Key issues affecting the supply chain in the near term
Recently, the most contagious new crown variant BA.5 has been monitored in many cities in China, including Shanghai and Tianjin, making the market pay attention to port operations again. In view of the impact of repeated epidemics, domestic ports are currently operating normally. #Paper Cup Fan

Potential rail freight strike may have been avoided in 60 days with Biden intervention: U.S. President Biden signed an executive order on July 15, local time, appointing members of the Presidential Emergency Board (PEB) to intervene in 115,000 workers. National Railroad Labor Negotiations, including BNSF Railroad, CSX Transportation, Union Pacific Railroad, and NORFOLK Southern Railroad. Maersk will continue to closely monitor the progress of the negotiations and no disruption to rail services is currently expected.

The contract between the International Terminals and Warehouse Union (ILWU), which represents dockworkers, and the Pacific Maritime Association (PMA), which represents the interests of US West Coast terminal employers, expired on July 1, US local time. Both employers and employees said the contract will not be extended, negotiations will continue, and port operations will not be interrupted until an agreement is reached. #Raw Material For Paper Cups

California’s “AB5″ labor bill was protested: The US Supreme Court decided on June 28 to reject the objection raised by the California Trucking Association, which means that the “AB5″ bill has come into effect. The “AB5″ Act, also known as the “Gig Worker Act,” requires trucking companies to treat truck drivers as employees and give employees benefits. But the bill has drawn dissatisfaction among truckers, because it means truckers will lose their freedom to take orders or have to bear the burden of more expensive insurance premiums. Since most trucking associations in Southern California have historically preferred and fought for the right to operate as independent contractors and do not want to be corporate employees. There are about 70,000 truck owners and operators across California. At the Port of Auckland, there are about 5,000 independent truck drivers carrying out daily shipments. To what extent the entry into force of AB5 will affect the current supply chain is unclear. #Paper Cup Bottom Roll

Operations at the Port of Auckland came to a near standstill last week after protesters blocked the terminal gates. Operations on ships and terminals have slowed as cargo operations ceased and hundreds of ILWU members refused to cross the blockade for safety reasons. However, it is uncertain whether protests will resume on Monday after California truckers stopped protesting over the weekend.

The Port of Oakland, a key hub for California’s more than $20 billion in agricultural exports, including almonds, dairy products and wine, is the eighth-busiest container port in the U.S. as it struggles to clear stranded goods due to the pandemic before the trucker protests began. #Paper Cup Fan Sheet

Maersk has been working aggressively over the past few years to ensure its operations are compliant, and AB5 is not expected to negatively impact Maersk’s ability to serve customers in California.

U.S. ports set another record for imported container volumes
Despite concerns about a recession, U.S. ports have been breaking records. U.S. container imports hit an all-time high in June this year, and July is likely to hit another record or be the second-highest month. At the same time, the volume of imported containers is continuing to shift to the eastern ports of the United States. The ports of New York-New Jersey, Houston, and Savannah all posted double-digit increases in throughput, which in turn drove a 9.7% year-on-year increase in import volumes at major East US and Gulf Coast ports in June, while volumes at West US ports rose 9.7% year-over-year. It increased by 2.3%. Maersk expects this preference to shift to eastern US ports may continue into the third quarter of this year, given the uncertainty of the US-Western labor negotiations. #Pe Paper Cup Roll

According to the latest data from SEA INTELLIGENCE, the punctuality rate of the Asia-West America route increased by 1.0% month-on-month to 21.9%. The 2M alliance between Maersk and Mediterranean Shipping (MSC) was the most stable liner company in April and May this year, with an on-time rate of 25.0%. For the Asia-East America route, the average punctuality rate decreased by 1.9% month-on-month to 19.8%. In 2022, 2M Alliance has been one of the best performing liner companies on the US Eastbound routes. Among them, in May 2022, Maersk’s benchmark rate reached 50.3%, followed by its subsidiary HAMBURG SüD, reaching 43.7%. #Paper Cup Bottom Paper

The number of ships queuing up at North American ports is still increasing
The number of ships in queue is still increasing, and the number of ships queuing outside U.S. container ports is still increasing. 68 ships are sailing to the US West, of which 37 will go to Los Angeles (LA) and 31 will go to Long Beach (LB). The average waiting time for LA is 5-24 days, and the average waiting time for LB is 9-12 days. #

Maersk has worked to increase the TPX route from Yantian-Ningbo to Pier 400 in Los Angeles to 16-19 days.

