As the performance of US imports continues at unprecedented levels, Maersk will aim to provide an update on the different supply chain developments on a more frequent basis. Our goal is to provide you with the most relevant information in order to assist you to make the right Supply Chain decisions given current volatilities. You will find our latest update below:
Ocean Update:
Lunar New Year has resulted in no significant slowdowns in demand out of Asia
There could be missed sailings due to vessel slidings due to the continued operational delays especially in Los Angeles/Long Beach area. All are keeping a close eye on how the situation in Asia is developing with truck availability and factory closures around the holiday period. Currently trucking is the primary bottleneck with availability reported as low as 10-20% of normal as a result of the holiday. Only slight improvements are expected heading into March.
Capacity availability & schedule reliability has seen little change from our previous update
In Los Angeles/Long Beach, there is significant wait times as vessels queue to enter the harbor as a result of the continued strong demand and labor ganging restrictions on vessels (due to labor shortage). Similar pressures, albeit not nearly as significant, are seen in Vancouver, Savannah and other USEC ports. The wait times vessels are facing at port destinations continue to impact the availability of vessel capacity in Asia as vessels are unable to return on schedule. This is resulting in an increased amount of slide sailings and delays, but it is important to note that it’s not a result of a change in outlook around demand strength. An increased number of COVID cases amongst seafarers is also impacting some vessel ops and thus availability of vessel capacity.
Equipment shortages remain an industry-wide challenge and one of the limiting factors for shipments out of Asia
While the initial shortage was for 40’ container types, the duration of demand has resulted in shortages of alternate sizes as well being used for substitution. 20’s and 45’s are limited in specific areas and 40’ NOR (Non-Operating Reefer) also have restricted availability. Repositioning will remain a focus moving forward tied to plans for additional in-fleeting of equipment in March and April. These additional boxes deployed into the equipment fleet will not solve the equipment issues being faced, but it will help reduce some of the pressure.
Demand duration
Based on the abovementioned trends, we expect the current challenges to continue throughout Q1. The focus remains on ensuring coverage for the demand out of Asia while balancing schedule reliability issues and mitigating port operational delays as best as possible.
Your forecasts are of vital importance
Please be sure to continue to share your April & May 2021 expectations to allow for our optimal and proactive planning for the months ahead.
China update and Chinese New Year (CNY) impact on supply chains
Holiday schedule of vendors is not impacted
Most factories will start holiday during weeks 5-6 and 90% of workers are expected to return by weeks 7-8 according to the latest survey of 947 factories. 20% of factories surveyed, estimate to catch up to 100% production levels and 32% of factories will achieve 50% production levels by end of February.
Equipment remains the key constraint especially in South China
Nevertheless, despite equipment, scheduling and vessel space challenges, there’s a lot more cargo volume moving.
Status of Chinese seaports and river ports during CNY
Heavy congestion in Greater China’s main ports is caused by the cumulative vessel delays of carriers and the CNY cargo rush. For Yantian/Shanghai/Ningbo ports, average waiting time lasts 1.5-3 days with the container yard density at 80-98%.
North America port operations update
PNW (Pacific Northwest):
Prince Rupert Terminal
Vessel wait times have increased to 7 days on average.
Yard capacity has improved to 95% capacity and still using overflow areas to keep the yard fluid. To free up space on terminal, empty equipment is being moved off dock if not evacuated within 7 days. (This is not impacting Maersk).
Rail dwell is at 3.5 days with cold weather restrictions in place limiting the maximum length of trains for safety.
Vancouver/Centerm
Vessel wait times have maintained at 7 days oaverage.
Yard capacity decreased to 93%.
Rail dwell has decreased to 4–5 days.
Southern California
The daily number of vessels at anchorage waiting for berths remains between 30-35. Labor shortage continues to impact all terminals. Allocation of resources are based on vessel ETA and the amount is limited per vessel. Waiting times for berthing average has improved to 6-10 days and waiting time for allocation of labor is 6-9 days. As a result, for 2M our goal is to have one vessel per service at berth and one at anchor at all times to ensure we are able to secure berth and labor at the same time. With the limitation on the number of labor gangs allocated to vessels, all vessels regardless of size, are capped at 4 gangs. This increases the port stay of a large vessel by an average of three days. With our strategy of one vessel at berth and one at anchor we ensure our ability to always have cargo discharging from our vessels.
