Table of contents
Topic of the week:
The strikes along the Canadian West Coast continue to disrupt operations at the Port of Vancouver and the Port of Prince Rupert, two of Canda’s busiest ports. The strike began on the 1st July as disagreements over a new contract arose between the International Longshore Warehouse Union (ILWU) and the British Columbia Maritime Employers Association (BCMEA). Initial talks before the strike start date took place in an attempt to resolve the issue without the need for strike action, however negotiations failed. The strike is now entering its 14th day, and an estimation from the Railway Association of Canada has warns that for every day the strike continues, it could take between three and five days for networks and supply chains to recover from its effects.
Ocean carriers are now beginning to put plans in place, in order to change services and divert vessels away from the affected Canadian ports. Carriers are now looking at American alternatives, and two vessels in particular have already confirmed that they will be leaving the Canadian ports and will not be returning, exclusively calling at USA ports. However, ILWU U.S. workers have confirmed that they “will not be unloading Canadian bound cargo in solidarity with our Brothers and Sisters in ILWU Canada,” as they are the only workers authorized to work on the diverted vessels calling at USA West Coast ports.
This could have a knock-on effect causing congestion at USA ports too. The whole situation is causing retailers and supply chains to worry as peak season begins to roll in and back-to-school items are being transported. Negotiations have begun again but it seems that the two parties are still far from reaching an agreement with little to no compromise.
There are also warnings of inflated freight rates and charges as demand increases as a result of the strike action, leading the Airforwarders Association (AfA) to speculate whether air carriers can expect an influx of air cargo. As of yet, there has not been a modal shift from sea to air cargo, but with the warning of further disruption, airports and carriers may want to prepare for diverted cargo. The executive director of AfA, Brandon Fried, mentioned in Air Cargo News that the AfA will “monitor the situation closely and consider diversions to other destinations if the strike drags on,” and that “we may not see a substantial impact until next week.”
Currently the ILWU and the BCMEA have been given a draft resolution by a federal mediator. Both parties have 24 hours to decide whether they accept the proposal or not. This effort is in hopes that the strike can come to a quicker solution and open port operations up again.
Sea:
- Over the last two weeks China/East Asia to North America West Coast spot rates have increased by 9% from $1,209/FEU to $1,318/FEU according to Freightos data.
- China/East Asia to North America East Coast spot rates have risen over the last two weeks, increasing by 3% to $2,375/FEU.
- Global container spot prices have fluctuated over the last two weeks, and are now sitting at $1,290/FEU, a 0.5% decrease over the last two weeks, and a 79.8% decrease from spot rates in July 2022 according to the Freightos Baltic Index (FBX)
- China/East Asia to North Europe spot rates have increased by 2.6% over the last two weeks, now sitting at $1,299/FEU, says (FBX)
- More and more carriers are now equipping their dry fleets with telematics hardware, converting regular containers into “smart containers”. The addition of this hardware enables containers with tracking and monitoring capabilities and Drewry now estimates that by 2027 around a third of containers across carriers, will be converted into smart containers.
Air:
- Global Air Freight spot rates currently sit at $2.49, a slight decrease according to the Freightos Air Freight Index (FAX)
- Europe to Northern America spot rates currently sit at $1.81 (100-3000kg), says FAX, decreasing by 9.4%
- Europe to Central Asia spot rates have fallen by 7.5% currently sitting at $2.2 (100-3000kg), says FAX
- Europe to Asia, Greater China spot rates currently sit at $1.52 (100-3000kg), says FAX, a 3.7% decrease.
- The autonomous cargo airline startup, Ribbit has now been endorsed by the Canadian Government. Ribbit will now equip Transport Canada with their autonomous airline capabilities with a single fixed-wing airplane that will have the option to be piloted, as well as a remote crew and maintenance team. Ribbit has stated that it has gained a Special Flight Operations Certificate for flight testing without a pilot on board.
- The company Jettainer has now partnered with Lufthansa Cargo as it’s first customer to use the new fully certified fire resistant AMX ULDs (Unit Load Devices). This latest development in ULDs has been fully certified to the most recent FAA TSO C90e specifications, and have been built to contain a fire for up to six hours. This is in an attempt to provide further levels of safety for cargo aircraft and allows crew sufficient time if they were to ever need to re-route or land in an emergency.
That’s all for this week’s update…
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