LFS news blog


Robust import volumes are straining the US west coast gateways.

According to The Loadstar, retailers are concerned about delays to their holiday merchandise, as robust import volumes are straining the US west coast gateways.

In particular, they claim, the port complex of Los Angeles and Long Beach is already struggling with lengthening transit times.

According to the Port Tracker report, published monthly by the National Retail Federation (NRF) and Hackett Associates, US container ports handled 2.1m teu of imports in August, up 9.7% month on month, and 8% year on year, to reach the highest monthly level on record.

The brunt of this wave of imports has hit the LA/LB complex, and increased further last month as Los Angeles recorded its strongest September tally in its history, its teu count up 13.3% from a year earlier.

And whereas it handled 627,000 teu on average every month in the first half of the year, this jumped to 900,000 teu in the third quarter.

At Long Beach, the container count was up 12.5% year on year in September.

Up the coast, the port of Oakland reported a 10.6% surge in imported containers on September 2019, to 93,916 teu, which smashed the port’s previous monthly record of 84,901 teu, attributed to retailers stocking up for the holiday season.

“We continue to see the replenishment of warehouse and distribution centre inventories, along with retailers prepping for year-end holidays,” said Gene Seroka, executive director at the port of Los Angeles.

September US retail sales were up 1.9% on August and 5.4% year on year, led by non-store retail (largely e-commerce), which was 23.8% higher than a year earlier.

The surge in e-commerce has been widely identified as the reason for the disproportionately strong surge of cargo flows through the west coast ports, as transit times from Asia to the US interior are faster than routings via the Atlantic or Gulf ports. And faced with soaring airfreight rates, many e-commerce shippers have embraced expedited ocean services to Los Angeles and Long Beach.

And, burned by stock-outs in the spring, retailers have been building up inventory, lest they face a repeat of that experience and lose business to competitors.

NRF VP for supply chain and customs policy Jonathan Gold said in Port Tracker: “Retailers are making sure their shelves and warehouses are well stocked for the holidays. They are stocking up earlier than usual because they know many consumers will be shopping early this year to avoid crowds and shipping delays.”

But Port Tracker predicts a slowdown to 1.86m teu in October, down 1.1% year on year, and foresees further decline in momentum for November (down 5.1% year on year to 1.61m teu) and December (down 11.2% to 1.53m teu). This would add up to 20.5m teu this year, 4.9% lower than in 2019.

However, other predictions are more bullish beyond October.

“The NRF is predicting October volumes to be only 1% behind last year. And though they expect a drop-off starting in November – possibly impacted by the delay of additional government stimulus – there are other indications that restocking and pre-ordering of spring shipments ahead of Chinese New Year in February could keep volumes elevated into next year,” said Eytan Buchman, chief marketing officer at Freightos.

CRM service provider Salesforce predicts a massive surge in online shopping during the holiday season, with 30% growth globally and 34% in the US. The ensuing volume of shipments will likely exceed available capacity by 5% and lead to delays of up to 700m packages, it warned.

Some carriers have indicated that they anticipate strong volumes through the remainder of this year. Despite the reinstatement of blanked sailings and the deployment of additional loaders, cargo terminals at Asian transshipment hubs have continued to see high roll-over rates (in excess of 30% in Singapore, Ningbo and Pusan), which are expected to continue well into the fourth quarter. This also suggests continuing heavy volumes and congestion at the US west coast ports.

Los Angeles and Long Beach have struggled with congestion since June, owing to elevated volumes, labour shortages and reduced work teams at the terminals and distribution centres, and chassis shortages. According to the Pacific Merchant Shipping Association, container dwell time in Southern California in August was 3.25 days, up from 2.8 days in July, with 10% of the containers stuck at terminals for five days or longer.

The congestion spread to the rail carriers serving the ports. Their struggles with elevated volumes have led to rate hikes and surcharges. Union Pacific raised spot rates and/or surcharges three times within a month.

The pain for importers appears to be far from over.

In LFS, we offer you freight shipping solutions in Mexico, Canada and the U.S. Contact us to ease your processes and help you to import or export your loads.

By: LFS Marketing

October 27, 2020

USMCA: Challenges and Trends

According to Bloomberg Tax, replacing NAFTA with USMCA meant modifications to the existing rules of origin that will determine if a product qualifies for duty-free treatment. For many importers the transition caused concern about whether they would lose duty-saving benefits. Importers quickly began looking at their existing top imports by value to understand if they will qualify. However, as supply chains are shifting faster than ever, validating potential new opportunities to apply FTAs is as critical as determining whether existing product claims can continue.

This is particularly true for industries where USMCA simplified or expanded the opportunities for duty-free treatment, such as computer and electronic product manufacturing, which ranks as the seventh largest U.S. manufacturing industry, according to the publication U.S.-Mexico-Canada Trade Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors. Electronics is a highly integrated industry with Mexico as a major manufacturing hub for these products. In fact, Mexico is one of the global leaders in production of flat-screen televisions and computers, most of which are exported to the U.S. By recognizing the deep integration of these supply chains, USMCA negotiators generally eased the qualification by reducing regional value content (RVC) requirements, converting tariff shift requirements, and making tariff shift rules easier to meet.

