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GT Podcast – Episode 129 – The Port Authority of NY & NJ – The Port That’s Doing Alot and Doing it Right

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GT Podcasts

GT Podcast – Episode 129 – The Port Authority of NY & NJ – The Port That’s Doing Alot and Doing it Right

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Welcome to another episode of “Logistically Speaking,” the podcast that delves deep into the pulse of global trade and logistics.  Today, we’re excited to welcome a very special guest, Bethann Rooney, the Port Director of the Port Authority of New York and New Jersey, one of the busiest and most significant ports in the United States.

In this episode, we will uncover why the Port of NYNJ stands out as a powerhouse in the global port community. Bethann will share her insights on how the port not only handles immense logistical challenges but does so with exceptional efficiency and innovation. We’ll explore the strategies that make this port a model of success, emphasizing sustainability and forward-thinking management.

Moreover, we’ll dive into a unique ecological concern—can a small marine organism actually threaten the accessibility of big container ships? This might sound minor, but it has the potential to create major ripples in global shipping logistics.

Stay tuned as we navigate through these fascinating topics, offering you a behind-the-scenes look at the complexities and triumphs of running one of the world’s most influential ports.

For more information on the Port Authority of NY & NJ, visit https://www.panynj.gov/port/en/index.html

Check out more of our GT Podcast – Logistically Speaking Series and more here!

GT Podcast Episode 127 Cover Art
GT Podcasts

GT Podcast – Episode 127 – North Carolina Ports – What it Takes to be North America’s #1 Most Productive Port

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In GT Podcast – Episode 127 of Logistically Speaking, we will speak with North Carolina Ports Executive Director, Brian Clark.  We will learn why North Carolina Ports has seized the #1 spot in North America for productivity, what advantages the port offers from an intermodal side of business, and why the heck are things turning so cold at the ports and businesses are loving it!

For more information on North Carolina Ports, visit https://ncports.com/

Check out more of our GT Podcast – Logistically Speaking Series and more here!

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3pls, Archives, Commentary, Global Logistics, Global Trade Daily

How to Make Cargo Movement More Sustainable and Efficient

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Nearly two years on, the pandemic and its effects on the supply chain are still going strong. The ability to move cargo has never been this severely impacted on such an ongoing basis. Several hub ports and gateway terminals are facing COVID-19 peaks due to high yard density, creating bottlenecks that back up arriving shipments on one side while wrecking delivery and distribution on the other.

As the queue of stranded vessels crosses 100 ships in Southern California ports, many export, logistic, and supply chain leaders are left wondering: Is this an indicator of things to come in the so-called new normal?

Thankfully, the short answer is no. Although port congestion — and supply chain disruptions in general — cause concern across governments worldwide, the good news is that they can be managed and even averted. All it takes is smart management, timely intelligence, and informed planning.

True Causes and Effects of Port Bottlenecks

Today’s rampant logistics disruptions in ports were exasperated by the pandemic, but the underlying supply chain issues aren’t new. One of the biggest mistakes businesses still make is the failure to plan for demand. When waiting times for container ships stretch to several days, the worst thing to do is send out another few thousand orders.

Despite decades of exacerbated logistics expenses due to unoptimized demand planning, however, businesses still haven’t prioritized effort and resources. Many continue to operate indiscriminately, receiving and fulfilling orders on an as-is, when-is basis with little thought given to optimizing effort and spend.

This results in larger unsold inventory piles, greater operational costs, and higher CO2 emissions. In fact, pollutant emissions in the four largest shipping ports in the world have increased 79% since the pandemic began. By 2050, scientists estimate maritime shipping will account for 17% of global annual CO2 emissions.

Obstacles in the Way of Sustainability

Although prioritizing a lower carbon footprint in maritime transportation and logistics isn’t difficult, it’s only possible with full, real-time visibility into supply chain operations. But modern supply chains are under immense pressure from start to finish.

On one hand, there is the perpetual challenge of rising costs and slimmer profit margins. On the other is the challenge of growing demand for more everything in less time. As if those issues aren’t enough, supply chains are becoming increasingly complex over time, as consumers now have multiple routes to market. Businesses throughout the supply chain must cater to each of these channels.

Finally, there is the constant pressure of growing environmental and sustainability regulations. As consumers become more ethically aware and resources become more scarce, regulatory bodies across the globe are cracking down on businesses to adopt less wasteful, more sustainable approaches to operations.

Regardless of these forces, however, one truth remains unchanged: As customer demand evolves, the need for speed, quality, and a superlative experience grows. The only way to address these issues in maritime shipping is to maximize value across the supply chain. When material flow is lean and streamlined, it allows for highly optimized operations at an end-to-end level.

Steps to Fix Unsustainable, Inefficient Shipping and Supply Chain Chaos

By producing just enough to cater to demand, companies can minimize environmental impact. In doing so, they can cut down emissions and excess inventory across the entire supply chain. Additionally, companies should make the most of limited inventory availability with minimal changeovers while prioritizing the minimization of their carbon footprint.

