Coal accounts for 60% of China’s total energy output, but even efforts to utilize green energy have been thwarted by nature. Droughts have crippled the potential to offset the high coal prices with hydropower.

What Does This Mean for China and the World?

The most immediate issue faced by the power shortage is in the homes of the billions of Chinese citizens. Traffic lights, failure of heating systems and the shutdown of elevators in high-rise buildings have brought many people to seek medical care; in the Liaoning province, 23 workers where sent to the hospital with carbon monoxide poisoning when ventilators unexpectedly and suddenly shut off.

American companies Apple and Tesla have been warned th

at production lines have been and will continue to be negatively affected. Some economists are projecting China’s GDP to decrease by nearly 1.5% in the fourth quarter of this year. Industrial output growth In September decreased 4.5% adding to the short-term global concern of rising ocean freight rates.

How Long Will the Power Crunch Last?

Unfortunately, there is little hope that the energy crunch and intermittent power outages will vanish overnight. Nationwide safety checks in coal mines that have recently seen a concerning uptick in deadly incidents have resulted in massive suspensions of operations across all of China, leading to a further rise in the price of coal. Forecasts are predicting the situation will continue until at least the end of the year, possibly even into the spring of 2022 as a demand for heat during the winter months will continue to stretch the power grid.

Business owners are frustrated with the power crunch, which has been exacerbated by President Xi Jinping’s goal of a carbon neutral China by 2060. China, as it currently stands, is massively dependent on coal power and it will take time to fully transition to a grid supported by hydro, wind and other sustainable forms of energy generation.

How SiShips Gives You The Advantage

Sheltered International is here to help guide you through unprecedented upheavals in the global shipping market. With our unique combination of technology and shipping expertise, Sheltered International is dedicated to transparency and designed to put control in the hands of the shipper. We will always find the most efficient way to transport your product, saving you time and money.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

All of Your Logistics Solutions in One Place

Sheltered International is excited to share we will now be offering managed transportation. If you’re looking to outsource all of your logistics operations or just a specific segment, such as supply chain discovery or shipment optimization, managed transportation is the best way to grow your business with the assistance of our shipping expertise. Sheltered International will use these new services to enhance our already existing resources of satellite tracking, document management, notification management and delivery deadline tracking.

What that means for you, the shipper, is you will be able to have greater control over your freight shipments while saving on cost.

Put the Shipper In Control

The singular goal of managed transportation is to empower the shipper with choice. We provide the knowledge and you can make the decisions that work best for your company; it’s as simple as that. Instead of booking on our contracts, we enable your business to initiate your own carrier contracts.

Once your freight is en route, we will use our software and staff to optimize routing, notify you of shipment dispatch, track transit and delivery, and, ultimately, ensure payment and analyze the reported data. Our package of managed transportation services includes:

• Account Management & Governance
• Freight Optimization
• Reporting & Analytics
• Vendor Management
• Flexible Commercials
• Consulting & Engineering
• Order Management
• Procurement & Pricing
• Risk Management
• Control Tower
• Track & Trace
• Freight Pay & Audit

A Hybrid Approach to Managed Transportation

There are two options when looking to improve the speed and quality of your freight delivery: your company can purchase a transportation management system (TMS) or you can outsource the logistics to a managed transportation services provider (MTS). The upshot of a transportation management system is greater net savings, however, you are unlikely to see the same quality of service improvements compared to a managed transportation services provider.

But, what if you don’t have to choose?

Sheltered International is now able to provide our clients with the best of both worlds. We will provide you with the value-added services that you select; a few examples include logistics consulting and analysis, carrier procurement, shipment planning, and execution. And, of course, you will have dedicated account teams at your disposal that will provide insight into KPIs, inside industry updates and quarterly business reviews.

Benefits for Small Shippers

Traditionally, shipping has been all about volume, and for smaller shippers who can’t match the output of larger corporations that means being left behind in the dust and dealing with exorbitant prices and poor customer service. Managed transportation is a modern way for companies with smaller footprints to have access to the same benefits of those larger companies.

Managed transportation with give you access to the whole toolbox without the costs traditionally associated with the large operations that enable access to those volume based discounts.

