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Ship Congestion Continues 

Ship Congestion Continues 

The Impact of the Suez Canal Blockage on Global Shipping

The recent situation in the Suez Canal resulting in the containership Ever Given blocking the enitre canal for days, could not have happened at a worse time due to to the current extremely high shipping demands. Global shipping, the industry that transports steel boxes full of products around the global economy, was already reporting record highs and operating at full capacity.

The Port of Long Beach reported its busiest month ever in March 2021 as imports continued to pour into U.S. seaports. The congestion resulting from the Suez canal is not directly affecting operations at the Port of Long Beach according to Noel Hacegaba, the deputy executive director with the Port. However, as companies search for alternative routes, Long Beach could experience an increased amount of ships docked offshore in the coming weeks.

Shipping congestion

Photo courtesy of Thomas R. Cordova.

Trade Routes Further Slowed

Ship congestion outside the biggest U.S. gateway for Asian imports remained elevated with the wait to offload containers lengthening to eight days, which added costs and complications for companies trying to stay well-stocked in an accelerating economy.

All of the above considered, the Suez Canal blockage only further slowed trade flows. Rolf Habben Jansen, chief executive officer of Hapag-Lloyd AG, reported “Box availability will be tight for the next six to eight weeks.” Specifically citing ports in the U.K. and in Rotterdam, Europe’s largest for ocean cargo, among the gateways facing delays. 

Jansen went on to say, “we hope to get back to some kind of normalcy toward the end of the second quarter or early in the third quarter, but that certainly is not a given and is probably a bit of a best-case scenario but not impossible.”

How Sheltered International Can Help

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.


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

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Tensions High Over Ever Given Containership Blockage

Egypt Seizes Ever Given, Demands $900M for Suez Canal Blockage

Egyptian authorities have seized the Ever Given containership, which blocked the Suez Canal for almost a week last month, amidst a dispute over financial damages.

Egyptian authorities have ordered the Ever Given’s owner, Japanese chartering company Shoei Kisen Kaisha, to pay $900 million in compensation. The bill includes losses inflicted by the congestions the ship caused, maintenance fees and rescue operation costs, according to Egypt’s state-run news agency Al Ahram.

Suez Canal

Image courtesy of Planet Labs Inc.

The Backstory 

On March 29th, 2021, The Ever Given containership was successfully dislodged after blocking the Suez Canal for nearly a week. Because of the blockage, the Suez Canal experienced a congestion of an upwards of 422 ships. 

The rescue operation, which required extensive dredging and tugging operations, gained huge global attention with each day that passed, as ships from around the world, carrying vital fuel and cargo, were blocked from entering the canal during the crisis, raising alarm over the impact on global supply chains.

Two Sides to Every Story 

CNN reports that UK Club, one of the ship’s insurers, questioned the basis of Egypt’s claim.

“Despite the magnitude of the claim which was largely unsupported, the owners and their insurers have been negotiating in good faith with the SCA. On 12 April, a carefully considered and generous offer was made to the SCA to settle their claim,”  UK Club said in response to the claim from the Suez Canal Authority (SCA).

UK Club’s statement went on to explain why they believes the claim is not valid.

“The SCA has not provided a detailed justification for this extraordinarily large claim, which includes a $300 million claim for a ‘salvage bonus’ and a $300 million claim for ‘loss of reputation.’ The grounding resulted in no pollution and no reported injuries. The vessel was re-floated after six days and the Suez Canal promptly resumed their commercial operations. The claim presented by the SCA also does not include the professional salvor’s claim for their salvage services, which owners and their hull underwriters expect to receive separately,” the UK Club statement said.

On Wednesday, the ship’s technical managers, Bernhard Schulte Shipmanagement (BSM) reported that the ship had been declared safe for onward passage to Port Said on the Mediterranean Sea, but had been detained because of the dispute between the Suez Canal Authority (SCA) and the vessel’s owners.

The ship’s cargo has been seized until the dispute is resolved, according to the Suez Canal Authority.

With Shipping Demands Being at an All Time High, Timing Couldn’t be Worse

On March 29th, 2021, The Ever Given containership was dislodged after blocking the Suez Canal for nearly a week. Ever Given

The Suez Canal, which offers vessels a direct route between the North Atlantic and northern Indian oceans via the Mediterranean Sea and the Red Sea, suffered a blockage which resulted in a congestion of an upwards of 422 ships.

The rescue operation, which required extensive dredging and tugging operations, gained huge global attention with each day that passed, as ships from around the world, carrying vital fuel and cargo, were blocked from entering the canal during the crisis, raising alarm over the impact on global supply chains.

