Possible Lockout or Strike at CN and CPKC by May 2024

Rowena Lo Featured, News, Uncategorized

The union representing nearly 9,300 workers at Canada’s largest rail operators, CN and CPKC, is facing a potential work stoppage due to stalled negotiations over working conditions and wage increases. Teamsters Canada, led by François Laporte, accuses both rail companies of wanting to remove essential safety-critical rest provisions from collective agreements, which are crucial for combating crew fatigue and ensuring public safety. Despite seeking a negotiated settlement, the union finds the companies’ demands unacceptable.

Notices of dispute were filed by CN and CPKC this week, marking the beginning of a process that could lead to a strike or lockout by early May. The union claims that the railroads prioritize profits over the well-being of supply chains, farmers, or small businesses, and are prepared to force a work stoppage to meet their goals.

The dispute involves 6,000 CN workers and 3,200 CPKC workers in Canada, covering conductors, engineers, and yard workers, plus around 80 rail traffic controllers represented by TCRC’s Rail Canada Traffic Controllers division. The current collective bargaining agreements expired on December 31, 2023.

CPKC responded to the union’s accusations by stating they have offered wage increases, quality-of-life improvements, and predictable schedules with assigned days off. However, they acknowledge a significant gap remains on these issues. CPKC proposed two options for renewed contracts, emphasizing safety and employee well-being, while CN highlighted regulatory changes that necessitate a modernization of the compensation model to maintain a predictable, efficient service for both employees and customers, suggesting a structured workweek with ample rest periods and consecutive days off.

Canaan Group remains committed to delivering timely market insights to our esteemed clients, focusing on risk mitigation and strategic planning. Should your shipments depend on intermodal services, we encourage you to consult with the Canaan Group team to explore strategies for overcoming potential challenges.

Starlux Airlines Elevates Cargo Capabilities With Airbus A350 Freighter Order

Rowena Lo Featured, News, Uncategorized

Starlux Airlines, a Taiwanese airline that began operations just four years ago, has recently made a significant move in the aviation industry by ordering five A350 freighter airplanes from Airbus. This decision marks Starlux as the first Taiwanese airline to operate this next-generation cargo jet, signaling its entry into cargo transportation, particularly focusing on the global demand for electronic components and semiconductors—a market Taiwan is prominently known for.

The deal was announced during the Singapore Airshow and highlights Airbus’ competitive edge over Boeing, particularly in the race to supply the future of cargo aircraft. Starlux’s choice of the A350 freighter is strategic, given its plan to deploy these aircraft on major intercontinental trade routes, leveraging the expected rise in demand for cargo capacity.

The A350 freighter is still under development and is anticipated to offer significant advantages in terms of payload capacity, range, and fuel efficiency. Capable of carrying up to 122 tons of cargo over 4,700 nautical miles, the A350 freighter also boasts the largest main deck cargo door in the industry and a construction that utilizes advanced materials for over 70% of its airframe. These features contribute to its 20% better fuel efficiency and lower CO2 emissions compared to current models like the Boeing 777 and 747-400.

Airbus has received 55 orders for the A350 freighter from various airlines and leasing companies, indicating a strong market interest. However, Boeing’s 777-8 freighter, which also has 55 orders, remains a close competitor, with certain advantages in payload capacity and cargo volume. The industry’s preference between Airbus and Boeing often depends on existing fleet compositions, as operating a homogeneous fleet can reduce costs related to pilot training, maintenance, and operations.

This move by Starlux not only reflects the growing competition between Airbus and Boeing in the cargo aircraft market but also highlights the cautious optimism in the air cargo industry, which is slowly recovering from a recent downturn. The decision underscores the importance of advanced technology, fuel efficiency, and environmental considerations in shaping the future of air freight.

Although most of the services of Starlux is focused on Intra Asia, this announcement will present new opportunities for Asia /North America and Asia / European Lanes for the future. 

The Canaan Group airfreight team consistently collaborates with leading airlines including JAL, EVA Airlines, KLM/Air France, Air Canada, ANA, Lufthansa, Qatar, Turkish, and many others to offer extensive global service points, ensuring the most efficient transportation of your urgent cargo.

The Complexities of Global Trade

Rowena Lo Featured, News, Resources, Uncategorized

Despite shifts in geopolitics and the relocation of manufacturing hubs to countries like Vietnam and Mexico, China maintains its position as a key trading partner with both Canada and the USA. By redirecting trade through these nations, China has crafted a viable strategy to circumvent tariff barriers. This is exemplified by China’s tactical diversion of exports via Mexico, a strategy that undermines US efforts to lessen its reliance on Chinese goods. An analysis of trade data underscores a significant increase in the volume of goods moving from China to Mexico, with the number of 20ft container shipments escalating from 689,000 in the first three quarters of 2022 to 881,000 over the same timeframe in 2023. This development has positioned Mexico as the leading exporter to the US (as highlighted in last month’s newsletter), underscoring the challenges faced by the US in disentangling its supply chains from the grip of Chinese manufacturing.

