6/4/2020

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Dear Value Client

First and foremost - Please stay safe, look after yourselves, and others. Follow the guidelines, and don’t venture from home unnecessarily - We all need to play our part.

As you’re no doubt aware BRi is classified as an essential service, so this see the BRi team operating remotely whilst in Level 4 lockdown, but it remains business as usual albeit in a new normal for us.

We remain fully contactable on all the usual email and phone numbers and continue to actively manage your supply chains over this time.

We’re very conscious of not wanting to overwhelm people with too much information now, so we are trying to balance the need to pass on relevant information verses the seemingly nonstop updates we’re receiving from the industry, and partners.

A couple of recent updates from US Partners are below for your reference. Many of the local point’s highlight apply on a Global Origin/ Destination basis. We also have some positive news to pass on in terms of local liner detention charges – As per the enclosed Liner updates that we have received over the past couple of days, Liners are beginning to announce Detention waiver programs. Please note that this applies to Detention and they do not extend to Demurrage as these charges are controlled by the various Port Companies. We will keep you updated as other lines advise their policy’s according.

BRi USA News - Passenger Airlines Morph into Cargo Carriers

With freight capacity scarce, the number of passenger airlines offering dedicated charter flights is proliferating.

More passenger airlines are helping fill the severe shortage in freight capacity by turning their aircraft into cargo-only airplanes to haul critical medical supplies, foodstuffs and other economically essential goods. The rapid implosion of air travel as countries closed borders to contain the coronavirus outbreak forced airlines to ground most of their fleets, especially widebody planes used in intercontinental service. Lower-deck space in passenger planes represents about half the worldwide capacity for moving goods – and even more between North America and Europe.

With one million flights cancelled through June 30, there aren’t enough all-cargo planes to make up the difference and air freight rates are shooting up as a result. A one-way charter for a full freighter on key routes can cost up to $1 million today, four times the rate before the crisis, according to industry experts.

Airlines are relying heavily, but not exclusively, on large aircraft such as the Airbus A350, and the Boeing 777 and 787 that carry huge amounts of cargo even when loaded with passengers and baggage. Much of the activity at present is trans-Atlantic, but airlines are also dispatching cargo-only flights between North America and South America, and Australia, and between Europe and Asia. Some carriers are being creative by putting cargo in the seats of the passenger compartment, secured by netting and other restraints, to maximize efficiency. And a few are offering multi-party, less-than-full aircraft charters for importers and exporters that don’t have enough volume to rent an entire plane.

 

Airlines making the shift to utilize passenger airplanes include Air Canada, Lufthansa, United Airlines, Delta Airlines, American Airlines, LATAM Airlines, Virgin Atlantic, Etihad Airways, Air New Zealand, China Eastern Airlines, Cathay Pacific and International Airlines Group (IAG, parent company of British Airways).

While not every plane is equipped with the safety mechanisms to carry all cargo, such as pharmaceuticals, airlines are doing their best to accommodate as much cargo as possible. For more information on flight availability, please reach out to your assigned BRi representative  

Additional Section 301 Product Exclusions Announced, Select Medical Supplies Included

The United States Trade Representative has announced additional exclusions from the China Section 301 tariffs for List 4 goods. Included in this round of exclusions are 7 product specific exclusions and five 10-digit HTS codes. The provisional HTS code is 9903.8844 for these exclusions that are retroactive to September 1, 2019 and remain in effect until September 1, 2020. Importers should review the newly excluded products and apply for refunds of any tariffs paid on such goods since Sept. 1, 2019. Importers may utilize these exclusions for any product that meets the descriptions in the USTR notice, even if they did not request it.

Port Status Update

Philippines – Manila Ports

This week we received second-hand reports that South Terminals in Manila were possibly affected by Labour action associated with COVID-19. This morning we learned those reports were inaccurate and can report:

• All ports are operating normally and regularly.
• The PHL Bureau of Customs is on skeletal work force, thus, the processing and releasing is delayed, but functional.
• All mass transport has been suspended, thus, causing some transit delays.
• The PHL government has given the directive - "cargo must move unhampered."  

China/Hong Kong/European Ports

Note that our carriers have informed us that all China/Hong Kong ports are open and operating at normal levels, excluding Wuhan, which is still awaiting approval from local authorities to reopen. European ports are also open and operating at normal levels, excluding Le Havre, which is experiencing some port congestion.  

Pile Up of Non-Essential Cargo at US Ports Raises Alarms

Even as China’s manufacturing comes back online, shippers faced with plummeting demand have begun a process of slowing the supply chain — cancelling orders, requesting containers not be loaded on ships, and seeking to store cargo at destination ports. With demand in major consumer markets such as the United States evaporating due to the coronavirus disease 2019 (COVID-19), a potentially major backup of loaded containers throughout the US port system may be starting to take shape. The early signs are manifested by some of the largest ports along the US East Coast now scouring available land to boost temporary storage capacity on or off terminal grounds.  The demand is growing as some retailers and manufacturers fail to pick up containers because warehouses are full or closed due to not being deemed essential service providers responding to COVID-19, or because retailers have requested delayed deliveries at distribution centres. Although the situation remains fluid, ports are warning that because all US import gateways may be simultaneously facing the same situation, a bottleneck of national proportions may be beginning to take shape.  Some retailers and manufacturers are choosing to risk demurrage penalties rather than accept containerized goods and materials they’ve ordered, while others may have to accept demurrage penalties due to their inability to deliver to customers. This speaks not just to the threat of port congestion, but the scale in which COVID-19 has upended consumer and manufacturing demand. US importers this week triggered a wave of cancelled, reduced, and postponed ocean shipment bookings for April, but with Chinese factory production recovering, ships from China to North America are beginning to sail at full capacity. Below is a general overview of the operations BRi USA has been able to gather for most major U.S. ports. This list will be updated as information is made available. Port of Los Angeles/Long Beach - The ports of Los Angeles and Long Beach are generally fluid now, but in late February congestion began building after carriers responded to reduced Chinese production tied to COVID-19 by blanking sailings. With outbound vessel space being reduced, terminal operators told beneficial cargo owners (BCOs) and truckers not to return containers to their facilities once they were emptied for fear the terminals would be overwhelmed with empties. The port has reviewed their space and stated they have plenty of space to store containers, as well as the terminal tarmacs also have ample space.  Port of Baltimore – Low cargo volumes have triggered a holiday closure March 30-31, but the port operator will open an hour early (6:00 a.m.) April 1-3. Port of New York/New Jersey - The Port Authority of New York and New Jersey is talking to warehouse owners and operators to gauge their vacant capacity and considering options to provide additional storage space.   Port of Virginia (Norfolk) - The Port of Virginia has sufficient storage space to accommodate the additional volume and does not anticipate needing to adjust operations for a potential surge.  Port of Miami – Open and operational as usual. Effective Monday, March 30, the terminals will no longer supply truckers with Haz Mat or Dangerous Goods documents at the terminal in an effort to maintain social distancing. Truckers must have these documents prior to arriving at the terminal.  Port of Georgia (Savannah) - Georgia Port Authority is opening a new space at the Garden City Terminal in Savannah where 11,130 TEU can be stored. There’s already capacity in the new space for nearly 5,000 TEU, and the other 6,000 TEU of capacity will be added by mid-April.

As a valued customer of BRi, we appreciate your business, and we will continue to source the best options for your supply chain needs now and into the future.

Stay safe.

Keeping You Informed!

BR International 

 

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