UPS Temporarily Stops Picking Up Orders From Six Retailers to Cope With Holiday Surge

UPS truck

As COVID-19 cases and hospitalizations continue to surge across the U.S., more people have turned to online shopping this holiday season—and delivery services can’t keep up.

On Wednesday,  the UPS ordered drivers to temporarily stop picking up orders from six retailers after too many packages exceeded the shipping giant’s capacity. The retailers include Gap, Nike, L.L. Bean, Hot Topic, Newegg, and Macy’s.

The move, which some drivers say they had not seen in previous holiday seasons, is likely to ensure the service does not take on more than it can handle. It’s unclear how long the restrictions will last.

A UPS spokesman told CNBC on Wednesday that the carrier had set “specific capacity allocations” for its customers over the holiday season. Retailers were also advised by carriers to spread out online promotions beyond Black Friday, and many started their sales as early as October.

Both UPS and FedEx upped their shipping rates earlier this year, as many retailers have been bombarded with online sales that have pushed carriers to their limits for most of the pandemic. In October, UPS announced it would hire 100,000 workers to accommodate the holiday shipping rush, while FedEx said in September that it planned to hire 70,000.

According to Adobe Analytics, Thanksgiving saw $5.1 billion in online sales, and Black Friday racked up $9 billion. In-store shopping on Black Friday saw a 52% decrease from last year, according to data from Sensormatic Solutions. Cyber Monday brought in $10.8 billion in online sales, a 15% increase from last year.

(Source: Slate)

Two New STS Cranes Added to Vanterm Terminal

STS Cranes

Global Container Terminals (GCT) has received two modern ship-to-shore (STS) cranes, capable of handling 14,000TEU vessels at GCT Vanterm in Burrard Inlet in Vancouver.

The cranes are part of GCT’s US$160 million private sector investment to modernize and increase the level of operations at GCT Vanterm.

GCT Vanterm’s two newly arrived cranes will be among the most advanced in North America, according to a statement, electrically powered, they feature regenerative drives that can provide power back into the grid and high-efficiency LED lighting.

The cranes will reduce glare and light pollution along with features intended to reduce operational noise, while they have also been painted cloud-white colour to mitigate daytime skyline visibility.

GCT added that the new machines, along with other equipment upgrades and process improvements, will improve safety for the workforce, increase terminal capability, and reduce equipment emissions by 55%, all within the same footprint.

(Source: Container News)

Canada Blocks Exports of Some Bulk Prescription Drugs to U.S. to Prevent Shortages

Canada has blocked bulk exports of prescription drugs to prevent shortages at home, in response to outgoing U.S. President Donald Trump’s efforts to allow imports from Canada to lower some drug prices for Americans.

“Certain drugs intended for the Canadian market are prohibited from being distributed for consumption outside of Canada if that sale would cause or worsen a drug shortage,” Health Minister Patty Hajdu said in a statement.

The Canadian measure went into effect on November 27th, just days before a U.S. “Importation Prescription Drugs” rule that would eventually allow licensed U.S. pharmacists or wholesalers to import in bulk certain prescription drugs intended for the Canadian market.

Trump touted the plan in his first debate with president-elect Joe Biden, who has also said during his campaign that he would set up a similar import plan to try to reduce prescription drug costs for Americans.

“Canada is a small market, representing 2 per cent of global drug sales, that sources 68 per cent of its drugs internationally. The need for vigilance in maintaining the national drug supply continues,” Hajdu’s statement said.

Prime Minister Justin Trudeau said in September he was willing to help other nations with pharmaceutical supplies if possible, adding that his priority was protecting the needs of Canadians.

(Source: CBC News)

Cargo Rollovers Rise in October

ocean freight

Demand for ocean cargo surged through October as ocean carriers added nearly as much capacity as possible. The swelling demand to move containers and the lack of additional capacity has resulted in a wave of rolled cargo, with some carriers reportedly rolling as many as 1 in 3 shipments.

The rate of rolled cargo at transshipment ports increased in October to nearly 29%, up from almost 27% in September, and more than 22% in October 2019, according to figures in an emailed release from Ocean Insights.

The second-busiest port in the world, Port of Singapore, saw an increase in its ratio to more than 31% rolled cargo in October from more than 30% in September.

Some areas did see improvement, however, including the busiest port in the world, Port of Shanghai, which had its ratio improve to less than 23% in October from almost 26% in September.

Some trade specialists have pointed towards an import wave that has been building in momentum over the past few months, as retailers restock from low inventory levels, along with a surge of e-commerce shipments for those who have retained their purchasing power amidst the COVID-19 pandemic.

U.S. exporters have voiced frustration with this fact in recent weeks, saying ocean carriers are moving empty containers back to Asia rather than wait for agricultural exports.