Imagine a pullback car that’s zipping ahead. Before it goes five seconds, another car is sent hurtling right after the first. This goes on until there’s a pileup that looks shockingly like rush-hour traffic on a Monday morning. Now, think of the same thing happening with order shipping and maritime transportation.

The pileup can be averted by increasing the window between two consecutive orders and collating more orders into a single shipment. To make the shipping process more sustainable and efficient, export, logistics, and supply chain businesses can follow these steps:

1. Accurately predict demand.

When historical sales data is viewed with a host of related factors, such as order volume, purchase trends, product mix, and revenue, it reveals a clear pattern of demand. This makes it possible to predict demand accurately for the near term and different horizons. When you can predict demand proactively, you can efficiently plan resources to minimize waste and accelerate a smooth, continuous flow of goods and cash. Businesses should use AI to monitor and predict demand changes so they can focus on what will sell, thereby eliminating early production and over-ordering down to the exact location, increasing availability, and maximizing on-time, in-full orders.

2. Segment and prioritize feedback.

Once businesses know the demand they’re catering to, the next step is deciding on the order of priority when fulfilling that demand. This is where demand and customer segmentation play a key role. Prioritized grouping of orders ensures fewer shipments, lower logistics costs, and minimized disruptions in the supply chain.

3. Combine all data.

Traditionally, businesses have adopted a siloed approach to analytics and AI projects and enterprise-wide rollouts. This is a flawed approach, however, because business operations are continuous by nature. Therefore, compartmentalizing data only leads to a myopic view of a large planet. When operational data is viewed in continuity, it affords a big-picture look at optimization without impairing overall operational goals. Even better, it will likely improve those goals.

The maritime transportation and logistics industry struggles with a multitude of sustainability and supply chain challenges. Disruptions in planning and a lack of clear insight into customer demand result in over-ordering, over-stocking, and over-producing materials. This “over-everything” results in higher CO2 emissions, stock-outs, and millions of dollars in lost sales.

Port congestions and supply chain bottlenecks affect the local, regional, and global markets, so much so that the crunch on container capacity could last until Q4 2022 with container prices surging. Companies should look at reducing waste, transport, and CO2 to increase their material movements, free cash flows, gain competitive market advantages, and ultimately run more sustainable businesses.

Author’s Bio

Anita Raj is a seasoned technology thought leader and product marketing expert for building impactful go-to-market strategies for targeted markets such as Europe, the U.K., and the U.S. She is the vice president of product marketing at ThroughPut Inc., responsible for the vision, strategy, and execution of go-to-market and product marketing initiatives, including value proposition, product launches, customer marketing, and product life cycle marketing.

 

SC Ports handled 230,420 twenty-foot equivalent container units (TEUs) at Wando Welch Terminal, North Charleston Terminal and Hugh K. Leatherman Terminal in February, up 26% year-over-year.
Archives, Global Trade Daily, Imports/Exports, Ocean Ports

12 Consecutive Months of Record Volumes at SC Ports

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South Carolina Ports had a record February for containers handled at the Port of Charleston.
SC Ports handled 230,420 twenty-foot equivalent container units (TEUs) at Wando Welch Terminal, North Charleston Terminal and Hugh K. Leatherman Terminal in February, up 26% year-over-year.
SC Ports has moved more than 1.87 million TEUs thus far in the fiscal year 2022, from July through February, up 16% fiscal year-over-year.
Following the reports, Jim Newsome, South Carolina Ports CEO said “February marked the twelfth consecutive month of monthly year-over-year container records at SC Ports. With record throughput volumes, we continue to experience a high number of import containers awaiting delivery on our terminals. We remain focused on creative solutions and executing our vital infrastructure projects, including the completion of the Charleston Harbor Deepening Project this fall, initiating construction on the rail-served Navy Base Intermodal Facility and inner-harbor barge project, and advancing towards quick completion of the Inland Port Greer expansion project.”
SC Ports handled 127,492 pier containers – which accounts for containers of any size – in February, up nearly 26% from a year ago.
Thus far in the fiscal year 2022, SC Ports has moved 1.04 million pier containers, up nearly 16% fiscal year-over-year.
In February, SC Ports handled 119,582 loaded import TEUs, up 46% from last year as retail imports continue to drive sustained cargo growth. Simultaneously, the Port handled 54,755 loaded export TEUs, down nearly 19% from the same month last year. As SC Ports experiences an increasing imbalance, loaded import volumes were more than double-loaded export volumes in February.
Newsome concluded “Together, with our teammates, broader maritime community and motor carriers, we continue to work through this unprecedented time of supply chain challenges. The strength of our port continues to be in our highly skilled workforce and how we adapt collectively to keep freight moving for our customers.”
About South Carolina Ports Authority
South Carolina Ports Authority, established by the state’s General Assembly in 1942, owns and operates public seaport and intermodal facilities in Charleston, Dillon, Georgetown and Greer. As an economic development engine for the state, Port operations facilitate 225,000 statewide jobs and generate nearly $63.4 billion in annual economic activity. SC Ports is soon to be home to the deepest harbor on the U.S. East Coast at 52 feet. SC Ports is an industry leader in delivering speed-to-market, seamless processes and flexibility to ensure reliable operations, big ship handling, efficient market reach and environmental responsibility. Please visit www.scspa.com to learn more about SC Ports.
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Archives, Global Logistics, Global Trade Daily, News, Ocean Ports, Uncategorized

