BDP Trendwatch: Pileup of empty containers building in the US East and West Coast, repatriating empties major challenge in mid to long term; Biden to require US-made steel, iron for infrastructure; China Vows to Ease Supply Chain Woes in Foreign Chamber Meeting

Pileup of empty containers building in the US East and West Coast, repatriating empties major challenge in mid to long term

According to a recent analysis by Container xChange, one of the many challenges for the supply chain now is the overflowing container depots in the US and the pileup of empties that will push the container prices further downwards in the mid-term.

The analysis shows that container prices are declining in the US by as much as 30% in the past two months across the east and the west coast and more than halved at some ports from 2021 prices. Bigger carriers, as per a report by CNBC recently, are shipping empty containers back to Asia from the US to increase profitability and ensure that the high-value cargo from Asia reaches back to the US where the demand is.

“In general, logjams and disruptions lead to an increase in container prices, especially in second-hand container prices because more container volume is tied up along the logistic supply chain. However, in the United States, there is a pile-up of empties as those containers cannot be repatriated back to Asia because of several disruptions one after the other in the past 2 years, and more recently due to the China lockdowns and Russia Ukraine crisis,” said Christian Roeloffs, cofounder and CEO, Container xChange.


Biden to require US-made steel, iron for infrastructure

The Biden administration is taking a key step toward ensuring that federal dollars will support U.S. manufacturing — issuing requirements for how projects funded by the $1 trillion bipartisan infrastructure package source their construction material.

New guidance issued Monday requires that the material purchased - whether it’s for a bridge, a highway, a water pipe or broadband internet - be produced in the U.S. However, the rules also set up a process to waive those requirements in case there are not enough domestic producers or the material costs too much, with the goal of issuing fewer waivers over time as U.S. manufacturing capacity increases.

“There are going to be additional opportunities for good jobs in the manufacturing sector,” said Celeste Drake, director of Made in America at the White House Office of Management and Budget.


China Vows to Ease Supply Chain Woes in Foreign Chamber Meeting

Chinese officials pledged in a meeting with foreign chambers to address supply chain concerns while reaffirming their commitment to the country’s Covid Zero strategy, according to participants.

Representatives of foreign companies in China met Monday with Commerce Minister Wang Wentao to discuss the impact of Covid controls, as outbreaks and lockdowns spread across the country and damage the economy. The eight groups present were the European, German, Japanese, South Korean and U.K. chambers, as well as AmCham China, AmCham Shanghai and the U.S.-China Business Council.

Jens Hildebrandt, executive director of the German Chamber of Commerce in North China, said the meeting let them raise pressing issues member companies were facing related to the country’s Covid-containment strategy, especially in Shanghai.


Fewer cars, more locomotives: Union Pacific, BNSF try to clear congestion

Low rail utilization at the Port of Los Angeles in February had pushed port leaders to encourage shippers to divert more shipments from truck to rail as a way to clear congestion. Now railroads face the opposite problem as they struggle to move a deluge of cargo.

Rail volumes rose sixfold within the last month alone, Gene Seroka, executive director of the Port of Los Angeles, said at a media briefing Wednesday. Approximately 16,000 containers are waiting to load on-dock rail, almost double the number from last fall.

"Both Western railroads had seen worryingly low numbers for a number of months, and everybody in the industry rallied around them to get more intermodal cargo," said Seroka. "That cargo is here—and we've got to handle it better."

Supply Chain Dive

EU to end cargo-in-the-cabin flights

The European Union Aviation Safety Agency (EASA) will put a stop to cargo-in-the-cabin flights beyond July 31.

The use of the passenger cabin for cargo, known as cargo-in-the-cabin flights, have been operating since 2020, after the EASA issued approvals and exemptions for the transport of cargo in passenger cabins on a case-by-case basis.

These approvals and exemptions were time-limited and while the EASA extended the rules in August 2021, it will not extend the timeframe again, it said in a statement on April 11.

AirCargo News

What is the UK-India free trade agreement all about

British Prime Minister Boris Johnson's India visit on 21 and 22 April is expected to give a major push to the bilateral free trade agreement negotiations between India and the UK, which began in January 2022 with an end-of-the-year timeline for an interim pact.

The interim (early harvest agreement) pact aims to achieve up to 65 per cent of coverage for goods and up to 40 per cent coverage for services. By the time the final agreement is inked, the coverage for goods is expected to go up to “90 plus percentage” of goods.

"Early harvest agreements are used to open up bilateral trade between two countries on a restricted list of goods and services, primarily as a frontrunner to clinching a more comprehensive FTA. This FTA is significant for the countries in the manner that trade deals with the UK could boost exports for large sectors such as textiles, leather goods, and footwear which will in turn increase the prospects for employment considering the scale of these sectors," said Mukul Chopra, Senior Partner, Victoriam Legalis - Advocates & Solicitors.

The Times of India