Trade News

July 14, 2021

Port of Vancouver Congestion Mounts Despite Resumed Rail Service

The Port of Vancouver is continuing to feel the domino effect from the disruption caused by wildfires in British Columbia even as CN and Canadian Pacific rail service resumes. As of Wednesday morning, 39 ships were at anchor at Canada’s largest port.

Trains began running again on Sunday via a CP rail line that has been shut down because of the fires. CN is also using CP’s tracks through an agreement since its line remains out of service, according to an operations update from the Vancouver Fraser Port Authority.

Rail backlog at the port remains substantial, with CN rail-bound imports spending over a week on-dock at all of Vancouver’s terminals, according to port data. Trains running through the area of British Columbia affected by the wildfires have been subject to a Transport Canada slowdown order since Sunday.

Meanwhile, the congestion of vessels at the port has mounted because of the rail disruption. The vessels at anchor Wednesday included six container ships.

“Anchorage demand continues to be high and nearing full capacity,” the port authority said on Tuesday. “Demand for large vessel anchorages presently exceeds supply. Anchorages are assigned in a manner that ensures fluidity across all ship types and maintains essential services.”

(Source: Freight Waves)

July 12, 2021

Biden Vows to Tackle Competition Issues in Liner Shipping

U.S. President Joe Biden will shortly order American transportation agencies to address competition in rail and shipping, as shippers struggle with sky high freight rates.

Biden’s executive order will tap the Federal Maritime Commission (FMC) and the Surface Transportation Board (STB) to come up with solutions.

The order will ask the FMC to take all possible steps to protect American exporters from the high costs imposed by the ocean carriers and to crack down on unjust and unreasonable fees, including detention and demurrage charges. Demurrage and detention charges imposed on shippers by containerlines have more than doubled over the past year.

White House press secretary Jen Psaki said Thursday that Biden will direct the FMC to crack down on “unjust and unreasonable fees” in the ocean shipping industry and work with the Justice Department to investigate anticompetitive practices.

The STB, meanwhile, will be tasked with taking long-standing measures to increase competition where the railroad is monopolised, including so-called “competitive switching rules” which require a monopoly railway to grant access to its railroad under certain conditions.

Container shipping spot rates on the Shanghai – Los Angeles route soared $466 this week to stand at a record $9,631 for a feu, which is 229% higher than same period in 2020, latest data from Drewry shows.

Other nations, including China, Vietnam and South Korea, have also looked into tackling high shipping costs over the past year.

(Source: Spalsh247)

July 12, 2021

B.C. Wildfires Damage Rail Lines, Backlogging Canada’s Freight Supply Chain

Wildfires burning across British Columbia damaged rail lines and brought train shipments to a grinding halt, causing a backlog of deliveries of all sorts of freight that is only now starting to slowly clear.

Rail giants CN and CP have warned their customers that fires damaged major rail lines in the interior of the province, making them unsafe to use. That caused trains to back up along the network, idling thousands of rail cars and stranding their contents.

CN has told its customers that all intermodal traffic and carload traffic north and eastbound from Vancouver was affected by the wildfires, as was traffic coming into Vancouver from east and north of Kamloops, B.C.

The rail carrier said an embargo had been issued forbidding it from sending any more rail traffic “westbound to Vancouver from northern B.C., and east of Kamloops and from the Vancouver area toward the East.”

Prof. Barry Prentice at the University of Manitoba, who studies transportation logistics, told CBC News in an interview that the rail blockage underscores how vulnerable Canada’s economy is to infrastructure breakdowns.

“There are choke points where if something fails, the whole system stops,” and the area with the most fire damage, at the top of the Fraser Canyon is one of them, he said. Both CP’s and CN’s lines in the area are “both close together so if there’s a problem there, they’re both affected,” he said. “And if they’re both affected, it’s virtually the entire system.”

“When you get a holdup like this and you get a backlog, it takes a long time for that to be incorporated into the stuff that’s also coming because nothing stops coming,” Prentice said. “If you dam up a river, it’s going to build up behind it.”

At the peak, more than 4,000 rail cars of crops were marooned because of wildfires, according to the Ag Transport Coalition, a group that speaks on behalf Canadian wheat, soy and canola producers.

(Source: CBC News)

July 7, 2021

Border Restrictions to Begin Easing for Fully Vaccinated Canadian Travelers

Effective Monday July 5, 2021 , fully vaccinated Canadians and permanent residents — those who have had a full course of a COVID-19 vaccine approved for use in Canada — will be able to skip the 14-day quarantine. Eligible air travelers will also be exempt from the requirement that they spend their first three days in Canada in a government-approved hotel.

But the Canada Border Services Agency has a warning: would-be travelers will still be prohibited from entering the country if they were not eligible to travel to Canada before Monday. Travelers must use the ArriveCAN app or web portal prior to departure to log their vaccination details, as well as the results of a negative COVID-19 test that’s less than three days old.

