DoD/Government Personal Property Experts: This is our monthly update of International Logistics issues.

 

The report provides situational awareness on issues and realities on the ground and where you might see shipment delays, and why.  And where situations improve, that will be noted as well.  Monthly changes will be noted in red. 

 

 

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Trucking

 

September ‘23

YTD Diesel Cost: Diesel prices continue to rise sharply

 

 

 

September ‘23

Trucking Rates: WEEKLY SPOT RATES

 

 

 

September ‘23

Trucking Rates:  Spot market TL rates appear to have bottomed:  the question now is how long they

Roll along the bottom before they rise.  In a highly (but regularly) cyclical market, we are at the trough.

 

 

Ocean Services:

 

It should be noted that all of the issues and delays outlined in this report do not affect MHHG any differently than they do other commercial cargoes.  There is some priority given by the ocean carriers to accommodate the timely release of MHHG at most US ports.  But, for the most part, MHHG are affected by the same factors and caught up in all of the same delays as other cargoes.

 

Ocean

 

Ocean container volumes continue down in all lanes, along with related reductions in port and rail congestion.  Peak season this year saw none of the supply chain related problems.  While the early part of the peak still saw some congestion at North Europe ports, this has now subsided.  And, as noted, North Europe port delays never seriously affected military household goods (MHHG).  There have been issues with specific vessels.  APL had an 11 day delay off of the US West Coast to Asia this past month due to an engine breakdown.  Maersk line has had to delay two vessels in the past month in their North Europe service due to urgent vessel repairs.  The ARC service to and from North Europe has had limited space for MHHG over the past ten months due to the priority they give to military unit cargo and the significant need DOD has had for ARC space over this period.  However, the container carriers (Maersk and Hapag Lloyd) easily accommodated the additional volumes. 

 

Following the settlement of the west coast labor agreement, volumes to and from west coast ports have started to increase on a monthly basis, as cargoes diverted to the east coast ports are shifting back to the same extent.  Nevertheless, east coast ports continue to be busy and it is as yet unclear how much west coast ports will return to pre-pandemic and pre-labor negotiation volumes.   We believe that the lessons which importers learned from the pandemic will result in a more balanced distribution of Asia freight among east and west coast ports.  While southern California ports will disagree, this is a good thing in the larger sense of the overall supply chain.   

 

As previously noted, APL has been dry docking some vessels this year as part of scheduled vessel maintenance.  This created a gap in their US flag Asia schedule from mid-July, affecting both the APL Asia service and Maersk Line, who also ride the APL vessels and had some effect on shipments to and from Japan and Korea.  This was, in addition to the slower speed schedule that APL has been employing since early this year, resulted in a 49-day service rotation versus the prior 42 day rotation and created a gap every six weeks.  Because APL gave notice of this to the trade well in advance, port agents were able to adjust and we do not believe this caused any major delays to MHHG over this period.  APL has now advised that they expect to be revamping their service starting with new vessels early in 2024 which will eliminate this gap entirely.

 

Panama Canal

 

There are concerns that a continued drought in Panama is going to limit the draft of vessels that transit the Panama Canal.  The canal depends upon water from Lake Gatun to operate the locks at both ends of the canal.  Water levels at the lake have been dropping, causing authorities to implement water saving measures and draft restrictions.  Draft restrictions limit the amount of cargo a ship can carry through the canal, potentially driving up the cost of shipping overall.  Much of Central America, including Panama, has been in a significant drought in recent months. The start of El Niño could worsen those conditions.  While this has no direct or immediate effect on MHHG cargoes today, it could in future, if more Asia cargo is moved back to U.S. West Coast ports.  Draft limits through the canal continue but still no impacts reported to any household goods/US Flag services.

 

Chassis

 

 There are no reported chassis problems at any port or railhead.

 

North Europe:

• Direct US flag service is provided by Maersk Line and Hapag Lloyd (containers) and by ARC (breakbulk), as space is available.

• No congestion reported.

 

Italy:

• Maersk and Hapag Lloyd provide service to and from Italy.  Italy containers move over North Europe and transit via rail to and from Italy. 

• Customs issues in Northern Italy, due to the change to a Pordenone rail movement of containers, are still in the process of being addressed with Italian authorities.  Workarounds have prevented delays to MHHG shipments.  It should also be noted that the switch from a rail routing via Genoa to via Pordenone has taken time overall off of the transit.

 

Spain, Other Med and Middle East:

• Maersk provides service to Spain.  Maersk and APL both service the other Med destinations and the Middle East.  Maersk operates the service and APL rides the Maersk vessels.  Both operate their own feeder services into Turkey, Greece, Crete and Middle East ports.
• Maersk and APL both offer P2 service to and from Turkey, Greece and Crete.

• There are no current issues at Med or Middle East ports.

 

Asia:

• APL and Maersk provide ocean service to and from Japan and Korea.  APL operates the service and Maersk rides the APL vessels.  APL and Matson provide ocean service to and from Okinawa.

• Asia ports are operating normally at this time without any major delays or disruptions, although there have been some port closures for a day or two due to typhoons.

 

Hawaii:

• Matson and Pasha Hawaii serve Hawaii with multiple sailings during the week. 

• There are no current issues at Hawaii ports.

 

CONUS Rail:

• Rail dispatch and railcar availability is normal with no delays at any railhead.

 

Issues by Location:

  

Chicago:

• No delays reported.

 

Baltimore:

• Baltimore is served over Norfolk by US flag container vessels connecting to a weekly barge service between Norfolk and Baltimore.  The port is serviced directly by ARC with their breakbulk service.  Containers to and from Asia, Hawaii and Guam are railed into Baltimore via the Norfolk Southern railroad.
• No barge delays between Baltimore and Norfolk reported. 

 

Norfolk:

• Some berthing delays for larger vessels.  This is not affecting US flag service.

 

Charleston:

• No berthing delays reported.

 

Savannah

• Still some berthing delays of up to 4.5 days for some vessels.

 

Jacksonville: 

• No berthing delays reported.

 

New Orleans:

• The chassis shortage overall in New Orleans has improved but 45ft chassis remain in short supply.

 

Houston:

• No new issues or congestion reported.
• Berthing delays of 1 day reported.

   

 

Los Angeles/Long Beach:

• Labor
• No congestion reported.
• Intermodal rail containers dispatch from LA/Long Beach has returned to normal.  Average dwell is currently 3.5 days from discharge to dispatch on rail. 

 

• Vessel queuing:

 

• No congestion reported.

 

Oakland:

• No congestion reported.