Lineage Logistics Acquires MTC Logistics, Expanding Access to Ports on U.S. East and Gulf Coasts

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 Acquisition adds four cold storage facilities along the U.S. East and Gulf Coasts, including nearly 38M cubic feet and over 113,000 pallet positions. 

Lineage Logistics, LLC (“Lineage” or the “Company”), the world’s largest and most innovative temperature-controlled industrial REIT and logistics solutions provider, today announced that it has acquired MTC Logistics (“MTC”), a leading cold-chain provider with four strategic locations on or near the ports of Baltimore, MD, Wilmington, DE and Mobile, AL. Financial terms of the transactions were not disclosed.

Through the acquisition of these four facilities, Lineage will add nearly 38 million cubic feet of capacity and over 113,000 pallet positions in the United States. These facilities will add to Lineage’s existing footprint of over 400 strategically located facilities totaling over 2 billion cubic feet of capacity across 19 countries.

Greg Lehmkuhl, President and CEO of Lineage Logistics said “MTC Logistics’ strong presence at key ports along the U.S. East and Gulf Coasts and focus on best-in-class service and innovation will help better connect our customers to the global food supply chain. We look forward to welcoming the MTC team into the One Lineage family and leveraging their expertise to fulfill our vision of becoming the world’s most dynamic temperature-controlled logistics company.”

MTC Logistics, was a wholly owned subsidiary of Hoffberger Holdings, Inc. (“HHI”) a diversified privately held investment company of the Hoffberger family of Baltimore, MD. A fifth-generation family business and recognized as one of the International Association of Refrigerated Warehouses (IARW) North American Top 25, MTC provides warehousing services including blast freezing, import/export services, case selection, transportation/port drayage and storage between -20 degrees Fahrenheit and +40 degrees Fahrenheit.

Harry Halpert, Chairman of MTC Logistics and CEO of Hoffberger Holdings added “As part of MTC’s nearly century-long commitment to the refrigerated and frozen warehousing and transportation industry, we have always sought opportunities to be a warm, responsive and dedicated partner to our customers. Our customers and associates will benefit from Lineage’s scale and industry-leading technology, and we are fortunate to find a strong partner who shares our values and customer-centric approach.”

G2 Capital Advisors LLC and Whiteford, Taylor & Preston LLP served as financial and legal advisors to MTC, respectively.

About Lineage Logistics

Lineage Logistics is the world’s largest temperature-controlled industrial REIT and logistics solutions provider. It has a global network of over 400 strategically located facilities totaling over 2 billion cubic feet of capacity which spans 19 countries across North America, Europe and Asia-Pacific. Lineage’s industry-leading expertise in end-to-end logistical solutions, its unrivalled real estate network, and development and deployment of innovative technology help increase distribution efficiency, advance sustainability, minimize supply chain waste, and most importantly, as a Visionary Partner of Feeding America, help feed the world. In recognition of the company’s leading innovations and sustainability initiatives, Lineage was listed as No. 17 in the 2021 CNBC Disruptor 50 list, the No 1. Data Science company, and 23rd overall, on Fast Company’s 2019 list of The World’s Most Innovative Companies, in addition to being included on Fortune’s Change The World list in 2020. (www.lineagelogistics.com)

About MTC Logistics

MTC Logistics was a wholly owned subsidiary of Hoffberger Holdings, Inc. (“HHI”) a diversified privately held investment company of the Hoffberger family of Baltimore, MD. MTC Logistics operates four distribution centers with more than 38 million cubic feet of refrigerated and frozen space, serving the ports of Baltimore, MD, Philadelphia, PA, Wilmington, DE, and Mobile, AL.

Archives, Commentary, Global Trade Daily, Uncategorized

Top 5 Ports in Europe 2021

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Top 5 Ports in Europe 2021

In Europe, there are over 1,200 ports. For the next installment of PTI’s Top Ports series, we are whittling this down to the top five disruptors in the container sector for 2021.

Following on from our lists of ‘Top 5 Ports in India 2021’ and ‘Top 5 Ports in Australia 2021’, our attention now shifts to Europe.

To accumulate this list, PTI looked at each port’s container handling figures for calendar year 2021 and ranked them accordingly.

5. Port of Piraeus

Kicking off our list is the Port of Piraeus – the largest port in Greece. Port officials recently told PTI that a total of 5.3 million TEU passed through its facilities in 2021.

