On December 8th, H.R. 4996-Ocean Shipping Reform Act of 2021 easily passed in the House of Representatives on by a vote of 364 to 60. The Act is designed to strengthen the overseas supply chain, support the growth of U.S. exports and eliminate unfair business practices. If this Act becomes law, it will help to ensure that ocean carriers no longer refuse cargo bookings for U.S. exports and that shipping carriers and marine terminal operators certify that any shipping container late fees are fair and comply with federal regulations.
Over the past two and a half years since the first COVID-19 cases emerged, the global supply chain has experienced a myriad of obstacles—and continues to. From manufacturing to ocean shipping to trucking, just about every challenge that could occur, has occurred. Perhaps, however, there are some rays of light starting to emerge for the supply chain.
New COVID cases are continuing to wreak havoc in world supply chains. The spread of the COVID Omicron variant has created bottlenecks throughout the world and in particular at many of the world's busiest ports in China. Operations at the world's busiest port of Shanghai are struggling to cope with shipments that have been re-routed from other large Chinese ports such as Shenzhen in the south and Tianjin in the north.
Undoubtedly, COVID-19 has had a dramatic impact on the supply chain. COVID had led to ongoing shortages of products, widespread price increases, and continued supply chain unpredictability. Indeed, when the world economy reopened after largely shutting down at the onset of COVID, supply chains couldn’t keep up with the sudden huge surge in product demand. New COVID variants and various health protocols have also weighed heavily on logistic networks.
A new queuing system has been developed and implemented to help alleviate port congestion and pollution at the Ports of Los Angeles and Long Beach. As of November 16, the system now requires cargo vessels that arrive early at the LA and Long Beach ports to wait 150 miles offshore. Previously the ships were able to stay within a small 40-mile perimeter off the ports. The new system has been developed by the Pacific Maritime Association, the Pacific Merchant Shipping Association and the Marine Exchange of Southern California as well as shipping companies and was signed off on by the twin ports. The new queuing process will not apply to vessels currently in the arrival queue.
The recent blockage of the Suez Canal by the Ever Given container ship has shown just how fragile global shipping can be. But, this Suez incident was just one episode in the overall shipping crisis triggered over a year ago by the Coronavirus pandemic. Perhaps the biggest obstacle to shipping now is the shortage of transport boxes (shipping containers). Even when these containers are available, their prices have increased to sky-high levels—from about $1000/each prior to 2020 to up to $10,000 now, according to the DW article: “Coronavirus Pandemic Triggers Shipping Container Crisis.”