Coronavirus Effect on Supply Chains

Coronavirus Effect on Supply Chains

The coronavirus disease 2019 (COVID-19) is upending global container volume demand and rippling through containerized supply chains.  That's sending shockwaves to all freight transport modes, from trucking to air cargo. 

The widening impact COVID-19 is having on retail and manufacturing demand is creating the need for two importing speeds. Cargo owners such as apparel and automotive importers want to delay receiving goods for now-closed brick-and-mortar stores and production lines, whereas importers shipping personal protective equipment (PPE) and essential household consumer goods want them faster.  Against that backdrop, carriers, forwarders, port authorities, and marine terminals are warning of a cargo bottleneck if more Western importers fail to pick up containers when they arrive, causing port congestion and inland equipment shortages that will slow down the broader supply chain.

Bookmark this special page for regular updates on how the industry is responding.

News & Analysis

30 Sep 2022
Spot rates in the eastbound trans-Pacific are dropping so quickly — and by such large amounts — that industry analysts warn carriers could soon be carrying containers at a loss.
15 Sep 2022
US imports from Asia remained strong through August despite container shipping indicators normally associated with a drop in cargo volumes.
06 Sep 2022
The recently ample supply of equipment has cut the price of new 40-foot containers by about 20 percent since late last year, and the price could soften further into 2023, according to Drewry.
01 Sep 2022
The HOS exemption has been extended five times since it was put in place in 2020 by a presidential emergency order, and it has been modified as the pandemic evolved.
25 Aug 2022
Even with the recent sharp decline in spot rates, they are still more than twice what they were two years ago when imports from Asia began to surge after initial COVID-19 lockdowns in the US were lifted.
16 Aug 2022
Industry analysts say they expect US imports from Asia to remain strong for the next several months as a significant amount of holiday season goods remain in transit or stuck in vessel queues outside major gateways.
15 Aug 2022
Although volume growth is waning, container shipping demand for now remains strong and operational bottlenecks continue to remove capacity, slowing the industry’s eventual return to normality, according to JOC analyst Lars Jensen.
11 Aug 2022
As a new clean truck rule in California looms, replacing older trucks with compliant vehicles is becoming increasingly difficult — and costly — amid shortages of microchips and other parts.
29 Jul 2022
Retailers and forwarders in the eastbound trans-Pacific are facing an unusual dichotomy in which spot rates continue to deteriorate even though monthly import volumes from Asia remain at record or near-record levels.
14 Jul 2022
US imports from Asia hit a record for the month of June as consumers seemingly shrugged off rising inflation and maintained recent spending habits.
11 Jul 2022
The degree to which US importers can negotiate lower service contract rates hinges on whether container lines can keep up spot rates, which are still three times higher than before the COVID-19 pandemic.
15 Jun 2022
Robust imports from Asia in May produced a new record, defying concerns about high inflation in the US and COVID-19 lockdowns in Shanghai.
08 Jun 2022
US retailers are forecasting near-record imports through the peak shipping season as back-to-school goods that have already begun landing are followed quickly by holiday season merchandise.
07 Jun 2022
Forwarders say they expect an earlier-than-usual peak season that will lift trans-Pacific spot rates that have been easing, but the trimming of retail orders and front-loading of cargo cloud the longer-term outlook for the health of Asian imports.
26 May 2022
West Coast port officials say excessive rail container dwell times due to insufficient rail assets and capacity threaten the gains ports are making in clearing vessel backlogs and lowering truck turn times.
23 May 2022
Coastwide contract negotiations between the ILWU and West Coast waterfront employers have been put on hold, although individual committee meetings on specific issues such as worker safety will continue.
17 May 2022
New data suggests fears of renewed and widespread port congestion in the US this summer are valid, particularly if growing imports collide with the start of peak shipping season and the return of normal cargo flow from post-lockdown Shanghai.
16 May 2022
Container terminals in Vancouver and Prince Rupert are operating at full capacity, meaning they are unable to handle any cargo diversions from US West Coast ports if longshore contract negotiations head south.
13 May 2022
The debate over whether a freight recession is starting in US trucking is getting hotter as spot rates decline but other demand and pricing indicators stay positive.
12 May 2022
Uncertainty surrounding the timing and speed at which Shanghai’s logistics sector will fully reopen after COVID lockdowns is making it difficult for US shippers and forwarders to plan for the second half of the year.
09 May 2022
US retailers are moving shipments forward in a bid to build inventories before inflation drives prices too high and weakens consumer spending.
29 Apr 2022
Multipurpose and heavy-lift vessel capacity will remain tight for years, keeping upward pressure on pricing, carrier executives said at the JOC Breakbulk & Project Cargo conference.
26 Apr 2022
Disruption from COVID lockdowns in China may worsen once those restrictions are lifted and a fresh wave of containers heads for US ports, S&P Global economist Patrick Newport warned Tuesday.
22 Apr 2022
Despite a modest increase of 2.7 percent in imports from Asia in the first quarter, continued congestion at major US gateways indicates port-related supply chains will struggle with even single-digit growth in imports this year.
18 Apr 2022
A coming import surge composed of early back-to-school and peak season merchandise and pent-up shipments from Shanghai has ports and terminal operators in Los Angeles and Long Beach concerned about another summer meltdown.
07 Apr 2022
Forecasting strong import growth this summer, US retailers warn ports of the urgency they face in addressing port-related supply chain bottlenecks.
24 Mar 2022
Ports on the East and Gulf coasts have increased their share of Asian imports to record levels as shippers and carriers mitigate the risks of West Coast port congestion and potential disruption from upcoming longshore contract negotiations.
21 Mar 2022
Trans-Pacific carriers are wrapping up service contract talks with small and mid-size shippers at much higher rates than large retailers secured just months ago.
18 Mar 2022
A second consecutive month of strong imports from Asia to start 2022 signals to US ports and supply chain stakeholders that the two-year streak of record or near-record import volumes shows no signs of abating.
08 Mar 2022
US imports are expected to be at near-record levels this spring and summer, with consumer demand remaining strong and supply chain bottlenecks showing no signs of improvement, retailers said in their latest forecast.
07 Mar 2022
Vessel bunching at Asian and US ports and congestion in the interior US are severely restricting vessel capacity in the eastbound trans-Pacific, pushing service contract rates to record levels with no relief in sight this year.
07 Mar 2022
CMA CGM has followed the industry trend of reporting extreme profitability for 2021, dramatically paring down debt while making several billion-dollar acquisitions.
22 Feb 2022
The South Carolina Ports Authority has proposed converting of one of three International Longshoremen’s Association (ILA) locals from part-time to full-time work in exchange for the ILA settling its dispute over work performed at the new Leatherman terminal in Charleston.
17 Feb 2022
Terminal operators in Los Angeles-Long Beach believe they have turned the corner on unprecedented congestion issues that have plagued the port complex for the past two years, but they say cargo flow will not improve significantly in the first half of 2022.
09 Feb 2022
A return to single-digit year-over-year growth in imports in the first half of the year will still not provide the relief necessary for US ports to clear their cargo and vessel backlogs, according to retailers.
02 Feb 2022
Labor and chassis shortages and increasing truck turn times and vessel backlogs signal more congestion ahead for the ports of Los Angeles and Long Beach in the coming months.

Commentary

With so many products currently subject to Trump administration tariffs, a huge portion of entries from China will not be eligible for CBP's recently announced COVID-19-related duty deferral program.

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