Current Affairs
January 15, 2021
Container Traffic Jam
Inside California’s Colossal Container-Ship Traffic Jam
by Tyler DurdenFriday, Jan 15, 2021 – 14:05
By Greg Miller, of Freight Waves,
In the movie “Falling Down,” the character played by Michael Douglas is stranded in a Los Angeles traffic jam. He abandons his car, starts walking with briefcase in hand and ultimately has a mental breakdown. Cargo shippers trying to get their containers through the ports of Los Angeles and Long Beach can relate.Container imports overwhelming California ports
The pileup of ships offshore in San Pedro Bay and congestion onshore at the terminals have reached epic proportions. And the situation could become even more maddening in the weeks ahead.
32 container ships at anchor
American Shipper interviewed Kip Louttit, executive director of the Marine Exchange of Southern California, to get the latest on ships in San Pedro Bay.
He reported that as of midday Wednesday, 91 ships were in port: 46 at berth and 45 at anchor. Of those, there were 56 container ships: 24 at berth and 32 at anchor. Between Wednesday and Saturday, 19 more container ships will arrive, with the same number due to depart.
There were a few more container ships at anchor on Friday — 37 in total. Yet Louttit said “there has been no significant change between the first of January and today.”Container ship locations, Jan. 13 (Map: MarineTraffic)
Louttit confirmed that ships have effectively filled all of the usable anchorages off Los Angeles and Long Beach. Ships have also taken six of the 10 contingency anchorages off Huntington, the next town south.
If all the anchorages and contingency anchorages fill up, ships will be placed in so-called “drift boxes” in deeper water. These are actually circles not boxes. Unlike ships at anchorages in shallower water, ships in drift boxes would not anchor, they’d drift. “When you drift out of the circle, which has a radius of 2 miles, you start your engine and go back to the middle of the circle,” explained Louttit.
Historical perspective on traffic jam
Given the drift-box option, container ships are not about to hit any kind of maximum capacity offshore of California. Nor is there a higher safety risk. “There are a lot of ships, but they’re all very carefully watched and managed,” affirmed Louttit.
The significance of so many anchored ships is what they reveal about the extent of the logistics logjam on shore.Anchored container ships stretch off into the distance
The most recent comparable anchorage level occurred during the labor dispute between the International Longshore and Warehouse Union (ILWU) and their employers in 2014-15.
“On March 14, 2015, there were 28 container ships at anchor. We’ve blown through that record,” said Louttit. The all-time record for ships at anchorage off California occurred in 2004 during a rail staffing shortage.
“Normally, if you want a baseline, there’d be a dozen and rarely are they container ships,” he said.
Signal still flashing red
The Marine Exchange does not look past the coming four days’ arrivals. But there are other ways to see what’s headed this way across the Pacific.
It takes two to three weeks for containers to cross the ocean from China to California. The Port of Los Angeles developed The Signal, a daily digital tool powered by Port Optimizer, to indicate what’s en route. The system uses manifest data from nine of the top 10 carriers calling in Los Angeles.
The Signal data updated on Wednesday showed no letup in sight. Imports are expected to rise from 143,776 twenty-foot equivalent units (TEUs) this week to 157,763 TEUs next week to 182,953 TEUs the week of Jan. 24-30.(Chart: The Port of Los Angeles Signal, Jan. 13)
Importantly, the data does not solely include TEUs arriving in a particular week. It also includes TEUs arriving in prior weeks that the port expects to handle in the stated week.
Consequently, the data provides an indirect indicator of how much cargo is getting delayed. For example, on Monday, Jan. 4, The Signal indicated the port would handle 165,000 TEUs that week. But by Friday, Jan. 8, the assessment for that same week had plunged to 99,785 TEUs — implying that over 65,000 TEUs were pushed to the following week (i.e., this week). This pattern also suggests that the forecast for 182,953 TEUs the week of Jan. 24-30 will ultimately be revised downward.
Congestion causes
In an alert to customers this week, carrier Hapag-Lloyd reported, “All terminals [at Los Angeles/Long Beach] continue to be congested due to the spike in import volumes and [this] is expected to last until February.
“Terminals are working with limited labor and split shifts,” it said, asserting that this is related to COVID. “This labor shortage affects all terminals’ TAT [turnaround time] for truckers, inter-terminal transfers and the number of daily appointments available for gate transactions and delays our vessel operations.”
As a result of “lack of terminal space” to service vessels, “there is a constant switching of terminals that must be kept in mind” given that containers are ending up “in the wrong terminal,” said Hapag-Lloyd.
