MARKET BRIEF | October 2020
Insights and stories for the logistics, shipping, and transportation industry.
A VIEW FROM THE STREET
As the summer has come to a close, and students have somewhat gone back to school, life is slowly getting back to normal. A sure sign of this is the Southern California traffic! I have found that the majority of my clients are back open for business, although with some new precautionary procedures put pin place to keep workers and visitors safe.
Not all clients are seeing me in person yet, due to their company policies, but with the ones that are, we meet while wearing masks and doing a temperature check when entering. The people I have been visiting seem to be happy to be back to work, and are welcoming.
I have found creative ways to still get together with clients, whether it be lunch outside, or an after-hours bike ride or walk. I think one of the silver linings of the COVID-19 lockdowns is that it made us remember that we are all the same, and regardless of position or title, we are all just humans trying to provide for our family and live a happy life.
Business has been up. With doors shut for several weeks — or months in some cases — companies are fighting back, so they don’t go under. It is impressive to watch, and I am proud that, as a representative for Aeronet, I can aid these companies in their recovery.
A “boots on the ground” update from Aeronet Worldwide
Business Development Manager, Michael Crowley.
Business Development Manager, Michael Crowley.
As the summer has come to a close, and students have somewhat gone back to school, life is slowly getting back to normal. A sure sign of this is the Southern California traffic! I have found that the majority of my clients are back open for business, although with some new precautionary procedures put pin place to keep workers and visitors safe.
Not all clients are seeing me in person yet, due to their company policies, but with the ones that are, we meet while wearing masks and doing a temperature check when entering. The people I have been visiting seem to be happy to be back to work, and are welcoming.
I have found creative ways to still get together with clients, whether it be lunch outside, or an after-hours bike ride or walk. I think one of the silver linings of the COVID-19 lockdowns is that it made us remember that we are all the same, and regardless of position or title, we are all just humans trying to provide for our family and live a happy life.
Business has been up. With doors shut for several weeks — or months in some cases — companies are fighting back, so they don’t go under. It is impressive to watch, and I am proud that, as a representative for Aeronet, I can aid these companies in their recovery.
U.S.T.R. PAYOUTS
Last month, a lawsuit was filed alleging the Office of the U.S. Trade Representative (USTR) did not have proper authority to “litigate a vast trade war for however long, and by whatever means, they choose.” Those who filed the lawsuit are looking to be refunded duties they paid on imports on List 3 products coming from China.
If the USTR loses this lawsuit, it could result in mass refunds of all Section 301 tariffs on List 3 and List 4A goods from China. In order for other importers to take advantage, they needed to file their own independent claims. Regardless, this could result in hefty sums being paid out by the USTR.
Last month, a lawsuit was filed alleging the Office of the U.S. Trade Representative (USTR) did not have proper authority to “litigate a vast trade war for however long, and by whatever means, they choose.” Those who filed the lawsuit are looking to be refunded duties they paid on imports on List 3 products coming from China.
If the USTR loses this lawsuit, it could result in mass refunds of all Section 301 tariffs on List 3 and List 4A goods from China. In order for other importers to take advantage, they needed to file their own independent claims. Regardless, this could result in hefty sums being paid out by the USTR.
LATEST COVID-19 IMPACTS ON SHIPPING
Two Importing Speeds
Cargo owners, such as apparel and automotive importers, want to delay receiving goods for now-closed brick-and-mortar stores and production lines. However, importers shipping personal protective equipment (PPE) and essential household consumer goods want them faster. Given that, carriers, forwarders, port authorities, and marine terminals are warning of a cargo bottleneck if more Western importers fail to pick up containers when they arrive. This will cause port congestion and inland equipment shortages that will slow down the broader supply chain.
Prolonged LA-LB Port Congestion
Warehouses in Southern California are holding onto containers and chassis an average of 7.4 days, twice the normal “street dwell” time, prolonging a chassis shortage that is disrupting the delivery of merchandise. The import surge that is fueling the chassis shortages is expected to continue, at least, through October, as carriers plan to deploy about 20 extra-loader vessels to the ports of Los Angeles and Long Beach. That suggests congestion issues and chassis shortages are likely to linger for the next month, or maybe even longer.
UK Port Congestion
Add the United Kingdom to list of countries with congested ports, due to limited working hours. This has culminated into a backlog, with vessels making berth, but not starting for another 12 to 24 hours. That is resulting in some vessels deciding to cut some of their European legs.
