Below is an update from one of our Shipping partners, CHRobinson. They provide a monthly explanation on these crazy times we are seeing in shipping products. We wanted to pass this information along where we see this as very timely information.

Market Update

• LA Ports Pier Pass
  • Starting AUG 1 TMF will be updated to $34.21 per TEU or $68.42 for all other container sizes
• New TSA Screening Regulation
  • Nationwide challenges with getting freight packed in drums booked and moving due to uncertainty around new TSA Screening requirements
  • These shipments need to be dealt with on a case by case basis and will heavily depend on specific airline availability
  • More info to come over the next couple of weeks from Air Product
• Vietnam
  • https://www.reuters.com/world/asia-pacific/vietnams-biggest-city-sees-panic-buying-over-virus-lockdown-fears-2021-07-07/
  • Ho Chi Minh will be going into 2 week lockdown starting today (July 9) restricting business hours, travel, etc.
  • Delays with air and ocean cargo are likely to occur but total impact to supply chain is unclear
  • Vietnam is already an extremely congested lane
• US Gateway Airport Space Challenges
  • Please refer to the attached from Rob Bonk regarding current airport/warehousing situation
  • As we continue to work through the challenges around screening, airline congestion, and delays please help share opportunities for us to quote dedicated trucks
  • Please continue to overcommunicate on any special requirements and/or customer expectations with us

GLOBAL FORWARDING INSIGHTS

[LINK] Stay up-to-date with market changes that impact air / ocean capacity at the trade lane level- everything you need to navigate global shipping.

N.A. SURFACE TRANS UPDATE

Driver Supply vs. Truck Demand 

Healthy contract rates can do wonders to improve tender acceptance on contract freight, but it does little to improve the overall situation for truckload supply. Capacity has been strained for more than a year as volatile demand trends, and challenges with truck and driver shortages have limited carriers’ ability to flex up as needed. The outlook for demand remains strong and should continue to stress carrier networks for the foreseeable future. 

As the summer peak season commences, Class 8 truck production and driver availability remain the biggest obstacles to a recovery in truckload supply. Until these issues are resolved, demand volatility will continue to result in highly unstable market conditions. 

The chart above illustrates the growing imbalance between demand and supply. Truck loadings are up 4%, and driver availability is down 3% year-over-year, illustrating how volumes have continued to grow while driver supply falls.  

The chart below shows FTR’s forecast for truck driver pressure peaking in Q2-2021 and remaining elevated through 2022. This supports the outlook that capacity constraints will drive unpredictable rate environments as demand ebbs and flows. Despite contract rate increases, we are still advising shippers to secure dedicated capacity on their consistent, high-volume lanes to ensure capacity is available in the coming year. 

Source: https://ftr.dev.imagescape.com/  

DAT Trends 

Transportation markets trends increased in the national LTR for the fourth straight week.  In comparing week 27 over the past six years for both Van and Reefer, 2021 LTR has increased WoW.  Van and Reefer LTR surpasses the 2018 levels and is the highest it’s been in the past six years during this same time period and growing. 

Dry Van 

·                  National Load-to-Truck ratio has increased WoW from 6.42 up to 6.71 WoW. 

·                  The Carolinas region is the tightest region at 11 to 1, up from 9 to 1 WoW. 

Reefer 

·                  National Load-to-Truck ratio has increased WoW from 14.21 last week up to 14.98 WoW. 

·                  Lower Midwest is the tightest region with over 24 to 1, down slightly from 25 to 1 WoW.  

Global airfreight updaTE

• Due to a combination of strong demand and lack of labor supporting airport handling we are seeing extreme challenges at certain airport terminals.  These are industry wide challenges that are likely to continue for the upcoming weeks and periodically for the remainder of the year based on demand and the evolving labor market.