 

 


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

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Ever Given Dislodged from Suez Canal

After Days of Suffering a Complete Blockage, The Suez Canal is No Longer Harboring a Ship Across its Waters

The Ever Given containership was dislodged this morning and is now once again floating in the right direction. Tug boats worked hours to get this ship freed from the canal, but it was with the help of high tide that the ship was finally freed. It is now being towed towards Egypt’s Great Bitter Lake, where it will undergo an inspection.

Ever Given dislodged from Suez Canal

“The outcome of that inspection will determine whether the ship can resume its scheduled service. Once the inspection is finalized, decisions will be made regarding arrangements for cargo currently on board,” charter company Evergreen stated. 

Effects Will Be Felt for Months to Come

Though the ship is now free, the effects from this misfortune are expected to last for months. Supply chain disruption and capacity cuts are expected even after the reopening of the canal.  

During the 6 days of this crisis, ships were rerouted around Africa to Europe and even through Panama to the US East Coast to avoid this blockage. The timing of this situation could not be worse due to extremely high shipping demands

“Companies should expect the Suez blockage to lead to a constriction in shipping capacity and equipment, and consequently, some deterioration in supply chain reliability issues over the coming months,” Caroline Becquart, senior vice president and head of Asia and the 2M Alliance service network at Mediterranean Shipping Co. (MSC), said on Saturday. 

“Unfortunately, even when the canal re-opens for the huge backlog of ships waiting at anchorage this will lead to a surge in arrivals at certain ports, and we may experience fresh congestion problems. We envision the second quarter of 2021 being more disrupted than the first three months, and perhaps even more challenging than it was at the end of last year.”

Backlogged Vessels Will Lead to Global Shipping Impact

Maersk stated that the goal will be to have shipping run continuously once the canal is reopened. However, the backlogged vessels from the past week alone will take anywhere from three to six days to pass through the canal. 

“It is evident that such an amount of capacity absorption will have a global impact and lead to severe capacity shortages. It will impact all trade lanes, as carriers will seek to cascade vessels to locations where they have the greatest need,” stated Sea-Intelligence.

Journeys Continue Along Suez Canal

Since being freed of its blockage, ships have now begun to pass through the Suez Canal. This is an incredibly busy route, with an average of 51.5 ships passing through the canal every day in 2020 according to the Suez Canal Authority. 

 

It’s stated that more than 350 vessels are waiting on both sides of the canal. The ship operators that decided to re-route their vessels around Cape of Good Hope have added over a week of sailing time and increased their fuel costs. 

Ships backlogged in Suez Canal

“As soon as the ship reaches the waiting place in the Bitter Lakes … the 43 ships waiting in the Bitter Lakes will begin to move south towards the Gulf of Suez,” a Suez Canal Official stated Monday. 

Ships will continue to journey through the canal, but containership reliability will likely fall in the coming weeks. 

How Sheltered International Can Help

When unpredictable situations occur, it is critical to choose the best possible company for your shipping needs. With Sheltered International we can ensure the quickest and most reliable options for your company when the current circumstances are not so reliable.


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

 

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Following Cargo Loss ONE Apus Sets Sail

Months After Cargo Loss Due to Foul Weather, ONE Apus Embarks on Journey to Long Beach

After departing from Kobe, Japan following a journey to remove hundreds of damaged and dislodged containers, the ONE Apus is expected to arrive in Long Beach, CA on or around March 30th. This journey stems from last year’s cargo loss during the ship’s trip from China to Long Beach, California, when an estimated 1,816 containers were lost overboard due to inclement weather. It was estimated that hundreds more collapsed on deck. 

One Apus

Photo courtesy of Seatrade Maritime

ONE Apus experienced massive swells and extreme winds about 1,600 miles off the coast of Hawaii in November of last year. Instead of continuing on its projected path to California, the 2019-built ship turned around and headed to Japan. ONE Apus arrived in Kobe on December 8th to receive repairs. The insurance claims from this loss of cargo are expected to be greater than $100 million.

Within a series of weather-related cargo losses on the trans-Pacific this past season, this incident was by far the worst. Ships have been packed nearly beyond capacity the last few months, due to the increased shipping demands.

Port Congestion Continues

Along with the increased shipping demands, extreme congestion at the ports of Los Angeles and Long Beach are still hindering the reliability of containerships. These delays will likely affect the arrival of ONE Apus – possibly not reaching the dock until as late as April 7, though expected to arrive much earlier.

The ONE Apus has been receiving repairs since its arrival in Kobe in December. As of February 26th, a total of 940 boxes had been discharged. The original plan was to carry as many of the original containers in good shape as the ship would allow, they have since stated that some of these containers may need to be loaded on different vessels to reach their destinations. 