Situated on the outskirts of Athens, the port boasts several strengths, primarily its strategic position and infrastructure.

COSCO Shipping previously increased its stake in the Piraeus Port Authority (PPA S.A.) by 16 percent after an exchange event for the Letter of Closing II Arrangements was agreed on 25 October 2021.

The acquisition of the additional stake in the port authority raised COSCO’s stake to 67% and marked a milestone in China-Greece cooperation by allowing the Chinese company to facilitate the port’s further development.

Last year also saw Shanghai Zhenhua Heavy Industries (ZPMC) deliver three remote-controlled intelligent quay cranes to the Piraeus Container Terminal.

 

These were the first machines in Greece to operate with what ZPMC calls a “smart core”, which enables easier semi-automated container handling operations.

4. Port of Valencia

Last year, the Port of Valencia overtook the Port of Piraeus for the title of Europe’s fourth busiest port.

Overall, Valencia handled over 5.6 million TEU in 2021, up 3.25 percent compared to its performance in 2020.

“These figures show that the Port of Valencia has the beginning of saturation,” said Aurelio Martínez, President of the Port Authority of Valencia (PAV).

“We are close to our maximum capacity of 7.5 million TEU and, when there is a lot of operational cargo, these limitations are already noticeable. That is why the new northern container terminal is essential if we want to continue to be a port of reference in world traffic.”

Due to its strategic location and its dynamic area of influence, the port is a key player in Spain’s foreign trade.

One of the Port of Valencia’s main goals is to become the first port in Europe to use hydrogen technologies to reduce the environmental impact of its operations, aligning with its ‘Valenciaport 2030, zero emissions’ initiative.

Work has recently begun on the construction of its hydrogen supply station which will provide the necessary fuel to equipment across facilities. This plant is set to be located on the north quay, at a site known as Bracet de la Gità or Xità.

3. Port of Hamburg

Taking the next spot on our list is the Port of Hamburg.

Over the last year, the port handled 8.7 million TEU, up 2.2 percent compared to 2020.

As Germany’s largest container port, Hamburg utilizes four container terminals, providing an annual handling capacity of 12 million TEU. Numerous multi-purpose terminals also add to this capacity where conventional general cargo containerized goods are handled.

In September 2021, COSCO Shipping Ports Limited undertook a strategic investment to receive a 35 percent minority share in the Hamburger Hafen und Logistik (HHLA) Container Terminal Tollerort (CTT) in the Port of Hamburg.

Under this agreement, CTT became the “preferred hub” for COSCO services and where cargo flows have been concentrated since.

The port also signed an alliance with the Port of Valencia which sees both parties collaborate in the development of maritime projects, with emphasis on the promotion of hydrogen.

The alliance specifically focuses on projects of clean energy with support from the European Union. Both parties agreed to focus their efforts on hydrogen generation initiatives, storage stations, supply and transport, and the use of hydrogen in terminals and machinery.

2. Port of Antwerp

Just shy of the top ranking is the Port of Antwerp in Belgium.

In 2021, the port reportedly processed over 12 million TEU, despite facing several disruptions in the global supply chain.

“Despite the strong performance, 2021 was not an easy year for our port. Thanks to the resilience and world-renowned qualities of our port community, we have returned to the 2019 pre-COVID-19 [levels] after barely a year,” said Jacques Vandermeiren, CEO for the Port of Antwerp.

Located in Flanders, the seaport is in the heart of Europe and easily accessible by major vessels.

Back in October 2021, Antwerp partnered with aerospace company Sabca to conduct field trials of a fixed-wing drone fitted with cameras to assess the technology’s potential in providing real-time on-site security imaging.

1. Port of Rotterdam

Topping our list of ‘Top 5 Ports in Europe 2021’ is the Port of Rotterdam in the Netherlands.

A record number of 15.3 million TEU passed through the port last year, up 6.6 percent from 14.3 million TEU in 2020.

“In terms of throughput volume, the port is back to its pre-corona level. Companies in the container sector, in particular, performed excellently, handling a record number of containers despite all the problems this sector faced worldwide last year,” said Allard Castelein, CEO of the Port of Rotterdam Authority.

“We are now investing in the construction of additional terminal capacity on the Maasvlakte to further facilitate the container sector. I am also optimistic in other respects.”

One of the port’s core aims is to attract, facilitate, encourage, and accelerate innovation and renewal so it can grow into the smartest port in the world.

This can be seen in the recent implementation of its Smart Mooring Solution. Rotterdam revealed in a social media post that the software is able to predict the impact that storms and adverse weather will have on moored vessels.

In June of last year, the port authority also launched a pilot project to further optimize port and supply chain process efficiency and safety, as part of efforts to digitize operations.

In a statement, the port authority said the target is to make customs processes more efficient and will involve working closely with shippers, customs agents, terminals carriers and other supply chain stakeholders.

