Digital Edition

June 7 2021

Issue link:

Contents of this Issue


Page 3 of 47

Mark Szakonyi 4 The Journal of Commerce | June 7 2021 Letter from the Editor WHILE IT'S BY no means a certainty, the COVID-19 pandemic and its det- rimental impact on cargo flows have created the most favorable environ- ment to alter US shipping law since the last rewrite occurred in 1998. Seeing a political opening — and responding to mounting frustration over canceled container bookings, instances of excessive storage fees, and poor service levels that have multiplied over the past year — the National Industrial Transportation League on May 19 took its best shot, submitting to Congress a set of proposed reforms to the Shipping Act of 1984. Driving the NITL e‡ort is a sense among some shippers that conditions, particularly on the trans-Pacific trade, will only get worse in the coming months, with retailers, carriers, and forwarders warning of continued import pressures through 2021 and perhaps into next year. Trans-Pacific ocean reliability to East and West coasts was below 16 percent in March, according to Sea- Intelligence Maritime Analysis, while eastbound base con- tainer spot rates are up by between 100 percent and 270 percent from a year ago, depending on the index. And that excludes the thousands of dollars in premiums that simply guarantee cargo is loaded as scheduled. It takes just a single lawmaker to introduce legislation to rewrite the act, just as former Rep. Bud Shuster did in 1998. At the time, NITL, then led by Ed Emmett, successfully lobbied for further deregulation in the form of con- fidential contracts to be included in the Ocean Shipping Reform Act of 1998. Now, NITL has thrown the gears into reverse, arguing for more oversight after the group says months of shipping disruptions have cost shippers billions of dollars. "These unprecedented chal- lenges have exposed gaps in the law governing ocean carrier services that warrant immediate action," NITL said. Chief among shippers' frustrations is a di™culty in obtaining minimum quantity commitments within newly signed trans-Pacific service contracts, even after paying more than double compared to last year. Mid-sized shippers agreed to pay about $2,850 to $3,200 per FEU to the West Coast, $3,800 to $4,200 per FEU to the East Coast, according to carriers, shippers, forwarders, and analysts. Several carrier executives tell The Journal of Commerce they are prioritizing MQCs£from continuing customers rather than those from new cus- tomers, and the transition from new contracts is always di™cult. With US imports up 21 percent between August and April from a year before, according to PIERS, a sister product of The Journal of Commerce within IHS Markit, container lines say they're providing the best service they can with capacity maxed out. Just hours after NITL's announcement, carriers, speaking through the World Shipping Council, slammed the reform proposal as going back in time. WSC said the proposals would "change the US ocean transportation system from a free-mar- ket model to a government managed utility£— much to the detriment of the nation's international trade," adding that there isn't a legislative solution to "systemic physical challenges caused by the COVID-19 cargo crunch." Congress might have an appetite to look for a solution, whether there is one or not. Led by the Agricultural Trans- portation Coalition, farmers and other members of the export community have been telling the Senate commerce committee for months that container lines are refusing to accept their cargo, instead prioritizing empty container returns to Asia. Sens. John Thune, R-S.D., and Amy Klobuchar, D-Minn., in March urged the FMC to crack down on carriers if the agency finds proof of anticompet- itive behavior. Container lines have been prioritizing higher-paying import While the iron is hot The Journal of Commerce (USPS 279 – 060), ISSN 1530-7557, June 7, 2021, Volume 22, Issue No. 12. The Journal of Commerce is published bi-weekly except the last week in December (printed 25 times per year) by JOC Group Inc., 450 West 33rd St., 5th Floor, New York, N.Y. 10001. Subscription price: $595 a year. Periodicals postage paid at New York, N.Y., and additional mailing o"ices. © All rights reserved. No portion of this publication may be copied or reprinted without written permission from the publisher. POSTMASTER: Please send address changes to The Journal of Commerce, Subscription Services Department, 450 West 33rd St., 5th Floor, New York, N.Y. 10001. The Journal of Commerce Executive Editor, The Journal of Commerce and JOC Events: Chris Brooks 609 649 2181, Executive Editor, The Journal of Commerce and Mark Szakonyi 202 872 1234, Managing Editor: Benjamin Meyer 916 716 6272, Managing Editor: Kevin Saville, 212 488 4282, Senior Editors: William B. Cassidy Trucking and Domestic Transportation 202 872 1228, Bill Mongelluzzo, West Coast 562 428 5999, Eric Johnson, Technology 213 444 9326, Janet Nodar, Breakbulk and Heavy Li 251 473 2742, Greg Knowler, Europe +44 7976798770, Ari Ashe, Southeast Ports, Intermodal Rail 202 548 7895, Associate Editor, Northeast and Gulf: Michael Angell, 646 505 4712 Senior Contributor: Cathy Morrow Roberson, 732 730 2533, Data Analyst: Marcin Lejk , +44 58 741 6270, Shipper Engagement Manager: Dustin Braden, 646 679 3450, Shipper Engagement Manager, Breakbulk: Diana Hamm, 832 499 7368 Senior Editor, Special Projects: Alessandra Gregory Barrett, 860 248 5238 Associate Editor, Special Projects: Emily DeVoti, Senior Designer: Sue Abt, Associate Production Manager: Kate Binder, 603 346 4680, Designer: Hannah Kidd, +44 203 253 2134, Sales: Cindy Cronin, Director APAC sales, 954 260 6061 Jean Gibbons, Senior Sales Executive West Coast, FL, GA sales, 706 469 7160 John Knowles, Senior Sales Executive EMEA, AU sales, +44 777 997 4677 Allyson Marek, Senior Sales Executive Northeast sales, 862 754 8012 Judy Welp, Senior Sales Executive Midwest, Gulf, Latin America sales, +1 512 284 2878 Nicole Hutchison, Senior Sales Executive VA, SC, NC, Canada sales, +1 240 626 6126 For Magazine Subscription Customer Service: 450 West 33rd St., 5th Floor, New York, N.Y. 10001 Vice President, Maritime & Trade, IHS Markit, Peter Tirschwell Manager, Production, Carmen Verenna Product Manager, JOC, Stephen Lyman ©2021 The Journal of Commerce — All Rights Reserved For more information, visit our website, Continued on page 6

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - June 7 2021