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LogisticsLogistics

Burning Cargo Ship Adrift; Freight Trains Boxed Out; New Shipping Queues

By Paul Page

 

Efforts to extinguish a blaze aboard a car carrier adrift in the Atlantic Ocean are being hampered by the nature of the cargo. Dutch experts trying to salvage the Felicity Ace say the large number of electric vehicles on board is complicating the recovery of a ship that was hauling 1,100 Porsche sports cars and 189 super-luxury Bentleys. The WSJ’s William Boston and Patricia Kowsmann report that the presence of burning lithium-ion batteries means SMIT Salvage is facing flames that spread fast and cannot be fought with water alone. The cause of the fire hasn’t been determined. For the auto industry, the latest in a string of supply-chain setbacks may raise fundamental questions about the movement of vehicles across oceans. Transport of lithium-ion batteries is tightly regulated in the aviation sector. Now, the power sources behind the burgeoning electric vehicle business may come under greater scrutiny in ocean shipping.

 
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Transportation

A double-stack intermodal train near the Port of Savannah last October. PHOTO: OCTAVIO JONES/REUTERS

The U.S. container import surge is increasingly going around rail yards. Inbound boxes that would normally move on railroads instead are moving on American roads, the WSJ Logistics Report’s Paul Berger writes, as shippers and logistics companies turn to trucks to avoid continuing supply-chain bottlenecks. U.S. intermodal shipments are down sharply this year after tumbling in late 2021 even as importers rushed to get goods to markets. Experts say shippers appear to be opting for the greater certainty and flexibility of road transport rather than risk tying up goods in rail networks. According to the Intermodal Association of North America, shipments by intermodal marketing companies by rail fell 7.3% in the fourth quarter but loads sent by truck were up 18.1% from the year before. The demand is driving up rates on truckload spot markets, which load board DAT says reached a record high in January.

 
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Quotable

“We have four times the import containers on our terminals than we had back in 2019, 2020.”

— South Carolina Ports Authority Chief Executive Jim Newsome
 

Transportation

PHOTO: LUKE SHARRETT/BLOOMBERG NEWS 

The alternatives to port congestion are rapidly closing. A backup of container ships waiting off South Carolina’s Port of Charleston has expanded to 30 vessels, the WSJ Logistics Report’s Lydia O’Neal writes, and authorities have pushed back by a month to mid-April their estimate for when the backlog will be cleared. The offshore queue is up from 19 vessels last month. The growth there follows a buildup of vessels late last year off Georgia’s Port of Savannah that has since diminished. The backlogs show congestion is spreading as shippers look for ways around the lengthy delays at Southern California ports at the heart of U.S. supply-chain bottlenecks. Those backups appear to be receding, with container dwell time at the ports of Los Angeles and Long Beach slipping to 7.7 days in December, according to the Pacific Merchant Shipping Association, still high but the first monthly decline since the spring.

 
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Number of the Day

141.8 Million

Square feet of warehouse space absorbed in the U.S. in the fourth quarter, a 5% increase from the third quarter and up 43.7% from the fourth quarter of 2020, according to Jones Lang LaSalle.

 

In Other News

Sales of previously-owned homes in the U.S. jumped 6.7% from December to January. (WSJ)

American Airlines is cutting more flights from its summer schedule because Boeing can’t deliver new 787s in time. (WSJ)

Germany halted the Russian-German Nord Stream 2 gas pipeline after President Vladimir Putin ordered troops into breakaway Ukraine regions.

Heavy-duty trucks and protesters demanding an end to Covid-19 vaccine mandates have left Canada’s capital city of Ottawa. (WSJ)

Chinese authorities want the country’s online food-delivery platforms to reduce the fees they charge businesses. (WSJ)

Deere & Co. expects strong demand for its farm and construction equipment to blunt rising production costs. (WSJ)

General Electric warned that supply-chain pressures would weigh on its results in the first half of 2022. (WSJ)

Germany’s producer prices skyrocketed 25% in January in the sharpest annual growth on record. (Reuters)

The U.S. Justice Department is working with other countries to identify and prosecute companies that are illegally exploiting supply chain disruptions for profit. (Supply Chain Dive)

Incoming A.P. Moller-Maersk chairman Robert Uggla says the shipping line has learned from its past mistakes in acquisitions. (Financial Times)

GXO Logistics is moving to buy U.K.-based Clipper Logistics in a $1.3 billion cash-and-stock deal. (Bloomberg)

Authorities reported casualties on a Grimaldi Lines ferry carrying passengers, cars and trucks in the Ionian Sea. (Maritime Executive)

Russia is opening its shipping season on the Arctic Northern Sea route earlier than ever. (TradeWinds)

Icelandic container line Eimskip projects continued “unusual conditions” this year after expanding its profit nearly 10 times over in 2021 to about $45 million. (ShippingWatch)

Hong Kong-based Kerry Logistics is buying trans-Pacific-focused ocean freight forwarder Topocean. (The Loadstar)

Combined exports from the ports of Seattle and Tacoma, Wash., fell 36% in January to the lowest level in records dating to 2015. (Port Technology)

Alibaba logistics arm Cainiao will use Atlas Air 747-8 freighters on new routes between China and the U.S. and South America. (Air Cargo News)

Asian airlines are ramping up overseas flights as borders begin to open around the region. (Nikkei Asia)

Authorities issued recalls for a wide range of products after a rat infestation was discovered at a Family Dollar Stores distribution center in Arkansas. (CNN)

Auto parts retailer and distributor AutoZone will place an 800,000-square-foot East Coast distribution center near Richmond, Va. (Associated Press)

Cannabis companies in Colorado are struggling with shortages of growing materials. (Denver Post)

 

About Us

Paul Page is editor of WSJ Logistics Report. Write to him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @pdberger. and @LydsOneal. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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