China is shipping far more goods to Mexico indicating that China is routing shipment through Mexico into the US more and more.

According to the research from Financial Times this month, despite efforts initiated by the Trump administration and continued under Joe Biden to lessen US reliance on Chinese products by imposing tariffs, less than 15% of US imports now come directly from China, down from over 20% in 2017. However, this has not significantly diminished the presence of Chinese goods in the US market, as these are still entering via Mexico without facing the same tariffs.

Chinese manufacturers, especially in the auto industry, have capitalized on this route. For instance, Chinese-owned companies in Mexico exported $1.1 billion worth of auto parts to the US in 2023, up from $711 million in 2021. Mexico’s imports of vehicle parts from China also surged to nearly $9 billion last year.

This situation demonstrates the challenges the US faces in shifting away from Chinese-manufactured goods. Despite new tariffs and investment screening measures introduced by Mexico and the US, the deep integration of Chinese products into global supply chains poses significant obstacles to these efforts.

A line graph showing total Mexican trade in US is growing.

The data and proposed graphs underscore the intricate dynamics of global trade and the difficulty in altering established supply chains, reflecting the broader geopolitical and economic interdependencies that challenge US policy objectives.

In response to the evolving global landscape of diversification, innovative logistics routes are emerging. If you’re looking to explore new lanes and routings with competitive pricing, reach out to Canaan Group for tailored solutions.

Reference:

Financial Times. (2024, February 21). “China Circumvents US Tariffs by Shipping More Goods via Mexico.” Claire Jones, Christine Murray, and Keith Fray. Retrieved from https://www.ft.com/content/2ca4da83-f858-4215-88e7-544adf0aa18e.

Shipping Perishable Goods: Meats, Seafood, Food Items

Rowena Lo Featured, Resources, Uncategorized

Shipping perishables is a critical task that demands careful consideration of various factors to ensure the goods reach customers in top quality. The choice of packaging is paramount, as it affects the freshness and quality of perishable goods and impacts space utilization, liability, and profitability. Within this realm, the Canaan Group excels, offering tailored solutions and leveraging the team’s extensive experience to optimize packaging strategies and transportation methods for perishable shipments.

When it comes to transporting perishables, the mode of transportation is a crucial decision influenced by the nature of the goods and the priority of delivery times. Air freight is often preferred for its speed, which is essential for maintaining high quality and extending the shelf life of perishable products. This mode of transportation is particularly suitable for perishables that need to be delivered quickly to retain freshness and maximize sellability. However, air freight comes with higher costs, making it necessary to conduct a cost-benefit analysis to determine its viability based on the perishable goods’ required freshness and shelf life.

However, the Canaan Group team also understands the advantages of ocean freight for perishable shipments with longer shelf life. With advancements in refrigerated container technologies and controlled atmospheres, the company harnesses the potential of ocean freight to transport perishables over long distances at competitive rates. Despite potential risks such as port congestion, our dedicated operations team mitigates these challenges through meticulous planning and proactive communication, ensuring a smooth shipping process for its clients.

Canaan Group’s logistics expertise shines through when performing a careful assessment of the goods’ shelf life, the importance of delivery speed, and the potential risks associated with each transportation mode to create an optimized shipping route. Our team also proactively maintains relationships with the top air and ocean shipping lines in order to secure the most competitive pricing for our clients.

Contact our sales team for more information about shipping perishable items to and from virtually anywhere in the world!

Insights Into 2024 – 25 Shipping Contracts Amid Supply Chain Disruptions and Negotiations

Rowena Lo Featured, News, Uncategorized

In the midst of the ongoing Red Sea Crisis, which has disrupted transportation through the Suez Canal for over five weeks now, experts like Lars Jensen, a renowned shipping analyst based in Denmark, are closely monitoring developments. Despite the passage of time, the situation in the Red Sea has seen little change, prompting shipping companies to continue adapting by rerouting vessels through the Cape of Good Hope.

Traditionally, annual contract rates from Asia to North America and Europe expire at the end of March each year. However, the uncertainty stemming from the Red Sea crisis, compounded by the recent Lunar New Year spot rates, has cast a shadow over the outlook for the remainder of the year.

Mid-size shippers are bracing themselves for anticipated rate hikes in their trans-Pacific contracts for 2024-25, driven by escalating carrier costs. However, negotiations have hit a snag due to disagreements over supply-demand dynamics and the lingering uncertainty surrounding the Red Sea crisis. Larger retailers, who often set the pricing benchmarks, are striving to maintain stable rates despite carriers’ claims of increased costs attributable to the Red Sea situation.