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Archives, Global Logistics, Global Shippers 101, Global Trade Daily

GLOBAL SHIPPING CRISIS: NO QUICK FIX

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With spring only a short time away, the shipping and logistics crisis continues to wreak havoc throughout the global supply chain, showing little sign of relenting. While recent data from the Federal Reserve Economic Data (FRED) and Descartes Datamyne™ point to a slight softening of economic indicators (although not enough to suggest a change in the levels of disruption), U.S. import volumes continued to break records in January and amplify supply chain and logistics challenges.

The big picture reveals ports are still struggling to handle the increased import volumes, as the pandemic continues to limit consumers’ service-based expenditures in favor of durable and non-durable goods purchases. Factors such as lengthy port wait times, labor and container shortages, the backlog of containers waiting to be emptied or transported, and the uncertainty of the impending International Longshore and Warehouse Union (ILWU) contract negotiations continue to disrupt the supply chain.

With no clear indicator of when the pressure on supply chains and logistics operations will begin to lift, importers and logistics service providers (LSPs) must hold the line as they contend with ongoing supply chain challenges.

SHIPPING VOLUMES SHIFT TO EAST COAST PORTS

While November and December 2021 showed a slight decline in U.S. import container volume, January 2022 rebounded to post a record volume of 2.47M TEUs. Compared to January 2021 and pre-pandemic January 2020, January 2022 volumes increased 3% and 14%, respectively, placing further strain on an overwhelmed global supply chain.

In an attempt to mitigate the impact of record-breaking import volumes, LSPs and importers continue to shift volume eastwards, away from the major West Coast ports. Container import processing declined for the third month in a row at the Port of Los Angeles, down 1.3% in January 2022—and down 25.4% since its high in May 2021.

On the opposite coast, the Port of New York/New Jersey processed the most containers for the second consecutive month. Similarly, the Ports of Savannah and Houston experienced increases of 6.8% and 17.4%, respectively, and their highest volumes of the last nine months.

RETAIL SIGNS

The FRED retail inventory-to-sales ratio illustrates the relationship between the end-of-month inventory values and monthly sales and is an important indicator of retailers’ ability to keep goods on physical and virtual shelves to meet consumer demands.

The latest update (November 2021) showed a slight improvement—an increase of 0.02 to 1.09—and may provide a faint glimmer of hope for importers and LSPs. Unfortunately, the ratio is still hovering near historical lows, as retailers grapple with empty shelves and frustrated customers. While there’s a possibility that retailers will be able to catch up on depleted inventory positions during the “slower” winter sales months, it’s too early to tell.


THE CULPRIT: CONSUMER DEMAND FOR GOODS

The amount of goods purchased by consumers is one of the most significant drivers of heightened global shipping volumes. Accordingly, the ratio of consumer expenditures on goods vs. services is one to watch. For the latest reported month (December 2021), the goods-to-services ratio dropped 1.8% to 51.6%.

This slight downward shift may signal softer import volumes going forward; however, January container import volumes remained in the massive 2.4M to 2.6M TEU range that persisted throughout 2021, contributing to the ensuing chronic supply chain disruptions (e.g., delays, variability, etc.).

With the pandemic still dampening expenditures on service and experienced-based businesses (e.g., travel, restaurants, entertainment), consumers will continue to spend more on goods than services—but for how long?

PANDEMIC STILL A FACTOR

As the U.S. and Europe start to make the shift towards living with the Omicron variant, China has taken a different approach; Beijing’s zero-COVID strategy could exacerbate global supply disruptions. China has strict lockdown protocols in place when a local outbreak occurs. If (when) lockdowns occur, the flow of goods could slow to a crawl or stop altogether, directly impacting manufacturers that rely on parts from China to produce their goods.

With Omicron cases receding across most of the U.S., half of the states have abandoned mask mandates and other pandemic-related protocols which could lead to a temporary spike in COVID-19 transmission, intensifying worker shortages and supply chain bottlenecks.

On an optimistic note, the Omicron surge did not dampen the employment market as anticipated. A low Federal Reserve Unemployment Rate is another economic indicator of a continued strong economy and higher demand for goods. Unemployment in the U.S. rose by a nominal 0.1% to 4.0%, according to the early February jobs report. Approaching the historical non-wartime low of 3.5%, the unemployment rate is down from 6.2% in February 2021—and down from the dizzying peak of 14.7% in April 2020. In addition, a surprising 467,000 jobs were created in January, a much larger increase than the roughly 150,000 forecasted new jobs.

NEXT STEPS

With shipping capacity constrained, importers should maximize profitability in the short-term by rationalizing SKUs to ship higher-velocity and higher-margin goods. If feasible, companies should shift volumes away from West Coast ports to alternate, less congested ports to reduce wait times.

LSPs should focus on keeping the supply chain resources they have, especially drivers. Leveraging route optimization technology, shippers and LSPs can help retain drivers by building trips to reduce stress and improve drivers’ quality of life.

