COMPANY NEWS

CN Rail blockade update

February 18, 2020 – With the illegal blockade on Canada’s rail lines, CN has provided the following update :

Our Western Canada recovery plan is underway. We are making good progress against the traffic out on line originating and destined to Prince Rupert, BC. Our service levels are improving daily and we are working around the clock to return to normal operations and the level of service you are accustomed to across the entire Western region.

East of Belleville, the injunction orders for the illegal blockade at Tyendinaga, ON, have yet to be enforced and continue to be ignored by the protesters. We have adjusted our operations to serve customers in the face of these challenges, but have been forced to only run limited service in the impacted areas until the illegal blockades end.

CN Rail will progressively shut down its network in Eastern Canada

February 14, 2020 – CN announced yesterday that it has been forced to initiate a progressive shutdown of its operations in Eastern Canada. This will include stopping and securing all trans-continental trains across its Canadian network and may soon lead to temporary layoffs within the company’s Eastern Canadian operational staff. CN sought and obtained court orders and requested the assistance of enforcement agencies to end the blockades in Ontario, Manitoba [a short-lived blockade on CN’s main line in Headingley, about 14 km west of Winnipeg] and British Columbia. While the blockades have come to an end in Manitoba and may be ending imminently in B.C., the orders of the court in Ontario have yet to be enforced and continue to be ignored. More than 400 trains have been cancelled since the blockades began.

CN Rail temporarily shutting down due to blockades

February 12, 2020 – Due to the ongoing blockades throughout Canada, CN Rail has been forced to implement the first wave of temporary network shutdowns:

• traffic between Western and Eastern Canada to Prince Rupert, B.C has been stopped

• most goods destined to Western Canada and the US Midwest from customers east of the Montreal area have stopped moving as well.

• Unless the blockades come to an immediate end, further shutdowns will occur over the next days.

According to information received from the carriers, CN will stop issuing reservations for traffic destined to Port of Montreal, Port of Halifax, Port of Vancouver, due to the significant backlog of traffic on rail and terminals destined to the three ports.

Ocean rates continue to fall due to the effects of coronavirus but air freight is expected to spike

February 10, 2020 – With the global coronavirus continuing its spread, Canaan Transport urges patience as cargo rates will be on a roller coaster ride in the next few months. Despite ocean carriers discounting container spot rates from Asia this week, there was still insufficient cargo to sustain the already reduced alliance service networks. Maersk and MSC were obliged to cancel this week’s 2M AE7/Swan loop from China to North Europe at the last minute after they were unable to secure enough cargo. This follows the announcement in the week by the 2M of a further void sailings to the Mediterranean and on the transpacific, together with a number of other westbound cancellations by the Ocean and THE alliances. The Shanghai Containerized Freight Index (SCFI) was not published again this week as the impact of the coronavirus outbreak in China shuttered many offices and businesses, with some not resuming until 17 February. However, the Ningbo Containerized Freight Index (NCFI) did publish last week, showing spot rate erosion across all its main components. On the other hand, air freight rates out of China could leap by 300-400% once production is fully back online and before belly traffic returns to the country. While manufacturing is unlikely to hit full capacity soon, factories are expected to reopen this week – which comes as bellyhold capacity out of the country has almost dried up. The supply chain storm will come when production ramps back up and the industry begins to feel the impact of belly capacity withdrawal, which we know won’t return before April at the very earliest.

Chinese lunar new year extended an additional week

January 30, 2020 – As a result of the extension of the Chinese lunar new year, factories and offices in China are not re-opening until likely February 10. As a result, we appreciate our customer’s and partner’s patience as the inevitable backlog will be pronounced once ports and airports return to normal. Delays for all cargo from, to and transiting via China will be delayed for the foreseeable future.

Wuhan Coronovirus to impact supply chains in the near future

January 25, 2020 – Due to the increasing likelihood of a global pandemic with the Wuhan novel coronavirus and the imminent extension of the Chinese lunar new year, we advise our customers and partners to anticipate disruption to global supply chains as China deals with this epidemic. Canaan Transport has instituted our own internal emergency preparedness procedures in our offices as a result of this growing threat.

Capacity tightening as carriers off load lower paying cargo in favour of higher paying freight

January 20, 2020 – This month has seen the return of container rollovers in loading ports out of Asia, as carriers continue to trim capacity. Reports indicate that some Asia-North Europe ocean carriers have been discharging containers loaded in China at transhipment ports en route, so they can accommodate better-paying cargo. And this week both the Shanghai Containerized Freight Index and Ningbo Containerized Freight Index referred to carriers “off-loading containers” at way ports. As a consequence of the aggressive blanking policies by carriers, some westbound sailings prior to the Chinese new year on January 25 are reported to have been 50% overbooked, which means even VIP contract customers have been fighting daily to ensure their boxes are shipped.

US China Trade Deal Phase 1 signed

January 15, 2020 – The U.S.-China trade deal that President Donald Trump and China’s Vice Premier Liu He signed today provides an escape clause for either country to withdraw if a dispute cannot be resolved through high-level talks. That’s one of the many details tucked in the 86-page agreement. A quick summary of this agreement reveals that consumers and businesses will still pay costly tariffs as the US will maintain 25 percent duties on roughly $250 billion worth of Chinese goods used mainly by manufacturers to make finished products in the United States. It will also keep a 7.5 percent tariff on another $120 billion worth of mostly consumer goods like jackets, gloves, footwear and flat panel electronic displays — although those were rolled back from 15 percent. China will also keep retaliatory duties of 5 percent to 25 percent it slapped on roughly $110 billion worth of U.S. products it imports from the U.S. — a move that’s harming American exporters. But China will issue tariff “exclusions” for specific goods it has agreed to purchase as part of the deal. However, over the 2020-21 two-year period, China will buy at least $200 billion more in U.S. products and services than it did in 2017.

Container Lines Boost Blank Voyages as Q1 Downturn Looms

January 13, 2020 – The downturn in U.S.-China trade is forcing ocean carriers to cancel a growing number of weekly sailings in the trans-Pacific trade lane, according to a container shipping expert. The cancellations point to a longer recovery in trade between the world’s two largest economies and augurs a poor start for U.S. ocean freight demand in 2020. At least 24 weekly sailings between Asia and the U.S. West Coast have been canceled in the first eight weeks of 2020, as reported by U.K.-based container research firm PR News Service. Those sailings represent about 198,000 twenty-foot equivalent units (TEUs) in capacity out of commission for the period. Service cutbacks are a seasonal phenomenon due to China’s Lunar New Year, which starts January 25 and ends January 30. Nine of the canceled sailings are occurring during that week.

New HS tariff to come in 2022

January 9, 2020 – The seventh edition of the Harmonized System nomenclature used all over the world for the uniform classification of goods traded internationally has been accepted by all HS contracting parties and will come into force Jan. 1, 2022. According to the World Customs Organization, HS 2022 includes 351 sets of amendments covering a wide range of goods.