Amidst these negotiations, concerns have been raised by shippers regarding surcharge waivers and potential shortages of space and equipment. Re-routings prompted by tensions in the Red Sea, as well as potential disruptions at key transit points like the Suez and Panama canals, have further compounded these worries. Shippers are now seeking greater flexibility in routing options to mitigate the potential impacts of these disruptions.  Various associations in North America have also voiced concerns about potential equipment shortages, particularly in light of longer voyages necessitated by routes around Africa. These shortages could significantly impact transit times and overall logistics operations, underscoring the need for proactive measures to address emerging challenges in global shipping routes.

As the Lunar New Year approaches, there’s a brief lull in activity. Many companies, including Canaan Group, are holding off on serious contract negotiations until after the Journal of Commerce’s annual Trans-Pacific Maritime Conference (TPM) in Long Beach. This conference, which Canaan Group attends every year, serves as a pivotal event where industry stakeholders gather to gain insights from economists, analysts, and executives. At #TPM24, scheduled from March 3-6, Canaan Group will eagerly seek clarity on the supply-demand dynamics shaping the shipping landscape for 2024 and beyond.

Mexico Gains Competitive Edge Through Near-Shoring Initiatives

Rowena Lo News, Uncategorized

In a recent Business Insider article, it was reported that Mexico emerged as the leading source of goods imported into the US in 2023, surpassing China for the first time since 2020. This development signals a notable shift in global commerce dynamics amid ongoing tensions between the US and China. While this milestone underscores Mexico’s rising prominence as a trade partner with the US, its implications for Mexican companies warrant closer examination.

The concept of near-shoring, which involves relocating manufacturing operations closer to end markets, is reshaping international trade practices. Unlike traditional offshoring, near-shoring prioritizes simplified supply chains and heightened market responsiveness. This approach is gaining traction as global trade patterns evolve. Kreim Kfurii, President of The Altas Network, notes that China is actively embracing this trend by expanding its manufacturing footprint into countries like Mexico. Rather than signaling a retreat in manufacturing dominance, this strategic move reflects a necessary adjustment to evolving market dynamics.

The shift toward near-shoring offers numerous advantages that extend beyond geographical convenience. By situating production facilities closer to consumer markets, businesses can significantly reduce lead times, facilitating faster delivery of goods and enabling prompt responses to market demands. This logistical efficiency supports leaner inventory models, thereby reducing costs and risks associated with excess stockpiles.

Moreover, near-shoring enhances supply chain control, quality management, and risk mitigation, while potentially lowering logistical expenses. The cultural and regulatory similarities between near-shore countries foster smoother operations and collaborative efforts. Through the establishment of manufacturing hubs in these regions, China shares its expertise, technology, and production capabilities, driving economic growth, job creation, and industrial advancement in countries like Mexico.

The recent merger of CP Rail and Kansas City Southern into CPKC heralds the creation of the first transnational rail network in North America. This development has significant implications, as shipments from China can now be routed directly to Mexico, where value-added processes can be applied. Subsequently, these products can be transported via rail from Mexican railyards, such as Lazaro Cardenas, to destinations across the US and Canada.

As businesses increasingly adopt near-shoring strategies, there arises a pressing need to reassess their supply chain architecture. Canaan Group maintains partner offices throughout Mexico, including Mexico City, Veracruz, Guadalajara, Laredo-Nuevo Laredo, Tijuana, and more. This extensive presence positions us to offer comprehensive support for your business needs. Whether it’s optimizing supply chain operations or navigating the complexities of international trade, our team stands ready to provide tailored solutions to drive your success.

National Supply Chain Office Starts Its Inaugural Meeting for 2024

Rowena Lo Featured, News, Uncategorized

In December 2023, the Minister of Transport, the Honorable Pablo Rodriguez, made a significant announcement regarding the enhancement of Canada’s logistics landscape: the establishment of the National Supply Chain Office. Led by Assistant Deputy Minister Robert Dick, this office will be headquartered in Vancouver, British Columbia, Canada. This initiative underscores the government’s recognition of the pivotal role that supply chains play in sustaining and bolstering Canada’s economic competitiveness.

The Federal Government has outlined four primary objectives for this newly formed office:

  1. Development and Implementation of a National Supply Chain Strategy for Canada: This strategic roadmap will serve as a guiding framework to optimize the efficiency and resilience of Canada’s supply chains.
  2. Provision of Support and Solutions during Significant Supply Chain Disruptions: Recognizing the increasing frequency of disruptions, such as extreme weather events and labor disputes, the office will provide assistance and innovative solutions to mitigate their impact.
  3. Facilitation of Data Sharing and Efficient Movement of Goods: By fostering collaboration and facilitating the exchange of data among stakeholders, the office aims to streamline the movement of goods across the country. This initiative will support informed policy, regulatory, and investment decisions at both governmental and industrial levels.
  4. Leadership, Coordination, and External Outreach: The office will provide overarching leadership and coordination to foster collaboration among stakeholders, including provincial, territorial, and global partners. External outreach efforts will ensure proactive engagement with pertinent supply chain issues, both domestically and internationally.