Missed truck appointments
Throughout the harbor, we continue to see a high number of missed truck appointments. We encourage customers to work with their trucking partners to cancel any import or empty appointments that will not be used to free them up for more urgent freight deliveries.
APM Terminals Pier 400 Los Angeles
Vessels alongside: Experiencing extended port stays of 3 days.
Yard utilization: 86%
Import dwell average 4–5 days.
Gates: Due to low imports available for delivery on terminal - Friday night and Saturday gates are not being offered at this time. As more cargo becomes available this decision will be re-evaluated.
Holiday work
Pier 400 opened 1st and 2nd shifts on both February, Friday, 12th (Lincoln’s Birthday) and Monday, February 15th (President’s Day). (Both of these dates are ILWU holidays but we are prepared to pay overtime to keep cargo moving).
TTI Long Beach
Vessels alongside: Experiencing extended port stays of 3 days.
Yard utilization: 84%
Import dwell average: 4–5 days.
Gates: TTI will offer a second shift gate 6:00 pm – 3:00 am PST on Fridays and a Saturday day gate during Peak Season.
Empty returns: TTI offers empty exemption appointments on dual transactions.
Oakland
Labor shortage continues to impact the berthing lineup of all terminals in the harbor.
The installation of 3 new cranes has taken the available berths down to 4 from 5. As a result, the current waiting time for berthing of large vessels is 4-6 days.
Port Elizabeth, (New Jersey)
To assist with irregular volume spikes since early Q4 2020, the terminal has been opening most Saturdays.
Port Labor & COVID-19
ILA: The total ILA membership is 65,000, however those specifically working containers under the Master contract are around 15,000 (according to the MILA healthcare coverage).
For the week ending January 30, 2021, there were 83 positive cases, with another 150 in quarantine. From March 2020-Jan 2021, the total was 816 positive and 1955 quarantined. New York/New Jersey was, and is by far the port with the largest positivity rate.
The USMX and ILA have worked very closely together to protect workers and keep cargo moving. We have not seen any significant shortages of labor due to COVID, and don’t anticipate any changes.
ILWU: The PMA typically cites 16,000 Registered ILWU along the USWC. COVID-19 cases are 500+ along the USWC and there has not had a significant impact on the dockworker labor supply. In fact, most longshore workers are working 5+ days/week. The union has been a true partner regarding the wearing of PPE, sanitizing equipment, and other prevention measures.
Warehousing, Distribution & Trucking update
Warehousing & Distribution
Accelerating e-commerce activity and rising inventory levels are continuing to drive increased demand for warehouse space and 3PL services. Preventive measures and testing are in place for labor. Customers should ensure they are positioned with their providers to be agile enough to meet demand and adjust as market conditions dictate.
Trucking
The severe driver shortage caused by the strong economy, regulatory restrictions (ELD mandate), challenges to the independent-driver model (AB5), and drivers leaving the industry continue to limit trucking resources to handle the additional volumes. We have increased our recruiting efforts to hire more drivers and retain our drivers.
Maersk Air Freight update
Los Angeles (LAX)
Availability at carrier for loose cargo: 48 hours.
Availability at carrier for unitized cargo: 8-10 hours.
Cargo availability within 24 hours (Pinto – no wait, STG 4-6 hours wait time).
No known labor related delays due to COVID-19.
No COVID-19 impact to Maersk or CFS staff.
New York (JFK )
Wait times at carrier for loose cargo: 3-4 hours.
Wait times at carrier for unitized cargo: 3-4 hours.
Cargo availability within 24 hours at CFS.
Load times at CFS average 1-2 hours.
No known labor shortages due to COVID-19.
No COVID-19 impact to Maersk or CFS staff.
