COMPANY NEWS

Port of Vancouver still dealing with delays

July 20, 2021 – The Port of Vancouver issued the following update yesterday. Temperatures in the southeastern part of the province will continue to be hot and above seasonal numbers. Wildfire activity in the B.C. interior is expected to continue, with impacts to rail operations. Over the weekend (July 17), a fire at Tremont Creek shut down CN and CP traffic briefly, for an hour and half.

At the time of this update, reports indicate that both CN and CP lines are operational, with an increase in rail activity over the past few days. Operations may be subject to temporary stoppages due to spot fires. Both lines continue to operate under Ministerial Order (MO) 21-06 requirements, which include targeted speed restrictions, increased equipment inspections, and staging and deployment of additional fire prevention equipment. All anchorage class assignments are experiencing heightened demand, and availability in both port jurisdiction and the Southern Gulf Islands is very limited at the moment. All English Bay anchorages are full and Southern Gulf Islands have 10 anchorages remaining. The vessel arrival board continues to be busy and we have multiple vessels all over 260 m in length arriving over the next 3 days.

Union Pacific temporarily stopping eastbound traffic to Chicago

July 19, 2021 – Union Pacific is temporarily suspending eastbound service from West Coast port terminals to its Global IV intermodal facility in Chicago to help ease “significant congestion” at inland terminals, especially Chicago, and at the ports. The suspension is aimed at helping ocean carriers reduce backlogs. UP hopes this suspension, which will start on Sunday and last for about seven days, will not only help relieve port backlogs for Chicago-bound container traffic but also ultimately help address backlogs for containers destined to other markets. The suspension applies to UP-served terminals at the ports of Los Angeles, Long Beach and Oakland, California, and Tacoma, Washington.

Port of Vancouver still affected by rail delays

July 11, 2021 – The Ministerial Order suspending rail service for 48 hours between Kamloops and Boston Bar, B.C. effective 00:01 PDT on July 9, 2021 ended at 00:01 PDT July 11, 2021. A new Ministerial Order has been issued by the Minister of Transport to enact precautionary safety measures to further protect against wildfires during extreme weather conditions. The order places operational restrictions on CN and CP rail lines routing between Kamloops and Boston Bar (Ashcroft Subdivision) and Kamloops and North Bend (Thompson Subdivision) when the fire hazard rating is listed as "extreme." Restrictions include reduced speed limits and fire mitigation measures. Additionally, the order requires risk mitigation action by all Class 1 railways throughout Canada when the air temperature is 30°C or above and the fire hazard level is listed as "extreme." The Ministerial Order took effect at 00:01 PDT on July 11, 2021 and will remain in effect until October 31, 2021. Anchorage demand at the Port of Vancouver continues to be high and nearing capacity. Anchorage assignments are made to ensure fluidity across all ship types and essential services.

CPR rail lines to Vancouver now clear but backlog continues

July 6, 2021 – BC wild fires continue to have rail main line operations severely constrained. CP Rail (CPR) and CN Rail (CNR) teams are on site and supporting local authorities. Berth availability for vessels arriving at Vancouver Port terminals is delayed as a result. At this time CPR has advised that their line is now cleared. It is anticipated that CNR will take a couple of more days. In the meantime CPR and CNR will share the one line for both Westbound and Eastbound trains. It is anticipated that GCT Deltaport should start seeing trains Tuesday evening / Wednesday morning, all going well. As a result of the rail line closures, there is now a large backlog to work through and delays from 72 to 96 hours can be expected. We are monitoring the situation closely and will update you as the situation evolves.

Port of Vancouver affected by BC wildfires

July 5, 2021 – We wanted to provide you with an update on the impacts of recent British Columbia wildfires on rail operations servicing the Port of Vancouver. All rail service coming into and out of the Port of Vancouver has been halted as a result of the B.C. wildfires. Currently, there are a large number of trains waiting to arrive at the Port of Vancouver. Both CN and CP Rail are working closely with Transport Canada and onsite inspectors to determine the necessary steps to resume safe rail operations. With rail impacts on terminal operations, vessel delays and heightened anchorage demand are expected. The Port is working closely with our container terminal operators, railways, and government to understand the impacts of these delays on terminal operations and to develop a recovery plan. All our customers with cargo transiting through the Port of Vancouver are advised of these potential delays.