On January 25th and 26th, the office convened the Western Corridor conference meeting, inviting a diverse array of stakeholders from across the supply chain spectrum. Participants included representatives from provincial and federal governments, transportation entities, ports, terminals, importers, exporters, and third-party logistics providers (3PLs). The objective of this gathering was to strategize and collaboratively chart a course for building an effective supply chain strategy aimed at enhancing the flow of goods into and out of Canada.

Canaan Group, a logistics company with over 45 years of experience, actively participated in the conference. The company remains committed to partnering with the National Supply Chain Office in pursuit of these objectives, leveraging its expertise and resources to contribute to the advancement of Canada’s logistics infrastructure.

Evaluating LTL Carriers In The Midst of Continued Failed Trucking Companies

Rowena Lo Featured, Resources, Uncategorized

Recent events in the trucking industry, such as the bankruptcy filing of Newsome Trucking and the closure of Yellow despite substantial government funding, highlight the challenges facing trucking companies. With over 75% of Canada’s trade conducted with the USA and a significant portion relying on trucking, it’s crucial to carefully vet your Less Than Truckload (LTL) vendors.

LTL shipping, wherein goods share trailer space with other shippers, is popular among retailers and small businesses for its cost efficiency. However, selecting the right LTL carrier involves more than just pricing. Here are some aspects you should consider when searching for the perfect LTL carrier to work with:

Transit Time:

Whether sending or receiving freight, transportation speed is a critical consideration. Be sure to consider stated transit times when selecting an LTL carrier. Long-haul carriers typically require more time for delivery compared to regional carriers. Advanced planning and scheduling help calculate shipping times accurately, minimizing delays and disruptions.

Freight Liability:

While every freight carrier offers a certain level of liability coverage, it may not fully protect the declared value of your cargo in case of damage. It’s advisable to obtain comprehensive freight insurance to safeguard your shipment. Understanding the level of liability coverage is essential for ensuring shipment safety and mitigating potential losses due to external factors.

Accessory Services:

Beware of hidden costs associated with additional services when booking shipments based solely on low rates. If your freight requires special handling, inside delivery, or is destined for limited access areas, inform your logistics provider in advance. This proactive approach not only prevents unexpected charges but also fosters a stronger relationship with the carrier.

At Canaan, we have cultivated enduring relationships and secured agreements with financially stable trucking vendors. We’re here to lend our expertise and support to meet your needs effectively. 

Exploring Indonesia’s Economic Growth and Trade Dynamics

Rowena Lo Featured, News

On February 14th, 2024, Indonesians will head to the polls to elect their next president as President Joko Widodo completes his two-term tenure. Under his leadership, Indonesia has emerged as a success story in Southeast Asia. President Widodo’s policies, including export bans that compelled companies to refine resources like nickel domestically, have propelled the nation up the global value chain. This strategy has significantly boosted investments, reaching a staggering $47 billion last year, nearly double the figure from when he assumed office.

Indonesia now boasts the world’s largest reserves of nickel, a crucial material for various industries such as electric vehicles and solar panels, essential for the global transition towards green energy. Additionally, it is the largest palm oil producer, a major exporter of coal, and a significant contributor to the pulp-for-paper industry. Given its economic prowess, Indonesia holds immense potential for expanding trade relations, particularly with countries like Canada and the United States, ranking 19th and 23rd respectively in its trading partnerships.

The nation’s key ports, including the Port of Jakarta in Java (Tanjung Priok), Surabaya (Tanjung Perak), and Semarang (Tanjung Emas), play pivotal roles in facilitating trade. Presently, no direct shipping services connect Indonesia to North America, resulting in transit times of approximately 35 to 40 days, depending on the North American port of discharge. Meanwhile, Soekarno-Hatta International Airport, Indonesia’s largest airport, serves the bustling Jakarta metropolitan area and the island of Java.

For further information regarding shipping to and from Indonesia, interested parties can contact our Canaan Sales team. They stand ready to coordinate with our partner offices in Indonesia, ensuring smooth and efficient shipping operations.

Unpacking Warehousing Trends in 2024

Rowena Lo News, Uncategorized

As the year begins in 2024, a notable shift is observed in the landscape of warehousing accessibility spanning both Canada and the United States. Even in traditionally constrained markets such as Vancouver, Los Angeles, and Chicago, an increased availability of warehousing space is discernible. This transformation is primarily attributed to the strategic destocking of inventories and the successful culmination of numerous construction endeavors across North America.