Congestion woes are now spreading well beyond California ports, confirmed Hapag-Lloyd. The carrier reported “heavy congestion” in Canada and “berth congestion at Maher Terminal and APM Terminals [in the Port of New York and New Jersey] impacting all services with delays of several days being experienced upon arrival.”
Little relief ahead
Liner companies traditionally cancel numerous sailings during the Chinese New Year period to account for decreased Chinese exports. If they did so in 2021, it would allow U.S. terminals time to clear some of the inbound congestion. Unfortunately for terminals, liners are opting against canceling sailings during the Chinese holiday period next month.
Ports could also see congestion relief if U.S. consumer demand slowed. However, that does not appear to be happening.
Analysts believe the “blue sweep” scenario — with Democrats winning the presidency as well as both houses of Congress — will spur $1 trillion-$2 trillion in new stimulus during the first half of this year.
Investment bank Evercore ISI predicted, “Additional checks will reach consumers at a time when unemployment is lower [than during the 2020 stimulus round], mobility has significantly improved, the overall willingness to spend of the general public is up significantly, confidence levels are higher, housing is strong and the savings rate is still extremely high. That is a set-up for a consumer boom.”A view of normal times in San Pedro Bay, when there are few ships at anchor
https://www.zerohedge.com/economics/inside-californias-colossal-container-ship-traffic-jam
January 14, 2021
ASC Board Changes
ASC Announces New Board Officers and Executive Committee for 2021-2022
Published on 2021-01-07. Author : SpecialChem
Adhesive and Sealant Council (ASC) announces changes in its officers and members of the executive committee for 2021-2022. ASC also announced directors re-elected for another three-year term on the board of directors, beginning January 1, 2021.
ASC’s Newly Elected Officers
- Matt Devine, former president of DHM Adhesives, now at H.B. Fuller. He has been elected to serve as chairman of the board through January 31, 2021. He will also lead the ASC executive committee. Devine previously served as ASC Treasurer for two years.
- Heather Campe, senior vice president, H.B. Fuller. She has been elected to succeed Matt Devine as chairman of the board beginning February 1, 2021 through December 31, 2022.
- Forest Driggs, senior vice president and chief financial officer, Franklin International. He has been elected to serve as treasurer beginning january 1, 2021 through December 31, 2022. he will also lead the audit committee and serve on the ASC executive committee.
Brian McSwigan, vice president, packaging and consumer adhesives at Henkel Corporation, will serve as Past Chair for two years and remain on the ASC executive committee.
The Board elected Tom Stewart, senior director, performance adhesives, at Ashland to a two-year term on the executive committee, beginning January 1, 2021.
Gerhard Haas, vice president, research & development, technical service, purchasing at Jowat Corporation was re-elected to another two-year term on the executive committee, beginning January 1, 2021.
Re-elected Members of ASC Board
- Darius Deak, global R&D director – NonWovens, corporate R&D director-Americas, Bostik;
- Damon Hollis, sales manager-Americas, Eastman;
- Mark Schneider, president, Albion Engineering Company;
- Tom Stewart, senior director, performance adhesives, Ashland;
- Dave White, senior vice president, quality and risk management, Sika; and
- Chuck Williams, senior technical director, global adhesives, polymers, adhesive and coatings center of excellence, Avery Dennison
Re-elected members of the ASC board will serving a three-year term beginning January 1, 2021.
“The newly elected ASC Board officers and directors bring many years of experience as leaders in the adhesive and sealant industry that will strengthen our organization as we transition into a post-COVID world,” said ASC President William Allmond.
“They will lead and oversee new strategic initiatives that emerge from ASC’s three-year long-range plan and reconnect the global value chain as hosts of the 10th World Adhesive and Sealant Conference in April 2022,” added Allmond. “As President, I am excited to work alongside our officers and board to grow the value we deliver to our membership and to the greater adhesive and sealant industry.”
ASC’s board includes 23 directors representing manufacturers, suppliers, distributors, and academia in North America.
January 14, 2021
ASC Board Changes
ASC Announces New Board Officers and Executive Committee for 2021-2022
Published on 2021-01-07. Author : SpecialChem
Adhesive and Sealant Council (ASC) announces changes in its officers and members of the executive committee for 2021-2022. ASC also announced directors re-elected for another three-year term on the board of directors, beginning January 1, 2021.
