MARKET BRIEF | June 2024
Major Effects from Singapore Congestion
The Port of Singapore is experiencing peak levels of congestion, and the situation has become critical. Container ships calling on the port, which is the second busiest in the world, are having to wait up to seven days to berth, up from the normal half-day wait. That’s about 450,000 TEUs stuck in limbo. Additionally, shippers are now skipping the port, which compounds the issue of downstream container volumes at other ports. The cause has mostly been attributed to off-schedule arrivals that lead to vessel-bunching. The ongoing crisis in the Red Sea continues to negatively influence shipping worldwide, shifting transit schedules. However, whether in Singapore or elsewhere, port congestion remains a global issue. About 7% of global container capacity is delayed by port congestion.
Strikes in Canada Looming
There are multiple labor situations occurring in Canada – with rail transport and the U.S. border at the center. A meeting last week between the Teamsters Canada Rail Conference (TCRC) and Canadian National Railway (CN) were halted by disagreements between the two parties. In anticipation of a strike shutting down the country’s rail system, shippers are already canceling calls at the ports in Vancouver and Prince Rupert. Regarding the other labor issue, the union representing Canada’s border agents originally said members “will begin job action across the country” on June 7 unless a new labor deal was reached. However, this was put on hold, and talks were extended into this week. Border agents are classified as “essential workers,” so the Canada-U.S. border will not close in the event of a strike. However, if job action does occur, there would be longer wait times and traffic build-up across all border crossings.
South Carolina Bridge Disaster Averted
Over two months since a runaway cargo ship collided with Baltimore’s Francis Scott Key Bridge, a similar incident almost occurred again – this time in Charleston Harbor. On June 4, the MSC Michigan VII lost control of its engines and went nearly full throttle through the harbor. This prompted the quick and successful closure of the Ravenel Bridge, one of the busiest bridges in South Carolina. Harbor pilots were able to help the Michigan pass safely under the bridge and anchor the vessel several miles offshore, where the U.S. Coast was able to begin an investigation. The bridge was cleared of all traffic one minute before the ship passed. The only damage was caused by the container ship’s wake, which knocked aground a small recreational boat, causing minor injuries to two people aboard. The Michigan is an older ship. Inspection and maintenance records show that it had been flagged for various problems twice this year, in two different countries. This includes issues with the steering gear alarm, propulsion, and auxiliary machinery.
The Home Depot Adds to its E-commerce Distribution
The Home Depot is continuing with its $1.2 billion supply chain investment, which includes plans to reach nationwide same-day delivery of online orders. Another component of that was announced last month – partnering with Instacart, following a trial run with the grocery technology company’s “Big & Bulky” fulfillment solution. The service provides same-day and scheduled deliveries for heavy items up to 60 pounds. This latest development adds to The Home Depot’s strategy of leveraging its flatbed and direct fulfillment distribution centers. In addition to the service benefit to its consumers, the retailer is looking to reduce congestion in their stores and reduce the time their associates spend on picking, packing, and staging orders for delivery.