Colliers Market report reveals a noteworthy evolution in Canada’s industrial warehouse vacancy rates, ranging from 1.5% in Vancouver to 4.5% in Edmonton. Concurrently, the overall US warehousing vacancy rate has ascended to 4.9% as of the close of Q4 2023. While surpassing pre-pandemic averages, these rates suggest that capacity constraints persist, exerting pressure on costs within the realm of third-party logistics (3PL).

During the crazy times of COVID-19, finding a place to store and move goods was like searching for a needle in a haystack.  Overstocked inventories precipitated a decline in the US vacancy rate to 3.4% by the conclusion of 2022. The subsequent phenomenon of the Great Destocking in 2023 witnessed a substantial 20% downturn in inflation-adjusted US inventories through September, albeit remaining 7% higher than 2019 levels. Consequently, warehousing vacancy rates rose to 4.9% by Q3 2023, below the pre-pandemic average of 7%, coupled with a 4.2% decline in employment.

Looking ahead in 2024, numerous shippers display a cautious stance, deferring warehousing decisions considering the slowing down of economic growth in both Canada and the United States.  In addition, there continues to be the completion of construction industrial warehousing projects.  The trajectory of US Southeast port cities, from Norfolk to Savannah, witnessed a substantial surge in developmental initiatives in 2023, a trend anticipated to endure through 2024. Notably, the warehousing and cross-dock space in Laredo, Texas, the largest US-Mexico border crossing for truck freight, remains constrained. The ongoing diversification in US entry points is poised to incite heightened demand for warehousing and storage at inland nodes as cited in the Journal of Commerce. However, the uncertain events like the Red Sea attacks and the oscillating dynamics of on-shoring and off-shoring initiatives also cause certain companies to look at restocking more inventory to mitigate some of the delays in shipment. 

For more information about your warehousing needs, please contact your local Canaan sales and customer service representative.

LTL and Full Truck Load capacity and rates for Q1 2024

Rowena Lo Resources, Uncategorized

In the first quarter of 2024, predictions indicate stability in Less-Than-Truckload (LTL) rates with subtle fluctuations, while truckload rates are expected to persist near the lows established in Q2 of the previous year. AFS and TD Cowen jointly released these insights as part of the TD Cowen/AFS Index, offering a forward-looking snapshot of pricing trends in the Less-Than-Truckload (LTL) and the truckloads market in North America.

For LTL rates, the index forecasts a 58.9% increase above the January 2018 baseline in Q1 2024, representing a marginal 0.7% decrease from Q4 2023 but a 0.8% YoY increase. This level is maintained since Q2 2022, influenced by the Yellow collapse in Q3 of 2023. The LTL market appears in a state of stasis due to soft demand, though the recent auction of former Yellow terminals to carriers like XPO and Estes is expected to enhance network efficiency and overall capacity in the long run.  The overall net effect is that there will not be much changes on the LTL markets both in capacity and pricing for Q1 2024.

In the truckload sector, the rate per mile index is projected to be 4.6% above the January 2018 baseline in Q1 2024, showing a 0.2% decline QoQ and a 2.9% YoY decrease. Despite consistency since establishing a floor in Q2 2023, the average linehaul cost per shipment has declined in tandem with miles per shipment. Short-haul shipments, covering less than 500 miles, increased from 79.8% in Q2 2023 to 84.9% in Q4 2023. While truckload rates may not rebound in Q1 2024, macroeconomic conditions, including easing inflation and potential interest rate cuts, suggest the possibility of upward momentum later in the year. 

For now, there does not seem to be much shift in these 2 trucking areas both the LTL and the truckload rates.  For more information on specific trucking lanes, please contact your local Canaan staff and customer service. 

This article was summarized from the reports of InsideLogistics.ca.

Port of Montreal Faces Continued Threat of Potential Strike

Rowena Lo News, Uncategorized

Federal officials are involved in preventing a potential third labour stoppage in four years at the Port of Montreal, where dock workers have been without a labour deal since their agreement expired on December 31.  The Maritime Employers Association (MEA) in Montreal, which includes approximately 1,290 longshore workers and 165 checkers, is in ongoing negotiations with union representatives. The Federal Mediation and Conciliation Service experts are assisting in these discussions.

Pressure tactics, like strikes or lockouts, are pending a ruling by the Canada Industrial Relations Board on the MEA’s request to deem all longshoring activities at the port essential. A decision is expected after the parties submit more information by mid-February 2024.  The Port of Montreal experienced labour disputes during the first year of the COVID-19 pandemic, leading to significant supply chain disruptions. The federal government intervened with back-to-work legislation during the second conflict.

