There was a lot going on in 2021 that made us both panic and scratch our heads wondering how we got into this mess and how we were going to get out. But overall, December is here and we’ve made it to the end of the year mostly intact. We went from setting new records in the Western Hemisphere at the LA and LB ports to getting bombarded with the supply and demand until the supply chain was backed up for days on end.  At least 2022 will look better right? Maybe. There are going to definitely be a few issues to watch out for. From a driver shortage to a need for warehouse employees, now is a good time to make sure your drivers are feeling loved and your warehouse employees are being taken care of. It wouldn’t be a surprise with the number of ships waiting off the coast of LB and LA, to see a stevedore strike in the upcoming months. So it’s best we maximize the time and resources necessary to take care of our drivers and treat our partners with respect.  Next up, would be a crunch for capacity. There’s so much demand for everything due to COVID-19, that capacity is struggling to keep up. Rental prices per ship are ridiculously high for a single day let alone having it long enough to get things moving properly. Since it’s going to take time for capacity to catch up to demand, a lot of companies will need to take into account the assets they have on hand to utilize and prioritize shipments.  Investments and infrastructure are other fields we need to be working in. Without new ships, trains, planes, ports, and roads, we won’t be able to be as efficient as we need to be in our field to get things done. There’s no snap your fingers fix-all to this, but you can go out and vote for better infrastructure bills to be put through your local cities and states to make up for what we lack currently. Until then, we’ll just have to continue to seek out new efficiencies to do more with what we have.  But as for Nelson, we’re working hard to get your cargo where it needs to go. You can rely on us to make sure it’s in safe hands as we navigate the uncharted waters of what 2022 will bring. We’ll keep an open mind and a keen eye on the new possibilities on the horizon and keep you up to date with what is happening in the logistics world. 

This year has been a rough ride from start to finish, creating new and interesting challenges to overcome. First it started with container congestion on the US West Coast just beginning to rear its ugly head, signaling the maelstrom we’d be experiencing later in the year. There was the confusion about Vietnam ports where things were being shipped there from China to avoid tariffs, creating a bit of a trade war.  Then of course there was the ship that made its way into everyone’s newsfeed – Ever Given. Being stuck in the Suez Canal after being hit with a sandstorm was no joke – well at least not to those involved. For everyone else, the memes and jokes were abound. But that put the global supply chain on the map for everyone to start talking about it. You know the old trick to open with a good joke? Well we took that seriously. Granted, there were plenty of good things that happened too – the Port of Virginia coming in strong with new and improved $800 million infrastructure investment being one of them. But all good things aren’t always shareable as the bridge over the Mississippi River cracked, leaving 700 barges waiting. Summer came in strong with the heat highlighting hazmat dangers like Vivo phones igniting on ships because of the recorded temperatures. Vancouver itself was also cut off from the rest of the world by land for several weeks as flooding came with major rain storms.  But some good things are shareable, even if they have to be taken with the overwhelming side. Like how LA and LB ports processed 10 million TEU’s (that’s twenty foot equivalent units), in a 12 month period! That was record breaking for the western hemisphere. The Port of Virginia itself thrived this year with the new infrastructure in place. And the state won a bill for $1 trillion in infrastructure changes – everything from broadband access to making sure roads and bridges are reinforced and maintained, and much more.  Though there were problems with air cargo following the ocean cargo and getting congested, things were still looking up as Norfolk soared during the rough ocean freight market. Overall, while the year has been seen as one problem after another and congestion, congestion, congestion, Nelson has worked hard to make sure to keep your products moving. 