In the Pacific Northwest, both schedules and operations continue to face challenges, particularly at CENTERM in Vancouver, where site utilization is at 100%. CENTERM has now changed to single-vessel berthing operation and is facing congestion. CENTERM expects to reopen its second berth in September. The average rail layover time is 14 days. This has a significant impact on vessel operations for the foreseeable future. Also, given that cruise ships in the region have restarted, there could be a labor shortage that will further exacerbate the situation. Maersk said it was looking for solutions to reduce the overall impact by optimizing routes. #Pe Coated Cups Paper Sheets

Long queues have formed near the ports of the eastern United States and the Gulf of Mexico, the ports of Savannah, New York-New Jersey and Houston. At present, the yard utilization of many terminals is close to saturation. Congestion at ports in the east of the United States persists, both due to strong demand and the transfer of ships from the west to the east of the United States. Some port operations were delayed, disrupting schedules and increasing transit times. In particular, the Port of Houston has a berthing time of 2-14 days, while the Port of Savannah has about 40 container ships (6 of which are Maersk ships) with a berthing time of 10-15 days. Port of New York-New Jersey berths vary from 1 week to 3 weeks.

In order to provide the best possible service, Maersk said a number of measures are being taken to mitigate delays as much as possible, while other contingency plans are in place. For example, abandoning the TP23 at the Port of New York-New Jersey and calling TP16 at the Elizabeth Quay under Maersk Terminals, the average berthing time is only two days or less.

In addition, Maersk is working closely with the terminal to keep an eye on any possible changes, and to arrange vessels and capacity in a timely and reasonable manner to minimize delays and waiting times, thereby minimizing capacity losses.
Causes and progress of landside congestion
Inland, terminals and rail yards are expected to continue to experience significant congestion, which has severely impacted liquidity across the supply chain. More customer support is needed to address the surge in import container dwell times, particularly in inland rail regions such as Chicago, Memphis, Fort Worth and Toronto. For Los Angeles and Long Beach, it’s mostly a rail issue. High yard utilization remains a major issue, with the Los Angeles yard density currently at 116% and Maersk Rail container hold times reaching 9.5 days. Access to trained rail workers to manage current demand remains a challenge for rail companies. #Food Grade Raw Material Pe Coated Paper In Roll

According to the PACIFIC MERCHANT SHIPPING ASSOCIATION, in June, the average waiting days for imported containers waiting for rail transportation at the ports of Los Angeles and Long Beach reached 13.3 days, a record high. Considering continued rail delays for imported rail cargo to Chicago via Pacific Southwest ports, Maersk recommends that customers reroute to US East and US Gulf ports whenever possible.

Despite ongoing challenges, Maersk is working with suppliers on a daily basis to ensure that equipment including empty boxes can be delivered to customers. The number of empty containers in North America is stable, which can meet the export demand. #Pe Coated Paper Sheet

Supply chains key to central banks’ fight against inflation
Monetary policymakers around the world have been raising interest rates to keep inflation in check, but facing the risk of an economic slowdown or even recession, it’s hard to say whether it’s effective. The most recent U.S. CPI growth rate reached 9.1%, the highest in 40 years. The supply chain is considered to be one of the main factors contributing to inflationary pressures. The surge in prices was mainly due to shortages of goods and labor, as well as strong consumer demand and ongoing supply chain disruptions.

Despite evidence that U.S. demand for Asian exports is slowing, demand for container shipping still far exceeds North American terminal capacity. As we enter the traditional peak import freight season, supply chains should ensure smooth flow and keep congestion to a minimum. Maersk called for the balance to be a shared responsibility of shippers and carriers and that more aggressive and effective action was needed to reduce inflation. #Coated Paper Cup Roll