Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Cargo is backing up on Chinese docks due to government efforts to curtail the spread of the deadly coronavirus by forcing workers to stay home, and that congestion is already causing a domino effect on supply chains in the U.S. as well, a food industry trade group warned today.
That change is needed because of the broadening impact of the coronavirus—now officially named COVID-19 by the World Health Organization—an infectious bug that likely originated in December in wild animal food markets in the central Chinese city of Wuhan. The disease has since sickened thousands and killed hundreds of people, moving the Chinese government to slow the spread of the virus by constricting travel, a policy that has also hobbled the flow of trade.
The growing backup of containers at China's ports is now causing ripple effects in the U.S. as well, the group says. "Within China, the supply chain has been compromised, starting at the China marine terminals extending all the way to the ultimate inland destination points. The supply chain disruption has crossed the Pacific and is evident at U.S. marine terminals, and inland," Peter Friedmann, executive director of the Agriculture Transportation Coalition, said in a release.
Consequently, U.S.-based agriculture and forest products exporters have been finding their cargo getting "stuck" at inland origin points, rail ramps, truck yards, refrigerated warehouses, and domestic marine terminals, the group said.
That impact occurs because China's production of both industrial products and of consumer goods—such as apparel, footwear, and electronics—has slowed due to factory shutdowns that originally began during annual Lunar New Year celebrations but that were extended by government-imposed quarantines and closures.
In turn, there is now "dramatically less" cargo and fewer containers flowing from China to the U.S., and therefore fewer sailings by ocean carriers that are cancelling departures to avoid losing money by operating partly empty ships. Thus, there is an emerging threat of a shortage of ocean carrier capacity to take U.S. exports to China on what would ordinarily be the "backhaul" of a roundtrip ocean voyage, the group said.
For example, those effects are being seen at the Port of Virginia, which reported today that the number of empty containers for export in January fell more than 27% to 13,882 TEUs as a result of the uncertainty being created by the coronavirus, an increase in blank sailings, an extension of the Chinese Lunar New Year closures, and quarantines in China.
And on the west coast, leaders at the Port of Oakland reported that containerized import volume had jumped 7.3 percent last month over January 2019, lifting hopes for recovery from a U.S.-China trade war. But at the same time, Port of Oakland Maritime Director John Driscoll said it was "possible" that concern over the fast-spreading coronavirus could dampen trade growth. "The uptick in January was encouraging but we're hearing from shipping lines that cargo volume could moderate over the next few months," Driscoll said in a release.
Refrigerated exports in danger of spoiling on overcrowded docks
One industry that may be particularly susceptible to the impact of container crowding on Chinese docks is U.S. food exports that require constant electricity to stay fresh inside their refrigerated containers. Specifically, shipments of protein products such as beef, pork, and poultry may arrive on Chinese shores but not be able to locate enough open electrical outlets for plugging in their refrigeration units, the Agriculture Transportation Coalition said.
The problem has arisen because marine terminals lack the capacity to store all the containers coming off of arriving ships, so terminal operators must maintain efficient throughput to quickly move containers through terminals, past inspections, and onto waiting trucks or trains. However, that domestic freight routing has recently been hindered due to China's initiatives to restrain the spread of the virus by restricting workers' commutes to the docks and truckers' routes from place to place, the group said.
"One of the first messages we sent to our protein exporters was to be aware of the lack of additional capacity at China's marine terminals for refrigerated containers. In short, the plugs (supplying electricity to the refrigeration units on the containers) were fully utilized, with no more available for additional temperature-controlled containers," Friedmann said.
In response, the group is urging exporters to confirm with their ocean carriers at the very outset—before loading containers onto trucks or rail destined for seaports—that containers will be able to transit to the ultimate customer in China once they arrive. "For instance, before removing protein from refrigerated warehouses, the U.S. exporter should get a commitment for their ocean carrier that there will be available reefer plugs at the destination port," Friedmann said.
Editor's note: This article was revised on Feb. 11 to add information from the World Health Organization.
Online merchants should consider seven key factors about American consumers in order to optimize their sales and operations this holiday season, according to a report from DHL eCommerce.
First, many of the most powerful sales platforms are marketplaces. With nearly universal appeal, 99% of U.S. shoppers buy from marketplaces, ranked in popularity from Amazon (92%) to Walmart (68%), eBay (47%), Temu (32%), Etsy (28%), and Shein (21%).
Second, they use them often, with 61% of American shoppers buying online at least once a week. Among the most popular items are online clothing and footwear (63%), followed by consumer electronics (33%) and health supplements (30%).