ASC’s Newly Elected Officers
- Matt Devine, former president of DHM Adhesives, now at H.B. Fuller. He has been elected to serve as chairman of the board through January 31, 2021. He will also lead the ASC executive committee. Devine previously served as ASC Treasurer for two years.
- Heather Campe, senior vice president, H.B. Fuller. She has been elected to succeed Matt Devine as chairman of the board beginning February 1, 2021 through December 31, 2022.
- Forest Driggs, senior vice president and chief financial officer, Franklin International. He has been elected to serve as treasurer beginning january 1, 2021 through December 31, 2022. he will also lead the audit committee and serve on the ASC executive committee.
Brian McSwigan, vice president, packaging and consumer adhesives at Henkel Corporation, will serve as Past Chair for two years and remain on the ASC executive committee.
The Board elected Tom Stewart, senior director, performance adhesives, at Ashland to a two-year term on the executive committee, beginning January 1, 2021.
Gerhard Haas, vice president, research & development, technical service, purchasing at Jowat Corporation was re-elected to another two-year term on the executive committee, beginning January 1, 2021.
Re-elected Members of ASC Board
- Darius Deak, global R&D director – NonWovens, corporate R&D director-Americas, Bostik;
- Damon Hollis, sales manager-Americas, Eastman;
- Mark Schneider, president, Albion Engineering Company;
- Tom Stewart, senior director, performance adhesives, Ashland;
- Dave White, senior vice president, quality and risk management, Sika; and
- Chuck Williams, senior technical director, global adhesives, polymers, adhesive and coatings center of excellence, Avery Dennison
Re-elected members of the ASC board will serving a three-year term beginning January 1, 2021.
“The newly elected ASC Board officers and directors bring many years of experience as leaders in the adhesive and sealant industry that will strengthen our organization as we transition into a post-COVID world,” said ASC President William Allmond.
“They will lead and oversee new strategic initiatives that emerge from ASC’s three-year long-range plan and reconnect the global value chain as hosts of the 10th World Adhesive and Sealant Conference in April 2022,” added Allmond. “As President, I am excited to work alongside our officers and board to grow the value we deliver to our membership and to the greater adhesive and sealant industry.”
ASC’s board includes 23 directors representing manufacturers, suppliers, distributors, and academia in North America.
January 13, 2021
Truck Orders Surge
December Class 8 Truck Orders Are The Fourth Highest In History
by Tyler DurdenWednesday, Jan 13, 2021 – 5:35
Class 8 truck net new orders in December were the fourth highest in history at 50,900 units, down 2% MoM but up 153% YoY. Seasonally adjusted orders in the month came in at 39,500 units (474,000 SAAR), down 18% MoM. Orders were up 139% YoY to 142,000 units in Q4 (the second best quarter on record) and up 54% to 278,400 units in 2020.
As Alan Adler at Freightwaves writes, the surge in bookings reflects continued demand for consumer goods, an awakening of the manufacturing sector and robust fleet profits from tight freight capacity. A driver shortage is worsened by closed driving schools. Other drivers are sidelined because they failed drug tests. All of these factor into higher per-mile freight rates.
“As we at ACT [Research] can often be heard saying, ‘When carriers make money, they buy trucks,’” ACT President and senior analyst Kenny Vieth told FreightWaves.
The order strength in the last four months of the year made up for a stagnant order book in April and May, when the first wave of the coronavirus shuttered truck manufacturing plants and disrupted supply chains. But a V-shaped recovery took hold in late summer and plants laid on overtime to make up for delayed orders.
“Looking to 2021, with freight-intensive economic sectors like manufacturing coming on strong, and driver recruitment continuing to lag, carrier profitability should continue to accelerate, which bodes well for new vehicle demand,” Vieth said.
In a Thursday note from JPMorgan, the largest US commercial bank said it expects production of ~250,000 units in 2021 (up 17% YoY) and ~258,000 units in 2022 (up 3% YoY).
Should the economy fall victim to the worsening impact of the pandemic, fleets can cancel or retime orders. Order placements assure carriers of being assigned a build slot for their new trucks. As production backlogs grow, so does the time between order and delivery.
“Although we believe the tailwinds of still-strong consumer buying, likely to be boosted further by new stimulus checks, and inventory restocking will remain powerful in 1H21, a successful vaccine rollout and reopening of economies is likely to drive an aggressive shift in consumer dollars back to services,” Evercore ISI said in an investor note Thursday.
That could occur just as new trucks being ordered now are ready for delivery.
