We recently listened to an insightful podcast episode from HBR IdeaCast titled, “How to Use All your Vacation – and Really Unplug”, and wanted to share with you some things we learned.

A recent survey showed that 82% of Americans work on vacation, and 90% check their work messages. And not everyone takes their full vacation, with only 50% of people doing so.

The Logistics Managers’ Index (LMI) is a survey of supply chain professionals that measures activity throughout the transportation, logistics, and warehousing sectors. November’s report shows that inventory levels and warehousing utilization are increasing, but at a slower rate than before. Inventory costs, warehousing prices, transportation utilization, and transportation prices are increasing, at a higher rate than before. And warehousing capacity and transportation capacity are contracting. To read the full report, go to the LMI website.

Everyone at Canaan Group is wishing you an excellent holiday season, filled with joy, peace, and laughter. Please note our holiday schedule:

• Christmas Eve (Dec 24) – Regular Hours
• Dec 27 – 28 – Closed
• Dec 29 – 31 – Regular Hours
• Jan 3 – Closed
• Jan 4 – Regular Hours

Last week there were 101 containers ships waiting outside the ports of Los Angeles and Long Beach. LA-LB ports are expected to handle 3 million more containers in 2021 than the previous year. A busy month used to be 800,000 containers per month, and during 2021, the ports have been handling 900,000 containers per month.

Last month’s torrential rain and flooding in British Columbia caused large disruptions to the movement of containers as well as shortages of food and emergency supplies. Thanks to the tremendous work of Transport Canada, CP Rail, CN Rail, the Port of Vancouver, the terminals, and everyone in the supply chain, we have been able to bring a level of normalcy to the movement of containers through the largest gateway in Canada. The Port of Vancouver has provided excellent daily updates on import rail performance, truck terminal turn times, vessel on-time performance, and more through their port dashboard.

While some believe that trucking rates will decrease in 2022, others are predicting that rates will stay high and capacity remain tight. Although consumer demand for physical products should decline in the new year, the retail and manufacturing demand to replenish inventory levels will persist. In addition, lower-value cargo is currently sitting while high-value goods are being moved, and that cargo will need to be moved in the new year, propping up demand. And despite increased demand, trucking companies are not interested in adding capacity that would diminish their pricing power and lower profits.

Warehouses across North America continue to be at full capacity, largely due to persisting congestion at ports and in the supply chain. In our local Greater Vancouver market, Colliers reports that 3^rd quarter warehousing vacancy rates are at 0.5%, a record low, and asking rents have increased 13.2% year-over-year and at an all-time high. There have been no vacancies of warehousing or logistics spaces over 50,000 square feet for two consecutive quarters.

You’re probably seen the photos from the flooding in British Columbia. Between Nov 13-15th, up to 200 millimeters of rain came down on in some areas. On November 17th, a provincial state of emergency was declared and remains in place. Highways, roads, and railway tracks were damaged in the flooding, as seen in the photos we’re included in this post, shared by the BC Ministry of Transportation & Infrastructure. 

After two years of meeting virtually, our project cargo team was finally able to meet in person in Croatia last month. Although project cargo volumes have been down in the last 18 months during the pandemic, global activity has increased over the past 6 months with new energy plants, infrastructure projects, and machinery production resuming.

Just when you thought things in California couldn’t get worse, they did. Last week, 81 container ships were at anchor or loitering at the Ports of Long Angeles and Long Beach, an all-time high. Some vessels will have to wait 3-4 weeks before anchoring. All this is happening despite the ports opening 24/7.

In light of recent flooding in British Columbia, the Port of Vancouver has issued an update: All rail service coming to and from the Port of Vancouver has been halted due to flooding in the B.C. Interior as there is currently no transit between Kamloops and Vancouver. Both CN and CP Rail lines are assessing damage and will give a timeframe for re-opening once the assessments are complete. Flooding has also caused numerous highway closures throughout southwestern B.C. including all main routes to Metro Vancouver and Fraser Valley regions. These roadway damages are currently being assessed.

Last month we joined over 5000 people across Canada to attend the Deloitte360 conference, where Malcolm Gladwell gave a thought-provoking keynote speech. Gladwell argued that although advances in technology and data analytics will make the quality of our decisions better, it will make the life of decision-makers much harder. To explain, he compared puzzles with mysteries. A puzzle is a problem caused by the lack of information. A mystery is a problem caused by an excess of information. The past was a world of puzzles and the future is a world of mysteries. Mysteries impose a heavier responsibility on decision-makers to sift through and make sense of the enormous mounds of data available.

Last week, President Joe Biden announced that the Ports of Los Angeles and Long Beach would both be operating 24/7 to ease supply chain bottlenecks. These ports handle 40% of shipping containers imported to the United States. During off peak hours, cargo leaves the port 25 percent faster. The president received commitments from major retailers Walmart, FedEx, UPS, Target, Home Depot, and Samsung to ramp up activities to utilize off-peak hours at ports.¹

While the workplace can be a substantial source of stress on workers, research has found that how work is designed can have a significant impact on employee well-being, leading to improved job performance, lower health care expenses, and lower burnout rates.

As Black Friday and Christmas approach, desperate shippers have been paying up to $2 million for a trans-Pacific chartered flight. In pre-pandemic 2019 peak season, it would cost between $400,000 to $700,000.¹

The holiday season is looking bleak for some shippers. Already dealing with high shipping costs and lack of capacity, some companies will feel the impact of Asian port closures from tropical cyclone Kompasu and the lockdown in Vietnam.

North American shippers will see some relief once the busy 2021 holiday season ends, but not as much as past years. 2022 will see consumer spending drop, especially as government rent relief and fiscal stimulus are reduced or removed. But retailers and manufacturers will be working on replenishing record-low inventory levels back to normal. While transportation capacity is expected to be more readily available in 2022, there will be enough freight demand to keep prices higher than past years.¹

Worldwide e-commerce sales have grown six times in the last decade, from $572 billion in 2010 to $3.5 trillion at the end of 2019. This trend has only been accelerated by the COVID-19 pandemic. With more people relying on e-commerce for their daily needs, last-mile delivery systems are becoming the bottleneck, especially with increasing delivery traffic and shrinking labour availability.

During the last weekend of August, there was a record 47 container vessels waiting outside the ports of Los Angeles and Long Beach.¹ When ships are anchored offshore waiting for an available berth, they miss subsequent departure dates. This leads to cancelled sailings, reduction in much-needed capacity, and slowdown of container and chassis circulation, which adds to the upward pressure on already record-high rates.²

In China, Meishan Terminal in Ningbo port has reopened, following a Covid-related shutdown in August. Please be aware of office closures in China for the upcoming holidays of Mid-Autumn festival (Sept 19-21) and National Day Golden Week (October 1-7).