To build resilience into the supply chain, importers and LSPs should focus on supply chain predictability. By shifting the movement of goods to less congested transportation lanes, they can improve supply chain velocity and reliability.

Looking a bit further out, companies can mitigate reliance on over-taxed trade lines by evaluating supplier and factory location density. Although density enables economies of scale, the pandemic-related logistics capacity crisis exposed the downside of this operational strategy.

THE FINAL WORD

While the slight reduction in the personal consumption of goods might be a positive sign, other indicators, such as the retailer inventory-to-sales ratio, need to measurably improve to take the pressure off the U.S. logistics infrastructure in 2022. And with January’s container import volume at record levels and shipping and container prices skyrocketing, importers and LSPs are facing a congested and frustrating year ahead. Companies must prepare for more lasting impact by implementing tactics to address capacity constraints in the short-term, while taking steps to build long-term supply chain resilience.

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Archives, Global Logistics, Global Trade Daily, Ocean Carriers

HOW TO PREPARE FOR THIS YEAR’S CHALLENGES AND OPPORTUNITIES

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Twenty twenty-one was a difficult year in global logistics due to ongoing volatility. We worked alongside customers navigating the Suez Canal block, hurricanes and cyclones, port and terminal closures due to COVID-19 outbreaks, customs and trade changes, labor shortages and more.

I’ve been in the industry since 1997 and I have never seen this level of continual disruption across the entire supply chain for this length of time. However, with this year’s volatility, I was also given a front-row seat to a new level of hyper collaboration–including individuals going out of their way to help each other, more strategy sessions between shippers and forwarders, and continually leaning into historical data and current market insights find smarter solutions.

As we begin another potentially volatile year, I wanted to provide key strategies for global shippers to consider.

SEEK CREATIVE SOLUTIONS ACROSS THE ENTIRE SUPPLY CHAIN

At year-end, we typically see a jump in demand as shippers meet quarter-end quotas and prepare for the upcoming Lunar New Year, during which many factories in China shut down. However, in early 2022, shippers are also juggling potential delays from the Winter Olympics in Beijing throughout February. All of this is amid a strained supply chain market, which will take time to ease.

As you prepare for the year ahead, consider what different modes, trade lanes or inland transportation strategies you can implement in your supply chain. For example, while it may not be feasible to transport 100% of your freight via air, air freight continues to be the fastest way to replenish inventory, so prioritizing specific freight can help keep cargo moving. In fact, C.H. Robinson is running on average 15-17 air charters a week globally for customers looking to avoid the congested ocean ports, and we don’t expect that number to decrease in the near future.

Additionally, as demand and rates will likely continue to stay elevated, less-than-container load (LCL) shipping is a strategy to consider. Typically, space for LCL shipments is easier to find especially in a constrained capacity market, since you are only looking for some container space versus an entire empty container. We also continue to see large cost savings with expedited LCL services compared to today’s airfreight environment.

Keep in mind, LCL shipments are not going to bypass congestion at the ports, so inland strategies need to be considered. Currently, many ocean carriers are looking to move more interior point intermodal cargo versus focusing on port-to-port. We were able to help increase the flow of cargo inland for our customers by sending more 53-foot containers so cargo on the smaller 40-foot ocean containers can be efficiently consolidated in the larger ones and loaded onto trucks or trains to be taken to inland destinations more quickly. Overall, this increased our container capacity by 25% in Southern California.

Indeed, looking at only one portion of the supply chain or one mode can only get you so far. It’s important to consider all areas to keep your cargo moving.

UTILIZE DATA AND TECHNOLOGY

Although 2021 rendered a lot of unique situations—and 2022 may do the same—historical data can still help us find solutions. Finding common trends and themes in your cyclical data can give you an information advantage to make smarter decisions for your supply chain.

Additionally, the right technology tools can give you the visibility and predictability you need to adjust. For example, with the ongoing port congestion and delays, C.H. Robinson enhanced the vessel routing and tracking features within our transportation management system, Navisphere, to increase the efficiency and accuracy of port ETAs and automatically send updates if changes were discovered. This is important because ocean shipping is only one piece of the equation. Having visibility to changes in real-time gives our team and customers a chance to react and adjust other tactics down the road.

LOOK TO GLOBAL TRADE OPPORTUNITIES

It’s unclear whether we’ll see a reinstatement of certain Section 301 China duty exclusions. At press time, the House and Senate had yet to reach consensus on the legislative proposals. If passed, it would be effective through the end of this year.

While congestion and shortages continue across transportation modes, one area where you may find opportunities for savings is in your global trade strategy. Since each country’s trade policies are unique and can change, it’s important to have regular meetings with your trade advisor to break through the complexity of your total landed costs, including understanding your costs to import, identifying duty recovery possibilities and reducing your duty exposure via trade agreements.