How SiShips Gives You The Advantage

SiShips is able to help shippers of all sizes and experience levels with our flexible account management and à la carte pricing. With the addition of managed transportation we can tailor our services to fit your freight needs best. Whether your focus is domestic or international shipping, SiShips is here to help you find the most efficient way to transport your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

Learn How Long It Takes To Make a Shipping Container and Why There is a Current Shortage

Just like you don’t think about how a box of frozen waffles found it’s way to your freezer, it’s probably unlikely that you’ve ever seriously considered how involved and intricate the process of making a shipping container can be (even if you work in the shipping industry!) The process shares many similarities with putting together that cardboard box of waffles, at a much larger scale. It takes teams of hundred of specialized assembly line workers (welders, painters, etc.) to build just one box. When considering the scale at which a shipping container factory operates it is no surprise that they, like virtually every industry over the past year, have dealt with numerous delays stemming from the COVID-19 pandemic.

What Pieces Are Required for a Shipping Container?

Maersk is one of the largest shipping container manufacturers in the world.

The shipping industry is a global industry, but like the Spice Road of old, all shipping roads eventually lead to China. Even Maersk, based in Denmark and one of the largest shipping container manufacturers in the world, has their production facilities located in China.

It starts with steel. Big rolls of the metal alloy are unrolled and cut into sheets (approx. 2-3 meters in length). These sheets are sandblasted, primed and run through a corrugation machine. Corrugation increases the strength of all types of material; picture a strong cardboard box compared to a flimsy sheet of paper.

The sheets are also made to use roof panels, floor braces, and wall panels. Now that we have all our formed pieces, it’s time to build some containers.

Some Assembly Required

The initial step of construction is to weld wall panels, square tubing for the tops of walls, and to create a floor frame assembly. This floor frame looks much like a very wide, long steel ladder and provides structure and strength for the rest of the build. Corner posts are added and welded to the floor frame. Smaller pieces of the corrugated steel are used to build the door frame, which is then attached to the corner posts and floor frame. This step of the process is nearly identical to the initial framing of a house, except instead of wood and nails, we’re welding steel. Roof panels are then added, and are quite flimsy by themselves until they are attached to the pre-existing framework of the container, as they lack corrugation.

Logos and other paint decorations are one of the final steps in the building process.

The container now looks more like a finished product than ever. It is put on temporary wheels and run through priming, painting, and touch up. Workers then add varnished wood flooring and attach it to the container with a combination of wood glue and heavy-duty screws.

Any exterior decoration is now added and door hardware is installed. The all-important waterproofing stage begins by outfitting the door with rubber seals and waterproofing the bottom of the box in a specialized tunnel.

There are a series of inspections and tests including a run through the “car wash” to make sure the box is watertight and can handle extreme elements. Thanks to the hard work of dozens of people, we have a Grade-A shipping container!

Reasons for Current Shortage of Shipping Containers

There are shipping containers available, they’re just not where they need to be around the world.

Believe it or not, the time it takes to complete all of the steps lined out above is roughly twelve hours (including watching the paint dry). The real question is how quickly does the shipping container become available after placing an order? Normally, lead times for delivery of a shipping container is six weeks, but during the pandemic the shipping industry has seen those lead times stretch out to nearly four months.

Even still, China is expected to produced 5.4 million TEUs (20-foot equivalent units) of steel boxes in 2021, so how can there possibly be a shortage? Simply put, the shipping containers that do exist are in the wrong place. The now infamous blockage in the Suez Canal in addition to shutdowns at Chinese ports due to Covid-19 have pushed already strained shipping lines to the brink. In fact, the “shortage” of shipping containers is a bit of a misnomer; the physical number of shipping containers in existence exceeds the requested capacity. However, the lack of available shipping containers in desired locations will remain, in some form, until ports can work through their congestion.

How Can SiShips Give You An Advantage

If you’re looking for a shipping partner to guide you through the confusing waters of international and domestic trade, SiShips is here to help. We combine our personal expertise with state of the art software to work through any and all delays across the globe. SiShips can work with you to find the most cost and time-efficient ways to transport your product wherever it needs to go.

To learn more about SiShips, or to view a demo of our software, contact us today.

SiShips Expands Existing Information Database with Rail Tracking

We know, now more than ever, that information is the most valuable commodity. That is why we are excited to share SiShips is now offering rail tracking in tandem with our GPS satellite ocean tracking. Our rail tracking will provide near real-time data sent around the clock, increasing transparency in the shipping process and enabling our shipping partners to be constantly aware of the location of equipment and railcars on more than 560 rail carriers across North America. Our enhanced intermodal tracking abilities will provide more data that you care about in order to improve performance and efficiency while reducing cost.

It’s All About the Data

More data points means greater transparency and a greater ability to save you money. Utilizing wayside detectors, the system processes over 11 million events every single day, guaranteeing instant and, more importantly, accurate insight into the status of your shipments. These systems enhance our already vast ocean database and result in more detailed ETAs, Standard Point Location Codes and waybill information.