One Apus

Photo by: W.K. Webster & Co Ltd

Why Cargo Insurance is Important

When situations like this occur, cargo insurance can help protect your shipment while it is in transit, even as it moves through different modes and carriers. Cargo insurance offers door-to-door coverage and will reimburse the full value of cargo lost or damaged due to circumstances outside of the carrier’s control. The two primary types of policies are generally All-Risk or Free of Particular Average (FPA); the policy that is chosen will determine the spectrum of situations covered.

All Risk Insurance is the most common type of policy and covers the broadest range of incidents.  Unless explicitly excluded in the policy, all events are covered.  These commonly excluded situations include nuclear events, strikes, and riots, as well as flaws in the goods such as inadequate packaging or decay.

On the other hand, FPA coverage, or ‘named-perils coverage’ is much more limited and excludes coverage on losses due to common causes such as heavy weather, rough handling, theft, and more. If you are shipping used merchandise or bulk goods this may be the only available option to insure your shipment. FPA coverage is also very common for marine insurance policies. 

Will ONE Apus Declare General Average?

It is not yet known if the ONE Apus will declare General Average.  General Average requires that the shipowner and its customers share a proportionate amount of the costs associated with saving a vessel after a major casualty. When General Average is declared, cargo owners are required to contribute funds even if they did not cause or sustain damage before cargo can be released.  Both FPA and all risk will provide coverage for General Average.

How SiShips Can Help

1,382 containers are lost at sea each year according to the World Shipping Council, making cargo insurance an extremely important part of protecting your business. Through our encompassing shipment-management software SiShips, we will find a policy that works for you.

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

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How Imports Have Been Impacted by COVID-19 in 2020

Understanding How the Pandemic Has Affected Freight Forwarding This Year and Anticipating Future Changes

It’s no surprise that the COVID-19 pandemic has significantly impacted the global supply chain. From transportation to manufacturing to distribution and retail, all industries have experienced new challenges this year – challenges that will likely continue through at least Chinese New Year. To help you understand the factors that may impact your shipment, we’ve broken down how COVID-19 has affected shipping logistics this year so far.

Changes to Production and Demand

As COVID-19 spread around the world, international lockdowns halted production and slowed global economies in an unprecedented way. From April through June, global volumes came to a standstill. The limited products available for shipping experienced slowed journeys as cargo was stopped at origin or destination ports for various quarantining procedures.

By July, however, China had returned to full production, boosting availability and, subsequently, demand. This demand has not slowed: w=While September and October always see large order volumes from China as retailers prepare for the holidays, American imports from the Asia Pacific were 23.7% higher in October of this year than last year, and 10% higher than the month prior.

Globally, output increased in 22 of 26 subsectors in October, with automobiles and parts, banks, chemicals, and machinery and equipment representing the top performers.

Impacts of COVID-19 on Transportation

COVID-19 Impact on Shipping

Sluggish demand in the spring forced ocean carriers to blank sailings to cut losses, while reduced air traffic significantly reduced capacity in the skies as well. However, as sales picked up exponentially, carriers found themselves faced with the opposite problem: A surge of demand outweighing available cargo space.

Workforce shortages and various quarantine regulations slowed the devanning process, lengthening container churn from 1-2 days to 5-7 days. Despite carriers shortening container free time and increasing demurrage and detention charges, this reduced pace still created a build-up on the supply chain. Further fueling the imbalance, carriers struggled to get their equipment back to the origin ports where it was needed.

At the ports, the trucking industry was also impacted by surging volumes. Long lines and road congestion significantly lengthened the time needed to get containers out of and back to ports, generating a chassis shortage and slowing transport times. Able to move fewer containers than normal, trucking companies struggled to cover their costs.

Adjustments to Rates

Motivated by high export rates from Asia, carriers reduced the number of full containers available on the back-haul voyage to China, forcing customers to book more LCL in place of FCL shipments. This has further impacted the capacity shortage, driving up the cost of additional space. Likewise, lack of space on vessels forced cargo owners to pay a premium in spite of FCL contracts.

With all of these factors, shipping rates around the world have significantly increased. From Asia Pacific ports to Los Angeles, many rates doubled. From China to Europe, they tripled, with some containers moving at a rate of more than $8,500 per 40’. Even the typically stable Intra-Asia lanes experienced heavy rate increases.

How SiShips Can Help

We know there are a lot of changes impacting the freight forwarding industry right now. We’re here to help you stay on top of new rates, deadlines, and more, so you can be confident you’re always receiving the best option available for your business.

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

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Using SiShips’s New Deadline Tracking Feature

Managing Holiday Deadlines, Port Congestion With Deadline Tracking

With the holidays quickly approaching, conditions continue to deteriorate at US gateway ports. Congestion has already significantly impacted ports around the country, particularly along the west coast, subsequently driving up trucking rates and drastically slowing delivery times. To be expected around the holidays, surging ocean freight demand is placing the system under even greater stress. This year, however, this has been compounded by equipment shortages, overbooks, blank sailings, and existing port congestion.