• Demand out of Asia has increased in recent weeks

• Driven primarily by capacity/equipment challenges on the ocean market
• Market rates have increased as a result
• Expect volatility in the coming months leading into the traditional peak season

EU update

• Port congestion still continuing at UK and RTM ports, on average 2-3 days- causing vessel delays.
• Blank sailings set to continue through this month as reported previously.
• Still seeing VBS and general UK haulage issues as reported a few weeks back- set to continue through the summer.
• Agreement finally reached on the Ever Given- set to sail from the Suez Canal area in the next few days- link to article below.
• No major issues on Intra EU trucking- however some carriers are not wanting to cross from France to the UK through Calais due to the jungle and threat of immigrants trying to board trucks to cross into the UK- alternative crossings potentially being used- not affecting Transit time.

GLOBAL OCEAN

US-Asia trade

• Carriers now have 98% of total global vessel capacity in service, due to continued strong demand. However due to significant port congestion, vessels are being seriously delayed on their voyages, waiting for berths at congested ports, and slower port handling due to staff shortages as a result of COVID-19 impacts. As a consequence, void sailings are occurring in the market simply because vessels are losing as much as 2-3 weeks in their schedules due to these delays. Carriers then need to realign their vessels and avoid vessel bunching as much as possible. It has been calculated that the current delays in vessel schedules are removing as much as 20-25% of the actual vessel capacity from the market.
• Due to the shortage of equipment in Asia to meet TPEB demand, carriers are continuing to evacuate containers from the USA in large numbers, which is causing equipment shortages in the USA to meet export demand, particularly at IPI points and at Gulf ports. Shortages of RF containers including genset shortages are also very significant at USWC ports and at IPI points.
• Carriers are limiting their acceptance of export bookings on the TPWB trade in order to prioritize repositioning of empties back to Asia.
• Some carriers, such as YML and Maersk are pushing all US export IPI shipments to Asia through USEC ports in order to avoid USWC port congestion. Other carriers, such as ONE, are pushing IPI bookings to Asia through LALB in order to try and address the severe railcar imbalance currently experienced in LALB to meet import demand.
• As a consequence of the above factors, available space for export bookings is extremely tight. It is important to plan bookings at least 5-6 weeks in advance in order to secure space and equipment.  It is also becoming necessary to pay rate premiums in order to move containers on short notice. We are starting to see a small improvement in export space availability to North Asia, but space to South Asia ports continues to be extremely challenging.
• As a result of the space and equipment shortages, carriers have implemented GRI’s on the US-Asia trade for the month of July 2021. These GRI’s have been consistently applied on a monthly basis by carriers since Dec 2020.
• The port of Yantian/Shenzhen China suspended export bookings from China for a 1 week period due to COVID 19 impacts and a shortage of labor. The shortage of labor and mounting port congestion  caused carriers to divert their vessels to other south China ports which spread the port congestion issues to the entire region. The port has re-opened but there is a severe backlog and port congestion remains severe. This will undoubtedly impact US exports into the South China region, as many carriers are currently bypassing Yantian port until the situation  improves and the congestion at other nearby ports has become very significant.

US-Europe trade

• We have been seeing a constantly improving situation with available vessel space ex USEC ports to Europe, and we currently anticipate that most of the space issues will be resolved by mid Q3 2021. In addition, the Canada gateway for US Midwest cargo to Europe through Montreal or Halifax ports is very fluid. There continue to be rail delays from the US Midwest to both USEC ports and to Canada, but overall the situation has improved.

• Void sailings and port omissions are growing on the USWC-Europe trade due to severe port congestion on the US west coast as well as in Europe.  This is leading to serious space shortages on the USWC-Europe all water services.  Generally speaking, carriers are fully booked on the all water services 4-5 weeks out.

• THE Alliance have delayed plans to cancel their AL1 service until Q3 2021. Once this service is cancelled, vessels on other service loops will increase in size which will result in no change to the overall capacity available on the market. Nevertheless, the reconfiguring of these services is going to lead to schedule disruptions in June-July 2021. Some important changes to THE Alliance service as a result of this reshuffling are:
  • AL2 service is switching from London Gateway to Southampton
  • AL6 service is switching from La Spezia to Livorno
  • THE Alliance vessels will no longer offer export service from New Orleans and Jacksonville ports to Europe

• Due to a strong Asia-Europe trade as well as the recent Suez Canal incident, ports in Europe have become even more congested with carrier vessels waiting an average of 4-5 days to berth at major ports. Ports in the UK are especially impacted, and as a consequence, carriers have imposed port congestion surcharges which are payable at destination UK port. Carriers are also omitting UK port calls more frequently in order to try to keep their schedule integrity.