More price increases for all trade lanes

June 28, 2021 – Record high ocean freight spot rates ex-Asia have seen a further major hike this week, including rises of nearly 40% this week to the U.S., as a month of port restrictions and congestion at Yantian and other south China ports worsen container shipping’s already severe global capacity and equipment shortages. And with reports of actual market rates of more than $20,000 per FEU, some are questioning the value of pricing indices in the current highly disrupted market – especially those based on carriers’ published rates that are largely unavailable to most shippers. Although current massively elevated rates include a premium fee to guarantee equipment and space, some shippers complain that their cargo is still getting rolled. And as the peak season approaches, it appears the situation is about to get even worse for shippers to Europe and the U.S. and Canada. They will need to brace themselves for another round of FAK and GRI rate hikes on July 1, with yet another hike likely from the middle of the month and a peak season surcharge of several thousand dollars.

Container rates may continue to be high until 2022

June 23, 2021 – A widely held theory on pandemic spending is that container imports surged because Americans bought a lot more goods when COVID prevented them from buying services. Ergo, with more vaccinations and fewer hospitalizations, Americans will resume spending on services and consequently have less to spend on goods, the pandemic-induced driver of import demand will wane, spot rates will fall, and the market will return to some semblance of normality.

And yet, Americans’ spending on restaurants, air travel and other services has rekindled but there’s still no evidence of a drop in spending on goods.

Container imports remain at peak volumes. Spot ocean rates are still rising. Inventory-to-sales ratios remain stubbornly low – so low that it now looks inconceivable that they can revert to normal this year.

Paul Bingham, director of transportation consulting at IHS Markit, said, “We’re too far into the year without having recovered [inventories] to get out of this in 2021. We have to look to 2022 for any hope. So many portions of the supply chain are so far behind that it’s not going to happen in the next six months.”

Continued high rates on the horizon

June 21, 2021 – Container shipping will see an extended peak season this year, with no signs of a slowdown in demand, believes Hapag-Lloyd CEO Rolf Habben Jansen, warning that if demand picked up in the traditional third-quarter peak season it would extend beyond the traditional Golden Week slowdown. “People will start to ship early and it will probably last longer than usual,” he said. “Inventories are low, which is why people are eager to get stuff shipped; but even once we are beyond the pandemic, it’s not unlikely that people will want more inventory.” He expects demand “will stay robust for an extended period of time,” exacerbating the current delays in the supply chain. “The theme remains congestion,” he notes. “The U.S. is improving a little bit, but there are still ships waiting and we have not made the progress we wanted to in the second quarter. We need to have a not-too-strong peak season there to get out of the difficulties, which is not what we foresee at the moment.”

Air Canada announces first freighter flights

June 14, 2021 – Air Canada Cargo today announced the initial list of planned routes for the Boeing 767-300ER freighters scheduled to enter into service this fall. The first 767 freighter will operate on routes linking Toronto to Miami, Quito, Lima, Mexico City and Guadalajara, the first time Air Canada Cargo will serve this destination. As more freighters enter service, additional flights in January of 2022 will further expand the network with the addition of Halifax and St. John’s to Madrid and Frankfurt.

Port of Yantian delays causing ripple effect

June 13, 2021 – Long-suffering cargo owners face another wave of pain as the terminal congestion from the coronavirus outbreak in southern China threatens to ripple around the world. The ports of Yantian, Shekou and Nansha have been affected to varying extents by a spread of infection that has led to reduced handling capacity at terminals since the end of May, when a six-day stop on export containers entering Yantian was imposed.

Carriers have already announced significant disruptions to sailings and schedules due to the outbreak, with the Alliance cancelling or transferring 29 calls since the end of May and confirming omissions running up to June 25. We will continue to advise our customers of any relevant events but we ask for patience during this time.