Featured Headlines:
The Cape of Good Hope Tightrope
Falsehoods About Canadian False Woods
CBP's First Centralized Examination Station in the Nation Takes Flight
Sanctions Surge: U.S. Targets 400 Entities Supporting Russia
Railroad Roadblock Creates Trucking Tailspin
Getting Railroaded by Peak Season Sticker Shock
The Cape of Good Hope Tightrope
- Not only was the Cape of Good Hope dubbed the Cape of Storms before 1488, it is unofficially known as…wait for it… “The Graveyard of Ships!” Sounds perfectly safe!
- With over 3000 sunken ships at the Cape’s murky bottom and with its nautical neighbor called False Bay, what could possibly go wrong for the 40 commercial vessels saying their prayers and tightly grasping their lucky rabbits’ feet each day near Cape Town?
- This is what goes wrong (especially in their winter):
- The cold Benguela Current from the Atlantic does a deadly dance with the warm Agulhas Current from the Indian. Let’s call this the “Turbulent Tango!”
- “Cape Doctor” winds whip the sea…in fact, they whip it good. It’s not too late to whip it and call this the “Devo Dance!”
- Our dear friend, the Agulhas Current, sometimes gets cold feet after touching the Atlantic and reverses on herself…this is called retroflection, but we’ll call it the “Rogue Wave Rave!”
- Even without 3000 “Titanics” buried in her harbor, the uneven sea floor at the Cape is dominated by canyons and ridges. This jagged surface only angers the sea and her mighty waves; let’s call this “The Raging Rain Dance!”
- The Southern Ocean, packing Antarctic power from South to North, causes massive and menacing swells to join the party. Yes, this is the “Salsa Swell!”
- Despite her proud maritime history, is it any wonder that France has endured a deadly dance leading to two notable “Hopeful” incidents in the last two months?
- We watched CMA’s Benjamin Franklin toss 44 containers into the sea—while enduring damage to 30 more—and then the CMA Belem had a container stack collapse leading to the loss of about 100. Oddly enough, experts called CMA CGM “lucky!” …Well, okay??!!
- Look gang, listen up as you brave the dangerous waters of maritime acronyms!
- The International Maritime Organization (IMO) in support of the International Convention for Safety of Life at Sea (SOLAS) put strong verified gross mass (VGM) requirements in place in July 2016 to protect stevedores, seafarers, the public, and well… vessels!
- It is estimated that cargo weights are still incorrect 20% of the time! “Hey, it makes me more attractive to ocean carriers! Hey, these massive vessels can handle it!” Bad dog!
- Here’s the deal: The best way to combat violent weather and seas is to stack your containers from heavy to light on-board. This is the single best prevention method for container stack collapse and for overall vessel stability.
- Please don’t be that impressive specimen of a polar bear boarding a regional jet while giving his weight as 156 pounds (sorry metric folk, you’ll have to convert that yourself)! Coach your staff and your suppliers to be as exact as possible when obtaining and providing VGM data. Your cargo and sailors with their dance cards extremely full at the Cape of Good Hope will thank you… no, they really will!
Expanding Airline Fleet Feat
- We sure talk a whole bunch about steamship capacity; it is SO rude of us not to note the airline industry’s ambitious plans for fleet expansion! After all, the Air “heads” are a prideful yet shy group of wallflowers, compassionate readers!
- Let’s start with the basics: Boeing and Airbus strive to produce about 1,200 new aircraft per year combined. This gets added to a commercial fleet of 27,000 “birds in flight.”
- This aerial production schedule goes a lot more smoothly when 737 Maxes from Boeing are not grounded, when global inflation is considerably more “tamable,” and when headscratchers snarling global supply chains are not as common as cats in Rome!
- Fact Check: There are an estimated 300,000 feral cats in Rome!
- We have buckled up and felt the TURBULENT, CHOPPY air on the flight path to steady jet production… to say the least.
- Let’s face it, if you are reading this, you have a 97.3% chance of being a freight nerd (embrace it, stalwart supply chain pros!). So, you know that air cargo profits are down more than $20 billion this year with demand decreasing by and supply increasing by 5%.
- Why on Mother Nature’s green Earth would airlines be expanding fleets now when the average chargeable kilo of airfreight globally is down to $2.50? After all, the average beverage at Dunkin’ is $2.51 for heaven’s sake!
- Fact Check: The average cost of a beverage at Dunkin’ is actually $2.50!
- The answer, as usual since Covid, is that the passenger market is ON FIRE, and that fact hurts global air cargo performance. Feast your eyes on these stats:
- Passenger traffic should eclipse 5 billion travelers this year (6% higher than ’23), a new record in human history!
- Passenger revenue will be up 15% this year to $750 billion.
- Airline total profits should be up over 11% by the year’s end.
- What do we know about 80% plus passenger load factors? Hey, that still leaves 20% for cargo in the belly of the beast! So, belly space on passenger craft is the answer to cargo riddles, fore and aft!
- With total gross profits above one trillion dollars, is it even possible that airlines make just a 2.7% profit margin? Fact checker not needed…yes is the answer!
- Thus, airlines look to expand even their freighter segment because the industry depends on critical mass, a good sense of humor, and precise operational executions.
- Today, just 7% of airline capacity is devoted to cargo only today—but 40-50 newbuilds and nearly 100 passenger-to-cargo conversions per year show that airlines understand a future for air cargo that we cannot begin to fathom when looking at 2024 data alone!
Falsehoods About Canadian False Woods
- Lately, there’s been a whole lot of bark—but no bite—about Canadian wood packaging material (WPM) destined for the United States. Some folks have decided to make waves on the old rumor mill by alleging that the WPM needs to be heat treated or fumigated under ISPM 15 requirements.