• The joint MPS service currently operated by Hapag/MSC/ZIM/Hamburg Sud between Canada/US west coast ports and Europe, have announced that they will be cancelling their port calls at Vancouver and Seattle by mid-July. This means the service will be reduced to Los Angeles and Oakland port calls only. In addition, Hamburg Sud are completely withdrawing from this service.

US-LATAM trade

• Services to East Coast South America ports have reduced capacity by approx. 25% and this is expected to remain the case for the first part of Q2 2021. Blank sailings to west coast South America ports have increased to approx. 32% of capacity, due to space constraints and congestion at the transshipment hubs.
• The port congestion and vessel waiting time at San Antonio Chile has become quite extreme with vessels waiting up to 20 days to berth and commence discharge.

We are now seeing the same situation in Callao with vessels waiting up to 10 days prior to berthing. CMA has announced a temporary stop booking to San Antonio Chile port due to the severe port congestion.

• As a result of the port congestion issues causing sliding vessel schedules, capacity has become very tight in this market. The tight space is being further complicated by growing US export demand to LATAM from the auto and heavy machinery sectors. Another complicating factor is that many of the services from the USA to South America are transshipped and are connecting with vessel services on the Asia trade. Carriers are prioritizing vessel space to Asia over LATAM in these cases due to the urgency of getting equipment back to Asia.
• ONE have announced that they are changing their MAREX service ex Los Angeles to Central America locations from weekly to fortnightly.
• Due to the tightening of capacity, carriers have announced rate increases in July 2021 covering all South America and Central America ports.
• The port of Buenaventura has re-opened which should help to ease growing congestion at the nearby ports of Cartagena and Barranquilla where cargo had been diverted during the port closure.
• CMA have launched a new service Yuka Express from US Gulf coast ports to Honduras and Guatemala, including calls at Kingston and Cartagena. The first US export vessel departure is planned for June 26^th.

US-Oceania trade

•  The peak season continues on this trade and we are continuing to see significant space issues on the USEC to Oceania with the direct carriers. Service out of USWC ports continue to be very fully booked as well, largely due to severe port congestion issues both in the USA and at destination. Space out of both US coasts therefore continues to be completely full for 4-5 weeks out.\

• CMA will be reverting to fortnightly calls on their PAD service from USEC to Oceania in mid-Sept which is going to further tighten capacity on this trade for Q4 2021.

• As a consequence of the continuing tight space situation as well as the upcoming peak season for this trade,  carriers have announced GRI’s for both July and August that are expected to go through.

• Direct carrier service from USWC ports to Australia will move to fortnightly calls at Oakland port for a 6 weeks period continuing into July in order to try and regain some schedule integrity.

• The congestion situation at most Australia ports has improved recently, however last week some limited strike action resumed at Patrick terminals in Australia which could cause congestion issues to resurface in Melbourne and Sydney ports. Carriers are still waiting as much as 7-10 days at Auckland port before vessels are able to berth The carriers are therefore announcing a fortnightly service from USWC ports to Auckland, due to the persistent congestion at Auckland port and the need to get vessel schedules into better alignment. All the direct carriers continue to apply a port congestion surcharge at Auckland port.

US-India Subcontinent trade

• The Suez Canal incident caused void sailings, vessel bunching, further destabilized vessel schedule integrity, and increased port congestion on the USEC.
• India is very short of equipment and carriers are prioritizing moving empty containers over loaded ones, making space for loaded exports increasingly tight. In addition, carriers are choosing to prioritize sending empty containers to Asia over exports to ISC locations in order to feed equipment back to Asia.
• Several carriers such as Zim, CMA and others are limiting booking acceptance to destinations in ISC where the port congestion is very severe, for example Bangladesh.
• Due to the above factors/booking restrictions, space is very short to meet US export demand to ISC locations. It is very important to book 5-6 weeks in advance now on this trade.
• Carriers are announcing GRI’s on this trade planned for July 2021.