To combat these obstacles, we’ve added a new Deadline Tracking feature to our SiShips software. With Deadline Tracking, you can better predict how your shipments will be impacted by potential delays. This knowledge will allow you to make informed decisions for your business during the holidays. Read on to learn more about how to use this new feature.

Holiday Port Congestion

With holiday shoppers choosing e-commerce options over in-person ones, shippers are being tested to keep up with demand. West coast ports, in particular, are experiencing drastic increases in capacity: The Port of Long Beach handled 806,603 TEUs in October, breaking its previous record that had only been set in September.

Unsurprisingly, major online retailers like Amazon are a key factor in driving this surge: last month, 79% of Amazon’s shipments arrived via Los Angeles/Long Beach. Overall, e-commerce sales have increased 19.9% year on year, and experts predict sales in November and December alone will see a 33% year on year surge.

How to Use Deadline Tracking for Your Shipments

Ocean cargo shipments can be complex, particularly with the many added factors currently at play. Our Deadline Tracking was designed to simplify the experience and provide you with valuable knowledge.

Incorporated into your shipment’s timeline, the Deadline Tracking feature will display in red if the ETA will not meet your deadline. Note that if there is no door delivery option, the deadline will use the last port date.

Once your freight has shipped, the deadline will transfer from quotes and bookings into tracking automatically. Once the delivery is completed, the deadline will show the difference (+/-) between delivery and desired deadline.

Don’t have a deadline? Just tick the box next to “Any Deadlines” to skip this step.

Deadline Tracking SiShips Freight Forwarding


We know managing shipments can be difficult. That’s why we used our extensive years in freight forwarding to develop SiShips. With this software, quoting, tracking, and planning are made easy, so you can spend less time worrying about freight forwarding and more time improving your business.

Contact us today to learn more about how SiShips can simplify your shipping experience.

 

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What to Know About Coronavirus and Its Effects on the Shipping Industry

How Coronavirus is Affecting Trade with China

After the outbreak of the SARS epidemic in 2002, medical experts called for stricter quarantine laws regarding international travel, and thus the shipping industry, in the case of a future outbreak. These regulations are now being put into place as coronavirus spreads through the Wuhan province in China. This quarantine is affecting factories in China as well as those in neighboring countries whose employees have been unable to return to work after visiting family in the Hubei region during the Lunar New Year. Reduced production, coupled with concerns for the safety of operating crews on board sea and air vessels, has resulted in significant disruptions for the shipping industry.

coronavirus shipping industryCoronavirus Quarantines and Reduced Exports

Many factories around China have been temporarily closed following the outbreak of the virus, with some not anticipated to open until March 1. With these facilities shuttered, exporters can expect to see similar effects as with the Lunar New Year, which sees the pausing of production for nearly three weeks annually. Delays are typically expected to continue for several weeks following the holiday as well but are being exponentially compounded by the effects of coronavirus. Major corporations, including Hyundai Motor, Deere & Co., and PSA Peugeot Citroen have all been affected by these closures and supply disruptions.

Sea Freight Shipping Demand

With limited production, demand for shipping containers is dropping rapidly, resulting in low freight rates. Sea-Intelligence, a maritime analyst, predicts a loss of $300-350 million weekly for carriers. Further, according to maritime data provider Alphaliner, major Chinese ports have seen a 20% decrease in ship calls since January 20. To combat this, sixteen Chinese ports are offering reduced rates in an attempt to lure liners back in. In contrast, nearby ports like South Korea’s Busan are experiencing spillover and rising container capacities. If these levels continue to rise, ports’ efficiency will be compromised, adding to potential delays.

This reduction has also led to lower demand for oil. With prices seeing a decline beyond the expected from Chinese New Year, refiners are being driven to negotiate and limit crudes runs.

Effects on Air Cargo

Air travel to China has been suspended by nearly all airlines, and flights to and from Hong Kong have also been halted. While some importers anticipated delays on shipments for the Lunar New Year, they are now experiencing disruptions beyond their predictions. Where ocean freight is seeing reductions in shipments, air cargo space is now extremely limited. Cargo on passenger flights has been redirected to available freighters, but these flights have also been drastically reduced or suspended entirely out of concern for the crew’s safety.

Short- and Long-Term Effects

With imports redirected and substantial disruptions in production and exporting, businesses should anticipate delays until mid-March. Experts agree that long-term consequences remain difficult to determine at the time; however, if the SARS epidemic is any indication, Chinese markets will manage to recover once coronavirus has been contained, resulting in only short-term interruptions.


The shipping industry can be unpredictable. Keep track of any delays or disruptions that might affect your business with SiShips.

Learn more about SiShips can simplify your freight experience.

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