- This chatter claimed the new rules were in response to the recent Avian Influenza outbreak, but that’s just ‘knot’ true.
- The Canadian Food Inspection Agency has clarified that there’s no change to wood packaging requirements for the US. The NCBFAA Regulatory Agencies Committee (RAC) also double-checked with CBB-Ag and APHIIS, and they confirmed that the wood packaging material regulations remain the same.
- Back in 2005, it was decided that WPM moving from Canada to the US doesn’t need to be heat treated or stamped.
- Please note that in order to take advantage of this exemption, the WPM must come with export/shipping documents clearly stating that any unmarked wood packaging was produced in either the United States or Canada AND that it was manufactured with wood originating in either country.
- As a final heads-up, this exemption is only for the Continental United States. Wood packaging crossing into or out of Hawaii and US territories doesn’t get the same ‘tree’tment.
- You can ‘chuck’ out the full scoop on Canadian WPM regulations by swinging by the Animal Plant and Health Inspection Service (APHIS) website.
CBP's First Centralized Examination Station in the Nation Takes Flight
- In an exciting new collaboration, US Customs and Border Protection (CBP) has unveiled the opening of its very first Centralized Examination Station with direct access to an Air Operations Area, conveniently nestled within the bustling Dallas Fort Worth (DFW) Airport. Sounds like things are headed for a smooth landing just north of the border!
- The new all-in-one setup means cargo can now make a beeline straight from the tarmac straight to CBP’s inspection facility, which will help speed things up considerably! (Well, that’s the hope at least…)
- The new facility has been cleared to handle the high volume of international e-commerce shipments utilizing DFW. CBP officials will be responsible for churning through the millions of packages routed through DFW Airport to ensure that the legitimate cargo is fast-tracked accordingly.
- With this new station, CBP is in a much better position to catch illicit goods before they sneak over the border, while making sure the right products get to market quickly and safely.
- For more details about this project, please refer to CBP’s official press release published on August 14th.
Sanctions Surge: U.S. Targets 400 Entities Supporting Russia
- The United States has unleashed a rogue wave of sanctions on over 400 additional entities and individuals accused of bolstering Russia’s military machine in Ukraine.
- Among those targeted are several Chinese companies that Washington claims are helping Moscow sidestep Western sanctions and reinforce its military capabilities.
- The US Treasury Department is also going after transnational networks involved in procuring ammunition and other materials for Russia, aiding oligarchs in dodging sanctions, and laundering gold for sanctioned companies. Is this a James Bond film?
- The Biden administration added 123 entities to its export control list, requiring suppliers to obtain licenses before doing business with these companies.
- The sanctions also hit Russia’s energy sector hard, targeting companies in Turkey, the UAE, and Central Asia that the US believes are helping Russia evade sanctions.
- As the war in Ukraine grinds on, these sanctions are part of a broader strategy to weaken Russia’s ability to sustain its military operations.
- By targeting a wide array of companies and networks, US officials are looking to tighten the noose around Russia’s war economy—even as the conflict shows no signs of abating.
Railroad Roadblock Creates Trucking Tailspin
- The Canadian rail shutdown has thrown a wrench into the North American trucking industry, though motor capacity was tightening up long before the trains ground to a halt.
- Like David Bowie and Queen, the trucking industry is “under pressure pressin’ down on them”, and prices are skyrocketing—making it a tough and rocky road ahead for cross-border supply chains.
- Sorry to digress, but does anybody know what, “Mm-noom-ba-deh; Doom-boom-ba-beh;
Doo-boo-boom-ba-beh-beh” means at the start of that famous song? - Well one thing booming is the Canadian truckload market, with rates doubling or tripling in the spot market. A few high lowlights:
- Toronto to Chicago rates spiked 31% in a day.
- Vancouver to Windsor, the average tariff popped by 50%.
- Toronto to Allentown (no Billy Joel jokes!) climbed by 117%!
- More on the dooming and glooming side, Windsor, the largest truck crossing on the US-Canada border, is a key automotive hub, and these rate hikes are sending shockwaves through that supply chain.
- They say it takes at least one week to recover for each day of a nationwide rail strike, so shippers will be scrambling to cover spot loads while facing longer lead times and higher costs well into September.
Getting Railroaded by Peak Season Sticker Shock
- Starting September 1st, Union Pacific Railroad (UP) is rolling out up to $500 per-container peak season surcharge (PSS) for shippers in Southern California.
- With demand ramping up, UP is joining the crowd of intermodal providers adding extra fees to keep up with the surge.
- Not all surcharges are created equal—as UP’s PSS varies based on shipper volume. High-volume shippers will face a $300 per-container fee, while smaller shippers could see charges up to $500 per container.
- OF COURSE Amazon and Wal-Mart need another competitive advantage…Duh!!
- Though the domestic intermodal market isn’t quite as frenzied as the peak pandemic years, it’s still bustling compared to last year.
- UP’s senior VP of intermodal marketing and sales, Kari Kirchhoefer, explained that they’re pulling out all the stops—unstacking containers, repositioning empties, and running extra trains—to ensure they meet customers’ volume needs.
- It is rumored that Kari is also planning a long trip to Tahiti for her entire extended family… but we heard that from other railroads’ executives!
- Other big names—like Hub Group, J.B. Hunt, Schneider National, and Swift Intermodal— have already implemented surcharges, ranging from $250 to $1,200 per container, depending on the contract.
- Trying to sidestep these charges? Think again! UP is also raising spot market rates to prevent shippers from dodging their contractual surcharges on September 1st.
- For shippers into and out of Southern California, the message is clear: brace for impact. With surcharges on the rise and demand showing no signs of slowing, it’s going to be a costly peak season. So make sure your budget can handle the extra load.
- Take (sur)charge of your peak season. Reach out to Shapiro’s Freight Experts today!
