Weekly Roundup – May 23, 2024

Welcome back to the weekly roundup, where we provide concise summaries of the most important supply chain and logistics stories of the week. Covering breaking news, emerging threats, and changing market dynamics, it contains all the news you need to maintain a competitive advantage.

Shippers fight for allocations as early peak season hits Asia-Europe

Shippers on Asia-Europe routes are struggling to maintain their weekly allocations from carriers due to an early peak season driven by high demand, port congestion in Asia, and extended transit times around southern Africa. The surge in demand has pushed the peak season forward by over a month, leading to higher rates and equipment shortages. Carriers are responding creatively by cutting or limiting allocations through various strategies like blank sailings and new cancellation policies, making it difficult for shippers to secure agreed-upon allocations.

The trans-Pacific trade is experiencing similar issues, with carriers prioritizing lucrative spot market bookings over fixed-rate allocations to non-vessel-operating common carriers. This unexpected demand spike, attributed to early orders from Asia, has caught the market off guard, exacerbated by port congestion and vessel delays, further straining capacity and equipment availability.

Global reefer traffic set to rise boosted by southern exports

Global perishable shipments are set to increase this year, driven by a better-than-expected southern hemisphere harvest, according to Drewry. After two years of decline, reefer shipments are predicted to grow by 1%, led by strong citrus exports from South Africa. Good growing conditions and new orchards are boosting citrus exports, while New Zealand expects a strong kiwi crop.

Meat and banana shipments have also started the year positively. Drewry forecasts a 3.6% growth in citrus shipments and slight increases in other perishables. Despite a slight global decline in citrus production, exports are projected to rise, though demand in importing markets like Europe remains uncertain. New markets, such as Vietnam for South African oranges, are also emerging.

SC Ports resumes operations after software issues

South Carolina Ports (SC Ports) has restored full operations at all marine terminals and Inland Port Greer following a software issue on 21 May. Wando Welch and North Charleston Terminals will operate from 5:00 am to 5:00 pm on 22 May, while Inland Port Greer remains open 24/7. Cargo pick-ups and drop-offs are now accepted at all marine terminals and Inland Port Greer, but Inland Port Dillon is still not operational. To mitigate disruption, SC Ports extended operating hours at Wando Welch and North Charleston until 7:00 pm on 21 May.

Mounting container shortages creating ‘total havoc’

Forwarders report a severe shortage of containers in northern China due to unexpectedly strong market demand and reduced vessel capacity from the Red Sea crisis. Hans-Henrik Nielson of CargoGulf highlights the difficulty in equipment planning due to port omissions and congestion, leading to a scramble for 40′ HC containers. Ligentia confirms the shortage, noting that carriers like CMA, ANL, Maersk, and Hapag-Lloyd face container scarcity and schedule delays across major Chinese ports. Some areas like Xiamen have sufficient containers. With carriers reducing capacity and announcing blank sailings, the situation is expected to persist, prompting companies to secure space well in advance.

Canadian Rail Labor Dispute Talks Restart; CN Revises Offer

Canadian National Railway (CN) revised its offer to the Teamsters Canada Rail Conference (TCRC) on May 16, raising hopes for resolving a labor dispute that threatens major disruptions across North America. Talks resumed between Canadian Pacific Kansas City Railway (CPKC) and TCRC on May 17, with federal mediators involved. Both railways face potential strikes authorized by 9,300 employees. The disruptions could paralyze Canada’s supply chain, as railways handle most freight and exports. Contingency plans include shifting cargo to other ports and over-the-road options. The labor dispute has prompted major shippers like Maersk and NFI to prepare for significant operational impacts and increased trucking rates.

Both ACL and BG Freight Line will coordinate schedules to minimize connection times at Liverpool, ensuring smooth operations. This collaboration reflects a significant advancement in container shipping options between Ireland and North America.

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