With government regulators seemingly unable to rein in the power of the global shipping lines, it could seem that shippers don’t have much power to avoid rolled cargo.

(Source: Supply Chain Dive)

Commons Considers Bloc Bill to End Dairy Concessions in Trade Deals

cheese

When Canadian trade negotiators begin talks with the United Kingdom next year on a permanent bilateral trade deal, their hands could be tied when it comes to offering any future dairy, egg or poultry concessions — if Parliament passes a new private member’s bill that saw its first hour of debate on Tuesday.

Bloc Québécois MP Louis Plamondon’s legislation, Bill C-216, would amend the Department of Foreign Affairs, Trade and Development Act to state that the minister “must not make any commitment … by future trade treaty or agreement” that would increase the tariff rate quota (TRQ) applicable to dairy products, poultry or eggs, or reduce the tariff applicable to those goods when they are imported in excess of that quota.

Canada protects its agriculture supply management system for these commodities by carefully controlling access to its domestic market. Only small quantities of imports are allowed under strict international quotas — TRQs — with high tariffs keeping any extra imports above and beyond these quotas from being cost-competitive.

But the three major trade deals implemented by the Liberal government over the last four years — the Comprehensive Economic and Trade Agreement (CETA) with the European Union, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) with 10 other Pacific Rim markets and, most recently, the revised North American Free Trade Agreement (the new NAFTA) — all offered new access to Canada’s domestic market, among other concessions required to land these deals.

If Plamondon’s legislation garners enough support to pass in this Parliament before the next election, the first trade negotiation it could affect is talks between Canada and the United Kingdom to reach a permanent, comprehensive deal to liberalize their bilateral trade post-Brexit.

The government won’t release details of exactly what’s in that transitional agreement until the legal text is ready, which usually takes another two to four weeks. But Doug Forsyth, Canada’s lead negotiator in the talks, confirmed previously that the British were seeking additional tariff-free access to Canada’s cheese market.

“I want to be very clear that there is no new market access for cheese here in this transition agreement,” International Trade Minister Mary Ng told CBC News at Saturday’s announcement.

But yesterday at the Commons trade committee, Ng’s parliamentary secretary, Rachel Bendayan, said that language in the transitional deal commits both sides to returning to the table to reach what Prime Minister Justin Trudeau has called a “bespoke” bilateral deal by 2024.

That means the British could make another play to get more U.K. cheeses into Canada.

Based on remarks made during Tuesday’s first hour of debate, it appears Conservative MPs may not support this bill, although a party spokesperson has yet to comment on it or confirm how the Official Opposition will vote.

MPs will vote on the bill at second reading after its second hour of debate, expected later this winter.

(Source: CBC News)

Mixed Reaction to Reduced U.S. Duties on Canadian Softwood Lumber

lumber

Canada’s international trade minister says newly reduced duties on softwood lumber imported to the United States are “a step in the right direction,” but added any additional fees are “unwarranted and unfair.”

The U.S. Department of Commerce on Tuesday set a new duty rate of 8.9 per cent on average after completing its first administrative review on softwood lumber imports from Canada.

The new rate is down from the original 20.2 per cent average duty imposed in 2017 by the U.S., which alleged Canada was both unfairly subsidizing its industry and then dumping wood into the U.S. at unfair prices.

International Trade Minister Mary Ng said her ministry will continue to seek a negotiated settlement with the U.S. through both the World Trade Organization (WTO) and the new Canada-U.S.-Mexico Agreement. She said a settlement is “not only possible, but in the interests of both our countries.”

Ng has joined Prime Minister Justin Trudeau and other federal government officials in saying the U.S. duties have only served to drive up construction costs on both sides of the border, further hurting a lumber industry already impacted by climate change and other issues like pine beetle infestations.

The BC Lumber Trade Council called the remaining duties “frustrating and disappointing,” and said U.S. demand for lumber has outpaced domestically produced product.

In its own statement, the U.S. Lumber Coalition argued the reduced duty rate “understates true levels of subsidies and dumping” by the Canadian industry and expressed hope the rate will increase after the completion of a second review, which began in March.

“The U.S. lumber industry will continue to push for the trade laws to be enforced to the fullest extent possible in the second administrative review to allow U.S. manufacturers and workers the chance to prosper,” coalition co-chair Jason Brochu said.

(Source: Global News)

Canada and Britain Agree On Post-Brexit Rollover Trade Agreement

Canadian and British flags

Britain and Canada have struck a rollover trade deal to protect the flow of $27 billion-worth of goods and services between them after Brexit, and vowed to start talks on a custom agreement next year.

