Each month we will publish highlights from the important articles we’re reading about shipping and logistics. This month’s articles include implications of another Port of Montreal strike, the challenges reefer shippers are facing, delays at all North American ports, a look at how air cargo is doing in 2021, and the story of shipping a drilling rig from India to Benin, Africa bring clean water to those in need.
Serious Disruptions if Port of Montreal Strikes Again
A renewed port of Montreal strike would seriously hurt the shipping industry and the Canadian economy. That’s what industry groups are warning.1
March 21st is the date when the 7-month truce between the Maritime Employers Association and the Canadian Union of Public Employees expires. Many shippers are pre-emptively rerouting their cargo through Halifax and Vancouver in case things are not resolved before March 21. The 12-day strike in August 2020 caused significant interruptions and delays. We’ll keep you updated as this situation unfolds.
Reefer Shippers Facing Equipment Shortage and Higher Rates
Canadian importers and exporters of perishable food are facing a shortage of refrigerated (reefer) containers and high shipping rates that will continue well into the 2nd quarter. Many shippers are paying double the rates they paid last year, before the pandemic started.2
The reefer shortage has been caused by strong import volumes from Asia, terminal slowdowns caused by COVID-19’s impact on the workforce, trucking and cold capacity shortages, and issues repositioning reefer containers.
1-2 Week Delays at Ports a Regular Occurrence
Ports across North America are experiencing congestion with ships waiting to be berthed (recent reports have 31 ships at anchor waiting for berths in LAX/LGB).3
Even after ships are able to berth and containers are unloaded and loaded, truckers are having difficulty getting appointments to pick up the containers. This has led to increased detention and demurrage charges, which only adds to the frustration many shippers are feeling. Port delays are expected to continue for the foreseeable future.4
2021 Air Cargo Update by the Numbers
For those of you that appreciate statistics, here’s a few that represent the state of air cargo in 2021:
- Current average rates from Shanghai to North America are 84% higher than 2020, and 34% higher than 20195
- The amount of available air cargo capacity in January was 19.5% less than 2019 (this represents a 49% decrease in bellyhold cargo capacity on passenger aircrafts and a 29% increase in freighter capacity)
Air cargo rates are expected to remain high without the usual spring and summer slow downs, especially as businesses shift from ocean to air, due to extreme shipping delays from port congestion and overwhelmed carriers.6 Check with our team at Canaan Group for available inbound and outbound air cargo routes, as services are changing every week.
Shipping a Drilling Rig for Clean Water Program in Africa
Since 2004, GAiN (Global Aid Network) has been drilling water wells to bring clean water to over 1 million individuals living in extremely rural villages, home to some of the poorest people in Benin. For generations, people in the villages have had to walk hours to access water, and even then, the water was sometimes contaminated and would cause disease and death.
The good news is that 50-60 meters below the surface are clean water sources. With the drilling rigs, GAiN’s teams have been able to build water wells for these villages. Access to a sustained supply of clean water allows people to regain their health, be more productive in their agricultural projects, sell surplus crop, and eventually gain financial independence.
Over the last 10 years, Canaan Group has been arranging transportation for GAiN Canada. Recently we shipped a new drilling rig from India to the Port of Benin, to add to GAiN’s capacity for drilling new water wells. We’re grateful for the support of our Project Cargo Network partner Procam Logistics in India for their help in arranging this shipment in the midst of the COVID pandemic through a RO/RO vessel. Thank you to the amazing team at GAiN for bringing clean water to so many people in Benin. We feel privileged to serve alongside you.
1. New Montreal port strike would ‘really stick a knife in the Canadian economy’, The Load Star, Feb 22, 2021. Accessed Mar 8, 2021.
2. Reefer shippers facing higher rates, equipment constraints beyond 2021, Journal of Commerce, Mar 5, 2021. Accessed Mar 8, 2021.
3. Regional Updates in North America, Hapag-Lloyd website. Accessed Mar 8, 2021.
4. Detention and demurrage charges rise as regulators circle, Journal of Commerce, Mar 8, 2021. Accessed Mar 8 2021.
5. Air cargo 2021: The good, the bad and the ugly, American Shipper, March 4, 2021. Accessed Mar 8, 2021.
6. Lower-value freight bumped off planes by high-margin cargo, Journal of Commerce, Mar 5, 2021. Accessed Mar 8, 2021.