Anyone who arrived before Monday will still be required to spend a full two weeks in quarantine upon arrival, the agency says. “If you were unable to come to Canada on July 4 of this year, you can’t come in on July 5 — there’s been no change to all of the restrictions and the provisions that have been issued on that front,” said Denis Vinette, CBSA vice-president, travelers branch. “However, for those that can come to Canada, it’s a very cautious, early first step in starting to delay or remove some requirements at the border.”

Vinette said the agency is anxious to ensure people understand what is changing, as well as what is not, in order to prevent excessive delays or tie-ups at border control points. “I think we can expect, certainly in the early days, individuals believing that, you know, July 5 is here, Canada is now open for tourism, recreation and things of that nature. That is not the case,” he said. “We’ve prepared our front-line staff, who’ve been having to deal with this since the onset, for those types of scenarios.”

The ArriveCAN portal can be accessed either via the Apple or Android app or online via the federal government’s website at canada.ca. Travelers are required to use the latest version of the app, which will be updated when the regulations change. The mutual travel restrictions between Canada and the United States — which prohibit all discretionary travel between the two countries while continuing to allow the movement of trade, essential workers and international students — are due to expire July 21.

(Source: The Canadian Press)

July 7, 2021

Box Rates Up 332% Year Over Year

Shippers might be paying 332% more per box that they were this time last year, according to the latest data from Drewry, yet they’re having to put up with the worst schedule reliability in the history of the shipping container industry.

In the first five months of 2021, 401 vessel arrivals on the transpacific and 144 on Asia-Europe were over 14 days late, according to data from Sea-Intelligence. Putting these numbers in perspective, the combined 2012 to 2020 total of such late vessel arrivals was 388 on the transpacific and 69 on Asia-Europe.

“In the past few months, schedule reliability has been largely consistent, albeit at an extremely low level of 35%-40%, compared to a long-term average of around 75%,” Sea-Intelligence noted in its most recent weekly report.

The average delay for vessel arrivals that were marked as late remains extremely high globally, at close to six days, compared to a long-term average of around four days.

Liners have gone public recently, admitting that the current late arrivals situation is not good enough.

Earlier this month Hapag-Lloyd launched an initiative to provide full transparency on its schedule reliability.

“We are fully aware that our industry is currently facing the worst operational crisis in more than a decade and that we are far from delivering the absolute levels of service that you would expect from us and the entire industry,” the German carrier stated in a note to clients.

(Source: Splash247)

July 7, 2021

Port of Vancouver — Rail Service Halted

All rail service into and out of the Port of Vancouver has been halted as a result of the B.C. wildfires. Currently, there are a large number of trains waiting to arrive at the port. Both CN and CP Rail are working closely with Transport Canada and onsite inspectors to determine the necessary steps to resume safe rail operations.

With rail impacts on terminal operations, vessel delays and heightened anchorage demand are expected. The port is working closely with its container terminal operators, railways, and government to understand the impacts of these delays on terminal operations and to develop a recovery plan.

Real-time insights into Port of Vancouver operations can be accessed through the PortVan eHub app, which can be downloaded at www.portvancouver.com/port-dashboard/ehub-app or through the App Store (search for PortVan eHub or Port of Vancouver). Additionally, daily updates on import rail performance and weekly updates on truck terminal turn time performance are available through the port’s website at www.portvancouver.com/port-dashboard.

June 30, 2021

Yantian Port Back at Full Speed; Box Recovery Could Take a Month

The backlog of vessels waiting to reach berths at the Port of Yantian, the largest container port in China, is gone since terminals returned to full operations on Thursday following a COVID-19 outbreak among dockworkers that significantly curtailed operations.

However, shippers shouldn’t expect supply chains to be immediately repaired. While Yantian officials believe they can eliminate the accumulation of stacked containers within a couple of weeks, the backlog of shipments piled up in factories and warehouses elsewhere in the Shenzhen region will take at least a month to clear.

Yantian International Container Terminals on Thursday began accepting vessels at all 11 berths after running the port at 30% of normal productivity since the third week of May. Earlier this month vessels were waiting up to two weeks for a berth.

Port officials said the number of laden containers allowed to enter the port by truck will increase to 9,000 per day after restricting movements to about 4,000 to 5,000 containers. In an effort to move cargo dwelling on the docks first, they are placing a seven-day window on new cargo entering the gate based on a booked vessel’s estimated time of arrival.

The reopening of Yantian is also bringing down wait times at the nearby ports of Shekou and Nansha, which had been handling much of the vessel overflow during the past month.

The slowdown in productivity has had a huge impact on global freight transportation. The system was already straining to keep up with a prolonged surge in demand bumping up against infrastructure, equipment and labour limits that have left ports overwhelmed and led to vessel delays, which put strong upward pressure on freight rates.

