Congestion & COVID Causing Chaos

February 1, 2021

Moving containers from point A to point B has become more challenging.

Congestion at the ports is severe, COVID outbreaks are causing labor shortages, equipment shortages continue, and vessel delays are reaching all-time highs. Here is an overview of the factors affecting the industry.

Download the report here

Congestion Continues

The holiday surge has passed...

But with close to record volume on Asia to North America trade lanes, congestion at the ports is increasing.

Sea-Intelligence Maritime Analysis reports that global liner schedule reliability in December fell to 44.6 percent, down from 50 percent the previous month and 76.3 percent a year ago.
In LA and Long Beach, ships are stacked up and waiting 10 to 14 days to unload, creating congestion on the docks.
This congestion has caused schedules to be upended and has compromised reliability.
Export bookings against delayed ships are being held up, resulting in uncertain departure dates.
Carriers are continuously changing receiving dates, making it hard for truckers to know when they can reliably pick up containers. This is affecting turn times.
No one knows how long congestion will last, but it is not expected to abate until May or June.
Congestion is building at US East Coast ports and in European and UK ports as well.
Blank sailings are used during Chinese New Year as container movement slows to allow ports to catch up. This year, carriers minimized blank sailings to clear exports that are building at Chinese ports. Unfortunately, congestion at US ports is leaving carriers short on ships making it harder to clear the backlog in China.

COVID Concerns

Hundreds of ILW workers have come down with the virus.

Many others are quarantining due to exposure. Others are concerned about their health and not showing up for their shifts.

Worker allocations have been cut back, slowing loadings and unloadings and adding to delays.
An effort has been made by port officials, industry organizations, and maritime regulators to label these workers essential, rendering them eligible for vaccines since they are responsible for keeping the supply chain running, and any disruption would impact the economy.

Rates are Volatile

Rates have reached record levels.

The bad news is that rates have reached historical highs.
The good news is that they remain steady and have not increased in weeks.
Many contract rates are not being honored.

Space is at a premium & there are heavy schedule delays

Availability is in short supply, making it difficult to secure space.

Vessels are overbooked, and in Shanghai, it is estimated that 37% of containers are being rolled.
Carriers are pushing premium services, but that is still no guarantee of having cargo loaded.
Hapag-Lloyd has already announced cancellations of 21
eastbound sailings in February to restore schedule integrity.
Complaints about service levels and rising rates have attracted regulators' attention in the US, Europe, and Asia.

Equipment Shortages Continue

Shortages have especially plagued Europe and China while also affecting the US.

Equipment surcharges are being assessed to secure containers.
Carriers are giving priority to empty box returns to Asia since they can be turned around faster and placed back into service at a premium price.

Download the report here

At UTC, we work hard to keep your cargo moving.

Our teams of experts are in contact with carriers daily, and can help you navigate the changing conditions. Planning ahead, booking early, and working closely with your UTC representative will help you secure the most efficient options.

We value the trust you have placed in us, and thank you for your business.

Get in touch with your UTC representative

A Challenging Cement Plant Move

December 1, 2020

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A CHALLENGING

CEMENT PLANT MOVE

UTC Delivers to Landlocked Paraguay

UTC has a team of logistics experts specializing in moving cement plants anywhere in the world, no matter how complex the job. They spent 15 months planning, organizing, executing, and successfully delivering a complete plant to the Port of Asuncion in Paraguay. The cargo was comprised of oversize, overweight breakbulk and container shipments collected from countries on five continents.

Featured image showing a crain lifiting cargo onto an ocean liner transport ship

The client contracted with UTC because they had complete confidence in UTC's ability to manage this type of job in a remote section of South America. As is customary for any CAPEX or OPEX project, UTC's team carefully studied the processes, infrastructure, and resources available. They went to the region and, together with their local partner, visited and selected the most suitable port and terminal for the chartered vessels carrying the cargo.

Months Planning

Length of Paraguay River

miles

Paraguay's foreign trade conducted via river

Risk assessment and contingency planning were required to mitigate issues that could arise during the project timeline. Conducting this operation during a pandemic posed more challenges as it limited resources, travel, face-to-face meetings, and routine cargo inspections.

Paraguay is landlocked, and the most common and economical way to reach Asuncion port is to transport cargoes via barge from deep water ports in the gulf of Rio de la Plata up the Paraná and Paraguay Rivers. This route spans some 800 nautical miles (about 1500 km). The Paraguay River is the second major river in the Rio de la Plata Basin. Unlike other rivers in the basin, the Paraguay River has not been dammed for hydroelectric power, leaving it navigable for a long distance, second only to the Amazon in terms of navigable length on the continent. For this reason, it is seen as an essential trade route for landlocked countries such as Paraguay and Bolivia.

In-depth risk assessment identified challenges early on

One challenge was water level fluctuations on the river, which can cause disruptions to traffic during the dry season. The dry season set in during one segment of the project, and two-way traffic on the river was interrupted, leaving only one channel clear for movement. Approaching barges in either direction had to stop and wait for clearance to move through the open lane. While waiting for permission to continue to Asuncion, the water level receded further, and another barge transiting through the channel got stuck and blocked the only navigable route. Traffic came to a grinding halt in each direction.

Thanks to a detailed risk assessment plan, UTC had anticipated and was ready for the situation and quickly employed a shallow draft tug that cautiously moved the convoy of barges towards the final destination. In case it became necessary to offload the cargo before reaching Asuncion, an alternate port had been identified. Fortunately, this strategy did not have to be implemented.

Rodrigo Chittoni, UTC Vice President Central & South America Projects, recounted the group's mounting challenges during this leg of the trip. "The last barge was projected to take four days to transit to Asuncion. In actuality, it spanned three weeks as the convoy had to move slowly. Fortunately, due to the team's preparedness, they could shift plans based on rapidly changing river conditions. These occurrences, along with restrictions caused by COVID, posed challenges. Based on careful risk assessment early on in the planning stages, UTC's team of professionals responded to changing conditions to keep the cargo moving. Focused, in-depth planning is critical for a long term project such as this one. It is not something that just happens; it is strategically thought through and developed based on experience and knowledge."

This project showcases UTC’s extensive expertise and ability to manage OPEX and CAPEX jobs in remote areas when faced with multiple adversities. Large cement projects have successfully been completed in Brazil, Uruguay, Paraguay, Colombia, Ecuador, Chile, Bolivia, Mexico, Panama, and Costa Rica.

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Category: Point2Point