Asia-Europe trade

• The recent Suez Canal incident has increased vessel space shortages in Asia as so many vessels were delayed. Space is expected to be extremely critical on this trade over the next several months as we are now also heading into the traditional peak season period as Europe importers start placing their Christmas orders.
• Rates are constantly increasing on this trade and pricing is at unprecedented high levels.
• Container shortages in Asia are impacting this trade as much as it is impacting the TPEB trade. The container shortages are expected to become even more severe as a result of the Suez Canal incident.  
• Congestion at Europe ports is increasing – the average vessel dwell times at anchorage outside Europe ports are currently 4-5 days.

EQUIPMENT SHORTAGES

• Significant equipment shortages in Asia are leading carriers to reposition empty equipment rapidly from the USA back to Asia to meet TPEB demand. This is resulting in equipment shortages in the USA at IPI points in particular, and also at the port of Houston and New Orleans. Reefer equipment is also in very short supply with most carriers – particularly on the USWC and at rail ramps.
• A bumper agri crop this year has also led to significant agri export volumes which is creating critical shortages of containers at major agri rail ramps such as Kansas City, Dallas, Minneapolis and Omaha. Strong demand for resin is also contributing to the equipment deficit issues in New Orleans and Houston ports.

PORT TERMINAL AND RAIL OPERATIONS

We are continuing to see significant congestion at Los Angeles/Long Beach ports, Oakland, Savannah and NY ports due to a variety of factors – the main ones being:

• Continuing strong TPEB volumes flowing through the ports
• Increased empty equipment inventories at major ports
• Chassis shortages – in part due to warehouses not unloading import containers in a timely manner
• Port labor and driver shortages due to COVID-19 impacts.
• Deterioration of rail services across all US rail carriers. As the backlog of inbound traffic grows we have seen service failure on the westbound (export) side with increased origin dwell and units missing intended outbound trains and vessels. We are also seeing rail carriers limiting the number of containers they will allow to gate in per day for US export in order to avoid further complicating the existing congestion in the network.
• We are also seeing congestion and rail delays for traffic moving through all Canada ports, however the Canada gateway is currently running more smoothly than US gateways.

Here are some specific impacts we are seeing currently on ocean export activity out of the USA:

• Port congestion is causing serious delays to ocean vessels which are sitting at anchor for days waiting to berth. This in turn is leading to weeks where there are unintended void sailings, simply due to schedule delays. Vessel dates are sliding by as much as 1-2 weeks at USEC ports and as much as 2-3 weeks at USWC ports due to congestion issues.
• Delays in the vessel schedules are leading to continual changes in vessel closing dates. This requires constant monitoring and may require changes to shipper loading schedules in order to avoid additional costs.
• Shortage of truck capacity and chassis at some key rail ramp locations such as Chicago, as well as port locations such as Savannah, Charleston and Norfolk, are seriously disrupting the timely movement of US exports.
• Congestion at rail terminals due to import container volumes is leading rail carriers to limit the number of export containers they will accept per day.
• Ocean carriers having regular port omissions to catch up vessel schedules is often resulting in direct services becoming indirect while cargo is en route – adding weeks to the expected transit time.

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There is abundance of packaging suppliers that are getting into the Cannabis space. Here is quick perspective and what to prepare for taken from the May/June 2018 “ Healthcare Packaging “ magazine.  This is a perspective taken from those who supply packaging material.

Child Resistance and Blisters: With any marijuana product, child-resistance is an important piece of the puzzle. Flexible packaging and Blisters will play an important role. Plastic “exit pouches” are required at the point of purchase in some states’ cannabis dispensaries, and these must include a certified, child-resistant feature.
“On the marketing side, most cannabis manufactures are not blister packing yet. It’s a way to set your product apart from the typical bottled soft gels and capsules,” says Wes Mancoff, President of Thomas Packaging.
Nancy Warner, CEO of Assurpack, states, a pharma packaging industry veteran who supplies only child-resistant packaging, notes “People are starting to use primary blisters. The industry ti trying to be legitimate. They should take the highest level of precaution, so I always tell people you have to use F1 because you don’t know otherwise, and how can you support anything less than that?”
And what about sustainability? Most people want recyclable materials, but this can be difficult to balance with the need for child-resistance. Additionally, many cannot afford these options.