As the third-largest city in Canada, Vancouver has a lot of traffic coming through. A storm that blew through recently had the city cut off from the rest of the country by land because of severe flooding, and mudslides that blocked all major highways and railways.  British Columbia declared a state of emergency on Wednesday that will allow it to prohibit nonessential travel, hoarding of goods, and price gouging, following what the locals are calling the storm of the century. Premier John Horgan told reporters “These are extraordinary events not measured before, not contemplated before.” The rain the fell on Merritt, a town of 7,000 people northeast of Vancouver was 3x’s the historical high. People are hoarding food and supplies, and Horgan is warning residents against it. The impact is expected to be significant and has a cascading effect, Wade Sobkowich says. Vessel delays when fright rates and demurrage are already a problem is just going to make things worse.  More than 1500 rail cars carrying grain are expected to be idle in Vancouver for days until things clear up.  The Canadian Military has deployed planes, helicopters, and several hundred troops to assist in Vancouver. Highway 7 was opened to allow the evacuation of refugees after it was cleared of rocks and debris but has been closed again until the damage has been further assessed.  Highways 1, 3, 5, and 99 are closed because of mudslides. Engineering teams are yet to report the full extent of the damage on the tracks as of November 22nd, and Vancouver has still yet to be fully evacuated. Maersk is predicting major disruption to port operations for the next few weeks, adding that there will be an increase in congestion at terminals and to expect vessel delays. An alternate port that sappers could use would be the Prince Rupert Port which has so far been unaffected by the problems. The port stated “[We are] fully engaged in supporting the response to the devastating impacts of the flooding in southern British Columbia and is ready to help the communities and supply chains being impacted by it. The Port of Prince Rupert remains fully operational and is not experiencing any impact to port or rail operations related to the extreme weather events and is ready to activate its full capacity. A number of terminals have the ability to handle additional cargo and are actively engaged with shippers and CN [Canadian National] to assist in facilitating the movement of critical goods, supplies and trade.”

Biden is preparing to sign a $1 trillion infrastructure bill, which Congress adopted more than a week ago. This bill was up against another one that would spend $1.75 trillion, but the choice went to the 13 crucial votes from Republicans in the House of Representatives, after receiving significant bipartisan support in the Senate in August. This plan, the biggest investment in the nation’s infrastructure in more than a generation, will help rebuild America’s broken infrastructure and potentially speed up the supply chain that’s currently being choked at the ports.  Places like Virginia have many infrastructure needs, from broadband access to making sure roads and bridges are reinforced and maintained, and much more.  The package includes $7 billion for transportation projects in Virginia alone, with more than $1.5 billion on the new transportation projects. About 1/3rd of the money will flow through the funding programs that Virginia set up in 2015. 1/3rd will provide new money to repair and replace roads and bridges over the next five years, and another 1/3rd will go into programs to reduce carbon pollution contributing to climate change, as well as protecting road networks against flooding. This will allow the state to bring forth big projects it otherwise wouldn’t have this soon in the game. The full impact will not be felt until 2025, says Gordon Dixon, Executive Vice President of the Virginia Transportation Construction Alliance. He adds, “There is this expectation that all this money from Washington, D.C. is going to be flooding into Virginia. It’s not going to happen that fast.” The infrastructure package will provide at least $100 million for accelerating the state’s effort to broadband access to all parts of Virginia, universally. This will close the large gap for high-speed internet service that is critical for work and study during COVID-19. It will also provide $1.2 billion to improve public transportation in Virginia by modernizing bus and rail fleets. Especially such places as passenger rail, including $22 billion in grants to Amtrak to expand the passenger rail service between Washington, D.C. and Richmond; as well as Hampton Roads and western Virginia.  Airports will receive an estimated $386 million over five years to make improvements in their infrastructure in the form of runways and terminals. The Port of Virginia will be eligible for funding through $17 billion in grants nationally. The state also expects to receive $378 million to replace lead water pipes and other drinking water systems. $106 million to install electric vehicle charging stations, and funding to replace school buses to reduce the pollution they emit. It will account for cleaning up hazardous waste sites and make the electric power grid more secure from cyber-attacks. All in all big changes are coming to the Virginia infrastructure and ports all across the state. Over the next five years, things are going to be changing for the better. 

Disruption in the air freight market is following the crisis on the US West Coast as containers pile up and rates continue to tick ever higher. With more cargo needing to be expedited to avoid gaps in inventory while containers languish, air freight has seen incredible demand this year. As cargo conversion helped save airlines after passenger travel dried up during the pandemic, many forwarders are capitalizing on the capacity until the ocean mess is sorted. This year, we’ve reported a number of records broken by the sheer quantity of imports crashing against our shores – from a record-setting year for the Port of Norfolk to a record-setting number of containerships waiting in San Pedro Bay. There has been a domino effect on the other modes of transport as truck capacity becomes non-existent, available space on rail carriers is diverted again as hubs are overwhelmed. We haven’t checked on the carrier pigeon option, but it stands to reason that’s going to have some issues at this point, too. Airports in major hubs are experiencing extreme congestion, leading some cargo handlers to store pallets in the parking lot as warehouses run out of space. As holidays inch closer the capacity issues won’t be getting better until at least Lunar New Year, though analysts expect congestion to carry on through 2022 unless something drastic happens. We cannot let the cure be worse than the disruption. The solution to such extreme demand? Time and patience are the only solutions that work. Planning ahead, being clear about needs, and being flexible with the options are the only ways that are confirmed to help keep cargo moving. Your support team at Nelson International is working hard to ensure our clients’ cargo hasn’t suffered too extensively during this disruption and we’re ready to talk to you about how we can help weather this tumultuous time.