Unique Benefits of Hybrid System with AIS Satellite Tracking

Our goal has always been to provide complete shipping visibility throughout the entire shipping process from initial loading to final delivery of freight. Our intermodal network allows us to fulfill that mission better than ever before as we deliver a seamless transition from sea-to-land. AIS satellites were first implemented in 1974, meaning we have decades of data to rely upon. Couple that with the terrestrial rail tracking, which contains data points from nearly 200 years ago, and you have an incredibly reliable system that is able to foresee changing conditions like no other.

Reduce Costs, Improve Performance

The sheer amount of data available through SiShips can be overwhelming, and even feel insurmountable to wade through, and that’s exactly where SiShips comes in to synthesize the seemingly inscrutable information. SiShips is able to improve efficiency for any company by keeping track of the entire fleet in one place. Our shipping partners are able to reduce overhead and shift their personal and invaluable IT resources to focus on their core business. There is no need to worry about bad orders, stress about disputed fees or demurrage charges when you have the exact location and timing of every single shipment at your fingertips.

How Can SiShips Give You An Advantage

Freight is constantly moving across thousands of miles every day. Sheltered International is dedicated to providing near real time information to our shipping partners in order for them to make the best decisions when it comes to their product needs. From local depots to international ports, our unique combination of technology and shipping expertise will keep you one step ahead of the competition. Rail tracking combined with AIS GPS satellites means you will never be in the dark about the status of your cargo.

To learn more about rail tracking via SiShips, or to view a demo of our software, contact us today.

Temporary Shuttering of Meidong Terminal in China

A positive test for coronavirus on a vaccinated individual, working for an undisclosed carrier, led to shipping delays and the temporary shuttering of Meidong terminal in Ningbo, China, the country’s second largest container port, according to Reuters. The shutdown of the terminal, at 3:30 AM local time on Tuesday, August 10^th, was the result of China’s tighter restrictions as it attempts to fight the most recent outbreak of coronavirus within its borders.

The backlog of ships queuing to call at Ningbo stood at 37 vessels as of Friday, August 13^th, down from a peak of 39 the day before. Ningbo Zhoushan Port Co Ltd, the owner of Meidong terminal, was forced to make quick decisions to divert incoming vessels to neighboring ports in Ningbo and Shanghai. Nearby Yangshan port in Shanghai was facing a backlog of 29 vessels of its own at the time of the report. Unfortunately, the timing could not be worse, as ports in the East China Sea are still playing catch up due to disruptions stemming from Typhoon In-Fa, that struck hard in July. 

Backlog Keeps Building

The ocean logistics chain is already stretched to its utmost limit, with 100% capacity on all ocean-going vessels; making it exceedingly difficult to lower the backlog, especially at an integral terminus such as Meidong, which accounted for 5.44 million TEUs, or 17% of the city’s total container handling volume in 2020. 

Amid no signs of lessening demand from the US and Europe, this latest domino effect of port congestion could push container shipping rates even higher, after setting an all-time record north of $20,000 per 40-foot box just last week. In addition to Ningbo and Shanghai, the Yangtze River estuary has seen particularly acute congestion. Experts are warning businesses to consider contingency plans as the U.S. ramps up for the holiday shopping season.

Shipping Companies Staying Optimistic

There is still optimism that the Ningbo shutdown will be less dramatic than that experienced in Yantian, near Hong Kong in the South China Sea. Over 150 ships were diverted or skipped calls entirely in May. Thorsten Meincke, DB Schenker board member for air and freight expressed hope Meidong will be able to isolate any infection and quickly resume operations as normal. “If they don’t open the terminal today or tomorrow, then the impact will be super massive. Ningbo is in the epicenter of greater Shanghai,” he was quoted in an interview with JOC.com.

Forwarders anticipate a phased reopening of the Meidong terminal to begin on Wednesday, August 18^th, following testing on 50,000 individuals showing no new cases of COVID-19. In order to clear the backlog, no new cargo will be accepted until a week later, on August 25^th, with normal operations expected to resume on September 1^st.

How Can SiShips Help You Navigate the Constantly Changing Global Supply Chain?

Through our unique combination of technology and shipping expertise, Sheltered International is dedicated to transparency and designed to put control in the hands of the shipper. We are able to provide up to date information on the status of ports across the globe and how to best manage your shipping and delivery needs. Just like freight moving from sea to air, when technology meets shipping, sparks fly. 