Another challenge is USMCA’s mid-year implementation. This timing means that importers must assess how this will impact their current sourcing plans. Doing so requires developing a USMCA plan with clear goals, then assessing each project, and its components, in light of those goals. Not doing so increases the potential of proceeding with projects that may no longer be beneficial or could leave money on the table. While USMCA allows preferential duty treatment to be applied retroactively, it does not allow importers to reclaim the merchandise processing fee for post-entry claims. While on a per-entry basis the maximum payment is only $528, over time managing USMCA claims proactively at the time of entry can result in substantial savings. While this may be a legislative oversight that will be addressed in the future, developing a plan to analyze USMCA’s entire potential impact on your company and then prioritizing next steps can result in a more complete duty-savings picture.

Understanding USMCA’s New Requirements

With only a short time to assess the new requirements, trade professionals across industries are, in some cases, struggling to understand and apply USMCA’s rules in a real-world context. One of these challenges is adjusting to the removal of the NAFTA preference override. Unlike NAFTA, a qualifying USMCA import may potentially have a country-of-origin marking that may not be U.S., Mexico, or Canada. Imported goods under NAFTA had to both (1) qualify under the NAFTA rules of origin, and (2) meet the NAFTA marking rules to be considered as originating in a NAFTA country. Where the marking rules were more stringent than the rules of origin, importers could claim the “NAFTA preference override” to allow a NAFTA country-of-origin marking. However, the USMCA’s Implementing Instructions stipulate that under the USMCA, an import does not need to be marked as originating in Canada or Mexico to receive preferential treatment. While this change brings USMCA in line with modern FTAs, it can be confusing and a new process should be implemented to manage the requirements.

The USMCA rules to qualify vehicles and parts have been revised and broken out into a number of different categories. A new requirement requires certain vehicle assemblers to collect labor wage information from suppliers which has raised questions. For examples, certain workers are included in this formula while others are not. While “high-wage transportation or related costs for shipping”—including “drivers and loaders performing the transportation, logistics, or material handling of a part or component”—can be included in meeting labor requirements (according to the Federal Register Notice from the Department of Labor titled High-Wage Components of the Labor Value Content Requirements Under the United States-Mexico-Canada Agreement Implementation Act), importers are finding that in practice it is not clear cut.

Understanding the new rules and implementing new procedures can result in real-time product slowdowns that impact bottom lines. Working through these challenges requires time—which may be in short-supply in many trade groups.

In LFS, we offer you freight shipping solutions in Mexico, Canada and the U.S. Contact us to ease your processes and help you to import or export your loads.

By: LFS Marketing

October 27, 2020

Intermodal, highly requested solution during the peak season.

U.S. rail volumes has increased closed to 2% as intermodal traffic pushed volumes higher. The U.S. railroads originated 520,452 carloads and intermodal units for the second week of October, according to the Association of American Railroads. Of that, intermodal traffic rose by 8.4% to 289,488 intermodal containers and trailers.

Some commodities have already posted year-over-year gains. Grain volumes, is one of them, presenting 12% of overall weekly traffic, rose 31% to 27,434 carloads. This increased analyzed from a Year-to-date U.S. volumes are 10% lower than the same period in 2019.

The port of NY/NJ also set a record for intermodal rail volume in August. “At almost 65,000 lifts, the portwide intermodal ExpressRail system handled 7.8% more volume than August 2019, with overall rail volume up 1.4% year-to-date through August 2020,” the port said.

“Port partners are taking proactive steps to add more resources and service hours to support this untraditional peak cargo volume season,” it said. “Daily communications with the port authority, freight railroads and marine terminal operators are ongoing to manage the strong cargo volumes and remain fluid at both the terminal gates and throughout the ExpressRail system. Actions already taken include increased weekend hours and the allocation of more labor to the ExpressRail terminals.”

The port said that it is “committed to working with Class I rail partners, Norfolk Southern and CSX, as well as local operator Conrail to manage the substantial intermodal volumes. Several system-enhancing investments have been identified and are underway.

“This assertive approach will ensure that off-port support infrastructure is scaled to accommodate anticipated cargo growth. For example, the Waverly Loop project is an off-site improvement that will enhance staging capacity and overall network fluidity. This Conrail project, which is estimated for completion in late 2021, will provide an additional 12,000 feet of rail staging capacity,” the port said. 

LFS offers you great availability in or intermodal solutions, contact us and get more information.

By: LFS Marketing

October 19, 2020

The Port of New York and New Jersey set a container volume record.

Thanks to the call of the largest container ship: CMA CGM Brazil with a capacity of 15,072 and twenty-foot equivalent units (TEUs), the port of NY/NJ achieved a monthly container record in August. The movements were in total 688,365 TEUs, a 1.3% year-over-year increase. Year-to-date volume through Aug. 31 totaled 4,661,453 TEUs.

According to freightwaves, “the August performance came on the heels of what the Port Authority of New York and New Jersey called the single worst quarter on record. Between March, when the full force of the COVID-19 pandemic hit the New York area, and the end of June, the port authority’s revenue miss totaled $800 million — about $200 million per month below budget.

