Global Logistics Alert: Sea Shipping Updates

Global Logistics Alert: Sea Shipping Updates

global logistics alert

Alert Message 1: Maersk Halts Red Sea Voyages

Maersk has instructed all of its vessels headed for the southern entrance to the Red Sea to halt immediately due to heightened hijack fears. The shipping giant sent a message to all crews in the vicinity of the Bab al-Mandab Strait to stop after two of their vessels were attacked on December 14th and 15th. If the decision is echoed by other shipping lines, sea trade markets could see a drastic impact in both transit times and cost hikes.

You can read more about this situation on the Ship Technology website here: www.ship-technology.com/news/shipping-giant-maersk-halts-southern-red-sea-voyages/?cf-view

Alert Message 2: Panama Canal Water Shortages

The Panama Canal water shortages remain as the canal authorities continue to impose restrictions limiting the number of vessels that can pass through daily. In November, the total transits declined 22% from the prior month. Reservation slots are being slashed in December and into January 2024. The Panama Canal is the primary route for 57% of the total cargo transported in container ships from Asia to the eastern coast of the US.

You can read more about this situation on the Freight Waves website here: www.freightwaves.com/news/panama-canal-transits-plunge-as-larger-ships-are-turned-away

What can businesses do to mitigate the impact on their supply chains?

  • Diversify their shipping routes. Businesses should consider using alternative shipping routes. An experienced freight forwarder, like Logistics Plus, can assist in evaluating such routes’ transit time and cost trade-offs.
  • Work with suppliers to manage inventory. Businesses should work with their suppliers to manage inventory levels and ensure they have enough stock to meet customer demand.
  • Communicate with customers. Businesses should communicate with their customers about potential delays and disruptions caused by these issues.

Logistics Plus is actively monitoring both situations to avoid supply chain disruptions. If you have any questions or concerns about how these issues may affect your supply chain, contact our team of experts today.

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Global Logistics Alert: Sea Shipping Updates

Global Logistics Alert: Increase in Pier Pass Fee

global logistics alert

Alert Message:

The West Coast MTO Agreement (WCMTOA) announced that on November 1, 2023, the Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach will increase by 4%. The adjustment matches the combined 4% increase in longshore wage and assessment rates recently ratified in the coastwide contract between the International Longshore and Warehouse Union and the Pacific Maritime Association.

Beginning November 1, the TMF will be $35.57 per TEU (twenty-foot equivalent unit) or $71.14 per forty-foot container. The TMF is charged on non-exempt containers.

You can read the full details on the PierPASS website here: https://www.pierpass.org/news/tmf-at-ports-of-los-angeles-and-long-beach-to-increase-4-2-on-august-1-2-4/

If you have any questions or concerns about how the increased fee structure will affect your freight costs, contact our team of experts today.

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Global Logistics Alert: Sea Shipping Updates

Global Logistics Alert: Panama Canal Drought

global logistics alert

Alert Message:

The Panama Canal drought is causing a shipping bottleneck with ripple effects on supply chains worldwide. The canal is a critical waterway for shipping goods between the Atlantic and Pacific oceans, and the low water levels have forced the canal authorities to impose restrictions on the size and weight of ships that can pass through.

The Panama Canal is the primary route for 57% of the total cargo transported in container ships from Asia to the eastern coast of the US. According to Reuters, the average wait time for non-booked vessels at the Panama Canal jumped by between 44% and 59% last month as the drought has led to restrictions on daily transits. Earlier this year, the Panama Canal Authority began imposing the restrictions in a move to conserve water. Currently, only 32 vessels with a draft up to 44 feet are allowed to pass per day.

What can businesses do to mitigate the impact on their supply chains?

  • Diversify their shipping routes. Businesses should consider using alternative shipping routes, possibly importing to U.S. eastern seaports, to avoid the Panama Canal. An experienced freight forwarder, like Logistics Plus, can assist in evaluating the transit time and cost trade-offs of such routes.
  • Work with suppliers to manage inventory. Businesses should work with their suppliers to manage inventory levels and ensure that they have enough stock on hand to meet customer demand.
  • Communicate with customers. Businesses should communicate with their customers about potential delays and disruptions caused by the drought.

You can read the full article from Reuters at https://www.reuters.com/world/americas/vessel-wait-times-panama-canal-increased-more-than-40-august-2023-09-02/. The Wall Street Journal also produced the following short video a couple of weeks ago to illustrate how the drought is impacting supply chains.

Logistics Plus is actively monitoring the situation to avoid supply chain disruptions. If you have any questions about how the drought may be impacting your supply chain, contact our team of experts today.

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Global Logistics Alert: Sea Shipping Updates

Global Logistics Alert: Increase in Pier Pass Fee

global logistics alert

Alert Message:

The West Coast MTO Agreement (WCMTOA) announced that on November 1, 2023, the Traffic Mitigation Fee (TMF) at the Ports of Los Angeles and Long Beach will increase by 4%. The adjustment matches the combined 4% increase in longshore wage and assessment rates recently ratified in the coastwide contract between the International Longshore and Warehouse Union and the Pacific Maritime Association.

Beginning November 1, the TMF will be $35.57 per TEU (twenty-foot equivalent unit) or $71.14 per forty-foot container. The TMF is charged on non-exempt containers.

You can read the full details on the PierPASS website here: https://www.pierpass.org/news/tmf-at-ports-of-los-angeles-and-long-beach-to-increase-4-2-on-august-1-2-4/

If you have any questions or concerns about how the increased fee structure will affect your freight costs, contact our team of experts today.

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Global Logistics Alert: Sea Shipping Updates

Global Logistics Alert: Compliance Note on Russia Sanctions

global logistics alert

Alert Message:

On March 2nd, 2023, the U.S. Departments of Justice, Commerce, and Treasury issued a joint compliance note on the use of third-party intermediaries or transshipment points to evade Russian- and Belarussian-related sanctions and export controls. This note marks the first collective effort by the three agencies to inform the private sector about enforcement trends and provide guidance to the business community on compliance with U.S. sanctions and export laws.

Since Russia invaded Ukraine on February 24th of last year, the Department of Commerce has launched a series of export control restrictions on Russia in partnership with over three dozen allies. These restrictions have severely impacted Russia’s ability to sustain its aggression.

You can read the full joint compliance note here: https://www.bis.doc.gov/index.php/documents/about-bis/newsroom/press-releases/3241-tri-seal-final-clean/file

If you have any questions about the compliance note, the Logistics Plus Customs and Compliance team is here to help.

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