Hundreds of vessels skipped South China ports to avoid waiting at anchor seven days or more for a parking spot. In mid-June there was a estimated backlog of 160,000 containers, or about 320,000 twenty-foot equivalent units, Nair said. On average, about 15% to 20% of containers are getting rolled over to a future vessel sailing because carriers are overbooked and are prioritizing freight based on profitability or operational considerations.

(Source: American Shipper)

June 30, 2021

Entry Into Force of Sewing Thread Requirement for Apparel Goods

Effective July 1, 2021, apparel goods of Chapter 61 or 62 containing sewing thread of heading 52.04, 54.01 or 55.08, or yarn of heading 54.02 used as sewing thread shall be considered originating only if such sewing thread is both formed and finished in the territory of one or more of the Parties.

Sewing thread is considered formed and finished in the territory of one or more Parties if all production processes and finishing operations, starting with the extrusion of filaments, strips, film or sheet, and including slitting a film or sheet into strip, or the spinning of all fibres into yarn, or both, and ending with the finished single or plied thread ready for use for sewing without further processing, took place in the territories of one or more of the Parties, even if non-originating fibre is used in the production of sewing thread of headings 52.04, 54.01 or 55.08, or yarn of heading 54.02 used as sewing thread.

Goods of Chapter 61 or 62 that are produced in Canada using non-originating sewing thread may nonetheless be eligible for duty-free treatment when imported into the United States or Mexico under the CUSMA Tariff Preference Levels (TPLs), regardless of the origin of the yarn or fabric used.

The CUSMA TPLs provide duty-free access for specified quantities of yarns, fabrics, apparel and made-up textile goods that do not meet the applicable rules of origin. Imports into the U.S. under TPLs are also exempt from U.S. merchandise processing fees.

For more information on CUSMA TPLs for textiles and apparel, please visit Global Affairs Canada’s textiles and clothing page.

More information on the sewing thread requirements is set out in Note 3 of Chapter 61 and Note 4 of Chapter 62 in Annex 4-B of the CUSMA and in subsection 2(b) of Schedule 1 of the CUSMA Rules of Origin Regulations (CUSMA Rules of Origin Regulations.)

June 30, 2021

Navigating Supply Chain Constraints and Trucking Rates

The capacity issue that has been looming over the trucking market for months is showing no signs of being resolved in any way for the remainder of the year. Strong demand has resulted in rates continuing to rise month over month across van, flatbed and reefer.

The ability for carriers to add capacity is limited by parts shortages that are holding back truck, trailer and chassis production, with the demand for trucking volume expected to continue moving forward as retail sales remain high and retailer inventories remain low. But analysts also see demand outside of retail.

“While not as large as retail in terms of overall freight generation, capital goods spending is freight intensive, and the coming capex boom will certainly benefit freight demand in the next few quarters,” says ACT Research’s Vice President and Senior Analyst, Tim Denoyer.

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June 23, 2021

Canada’s Inflation Rate Rises to Highest Level in a Decade

Canada’s inflation rate increased to 3.6% in May, the fastest pace in a decade, Statistics Canada says.

The data agency said in a news release Wednesday that the cost of just about everything is going up at a much faster pace than usual, from shelter and vehicles, to food, energy and consumer goods.

The cost of shelter increased by 4.2% in the year up to May, the fastest rise in the cost of putting a roof over one’s head since 2008. And the cost of filling a home with furniture and appliances also went up, by 4.4%. That’s the fastest pace of an increase for so-called durable goods since 1989.

Furniture prices in particular rose by 9.8% in the past year, their biggest jump since 1982. Last month the government slapped tariffs of up to 300 per cent on some types of upholstered furniture from China and Vietnam.

Gasoline prices have risen by 43% in the past year, a figure that looks especially high because it’s being compared to May of last year, when demand and prices for gasoline cratered. But even on a monthly basis, the cost of gasoline went up in May by 3.2% compared to April’s level.

Gas isn’t the only part of driving that’s getting more expensive either, as the price of new cars increased by 5% in the past year. That’s the biggest jump in vehicle prices since 2016, and the biggest reason for it is an ongoing shortage of semiconductors, a global trend that has jacked up the price of anything that uses microchips.

And the price of traveller accommodation rose by 6.7%. That’s the highest rate seen since the pandemic began and demand for hotel stays plummeted.

Canada’s economy is, indeed, starting to kick into high gear after stalling out during COVID-19.

Economist Avery Shenfeld with CIBC says that while the annual price increases are eye-popping, it’s important to remember that May’s numbers are being compared to the situation in May 2020, when just about every facet of the economy was in the doldrums.

“Prices look elevated compared to where they were a year ago, but that’s because prices a year ago were rock-bottom levels … in the throes of the first wave of COVID,” he said in an interview with CBC News. “We really haven’t had that much inflation if you measured prices relative to where they were in the spring of 2019.”

(Source: CBC News)