As shoppers await their beloved parcels, they often complain about the amount of time it takes for certain packages to get to them. With being spoiled with Amazon Prime’s two-day shipping standards, it makes them wonder why their other packages aren’t getting here quickly enough.  With the economic surge from stimulus checks and the threat of COVID-19 in the past years, people have been ordering more online than ever. Due to demand far outweighing the market’s capacity, companies have been struggling to keep up. But that isn’t the only thing holding up the supply chain. Between the weather, lack of workers, available space, and rail infrastructure creating a strain on the market, there are multiple issues blocking the supply and demand routes that get the packages from the online store and into consumers’ hands.  Weather is anyone’s game, but when it comes to a lack of workers, the trucking industry suffers greatly. Even jacking up the pay to entice new drivers to come into the industry isn’t helping. Between retail, work at home, and food industry jobs that get you home every day after a long day of work, the trucking industry can have you away for weeks at a time as you haul your cargo across the country. The space available to store the items is another issue. When warehouses begin to fill up, this creates a bottleneck that prevents more products from coming in. Not to mention their own issues with staffing and working bodies. When it finally gets down to the grind, postal workers are blamed for the slow mail when in fact the problem began long before it was ever in their hands. Overall, there are many places the products consumers are trying to get their hands on getting hung up in the transportation process. Is it going to change any time soon? Highly unlikely.

Ocean cargo congestion has turned into the most important subject in logistics during the pandemic. Currently, there are more than 50 ships at anchor in San Pedro Bay, waiting for a berth at the Port of Los Angeles and every day it seems a new record is being shattered by ocean ports on every coast. The Port of Norfolk is no exception, reporting gain this month that their August volumes were 24% over 2020. Every day the news is full of stories about the current disruption plaguing shippers, the record profits being reported by carriers and the steps shippers and government agencies are taking to push back against the problem. According to the American Shipper’s report on the outlook for the remainder of 2021, the forecast shows no relief. Breaking the record from August 2018, the port handled 307,023 teus – an 18.6% jump. The port handled 172,094 containers in August, an increase of 26.4%. The number of rail containers it handled grew 32.9%, to 57,839; truck containers rose 23%, to 106,458; and barge containers increased 28.3%, to 7,797. But the Virginia Inland Port handled 3.2% fewer rail containers, with volumes totaling 2,794. While we aren’t seeing the same disruption as the US West Coast, the infrastructure improvements are being pushed to the limit in Virginia. As larger ships call the port, thanks to a deep dredge in 2018, the internal staff required to service those ships have to grow in scale to keep cargo moving. If you need assistance navigating the ocean freight market and want to look at options away from NY and LA, your Nelson international representative is ready to assist you. We’re working hard to meet the demands of the new normal and would love the opportunity to guide your business toward logistical success alongside us.

One wouldn’t think that in the midst of such a crazy ocean market a carrier like 2M would blank sailings for the upcoming Chinese Golden Week in October, but here we are. With cargo already booked, some shippers are fuming at the idea of less capacity in the market especially headed into the holiday season. The common refrain we’re hearing is to shop early and be prepared but if other carriers follow suit and compound the delays, Christmas morning might have to wait a few weeks. Melodramatic? Maybe. But the idea that these sailings aren’t massively important to forwarders and retailers and can just be blanked is staggering. According to The Loadstar, “Maersk and MSC, the 2M partners, have cancelled four scheduled Asia-North Europe loops in weeks 39 and 40, thereby removing some 70,000 teu of capacity from the route.” The reason 2M gave for the blanks is to enhance schedule reliability, a lofty goal in the current situation. The good side is that with no cargo coming out of the blanked sailings, there will be a bit more room in the over-congested European ports. While all ports, sea, rail, and air etc., need some breathing room, the crush of waiting cargo in Asia will create further issues even as ports catch up. Maersk hasn’t confirmed the blanked sailings yet, but MSC is preparing their customers by providing alternate routings to placate the uproar we expect to see. It wouldn’t surprise us if next week we update this story to say 2M cancelled the blanked sailings or more carriers followed suit and blanked their own sailings. Both scenarios are equally likely and both will have far-reaching ramifications. Every straw in logistics is another broken back. Luckily for our clients, Nelson International has decades of experience working with ocean carriers. From our perspective, we still need advance notice and flexibility, but with that, we can ensure your cargo is moving even if we have to look at different carriers or voyages. We have options. We have tight partnerships with carriers who are working hard to meet the demand for ocean equipment and drayage. If you’re looking for solutions for the holiday season, reach out to your Nelson International representative to hear how we’re making your logistics plan stronger.