Third, delivery is a crucial aspect of making the sale. Fully 94% of U.S. shoppers say delivery options influence where they shop online, and 45% of consumers abandon their baskets if their preferred delivery option is not offered.
That finding meshes with another report released this week, as a white paper from FedEx Corp. and Morning Consult said that 75% of consumers prioritize free shipping over fast shipping. Over half of those surveyed (57%) prioritize free shipping when making an online purchase, even more than finding the best prices (54%). In fact, 81% of shoppers are willing to increase their spending to meet a retailer’s free shipping threshold, FedEx said.
In additional findings from DHL, the Weston, Florida-based company found:
43% of Americans have an online shopping subscription, with pet food subscriptions being particularly popular (44% compared to 25% globally). Social Media Influence:
61% of shoppers use social media for shopping inspiration, and 26% have made a purchase directly on a social platform.
37% of Americans buy from online retailers in other countries, with 70% doing so at least once a month. Of the 49% of Americans who buy from abroad, most shop from China (64%), followed by the U.K. (29%), France (23%), Canada (15%), and Germany (13%).
While 58% of shoppers say sustainability is important, they are not necessarily willing to pay more for sustainable delivery options.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
The port worker strike that began yesterday on Canada’s west coast could cost that country $765 million a day in lost trade, according to the ALPS Marine analysis by Russell Group, a British data and analytics company.
Specifically, the labor strike at the ports of Vancouver, Prince Rupert, and Fraser-Surrey will hurt the commodities of furniture, metal products, meat products, aluminum, and clothing. But since the strike action is focused on stopping containers and general cargo, it will not slow operations in grain vessels or cruise ships, the firm said.
“The Canadian port strike is a microcosm of many of the issues that are impacting Western economies today; protection against automation, better work-life balance, and a cost-of-living crisis,” Russell Group Managing Director Suki Basi said in a release. “Taken together, these pressures are creating a cocktail of connected risk for countries, business, individuals and entire sectors such as marine insurance, which help to mitigate cargo exposures.”
The strike is also sending ripples through neighboring U.S. ports, which are hustling to absorb the diverted cargo, according to David Kamran, assistant vice president for Moody’s Ratings.
“The recurrence of strikes at Canadian seaports is positive for U.S. ports that may gain cargo throughput, depending on the strike duration,” Kamran said in a statement. “The current dispute at Vancouver is another example of the resistance of port unions to automation and the social risk involved with implementing these technologies. Persistent disruption in Canadian port access would strengthen the competitive position of US West Coast ports over the medium-term, as shippers seek to diversify cargo away from unreliable gateways.”
The strike is also affected rail movements, according to ocean cargo carrier Maersk. CN has stopped all international intermodal shipments bound for the west coast ports of Prince Rupert, Robbank, Centerm, Vanterm, and Fraser Surrey Docks. And CPKC has stopped acceptance of all export loads and pre-billed empties destined for Vancouver ports.
Connected with the turmoil, Maersk has suspended its import and export carrier demurrage and detention clock for most affected operations. The ultimate duration of the strike is unknown, but the situation is “rapidly evolving” as talks continue between the Longshore Workers Union (ILWU 514) and the British Columbia Maritime Employers Association (BCMEA), Maersk said.
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."
In addition to its flagship Clorox bleach product, Oakland, California-based Clorox manages a diverse catalog of brands including Hidden Valley Ranch, Glad, Pine-Sol, Burt’s Bees, Kingsford, Scoop Away, Fresh Step, 409, Brita, Liquid Plumr, and Tilex.
British carbon emissions reduction platform provider M2030 is designed to help suppliers measure, manage and reduce carbon emissions. The new partnership aims to advance decarbonization throughout Clorox's value chain through the collection of emissions data, jointly identified and defined actions for reduction and continuous upskilling.
The program, which will record key figures on energy, will be gradually rolled out to several suppliers of the company's strategic raw materials and packaging, which collectively represents more than half of Clorox's scope 3 emissions.
M2030 enables suppliers to regularly track and share their progress with other customers using the M2030 platform. Suppliers will also be able to export relevant compatible data for submission to the Carbon Disclosure Project (CDP), a global disclosure system to manage environmental data.
"As part of Clorox's efforts to foster a cleaner world, we have a responsibility to ensure our suppliers are equipped with the capabilities necessary for forging their own sustainability journeys," said Niki King, Chief Sustainability Officer at The Clorox Company. "Climate action is a complex endeavor that requires companies to engage all parts of their supply chain in order to meaningfully reduce their environmental impact."