Montreal serves as Eastern Canada’s primary trading hub, supporting around 75% of the country’s manufacturing capacity and nearly two-thirds of the population. Ongoing labour negotiations are considered crucial for maintaining a stable business environment.  Preliminary figures indicate a 2% volume decline at the Port of Montreal in 2023, reflecting a global economic slowdown. Container volumes, specifically, dropped by 8.8% due to decreased consumer demand for imports.  Prime Minister Justin Trudeau expressed concern about the potential long-term consequences of a strike at the Port of Montreal, highlighting the impact on supply chains and the risk of customers choosing alternative transportation methods permanently.

For more information, please get in touch with our Canaan Group sales team.

Beyond the Horizon: The Maritime Musical Chairs of 2024

Rowena Lo News, Uncategorized

In the upcoming year of 2024, the maritime industry is poised for a transformative phase akin to a sophisticated game of musical chairs, particularly within the realm of shipping lines. Analogous to the strategic alliances observed in the aviation sector, wherein airlines align themselves under banners like Star Alliance, One World, and Sky Team, the container shipping sector operates under similar collaborative frameworks.

Much like Air Canada, serving as the national carrier of Canada within the Star Alliance, shipping lines form alliances to leverage synergies in the highly competitive maritime landscape. These alliances, such as 2M, Ocean Alliance, and THE Alliance, are instrumental in fostering cooperation among two or more container shipping companies. The primary objectives encompass an expanded network, cost efficiencies, and the preservation of individual operational autonomy.

In the container shipping domain, 2M represents a coalition of Maersk, holding a 14.7% market share, and MSC with a 19.5% share. Meanwhile, the Ocean Alliance comprises COSCO (10.8%), Evergreen (5.8%), CMA (12.5%), and OOCL, which is part of COSCO. THE Alliance includes Hapag Lloyd (7.0%), Yang Ming (2.5%), Hyundai (2.8%), and ONE (6.1%). A pivotal development on the horizon is the expiration and dissolution of the MSC and Maersk alliance by 2025. In response, Maersk and Hapag Lloyd are set to forge a novel alliance named the Gemini Alliance, thereby leaving THE Alliance to contend with a notable void in its network services, particularly on the Asia-Europe route.

Concurrently, independent carriers, exemplified by Zim Line, navigate the seas with distinctive services, predominantly focused on dedicated lanes. Zim Line’s recent announcement of the Pacific Northwest Xpress (ZPX) underscores this paradigm, introducing an express container service between Asia and the West Coast of North America. This service caters specifically to e-commerce shippers, while concurrently unveiling a north-south express service tailored for reefer cargo.

Against the backdrop of these dynamic shifts, an invaluable opportunity emerges for stakeholders to reassess the services engaged by Canaan. Canaan, strategically aligned with service contracts across all three major alliances, is well-positioned to empower its clientele with an expansive global reach.

For further inquiries, we encourage you to reach out to your dedicated Canaan Sales and Customer Service representative, who stands ready to provide comprehensive assistance.

From Sea to Sky: Hybrid Shipping Solution in the Face of Changing Tides

Rowena Lo News, Resources, Uncategorized

Back in the 1980s and 1990s, container ships were smaller and slower. This meant it took a good 50 to 60 days for urgent shipments from Asia to Europe. Air cargo, on the other hand, was too expensive for high-value goods, making it hard to justify the cost.

To tackle this, logistics companies like Canaan came up with a solution. They combined sea and air cargo by consolidating shipments from Asia into a single container. The container would then go to Vancouver, BC, or Seattle, WA, and from there, it would be transferred to a cargo or passenger plane and flown to Europe. This approach saved time compared to pure air cargo and was a bit more expensive than pure ocean shipping.

But over the last 20 years, improvements in both cost and transit times for vessels made this hybrid sea-air transport less competitive. However, recent disruptions in the Red Sea have led to a 20% increase in demand for sea-air transport at Canaan. During the pandemic, Canaan had already been offering this product, and now, with ocean carriers changing routes around Africa, resulting in longer transit times from Asia to Europe, the demand for this hybrid solution is making a comeback.

In the face of these challenges, exporters and importers are hesitant to fully switch to air freight due to the costs involved. At this stage, Canaan is well-placed to provide customers with access to this hybrid capacity. If you want more information about this service, feel free to reach out to our customer services and sales team at Canaan. They’ll be happy to help with any questions you may have.

Tags: freight canada, business shipping, freight to canada, air freight canada, shipping to the us, 3pl company, warehouse logistics, 3pl

Disruption at Sydney, Brisbane, and Fremantle Terminals

Rowena Lo News

Since November 2023, the Maritime Union and DP World have been stuck in a disagreement loop. DP World runs major terminals in Sydney, Brisbane, Melbourne, and Fremantle Ports, shaping the fate of 40% of Australia’s shipping. The heart of the matter revolves around a labor deal – the union pushing for a concise two-year plan with an 8% annual pay increase, while DP World leans towards a four-year deal with a 4% wage hike, adding more fuel to the fire with differences in benefits and working conditions.

