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Airfreight Volume Surge Causes Worry Among Forwarders, Flight Cancellations Rise Amid Weather Issues and Staffing Shortages, President Biden Signs New OSRA Into Law.

Jun 23, 2022

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World’s largest cargo ship arrives in UK. The world’s largest cargo ship, the Ever Ace, has arrived in the UK to unload 3,267 containers. The vessel currently holds the record for the most containers loaded on a single ship. The 1,300ft (400m) ship is capable of holding up to 23,992 standard containers.

Three New FMC Initiatives Assist Shippers, Improve Supply Chain Performance. The Federal Maritime Commission (FMC) has established three new initiatives to continue to improve legal and regulatory compliance of regulated entities, provide enhanced assistance to shippers, and focus on remedies to supply chain problems. The Commission will establish a new and permanent International Ocean Shipping Supply Chain Program, re-establish the Export Rapid Response Team, and take steps necessary for carriers, marine terminal operators, and operating seaports to employ a designated FMC Compliance Officer at the direction of FMC Chairman Daniel Maffei.


Labor talks at West Coast ports cause fears among businesses. Labor talks between management and the International Longshore and Warehouse Union whose members load and unload the ships has businesses that depend on the ports up and down the west coast worried. The contract that covers about 16,000 members of the International Longshore and Warehouse Union working at the ports is due to expire July 1, and it’s unlikely a deal will be reached before that date. Management and the union issued a statement last week in an attempt to assure businesses that they’re ready and willing to keep working under terms of the existing contract.


New strategy for Uyghur importations released. The strategy for the enactment of the Uyghur Forced Labor Prevention Act was released last week by the Department of Homeland Security. The purpose of the act is to strengthen the existing prohibition against the importation of goods made wholly or in part with forced labor into the United States and to end the systematic use of forced labor in the Xinjiang Uyghur Autonomous Region. Read the strategy to prevent the importation of goods mined, produced, or manufactured with forced labor in the People’s Republic of China here.

President Biden signs new OSRA into law. President Biden signed the Ocean Shipping Reform Act of 2022 (OSRA 22) into law on June 16, the first significant change to OSRA in 20 years. The bill revises requirements governing ocean shipping to increase the authority of the Federal Maritime Commission (FMC) to promote the growth and development of U.S. exports through an ocean transportation system that is competitive, efficient, and economical. The legislation also prohibits common ocean carriers, marine terminal operators, or ocean transportation intermediaries from unreasonably refusing cargo space when available or resorting to other unfair or unjustly discriminatory methods.


States receive funds to reduce truck crashes. The Biden administration recently announced a record allocation of $463.5 million for Motor Carrier Safety Assistance Program (MCSAP) grants administered by the Federal Motor Carrier Safety Administration to help prevent truck crashes. The funding for states and U.S. territories in 2022 level is a 52% increase from 2021. “FMCSA’s core mission is safety, and our work supports the U.S. Department of Transportation’s comprehensive National Roadway Safety Strategy working towards zero fatalities on our roadways,” said FMCSA Deputy Administrator Robin Hutcheson, in announcing the latest funding in early June. “MCSAP grant funding is an important tool to help reduce large truck crashes by supporting critical safety programs in every state.” Texas, California, and Florida were the top recipients of the funding, receiving over 20% of the money available in the program.

Cummins says that hydrogen is the future of trucking. Executives at engine Cummins Inc. believe that high fuel prices could compel fleets to take a long term look at hydrogen and electric-powered vehicles. “I think we’re all faced with the growing cost pressure of both diesel and gasoline — it’s a reality, and for many of our customers it’s about their business bottom line,” said Jennifer Rumsey, president and chief operating officer of the Indianapolis-based company, during an appearance on Transport Topics’ Newsmakers program. “There may be a place where this will drive a shift, where customers will consider alternative fuels and different fuels.” Cummins sees hydrogen-fueled trucks as suited to long-haul trucking, while EVs are more tailored to regional and final-mile delivery routes, Rumsey says. She noted that a broad transition will take time, and will come with cost and engineering challenges.


Canadian National Railway confirms IBEW member strike. Operations are continuing at Canadian National Railway (CN) after members of the International Brotherhood of Electrical Workers (IBEW) went on strike last week. CN says that it has deployed a contingency plan that allows for the maintenance of normal levels of safe rail operations across Canada and allows the railway to serve its customers for as long as required “While the company is disappointed with the current situation, CN remains committed to finding a resolution and it continues to encourage the IBEW to end its strike through an agreement or through binding arbitration,” CN said in a release.


Airfreight volume surge causes worry among forwarders. The Airforwarders Association says that forwarders need to be prepared for a volume increase in air freight loads, according to AircargoNews. Brandon Fried, the executive director of the Airforwarders Association says that the forecasted surge in demand for US air cargo capacity will be largely driven by a lack of sailings with ocean suppliers, but air cargo forwarders must “learn to be adaptable” in the current climate of already constrained airfreight capacity. Fried also told members of the Los Angeles Air Cargo Association (LAACA) that although global air cargo capacity is increasing, the US capacity crunch will be driven by a perfect storm of canceled China to US sailings, congestion at US airports, limited warehouse space, the labor shortage and rising inflation.

Flight cancellations rise amid weather issues and staffing shortages. Airlines canceled more than 35,000 flights last weekend— 6% of the total scheduled on Thursday and 5% on Friday. Flight cancellations have risen to 3% of all US-scheduled flights in 2022 compared to 2% in 2019, according to FlightAware data. Weather and staffing issues have been the main causes of cancellations, according to Business Insider.


Chinese oil imports from Russia soar in May. Reuter’s reports that China’s crude oil imports from Russia soared 55% from a year earlier to a record level in May, displacing Saudi Arabia as the top supplier, as refiners cashed in on discounted supplies amid sanctions on Moscow over its invasion of Ukraine.

Devastating earthquake hits Afghanistan. Disaster management officials say that the death toll from an earthquake in Afghanistan on Wednesday hit at least 1,000, with more than 600 injured and the toll expected to grow. Hundreds of houses were destroyed by the magnitude 6.1 event, which occurred at a depth of 51km (32 miles). It is the deadliest earthquake to strike Afghanistan in over 20 years and a major challenge for the Taliban.


Raw material costs for electric vehicles doubled since 2020. According to a new report from AlixPartners, raw material costs for electric vehicles more than doubled during the coronavirus pandemic, forcing automakers from General Motors and Tesla to start-ups like Lucid and Rivian to significantly raise prices on new vehicles. As of May, average raw material costs for an EV totaled $8,255 per vehicle, up 144% from $3,381 per vehicle in March 2020. EV-specific costs have increased to $4,500 from roughly $2,000 in the past two years.