To learn more about SiShips, or to view a demo of our software, contact us today.

Top 9 Container Lines Become the Target of FMC’s Audits

Among increased pressure from shippers, Congress, and the White House, the US Federal Maritime Commission (FMC) will begin auditing how they bill customers’ detention and demurrage charges. The audit targets the top nine container lines including Cosco Shipping Group, CMA CGM, Evergreen, Hapag-Lloyd, HMM, Maersk, Mediterranean Shipping Co., Ocean Network Express, and Yang Ming.

A letter to the container carriers details that the Vessel-Operating Common Carrier Audit program will determine whether carriers will face additional storage fees if they are unable to pick up or return containers. Lucille Marvin, managing director of the FMC, says in the letter that each carrier is required to encourage a managing director to respond to the FMC’s audit and provide regulators with monthly updates.

FMC Raises Questions in Fairness of Detention and Demurrage Fees

In spring 2020, the FMC questioned the fairness of detention and demurrage fees, bringing to light the question of whether or not they encourage carriers to retrieve import containers and return empty ones. Despite this, the underwhelming amount of formal complaints about detention and demurrage fees led to a lack of action. This, paired with President Biden’s executive orders that targeted container carrier practices, put pressure on the FMC to more strictly monitor any activity that could violate the Shipping Act of 1984.

On June 6, FMC Chairman Daniel Maffei and FMC Commissioner Rebecca Dye explained their goal to audit detention and demurrage billing, and Maffei acknowledged that the FMC might need more resources to do so. Jen Psaki, the White House’s press secretary, argued that carriers should not bill shippers while their goods wait at shipping ports.

Shippers and Container Lines Disagree on the Necessity of Fees

Shippers responded to the charges saying that they are responsible for paying the costly fees when congested ports prevent them from picking up containers and returning equipment. These fees are only becoming more expensive as Asian imports clog U.S. marine terminals, making it more difficult for truckers to pick up the containers and drop off equipment. In response to this rebuttal from shippers, carriers state that they must require fees as a way of encouraging the removal of cargo and the return of equipment in a timely manner.

Shippers have historically viewed detention and demurrage bills as unjust. The National Industrial Transportation League (NITL) and the Agricultural Transportation Coalition (AgTC) have sought changes to the placement of legal burdens, taking the position that detention and demurrage billing should fall on carriers rather than shippers. Meanwhile, the FMC is unsure how to respond to claims from shippers and truckers that some container lines use storage fees as a source of revenue. Rules created in response to a fact-finding inquiry in 2018 failed to end detention and demurrage billing practices that shippers deemed unfair. In response, the NITL and AgTC proposed changes to the Shipping Act.

It’s important to choose the most reliable company for your shipping needs, and shipping with Sheltered International is easy and affordable.

To learn more about SiShips, or to view a demo of our software, contact us today.

President Biden Released Executive Orders Affecting Ocean Container Shipping.

On Friday, July 9th, President Biden released executive orders affecting ocean container shipping. Biden’s orders encourage competition across several sectors, prompting the Federal Maritime Commission, or FMC, to pursue unfair carrier practices in the area of detention and demurrage.

Prior to Biden’s recent orders, the FMC already began investigating detention and demurrage practices they found unfair such as the refusal to carry exports, which violated the Shipping Act of 1984. The FMC also aims to strictly enforce rules so exporters aren’t excessively charged. The container shipping industry already faced two main issues that the President’s orders disappointingly did not change. Firstly, politically influential exporters have complaints about poor access to capacity. Secondly, there have been allegations of unfair detention and demurrage bills since before the recent orders, however, the pandemic made these issues even more evident when congestion at ports and railheads worsened.

According to White House Press Secretary Jen Psaki, the FMC is welcome to “work with the Justice Department to investigate and punish anti-competitive conduct,” but how this would be accomplished remains unclear. Despite investigations of container line collusion, the main issues regarding shipping practices such as alleged unreasonable export practices and the hefty financial impact of the pandemic are still relevant.

Executive Orders Call for New FMC Rules  

Shippers argue that despite FMC’s 2020 rule stating that importers, exporters, intermediaries, and truckers should not receive punishment when they are incapable of retrieving containers from or returning containers to, marine terminals due to circumstances outside of their control, they have not noted any change in behavior by carriers or marine terminal partners. Because of this, the FMC is attempting to more strictly initiate investigations on detention and demurrage rather than waiting for complaints to occur.