Fast forward to Friday, January 12th, 2024, work stoppages have made a comeback, keeping ships anchored for over 10 days. This isn’t just a tussle between unions and companies; it’s a headache for anyone involved in shipping goods to or from Australia. Until there’s a handshake or the Aussie government steps in, expect longer wait times for ships and delays in getting those containers where they need to be – we’re talking about a cleanup that could take several months. The ripple effect of this tussle reaches far and wide, reminding us of the human impact in the intricate web of global trade.

For more information, contact Canaan Group’s sales team.

Reference

https://theloadstar.com

Description: A sign saying customs office with an officer icon. a Red banner with white text reads "Canada's latest goods importation system." Tags: freight canada, business shipping, freight to canada, air freight canada, shipping to the us, 3pl company, warehouse logistics, 3pl

Are You Prepared for Canada’s Latest Goods Importation System?

Rowena Lo News

On May 13, 2024, CARM (CBSA Assessment and Revenue management) digital system will become the office system of record that importers and other trade chain partners will use to pay for import duties and taxes. 

What is CARM? 

CARM stands for the CBSA Assessment and Revenue Management program. It is a new initiative by the Canada Border Services Agency (CBSA) that aims to modernize and streamline the process of importing goods into Canada. CARM will introduce a new electronic portal for importers and customs brokers to submit their trade data, process payments, and manage their accounts with the CBSA. The system will provide more transparency and accuracy in the assessment and collection of duties and taxes, as well as improve compliance with customs regulations. CARM will also introduce new risk assessment tools and features to enhance trade security, reduce processing times, and increase efficiencies in the customs clearance process.

Do I have to sign up for CARM? 

As a business that imports goods into Canada, you will need to register for the Canada Border Services Agency’s (CBSA) Assessment and Revenue Management (CARM) system. CARM is a new system that was designed to modernize how the CBSA processes import/export data and collects revenue on goods entering Canada.  You can register yourself or ask your Canaan sales representative to assist you.

Who does CARM apply to? 

CARM, or the CBSA Assessment and Revenue Management project, applies to businesses and individuals who import goods into Canada. This includes importers, customs brokers, freight forwarders, and carriers who transport goods across the Canadian border.

Do I need a Canadian customs bond for CARM? 

Yes, you do need a Canadian customs bond to participate in CARM. The bond is a financial guarantee that you will pay any fees or penalties that may be assessed by the Canada Border Services Agency (CBSA) for non-compliance with Canadian customs regulations. A customs bond can be obtained through a licensed customs broker such as Canaan Transport Group or a surety company that provides bonding services. The amount of the bond will depend on the type of business you have and the value and volume of the goods you import into Canada.

If you have further questions, please contact Canaan Group sales on the website or at sales@canaangroup.ca.

Reference:

https://www.cbsa-asfc.gc.ca/services/carm-gcra/menu-eng.html

Tags: freight canada, business shipping, freight to canada, air freight canada, shipping to the us, 3pl company, warehouse logistics, 3pl

United States Maritime Alliance (USMX) and ILA (International Longshoremen’s Association) Urged to restart negotiations by US Importers

Rowena Lo News, Uncategorized

The looming threat of a US East Coastwide strike in the US maritime industry continues as negotiations between maritime employers and the International Longshoremen’s Association (ILA), have yet to restart. ILA President Harold Daggett emphasizes the need for a significant hourly wage increase before delving into other contract terms. The potential strike, the first in 47 years, carries financial repercussions for ILA’s 45,000 members. Despite expressing concerns about automation encroachment, Daggett urges members to enhance productivity for a favorable contract.

Fast forward to January 2024, the National Retail Federation (NRF) raises alarms, urging the USMX and ILA to resume negotiations promptly to avert disruptions. NRF President Matthew Shay underscores the risk to containerized imports via East and Gulf coast ports if talks remain stalled. With the current contract expiring in September 2024. NRF members and other US Importers contemplate contingency plans. NRF stresses the importance of immediate negotiations to prevent uncertainty and a potential shift away from East and Gulf coast ports by retailers and businesses. The industry braces for challenges, highlighting the delicate balance between labor demands, automation concerns, and maintaining a smooth flow in maritime operations.

For more information, contact Canaan Group’s sales team.

Reference
www.joc.com

Tags: freight canada, business shipping, freight to canada, air freight canada, shipping to the us, 3pl company, warehouse logistics, 3pl

Update On the Red Sea Attacks and Their Impact on Shipping (January 15th, 2024)

Rowena Lo Featured, News

The recent spate of attacks on the merchant fleet in the Red Sea continues to impact shipping traffic in the area.  Last Thursday, air strikes on January 11th by US and UK fighter planes on targets in Yemen from where Houthi militants have launched attacks on commercial shipping since early December.  This highlights that this conflict will continue to escalate and the shipping impact will be sustained over the course of 2024. 