Products: While flower is still common, the sheer number of delivery methods is staggering; edibles and infused products are rising in popularity. “A lot of medical patients don’t want to smoke the flower either for health reasons or they are limited in where can smoke,”, says Mancoff. “Capsules and soft gels with extracted THC and/or cannabidiol (CBD) are an easy delivery method that can be consumed discreetly.”
Aside from patient preference, laws in some states may help the edible market become as large, or larger, than that of flower. “Some states-like Pennsylvania at the moment – are passing medical marijuana laws that only allow concentrates and edibles, as supposed to flower,” says Chris Trabbold, Field Service Manager at All-Fill Inc., which supplies cannabis companies like Kiva Confections with packaging machinery.

Automation: Not all, but many edible are still produced in kitchens, not factories. “Most packaging is still semi-automatic with the edible world. But for flower, oils, cartridges and tinctures, people are using more large scale filling machines,” says Werner. “They’re not purchasing a bottle line that goes 300 per minute, but more like 50 per minute. Eventually there will be a lot more equipment demands.” Warner says she works a lot with preformed blisters, foil, cards and simple heat-sealing machines.
“Because it’s still federal illegal, you can’t ship across state lines. One thing we’re seeing is companies planning to open facilities in every state where cannabis is legal, “ says Mancoff. Some producers have even considered purchasing equipment and driving it across state lines to their different facilities because production requirements are small enough.

Future Planning: Where at Cheever we supply several different packaging manufacturers with various films and paper, we get to see firsthand some of the requests or questions they are facing first hand. If you are thinking of expanding your packaging, please gives a shout to pick our brain, we would love to hear on your project.

Jeff Ell
Vice President of Sales
jeff.e@cheeverspecialty.com

CMO Pam Webber from 99desings has provided what she is seeing as the Big Six design trends in packaging. If you have not heard of 99designs, super cool site where this is an online graphic design marketplace that connects freelance designers with business seeking everything from package design to logos. (We used them to create our current logo that you see on our Cheever website today)
We figured with the amount of requests they do in this space for packaging, hearing what Pam had to say is some good tribal knowledge – so here we go.

1. Simplicity. Using less language will keep you in sync with our fast-paced society. People race up and down the food isles so keeping things simple is a way to get noticed. Keeping things simple plays an important role in helping us access our intuitive side
2. Pastels. Pastels feel like a natural reaction to the hyper-stimulation and explosive colors we’ve been experiencing. They speak to our softer side and give products a candid and warm aura, which is translated into a pleasant and welcoming message for the potential customer. This translates in feminine, calming package designs that are starting to see a resurgence.
3. Doodles. Go figure that when Doodles are see on a package, doodles can turn a product into a fun universe that was born from someone’s imagination and shared with the world. Everyone loves Doodles from 3 to 90 year olds.  It is this “raw” un-edit, let-your-guard” down approach that shows the consumer – “hey I’m just like you”
4. Standout Shapes and Material’s. When needing to build a brand or re-brand, having this “extreme packaging” showcases the thoughtfulness and ingenuity your product brings to the market.
5. Vintage. Going with an old school design demonstrates and give the feel that you have a dedication to a certain level of quality, and it tells a story of tradition, respect and passion. These are elements that remain alive-from a design standpoint-through organized structure, dense details and strong, lasting identity. People love to see early turn of century workers “making” things with their hands or showing the hard work it took back then to make something great. It is also shows the passion the workers have for their product and company that really bleeds through to your audience. Think Chevy commercial “Like a Rock” and several others.
6. Vibrant Gradients. The use of gradients seems to be making a comeback. We are seeing more and more colorful gradients, adding depth, and form to package design.