As Britain prepares to end its transition out of the European Union on Dec. 31, it has negotiated multiple rollover bilateral deals to maintain trade, with many simply replacing the terms the bloc had already agreed.

British Prime Minister Boris Johnson joined Canada’s Justin Trudeau and their respective trade ministers on an online call to mark the deal, which paves the way for a tailor-made agreement covering more areas such as digital trade, small businesses, the environment and women’s economic empowerment.

The Canadian Parliament must approve legislation that would enable the deal to come into effect.

Britain is Canada’s fifth largest trading partner after the United States, China, Mexico, and Japan.

In less than two years, Britain has agreed to trade deals with 53 countries, accounting for 164 billion pounds ($217.82 billion) of British bilateral trade.

The UK-Canada Trade Continuity Agreement will be subject to final legal checks before it is formally signed.

(Source: Reuters)

Container Freight Rates Soar On Consumer Goods

shipping containers

Global container shipping rates have surged, with increased demand for restocking across the United States and Europe, container scarcity at export hubs, and changes in freight flows due to the COVID-19 pandemic.

The Freightos Baltic Global Container Index (FBX), a weighted average of 12 major global container routes, rose to $2,359 per forty-foot equivalent (FEU) container this week, the highest on record and up 30% since July 1.

“The spike is driven by very high demand for container freight since July, driven by post-lockdown restocking, limited air-freight capacity, incremental demand for stay-home goods and PPE (personal protective equipment), and a severe shortage of containers,” said Hua Joo Tan, container shipping market analyst at Liner Research Services.

Aside from the restocking swell, container rates have also climbed on a surge in orders from firms that usually ship goods in the belly of passenger jets, but now must use container vessels while much of the global air fleet remains grounded.

An uneven worldwide distribution of containers caused by disruptions to logistics channels because of COVID-19 lockdowns has also boosted rates.

While container costs are expected to stay high through the end of 2020, the evolving pandemic situation in major economies may abruptly change the trajectory of rates next year.

If the pandemic worsens and leads to stricter lockdowns and deeper recessions, consumers would likely cut spending as unemployment rises, reducing container demand.

(Source: The Chronicle Herald)

Trudeau Says Post-Brexit Trade Deal With U.K. Should Be Done By Year-End

U.K. and Canada flags

Canadian Prime Minister Justin Trudeau says a trade agreement with Britain should be secured by the end of the year — though there’s a chance Britain might not have the “bandwidth” to move forward with talks.

“I think we’re ready to have it done before January 1. One of the challenges is bandwidth,” he told an online conference hosted by the Financial Times on Wednesday, and reported by Reuters.

“The U.K. hasn’t had to negotiate trade deals in the past few decades so there is an issue of not really having the bandwidth within government to move forward on this,” he added.

“Canada is a really easy one — we’re there for it, we’d like to do it, so I’m very hopeful that it’s going to get done, but that is really up to the U.K. government.”

The U.K. officially left the European Union on Jan. 1, 2020, after more than three years of political and legal wrangling following a 2016 referendum on the question of whether to leave the trade bloc.

While the separation was official, it also kicked off an 11-month in-between period where existing rules for things like trade rules and regulations remained in effect as officials worked to nail down the final terms of major new deals to replace the existing regulations.

That transition period expires on December 31 of this year.

The deal is expected to largely mirror the Comprehensive Economic Trade Agreement, or CETA, which is the free trade deal Canada has in place with the European Union.

(Source: Global News)

Asia–U.S. Import Wave Building on East and West Coasts

A prolonged influx of Asian imports into the U.S. is building on the East and Gulf coasts, as volumes in October rose by double-digits over September, while West Coast ports saw more modest single-digit gains in traffic.

Between September and October:

  • Asian imports through East coast increased by 14.6%
  • Asian imports through Gulf coast increased by 48.4%
  • Asian imports through West coast increased by 6.2%

Of the top 10 US gateways for Asian imports, Houston saw the sharpest growth in October, with volumes rocketing 56%, as it handled approximately 26,500 more TEU than September. Baltimore saw the second sharpest growth, as volumes jumped 17%, or about 4,100 TEU. 

Even with the surge of Asian port volumes through East Coast ports, their total volumes in the first 10 months of this year are still 2.3% lower than a year ago. Comparatively, Asia import traffic through the West and Gulf coasts is up 0.1 and 8.4%, respectively. 

U.S. retailers’ restocking from low inventory levels along with a surge of e-commerce shipments for Americans who have retained their purchasing power amidst the COVID-19 has extended past the peak season past August.

Retailers and shipping executives anticipate that volumes will finally begin moderating as early as December, although some forwarders and carriers say elevated volumes could last until Chinese New Year; a week-long closure of factories that begins February 12.

(Source: JOC.com)