The number of container ships at the mouth of the Red Sea on their way to or from the Suez Canal was 90% lower in the first week of January than it was in the same period last year, reports the Financial Times.   According to research firm Linerlytica, 354 ships have been diverted south of Africa since Dec. 15, which corresponds to 80% of all ships sailing between the Atlantic, Mediterranean and Indian Ocean.  Only CMA CGM and a small number of niche carriers operating in the markets between Asia and the Eastern Mediterranean and the Baltics have continued to transit the Suez Canal.

Ocean carriers have stopped, for now, offering long-term agreements to the Asia-Europe market because of this disruption, making it impossible to assess the factors to determine a fixed contract level.   With the sudden increase in transit times and the coming of the long Lunar New Year holidays, space and equipment continue to be problematic.  GRIs, Space Guarantee premiums, and other “Red-Sea Linked” surcharges have started to be implemented since January 1st, 2024.  Despite the willingness for shippers and consignees to pay for these, there is no guarantee of securing cargo with consistent service.  As a result, certain factories (including Tesla’s plant in Germany and Volvo factory in Belgium) have temporarily closed because of the lack of components.  The situation continues to be fluid as the Canaan Team continues to monitor the situation. 

For more information, contact Canaan Group’s sales team.

References

https://www.freightwaves.com

www.joc.com

www.shippingwatch.com

www.timesofisrael.com

Image: Container ships stacked up. Theyre quite rusty looking. Most of them say Maersk on them. A red banner from the left appears and white text reads Maersk Vessel Attacked in Red Sea Over Weekend. A Canaan Group logo sits on the bottom right. Tags: freight canada, business shipping, freight to canada, air freight canada, shipping to the us, 3pl company, warehouse logistics, 3pl

Expansion of Another Air Cargo Center in Canada

Rowena Lo News

Winnipeg Richardson International Airport is slated for a significant $19.4 million cargo upgrade, backed by the National Trade Corridors Fund. The project encompasses the construction of a state-of-the-art storage facility, equipped with cold storage for perishable goods, aimed at expanding cargo capacity for both imports and exports. The initiative is strategically designed to enhance accessibility, particularly for remote and Northern communities. The comprehensive plan involves apron expansion, tenant relocation, site preparation, demolition of vacant structures, construction of the air cargo facility, and associated civil work. With over 4,700 cargo planes in 2022, the investment is deemed essential for fostering economic growth opportunities and solidifying the airport’s pivotal role in Canada’s supply chain network.

Canaan Group, an established player in air cargo logistics, is well-positioned to leverage its expertise in tandem with the airport’s expansion. The augmented cargo capacity, featuring cold storage and perishable goods space, perfectly aligns with Canaan’s commitment to delivering premium air cargo services. This strategic collaboration enables Canaan to provide enhanced flexibility and options to its clientele, catering to diverse industries such as pharmaceuticals and healthcare. The airport’s focus on embracing technological advancements, including last-mile delivery, drones, and cargo automation systems, complements Canaan’s dedication to staying at the forefront of innovation in the ever-evolving air cargo landscape.

For more information, contact Canaan Group’s sales team.

Reference

Inside Logistics. (2023, December 29). “Winnipeg Airport to Get $19 Million Cargo Upgrade.” Retrieved from https://www.insidelogistics.ca/infrastructure/winnipeg-airport-to-get-19-million-cargo-upgrade-187111/.

Tags: freight canada, business shipping, freight to canada, air freight canada, shipping to the us, 3pl company, warehouse logistics, 3pl

Trucking Supply and Demand Prediction for 2024 in North America

Rowena Lo News

The Logistics Managers’ Index (LMI) indicates a potential shift in the transportation market, as the capacity component has fallen below the transportation price figure, possibly signaling a move towards supply and demand equilibrium. Despite truckload demand being lower than during the pandemic, it has steadily grown in 2023. Carriers and third-party logistics providers grapple with oversupplied capacity due to a surge in entrants in 2020-21. Tender volumes in December are over 10% higher year over year, signaling increased economic demand for goods. Zac Rogers, an associate professor of supply chain management, attributes demand growth to right-sized inventories and consumption growth. Concerns about consumer health persist, but Anthony Smith, FreightWaves’ chief economist, expresses confidence in the American consumer. The Logistics Managers’ Index (LMI) outlook for transportation prices in 2024 indicates respondents’ expectation of rates bottoming, with a reading around 64. The data suggests a fast-moving return to equilibrium between supply capacity and demand. 

For LTL or FTL rate inquiries, please contact our Canaan Sales team.

Reference

FreightWaves. (2023, November 18). “LMI Showing Transportation Market Flip is Coming.” Retrieved from https://www.freightwaves.com/news/lmi-showing-transportation-market-flip-is-coming.