Container congestion, let’s talk about it for a quick minute. While it might seem irrelevant to you or that you have no idea what I am talking about, this topic is impacting you either directly or indirectly every day. If you have braved the outside world to shop from a physical cart compared to your digital one, you might notice that stores have large swaths of empty space on shelves, or maybe you’ve been looking to buy a new car, but prices are high and options are limited. Why is that? No clue? Don’t worry, the class is in session! Econ 101 In economics, there is a nifty principle called “supply and demand.” But what happens when said supply is unavailable while demand stays consistent or increases? Prices increase, or in some cases, the products become unavailable. Currently, this is not being done by dastardly folks who want to keep you from your favorite towels at Target or jack up the prices to pad the bottom line. It is a direct result of global container congestion. Bottlenecked Okay, so what is “container congestion” you ask? Simply said, cargo is being bottlenecked in the supply chain. But as with anything, it’s not that simple. There are so many containerships at ports of entry around the world filled with goods ready to be offloaded, but there just aren’t enough people to unload or places to put the goods once they are received. Even when cargo has been unloaded, finding equipment and transportation to move it within the domestic portion of the supply chain is problematic. We have seen both shortages in trucking and embargoes on rail that have exacerbated the issues at ports of entry, compounding the problems tenfold. How it Started It’s easy to see the main antagonist of this story; COVID-19. Once the pandemic hit, the majority of consumers made a run on supplies (remember how scarce TP was back then?) and then shifted to eCommerce for most of their shopping needs. The unexpected skyrocketing of eCommerce and overwhelming demand for supplies caused a shock to most supply chains. How it’s Going This shock has yet to be alleviated and as stated previously, the global supply chain has yet to have a chance to breathe or catch up from the impacts of early 2020. Even with ports shutting down overseas due to continual outbreaks of COVID, our own battle with the variants along with the backlog and lack of space and equipment are continuing to overwhelm the ports and keep supply chains strained. There are no quick fixes to the ongoing logistics issues facing the globe right now. Container congestion is here to stay, at least into 2022 according to some experts, and with that comes price volatility, fewer options while shopping, but more importantly a need to remain educated and patient. Things will get better. When? No one is quite sure. But it’s only a matter of time. 

After ten consecutive months of record-breaking numbers, the port declares that the fiscal year of 2021 saw 3.2 million twenty-foot-equivalent units, a 16.8% increase over 2020. Early on it was a grave concern that the lingering impact of the pandemic around the world would be massive disruption and issues for ports especially. Record import levels in the United States crashed against a lacking infrastructure for rail and truck movements that quickly exhausted warehouse space on the west coast. East coast ports also experienced congestion and overwhelming numbers, as evident by numbers released by Norfolk, a port that was luckily upgraded significantly in the years leading up to 2019 – an example of perfect timing if ever there was one. “The colleagues and partners of The Port of Virginia rose to the challenge. For much of the fiscal year, we were handling record volumes under COVID-restricted conditions, and we did so safely, swiftly, and sustainably. We consistently handled record-breaking volumes at industry-leading performance levels.” Stephen A. Edwards, the Port of Norflk’s CEO and Executive Director. It also deserves to be mentioned, that this year’s peak season had not even occurred before the FY2021 numbers were calculated. As we haven’t quite moved into the peak season as of the publishing of this blog, we’re expecting the next year of numbers to be even more explosive when the accumulation of peak, holiday, and consistent record-setting levels are maintained at least through 2023. Despite the good news for our home port, it’s rough on the ocean freight side these days and those issues plague the other modalities. Air cargo capacity is tight with rates steadily climbing and retrieval of cargo slower than ever before. Rail and truck delays are crushing the forwarders who are still lucky enough to get equipment and once again we’re looking at pandemic outbreaks that will cause delays with vessels leaving China. The domino effect will likely cause further disruption on the supply chain as we work to alleviate these problems. We at Nelson International are working diligently every day to continue serving our clients who are burdened by cargo issues with their ocean freight. Careful and creative planning along with advance notice and flexibility are the best way to keep ahead of the disruption, but despite best-made plans, contingencies are important if we need to pivot and make alternative arrangements. If you want to hear the ways we can help, contact your representative today.