Australia Port Congestion
Industrial actions, combined with adverse weather, continue to cause heavy congestion at Sydney terminals, which has impacted supply chains. Wait times are up to 19 days.
Trucking Impact
The impact of the Virus has disrupted the domestic trucking market, and has caused rates to outperform seasonal averages throughout the summer. This disruption has shifted freight — which would normally run under contract — to run on the spot market, further limiting truck capacity.
Limited Warehouse Space in LA
As mentioned earlier, Los Angeles is experiencing an influx of ocean freight, which has resulted in limited available warehouse space. This has caused a spike in the Los Angeles outbound rate, and that trend is expected to continue.
As COVID-19 continues to impact the global economy,
here are the latest downstream affects:
here are the latest downstream affects:
Two Importing Speeds
Cargo owners, such as apparel and automotive importers, want to delay receiving goods for now-closed brick-and-mortar stores and production lines. However, importers shipping personal protective equipment (PPE) and essential household consumer goods want them faster. Given that, carriers, forwarders, port authorities, and marine terminals are warning of a cargo bottleneck if more Western importers fail to pick up containers when they arrive. This will cause port congestion and inland equipment shortages that will slow down the broader supply chain.
Prolonged LA-LB Port Congestion
Warehouses in Southern California are holding onto containers and chassis an average of 7.4 days, twice the normal “street dwell” time, prolonging a chassis shortage that is disrupting the delivery of merchandise. The import surge that is fueling the chassis shortages is expected to continue, at least, through October, as carriers plan to deploy about 20 extra-loader vessels to the ports of Los Angeles and Long Beach. That suggests congestion issues and chassis shortages are likely to linger for the next month, or maybe even longer.
UK Port Congestion
Add the United Kingdom to list of countries with congested ports, due to limited working hours. This has culminated into a backlog, with vessels making berth, but not starting for another 12 to 24 hours. That is resulting in some vessels deciding to cut some of their European legs.
Australia Port Congestion
Industrial actions, combined with adverse weather, continue to cause heavy congestion at Sydney terminals, which has impacted supply chains. Wait times are up to 19 days.
Trucking Impact
The impact of the Virus has disrupted the domestic trucking market, and has caused rates to outperform seasonal averages throughout the summer. This disruption has shifted freight — which would normally run under contract — to run on the spot market, further limiting truck capacity.
Limited Warehouse Space in LA
As mentioned earlier, Los Angeles is experiencing an influx of ocean freight, which has resulted in limited available warehouse space. This has caused a spike in the Los Angeles outbound rate, and that trend is expected to continue.
ROAD TRANSPORT NEWS
In September, the current rate per mile average for vans set a record high, at $2.43. Also, refrigerated trucks (reefers) are currently taking dry loads out of California because the rates are comparable, and they don’t have to purchase diesel for the reefer. Rates are expected to continue to rise, with retail freight entering the spot market soon.
In September, the current rate per mile average for vans set a record high, at $2.43. Also, refrigerated trucks (reefers) are currently taking dry loads out of California because the rates are comparable, and they don’t have to purchase diesel for the reefer. Rates are expected to continue to rise, with retail freight entering the spot market soon.
MERCHANDISE PROCESSING FEE
As of October 1, the Merchandise Processing Fee is still 0.3464%. However, the minimum charge will now be $27.23, and the maximum will be $528.33.
As of October 1, the Merchandise Processing Fee is still 0.3464%. However, the minimum charge will now be $27.23, and the maximum will be $528.33.
WHAT’S NEW AT AERONET
Shipment Tracking Devices
Aeronet Worldwide has made tracking devices available that can provide peace of mind to shippers with high-value and critical cargo. Options include a cellular tracking device, as well as a GPS-based version. Contact your Aeronet representative for more information, or send us an email.
Shipping Tools
Aeronet Worldwide provides various shipping tools on our website, including the latest Incoterms, a DIM weight calculator, LTL freight class calculator, and a weather advisories stream from the National Weather Service.
We’re always working hard to ensure your cargo is handled
one shipment at a time!
one shipment at a time!
Shipment Tracking Devices
Aeronet Worldwide has made tracking devices available that can provide peace of mind to shippers with high-value and critical cargo. Options include a cellular tracking device, as well as a GPS-based version. Contact your Aeronet representative for more information, or send us an email.
Shipping Tools
Aeronet Worldwide provides various shipping tools on our website, including the latest Incoterms, a DIM weight calculator, LTL freight class calculator, and a weather advisories stream from the National Weather Service.
For more information on Aeronet Worldwide, visit Aeronet.com.