Biden’s orders call on the FMC to “vigorously enforce the prohibition of unjust and unreasonable detention and demurrage charges,” in addition to creating further rules based on recommendations from the National Shipper Advisory Committee to improve detention and demurrage practices.

Global Supply Chain Issues Worsened by Pandemic

An increase in import demands from U.S. consumers plays a big role in the present global supply chain issues. Consumer spending has increased by 10% in 11 months of the past year. Surprisingly, the pandemic helped the container carriers gain an advantage over their consumers in that all ships are sailing fully stocked. In the U.S., there is more demand than shipping capacity onboard the vessels. The World Shipping Council, or WSC, urges for normalized demand over-regulation with the argument that ocean carriers are expanding all available resources to overcome disruptions caused by the COVID-19 pandemic and other global shipping issues.

Shippers have criticized carriers about the capacity of their ships, but carriers responded that there is no extra capacity available to handle the spike in demand. The WSC representing container lines said, “Ocean carriers are employing all available capacity and pulling out all the stops to manage the operational disruptions brought on by COVID-19. This is not the fault of any supply chain actor. Supply chains simply cannot efficiently handle this extreme demand surge.”

Given the current issues in shipping, it’s important to choose a company you can rely on. Shipping with Sheltered International is a quick and reliable way to get things done. Plus, with Shipping International software, you can get instant access to quotes to make sure you’re getting the best price.

To learn more about SiShips, or to view a demo of our software, contact us today.

Delays Threaten New Disruptions in Global Trade

COVID-19 restrictions, which have complicated major ports in the U.S. and Europe through the pandemic, are now disrupting operations at a key export hub in China that could last until the end of this month and lead to further rise in ocean freight rates.

Recent Set Backs

Capacity at major ports is being pushed to the limit by tighter coronavirus controls in China’s southern manufacturing hub. Operations have slowed as authorities restrict business activity in the efforts to halt COVID-19 outbreaks.

The present COVID-19 crisis has resulted in Guangdong province taking tighter controls, as mass testing in the regional capital of Guangzhou reveals more cases of the Delta variant of the virus. The eruption of cases has caused serious delays at normally highly efficient South China ports—Yantian, Shekou and Nansha.

The restrictions have particularly impacted operations at Yantian International Container Terminals, an operator of terminals at Shenzhen port. The port was partially closed in late May for a few days after some dockworkers were among those confirmed with Covid-19 amid the outbreak in Guangdong Province. The facility is facing challenges due to efforts by the local authorities to disinfect and enforce quarantine measures, which has led to labor shortages.

Extended Delays 

Analysts and industry stakeholders do not anticipate a swift resolution to the port congestion or container availability issues at ports in southern China.

In a recent advisory, Maersk stated, “After a six-day stop on export containers, the Yantian Port Authorities have announced that productivity is gradually set to increase as more workers return and more berths reopen.”

While this has a positive impact on gate activity, which is soon expected to reach the same levels as before the incident, schedule reliability will continue to suffer with an average waiting time of 16 days and counting.

Vincent Clerc, AP Moller-Maersk’s CEO of Ocean & Logistics, stated: “I would say this for us is a much bigger disruption than the Ever Given getting stuck in the Suez Canal for some days because of the duration and the importance of Yantian as a gateway.”

The blockage of the Suez Canal only lasted for six days, while the situation in Yantian has already lasted several weeks with no end in sight for the coming weeks either. Yantian is a key gateway port on a global scale.

Significant Ripple Effects

Charter rates for containerships are at record levels due to an almost complete lack of available tonnage. The lengthy delays in vessels schedules will see lines such as Maersk being forced to cut sailings due to reduced available capacity. 

“We will see lost sailings as a result of these delays which will only compound the congestion that we’re seeing,” Clerc stated.

The Yantian port delays are bound to have significant ripple effects. Many in the industry are working hard to redirect cargo to other ports in the Pearl River Delta region, which comes with its own challenges such as equipment shortages and significant berthing delays.

How SiShips Can Help

The challenges at Yantian are the latest in a saga of global container shipping issues that have plagued shippers, forwarders and carriers for more than a year — from port congestion, to container shortages, to Covid-19 complications, to the Suez Canal blockage. 

With shipping demands at an all-time high, it is critical to choose the best possible company for your shipping needs. Sheltered International can ensure the quickest and most reliable options for your company. With so many unforeseen factors impacting freight rates, it can be difficult to know if you’re getting the best price. With SiShips software, you can get instant access to quote options.

To learn more about SiShips, or to view a demo of our software, contact us today.