For example, our team has helped shippers identify thousands to millions of dollars in tariff refunds alone. If you import into the U.S., you can easily check for potential savings and refunds with our online Tariff Search Tool—www.chrobinson.com/en-us/resources/insights-and-advisories/trade-tariff-insights/hts-search/—and, if you’re sourcing from other countries, our team can create a customized sourcing report sharing potential cost savings or avoidance opportunities.

OCEAN FREIGHT UPDATE: GLOBAL

Forecasting remains essential. For this new year, we strongly encourage forecasting six to eight weeks minimum as a best practice. Considerations for staying consistent include:

-Prioritization

-Variability in SKUs/parts

-Smoothing volumes week-to-week

It’s important to be flexible in all facets of a shipment life cycle including:

-Carriers

-Equipment

-Modes

-Routing

OCEAN FREIGHT UPDATE: NORTH AMERICA

-Port congestion continues to strand vessels and equipment. In Los Angeles/Long Beach (LALB) there are more than 90 vessels with an average 18-30-day dwell. Seattle and Tacoma are experiencing an average of 12 days to berth, while Savannah still has more than 20 vessels waiting at anchor.

-South East Asia transshipment hub ports are also impacted, causing heavy delays on non-direct services via Asia.

-Overall capacity is affected by ongoing port congestion in many trade lanes. Vessels are oftentimes delayed back to their origin, missing scheduled port calls to unload empty equipment, and pick up new laden exports to the United States.

-Schedule reliability and operational constraints are forecasted to continue.

OCEAN FREIGHT UPDATE: OCEANIA

-The supply chain in Oceania continues to be negatively impacted by the global supply chain disruption. Terminal congestion and suspension of pro forma berthing windows are having an impact on shipping schedules.

-Our teams are exploring diverse options in moving longstanding containers to help customers mitigate significant delays.

-The impact of port delays around the world is likely to keep freight costs high on all outbound trades.

FINAL THOUGHTS

While there is no one-size-fits-all approach, the above options provide shippers with strategies to help mitigate delays and identify potential savings as we begin another potentially unpredictable year.

Shippers have had to become increasingly nimble and informed over the past year, and now in 2022, it’s critical to remain agile, be open to alternative solutions and stay informed on the latest market insights. 

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Mike Short is president of global forwarding at C.H. Robinson. The Eden Prairie, Minnesota-based company solves logistics problems for companies across the globe and across industries, from the simple to the most complex. With nearly $20 billion in freight under management and 18 million shipments annually, C.H. Robinson is one of the world’s largest logistics platforms. Their global suite of services accelerates trade to seamlessly deliver the products and goods that drive the world’s economy. With the combination of our multimodal transportation management system and expertise, they parlay an information advantage to deliver smarter solutions for more than 119,000 customers and 78,000 contract carriers. Learn more at www.chrobinson.com. 

coffee
Archives, Global Trade Daily, News

Coffee Prices to Stumble After Surging 30% in 2021

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IndexBox has just published a new report: ‘World – Coffee (Green) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

Coffee prices remain highly volatile. In 2022, the average annual price for Arabica is forecast to decline thanks to expected production growth, while Robusta price will go up on skyrocketed demand from consumers, preferring cheaper alternatives to more expensive counterparts.

Key Trends and Insights

In 2022, the coffee price for Arabica is forecast to drop by about -2% y-o-y to $4.2 per kg, while Robusta will rise by 2% y-o-y to $2.0 per kg, the World Bank’s October forecast states. Expected production growth in Brazil is to push Arabica prices down. The price increase for Robusta is caused by heightened demand after many consumers began to seek cheap alternatives to more expensive Arabica.

The average annual price for Arabica coffee rose by 36% y-o-y to $4.51 per kg in 2021, while Robusta went up by 31% y-o-y to $1.98 per kg over the same period. The average monthly price in December 2021 reached $5.91 per kg for Arabica and $2.48 per kg for Robusta.

Brazil, the world’s largest supplier of coffee with a 35% share of global exports, shipped 1.7M tonnes of coffee abroad from January through September 2021, which was +5.8% higher than in the same period of 2020. In monetary terms, Brazil’s coffee exports totalled $3.95B, increasing by 17% compared to the same period a year earlier. The average export price for Brazilian coffee jumped from $2.10 per kg in January to $2.77 per kg in September 2021.

Global Coffee Exports

In 2020, global exports of coffee in its unroasted (green) form declined modestly to 6.7M tonnes, approximately reflecting the previous year. In value terms, supplies expanded to $16B (IndexBox estimates).

Brazil was the key exporting country that supplied 2.4M tonnes of coffee abroad, approx. 35% of global volume. Viet Nam (1,208K tonnes) occupied an 18% share (based on tonnes) of total exports, which put it in second place, followed by Colombia (10%), Indonesia (5.6%) and Uganda (4.9%). Ethiopia (231K tonnes), Peru (213K tonnes), Germany (211K tonnes), India (206K tonnes), Guatemala (189K tonnes), Nicaragua (149K tonnes) and Mexico (105K tonnes) followed a long way behind the leaders.

