At Twill, we know that making logistics simple is also about having the right information to make the best decisions. Good insights help you avoid congested terminals, can inform your supply chain forecasting and ensure your warehouses are not going to be left empty any time soon.
Here’s a look at the latest factors impacting logistics in the North American market right now, along with expert insights from our team:
Omicron lockdowns to cause further supply chain disruption in China – especially for trucking
The big news in the region right now is not actually within North America, but with the Asia Pacific. The two markets are closely tied, so what happens in one, will likely have an impact on the other.
Right now, in China, at least five large factory cities (Dongguan, Shenzhen, Changchun, Jilin City, and Langfang) have completely shut down due to a surge in the Omicron Covid variant. This has halted production at many electronics and auto factories and there is no clear indication of when lockdowns will end.
The good news is that ‘essential’ terminals and main ports are operating as usual – including vessel operations, yard handling and gate-in & out. However, inland transportation disruptions are more significant, because truckers will be required to maintain Covid negative status, especially when crossing province borders. The frequent testing will mean a reduction in overall trucking efficiency.
What does this mean in the months ahead?
Our expert Paul Wills, Regional Head of Twill North America, gives you the outlook:
“In time the COVID Omicron wave will pass, and the suppliers, warehouse and truck operators will begin to rapidly send forward the backlog of cargo that has built up during the shutdowns. This may come at a time when seasonal shipping needs routinely rise as companies place orders to support what could be near record demand this year. That means effective supply chain management and contingency planning will be important to avoid unnecessary disruption.”
Container logistics challenges continue on Pacific Coast
Elsewhere in North America, vessel wait times on the Pacific Coast are approximately 11-36 days for the 46 vessels heading towards LA and Long Beach. In the Pacific Northwest, vessel wait times are at 14-days in Prince Rupert and 28-days in Vancouver. Yard utilizations, the designed container storage area in terminals, are at 100%, therefore impacting scheduled sailings with several missed sailings planned.
The impact of Internal longshore and Warehouse Union contract negotiations
Not only will potentially record demand has its impacts as inland transportation comes back online, but shipments may also have to navigate a new round of U.S. Pacific Coast supply chain disruption – arising from ILWU contract negotiations taking place this summer.
The ILWU (or the International Longshore and Warehouse Union) is a labour union that primarily represents dockworkers on the West Coast of the United States, Hawaii, and British Columbia, Canada. The union’s contract expires on the 1st of July. Negotiations are handled by the Pacific Maritime Association, which represents more than 70 maritime employers – and the hope is that negotiations will be swift.
However, given the uncertainties of the current logistics environment, ensuring your business is prepared for any potential impacts may again be important to ensure continuity for your business. Things to consider include:
Expedite critical imports prior to July 1
Postpone what can be postponed
Consider alternative gateways
Plan and secure inland capacity for rail, trucks, and chassis
What is the ocean freight outlook for 2022?
That’s a lot of mixed news for North America – but don’t worry, Twill is here to help all day, every day. If any of these updates are sending big red sirens flashing in your brain – get in touch with us to see how we can help.
In the meantime, here’s a quick update on the ocean freight outlook:
Transpacific eastbound trade strong – Trade on transpacific eastbound routes has been consistently strong in 2022 and is expected to continue as the backlog of Asian cargo is cleared.
New Maersk service on US East Coast - Thankfully, supercharged by Maersk, we’re well-positioned to meet this demand. In fact, the US East Coast looks particularly strong and as a result, Maersk is launching a new weekly East Coast service. This will include port calls in Vung Tao, Yantian, Ningbo and Shanghai with a Panama Canal transit and direct connections to Houston and Norfolk.
How about inland transport?
Looking at inland transportation in the USA, there is good trucking capacity across the West Coast, Texas and much of the East Coast. However, chassis capacity is a more mixed picture and rail capacity is in a much more difficult position across the West and East Coasts.
Want more info on container logistics?
If you want to delve deeper into the news, trends and insights of container logistics – our Knowledge Hub is the place to go. Take a look and keep an eye out for more updates!