“To get two back-to-back order months over 50,000 is a stellar accomplishment, after previously seeing orders crater to under 5,000 units in April,” said Don Ake, vice president of commercial vehicles at FTR Transportation Intelligence. “Now, 2021 has the potential to be an incredible recovery year.”
Orders for new dry vans and refrigerated trailers mirror the surge in the tractor orders that pull them. Flatbed orders are recovering more slowly. The September-November booking total amounted to the second-best three months in industry history. “The backlog is filled into Q4,” Dave Giesen, vice president of sales at Stoughton Trailers, told FreightWaves in December. “We will wait for the supply chain to catch up before we continue quoting as this is a long way out.”
Meanwhile, December demand for Class 5-7 trucks recorded its second-best ever volume at 35,100 units. Medium-duty orders rose 28% over November and 73% compared to last December.
“There is a symbiotic relationship between heavy-duty freight rates and medium-duty demand,” Vieth said. “Clearly, the shift in consumer spending from experiences to goods has been good for the providers of local trucking services as e-commerce has grown by leaps and bounds during the pandemic.”
https://www.zerohedge.com/markets/december-class-8-truck-orders-are-fourth-highest-history
January 13, 2021
Truck Orders Surge
December Class 8 Truck Orders Are The Fourth Highest In History
by Tyler DurdenWednesday, Jan 13, 2021 – 5:35
Class 8 truck net new orders in December were the fourth highest in history at 50,900 units, down 2% MoM but up 153% YoY. Seasonally adjusted orders in the month came in at 39,500 units (474,000 SAAR), down 18% MoM. Orders were up 139% YoY to 142,000 units in Q4 (the second best quarter on record) and up 54% to 278,400 units in 2020.
As Alan Adler at Freightwaves writes, the surge in bookings reflects continued demand for consumer goods, an awakening of the manufacturing sector and robust fleet profits from tight freight capacity. A driver shortage is worsened by closed driving schools. Other drivers are sidelined because they failed drug tests. All of these factor into higher per-mile freight rates.
“As we at ACT [Research] can often be heard saying, ‘When carriers make money, they buy trucks,’” ACT President and senior analyst Kenny Vieth told FreightWaves.
The order strength in the last four months of the year made up for a stagnant order book in April and May, when the first wave of the coronavirus shuttered truck manufacturing plants and disrupted supply chains. But a V-shaped recovery took hold in late summer and plants laid on overtime to make up for delayed orders.
“Looking to 2021, with freight-intensive economic sectors like manufacturing coming on strong, and driver recruitment continuing to lag, carrier profitability should continue to accelerate, which bodes well for new vehicle demand,” Vieth said.
In a Thursday note from JPMorgan, the largest US commercial bank said it expects production of ~250,000 units in 2021 (up 17% YoY) and ~258,000 units in 2022 (up 3% YoY).
Should the economy fall victim to the worsening impact of the pandemic, fleets can cancel or retime orders. Order placements assure carriers of being assigned a build slot for their new trucks. As production backlogs grow, so does the time between order and delivery.
“Although we believe the tailwinds of still-strong consumer buying, likely to be boosted further by new stimulus checks, and inventory restocking will remain powerful in 1H21, a successful vaccine rollout and reopening of economies is likely to drive an aggressive shift in consumer dollars back to services,” Evercore ISI said in an investor note Thursday.
That could occur just as new trucks being ordered now are ready for delivery.
“To get two back-to-back order months over 50,000 is a stellar accomplishment, after previously seeing orders crater to under 5,000 units in April,” said Don Ake, vice president of commercial vehicles at FTR Transportation Intelligence. “Now, 2021 has the potential to be an incredible recovery year.”
Orders for new dry vans and refrigerated trailers mirror the surge in the tractor orders that pull them. Flatbed orders are recovering more slowly. The September-November booking total amounted to the second-best three months in industry history. “The backlog is filled into Q4,” Dave Giesen, vice president of sales at Stoughton Trailers, told FreightWaves in December. “We will wait for the supply chain to catch up before we continue quoting as this is a long way out.”
Meanwhile, December demand for Class 5-7 trucks recorded its second-best ever volume at 35,100 units. Medium-duty orders rose 28% over November and 73% compared to last December.
“There is a symbiotic relationship between heavy-duty freight rates and medium-duty demand,” Vieth said. “Clearly, the shift in consumer spending from experiences to goods has been good for the providers of local trucking services as e-commerce has grown by leaps and bounds during the pandemic.”
https://www.zerohedge.com/markets/december-class-8-truck-orders-are-fourth-highest-history
Everchem Updates Archive 
Sign Up for Email Updates