In value terms, Brazil ($5B) remains the largest green coffee supplier worldwide, comprising 31% of global exports. The second position in the ranking was occupied by Colombia ($2.4B), with a 15% share of total shipments. It was followed by Viet Nam, with a 12% share.

Top Largest Coffee Importers

In 2020, the U.S. (1.3M tonnes) and Germany (1.1M tonnes) represented the major importers of coffee in unroasted form across the globe, together mixing up 37% of total volume. Italy (565K tonnes) and Japan (390K tonnes) accounted for a further 15% of global international purchases. Spain (287K tonnes), France (229K tonnes), Russia (198K tonnes), Switzerland (180K tonnes), the Netherlands (174K tonnes), South Korea (157K tonnes), the UK (156K tonnes), Belgium (146K tonnes) and Poland (128K tonnes) occupied relatively small shares of the total volume.

In value terms, the largest green coffee importing markets worldwide were the U.S. ($4.2B), Germany ($2.6B) and Italy ($1.2B), together accounting for 45% of global purchases. These countries were followed by Japan, Switzerland, France, Spain, the Netherlands, South Korea, the UK, Russia, Belgium and Poland, which together accounted for a further 30%.

Source: IndexBox Platform

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BEST CARGO YEAR EVER AT SOUTH JERSEY PORTS

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The South Jersey Port Corporation closed out 2021 with an all-time record-breaking cargo volume of 4,636,097 tons, a 54% increase over 2020, breaking the previous record by 6%.
“That’s the best in the history of the South Jersey Ports and we’re expecting 2022 to be a very strong year that may top 2021,” reported Andy Saporito, Executive Director and CEO of South Jersey Port Corporation at the monthly meeting of the Board of Directors. “This milestone is a testament to the skilled workers and partners who keep goods moving through the supply chain while our team seeks solutions to improve efficiency, attract business and build for the future. The ongoing collaboration with SJPC’s labor force and industry partners lifted the port to this extraordinary record during the challenging time of the Covid-19 pandemic,” said Saporito.
The dramatic increases in tonnage came from nearly all the SJPC’s prime cargo sectors: steel, plywood, recycled metals, cocoa beans, cement, and gypsum. The lone laggard, sand exports, is expected to increase as the national infrastructure plan is implemented. Rebounding steel imports led the way with 2,399,076 tons, a 141% increase over 2020. The majority of this increase occurred at the Paulsboro Marine Terminal which moved 1,760,018 tons of steel slabs. Plywood import tonnage increased by 98% totaling 220,812 tons demonstrating the Camden terminals as a premiere plywood portal on the East Coast. Cocoa beans totaled 76,108 tons, a 36% increase verses 2020 totals. Exports of recycled metals increased by 10% and cement increased by 8%.
The number of ship days was 960 days compared to 549 ship days in 2020, a 75% increase. “Ship days is the number of days a ship is loading or unloading at its terminal” explained Kevin Duffy, Assistant Executive Director / Chief Operating Officer. “We’ve worked hard to ensure we continue to operate safely and efficiently to move the increased cargo and have space to meet our customers’ needs”.
Brendan Dugan, Assistant Executive Director / Director of Business Development, expects the cargo activity at South Jersey Ports to remain strong for the foreseeable future due to the national infrastructure plan and New Jersey’s leadership role in the $109 billion offshore wind industry. EEW Group, which is building a $300 million manufacturing plant at the Paulsboro Marine Terminal to provide the massive steel monopiles for the offshore wind farms along the entire eastern seaboard, will ultimately require 150,000 tons of imported steel annually to meet their customers’ demand.  To build on this momentum, SJPC is conducting a study of the Port of Salem, which is a smaller port just down river from Paulsboro that could become an important supply port for the local offshore wind support services industry.
“The challenge is to build the infrastructure to grow the port while operating more efficiently to meet current demands,” said Dugan.  South Jersey Ports received a $6 million grant to upgrade the rail infrastructure at one of their Camden terminals and a $9 million grant for wharf infrastructure improvements at the Salem Terminal. “We identified an old building that we might refurbish to put another 40,000 square feet of storage space online and meet long-term customer demands.”
“We continue to focus on upgrading technology and automation to optimize the fluid movement of cargo through our terminals and to ensure our customers’ storage and inventory needs are met”, added COO Kevin Duffy.
The South Jersey Port Corporation was created in 1968 to operate marine shipping terminals in the South Jersey Port District, consisting of seven counties: Burlington, Camden, Gloucester, Salem, Cumberland, Mercer, and Cape May. The South Jersey Ports is a national leader in bulk and breakbulk cargo, shipping and receiving to and from Africa, Asia, Latin America and Europe. Their four international seaport facilities in South Jersey handle more than four million tons of bulk, breakbulk and containerized cargoes annually.