Welcome to our May Supply Chain Update, where we bring you the latest news and insights from the world of importing. We are highlighting key news stories to global supply chains, risk management, emerging trends, and sustainability. We aim to provide relevant and up-to-date information to help you succeed in your importing endeavors. Your feedback and suggestions are always appreciated.

Read more about this topic and others in the May 2023 Newsletter HERE.

As many seasoned importers know, it’s critical to start planning for the Chinese New Year (CNY) holiday far in advance. In addition to CNY, COVID-19 has resurged in China, and booking delays and cancellations are dramatically increasing.

Factories will shut down for several weeks and ocean carriers are expected to reduce their capacity for the month after the Lunar New Year ends. After they reopen, it takes at least a few more weeks to get back up to full production capacity. In addition to these delays, COVID is causing bookings in some regions to be pushed back toward the second half of January and early February, seriously increasing port congestion and blank sailings.

Though the Chinese New Year shutdown and COVID can be a time of stress for many businesses that rely on suppliers in China, it doesn’t have to be. Give us a call to help you navigate the import and supply chain process for a successful new year!

If you have any questions, don’t hesitate to contact us.

Thank you to Dan Mulligan of GCT Global for giving the NY-NJ Foreign Freight Forwarders and Brokers Association, including myself, a tour of the GCT Bayonne and providing us with a better understanding of the difficulties the terminals are facing. We are excited to see they are taking a proactive approach to the increase of imports and sharing ideas on how to improve.

We now have a better understanding of some of the difficulties the terminals face in moving cargo. They are currently building out another berth off the pier so they will be able to add another ship. You can learn more about these improvements by clicking HERE.

We are working on getting out to visit all the terminals in the NY/NJ area over the next year. Unfortunately, most terminals shut down their tours during the winter months, but we look to continue in the Spring 2023.

The Port of New York and New Jersey (PANYNJ) will implement a container fee on any long-dwelling import or export containers. The goal of the tariff is to reduce an excess of empty containers dwelling at the port and free up space for container pickup. It includes both loaded and empty containers.

The Quarterly container imbalance fee, announced Tuesday morning, will be effective as of September, 2022, pending a mandatory 30-day federal notice.

“The Port of New York and New Jersey is facing record import volumes, leading to empty containers accumulating in and around the port complex. They are now affecting the regional supply chain that is already under stress from various sources across the country,” said Port Director Bethann Rooney. “We emphatically encourage ocean carriers to step up their efforts to evacuate empty containers quicker and at higher volumes to free up much-needed capacity for arriving imports in order to keep commerce moving through the port and the region.”

In addition to the tariff, the port is setting mandatory container export levels.

Under the new rules, ocean carriers’ total outgoing container volume must equal or exceed 110% of their incoming container volume during the same period. If they fail to achieve this, the ocean carriers will be charged $100 per container of imbalance. Rail volume is not included.

The PANYNJ said the fees will offset the costs of providing additional storage capacity and other handling expenses due to “the glut of empty containers.”

A surge in Omicron variant infections has prompted Chinese authorities to lock down residents, close factories and stop truck traffic, snarling already frayed supply chains. As officials scramble to contain the country’s worst outbreak of Covid-19 since early 2020, they are imposing lockdowns and restrictions that are adding chaos to global supply chains.

The measures in China, home to about one-third of global manufacturing, are disrupting the production of finished goods. Trucks are being delayed by the testing of drivers. Container rates are rising as ships wait for many hours at ports and products are piling up in warehouses.

Please feel free to review the below graphic for Chinese Province updates.

As we are sure you are aware, many importers (and exporters!) are experiencing continued and growing supply chain challenges.  Persistent port and rail ramp congestion, container chassis shortages, excessive detention and demurrage fees from carriers, and upheaval among air cargo service providers are all contributing to this mess. As a client or associate of WB Skinner, we want to keep you informed of the current situation and provide you with the following updates. Terminal Delays Most terminals are experiencing moderate to severe congestion issues and delays. Unprecedented high volumes essentially everywhere, critical labor and equipment shortages, and reduction in yard space and downstream warehousing capacity are all contributing to this backup.

• On the East Coast, NY/NJ vessels are averaging wait times of up to two days, while Savannah can expect delays of 2-4 days and the remainder of the East Coast Ports project delays from four to as long as 16 days.

• West Coast vessel arrival waiting times range between 26-38 days. Imports into smaller ports such as Seattle and Oakland should expect delays from 3-15 days.

• In the Gulf, Houston wait times are up to 10 days, and can be further compounded by weather events.

Warehouse and Storage Capacity While the log jams at West Coast ports have gotten much media attention, a glut of containers is stacking up at the ports, indicative of one of the newest struggles in our supply chain. For the year to August, imports at the port of New York and New Jersey were 26.4 per cent higher than for the same period in 2020. The warehouses where those container loads would normally head first before being distributed are struggling to meet the unprecedented demand. According to the Financial Times, warehouse operators problems are compounded as they face shortages of everything they need to run their facilities efficiently, from racks and balers to forklift trucks and staff. Equipment Shortages Unprecedented chassis shortages continue in essentially all major terminals, including New York/New Jersey, Los Angeles/Long Beach, Philadelphia, St. Louis, Columbus, Cleveland, Chicago, Memphis, Atlanta, Nashville, and Louisville. Additional equipment availability remains an issue at Atlanta, Chicago, Cincinnati, Columbus, Detroit, Kansas City, Minneapolis, Memphis, Nashville, Omaha, St. Louis, South Florida, and Seattle. WB Skinner at Your Side Unprecedented challenges are all-encompassing, affecting ports, carriers, railroads, and trucking throughout the United States. As the front-line representative of your supply chain, please be assured that we will do our very best to help your business successfully navigate through this difficult period. If you have any questions, don’t hesitate to contact us.

While the log jams at west cost ports has gotten much media attention, a glut of containers is stacking up at the Port of New York and New Jersey, indicative of one of the newest struggles in our supply chain. Rebounding consumer demand has led to record imports through US ports on both coasts and strained every link in the supply chain, including warehouse space.

For the year to August, imports at the port of New York and New Jersey were 26.4 per cent higher than for the same period in 2020. The warehouses where those container loads would normally head first before being distributed are struggling to meet the unprecedented demand.

According to the Financial Times, warehouse operators problems are compounded as they face shortages of everything they need to run their facilities efficiently, from racks and balers to forklift trucks and staff. This equipment is caught in the same shipping delays as other imports.

Since our company operates in the middle of the supply chain, on your behalf, we must contend with untangling these persistent transportation logistics challenges the best we can. WB Skinner is leveraging our decades of experience and industry relationships to help meet clients’ needs for temporary warehousing and distribution of merchandise on the east coast.

We also offer our New York and New Jersey area importers a unique container strip and ship service. We unload the merchandise from the container, separate and load the cartons or drums onto new pallets by batch number, and shrink wrap it. Once it is all shrink wrapped, we arrange for a trucker to pick it up and schedule a delivery to your customer’s loading dock.

We are continuing to monitor these updates and doing our utmost to overcome these hurdles by communicating our collective frustrations to the nation’s container ports and carriers, as well as to the U.S. Federal Maritime Commission, which has taken great interest in this matter. Collectively, our goal, like yours, is to find a quick and sensible resolution to our nation’s troubled supply chain.