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Each month we will publish highlights from the important articles we’re reading about shipping and logistics. This month’s articles include trans-pacific rates doubling next year, carrier on-time reliability near an all-time low, real-time cargo visibility technology, Canada’s ELD implementation, and India’s shipments being impacted by COVID-19.
Trans-Pacific Rates are Doubling Next Year
As shippers negotiate Trans-Pacific service contract rates for the upcoming 12 months, they are willing to pay almost double what they did last year. After nine consecutive months of record or near record levels of North American imports from Asia with no signs of tapering off, shippers are willing to pay a premium to guarantee space. We are seeing ocean freight rates as high as USD $10,000 – $13,000/40’ from Asia to North America, with vessels booking up 3-4 weeks in advance.
In addition, many carriers are reducing free storage time at ports. In the past, shippers regularly received an extra grace period if their truckers returned empty containers late, but carriers are warning that free time will be reduced. Shippers should expect to pay more in demurrage fees this coming year.
Carrier On-Time Reliability near All-Time Low
Carrier on-time performances from Asia to the North American West Coast and East Coast are near all time lows of 14% and 12% respectively. This meant that in March, only 12-14% of vessels unloaded cargo at ports on or ahead of schedule. This is far worse than the 65-75% on-time performances recorded from January – July 2020.
The vessel delays are due to major port congestion and record or near-record imports for the past nine months. Import volumes are expected to stay at record highs well into the summer.
Real-Time Cargo Visibility Technology
At Canaan Group we are always looking for and trying new technology that might add value to our customers. In recent months we’ve piloted a real-time cargo tracking technology that shippers have appreciated.
This tracking technology allows shippers to see where their cargo is in real-time, whether it’s on an airplane above the Pacific Ocean, or on an ocean carrier waiting to dock at a port. The tracking technology also allows us to track the shipment condition, measuring humidity, temperature, pressure, and shock throughout the cargo journey.
Food importers and shippers of high-end products are finding this service valuable. They can set customized alerts, reporting, and in-depth analysis. This data allows them to eliminate surprises in their supply chain and find out about problems before they become problems. Contact us if you’re interested in trying our new real-time cargo visibility platform.
Canada’s ELD Implementation won’t initially impact Truckers
The Canadian ELD mandate comes into effect on June 12. The mandate states that all federally regulated carriers that are required to keep paper logs must transition to ELDs (electronic logging devices). But the Canadian government has said that initial enforcement measures will consist of “education and awareness,” with no penalties being applied.
The reason is that ELDs in Canada must be certified by a third party that is accredited by the government. But according to Transport Canada’s website (which was last updated on March 23), no ELDs have been certified. The third-party certification is what differentiates the Canadian ELD mandate from the US, where manufacturers self-certify.
India’s Shipments Impacted by COVID Numbers
The resurgence in COVID-19 cases in India is causing logistical challenges for the country. India is experiencing a second wave of COVID-19, with 348,421 new cases and 4,205 deaths on May 12th, according to the World Health Organization.
Although port operations are essential services and continue to operate in the midst of restrictions, there are operational delays as a result of strict health protocols requiring negative COVID-19 test results for all port personnel and vessel crew.
Sources:
1. Trans-Pac contracts leave shippers paying more, less ‘free time’, Journal of Commerce, April 21, 2021. Accessed May 7, 2021.
2. Carrier on-time performance improves marginally to West Coast, Journal of Commerce, April 27, 2021. Accessed May 11, 2021.
3. Canada’s fast-approaching ELD mandate won’t be enforced — at first, Freight Waves, March 9, 2021. Accessed May 12, 2021.
4. List of certified electronic logging devices, Transport Canada, March 23, 2021. Accessed May 12, 2021.
5. Resurgence of COVID-19 infections in India raises concerns over sugar exports, S&P Global Platts, May 10, 2021. Accessed May 12, 2021.
6. India, World Health Organization, Accessed May 12, 2021.