The Port of New York and New Jersey expects container volumes that have rebounded sharply from the height of the coronavirus pandemic to remain strong through the rest of the calendar year.

In August, imports increased 7.1% year-over-year and totaled 368,868 TEUs. Still, imports were down 4.7% year-over-year through the end of August, from 2,536,072 TEUs in 2019 to 2,416,690 TEUs through the first eight months of this year. Currently, the port welcomes the influx of containers and said in an announcement that maintaining cargo supply chain fluidity remains a primary objective.

“Port partners are taking proactive steps to add more resources and service hours to support this untraditional peak cargo volume season,” it said. “Daily communications with the port authority, freight railroads and marine terminal operators are ongoing to manage the strong cargo volumes and remain fluid at both the terminal gates and throughout the ExpressRail system. Actions already taken include increased weekend hours and the allocation of more labor to the ExpressRail terminals.”

LFS offers you great capacity in port NY/NJ, contact us and discover our solutions.

By: LFS Marketing

October 20, 2020

Discover the top 5 Trading partners of Texas, USA.

Did you know that Texas, is the State with the highest revenue generated with in freight shipping industry. According to the FHWF, Federal Highway Administration, Texas moves close to 1´359 USD bn along the current year, 2020 and the main industries requesting freight shipping solutions are: Oils & Gas, Mineral & Ores and Chemicals.

In most of the cases, like Texas, most of the shipments are local, which means lanes Texas – Texas, shipping the majority of the products between the same State. However, Texas has 5 main trading partners which are: Louisiana, Oklahoma, California, Illinois and Ohio, creating strategic lanes that represent opportunities for Project cargo, FTL and drayage considering the needs of the main industries in Texas. 

If you are looking for a strategic partner in the US, contact us! LFS offers you multiple freight shipping solutions, providing you efficiency, traceability and connectivity while you delight your customers.

By: LFS Marketing

October 6, 2020

A potential hurricane could hit the northern east coast of the US.

Currently, there is a Tropical Storm Delta in the south of Jamaica which is gathering strength as it moves toward the Cayman Islands. This tropical storm could intensify into a Category 1 hurricane while clipping western Cuba and becoming stronger to hit the Gulf of Mexico later in this week. This could be the 10th storm to hit the U.S. when it makes landfall between Louisiana and Florida by Friday.

Its winds could reach 105 mph as it crosses the Gulf, making it a Category 2 storm on the five-step Saffir-Simpson scale, the U.S. National Hurricane Center said Oct. 5. Delta’s intensity will depend on how much wind shear it has to fight off. Right now, wind shear looks to be fairly weak, making intensification likely.

Carriers and shippers should prepare for possible shut downs of roads and ports. On its current path, the storm will likely cause oil and natural gas production offshore of Louisiana to shut down, and it poses a threat to onshore refineries and shipping, said Jim Rouiller, lead meteorologist with the Energy Weather Group. Output from the Gulf has been disrupted several times this year from tropical storms and hurricanes moving through the region.

By: LFS Marketing

October 6, 2020

Freight volumes in Canada, rise for a third consecutive month.
News LFS
Freight volumes in Canada, rise for a third consecutive month.

According Trucknews TORONTO, Ont. — Volumes on Loadlink’s Canadian spot market rose 2% in August, the third consecutive monthly rise, according to Loadlink Technologies.

Year-over-year, August load postings were also up 2% from August 2019, the loadboard operator said late Thursday.


It said August’s positive performance fell in line with expectation.

“For the first time, two consecutive months saw positive year-over-year comparisons since June and July of 2018 when load volumes reached record highs,” the company said.

It said early August volumes fell slightly following a strong week to end July.

“Volumes held steady until the last week of the month when average daily postings surged entering September and reached a peak level not seen since March – right before the coronavirus pandemic impacted Canada.”

Overall outbound cross-border load postings on Loadlink’s spot market saw a gain of 27% against a 12% decline in truck postings compared to July.

“This increase in load postings was the main contributing factor to the overall monthly improvement from July.”

Inbound loads from the U.S. fell 10% compared to July 2020, it said.

Year-over-year, inbound load volumes were down 7%. Ontario, Quebec and Atlantic Canada also saw declines in loads as they fell 11%, 14% and 8% respectively. Western Canada fared the best as inbound load volumes only declined 1%.

Domestic activity on Loadlink’s spot market was up just 2% month-over-month, but increased 15% compared to August 2019.

Ontario and Quebec lanes were the standout performers when it came to lanes that saw the largest percentage increase in load volumes, the company said.

“Quebec outbound held the top three spots in this regard as the New Jersey, North Carolina and Florida inbound lanes all saw 88% average increases in loads from Quebec.”

Ontario outbound occupied the next two positions as the Florida and Virginia inbound markets saw 85% and 82% increases respectively, the company said.

By: LFS Marketing

September 29, 2020

A Deep Dive into US Exports to Mexico and Canada
News LFS
A Deep Dive into US Exports to Mexico and Canada

Given the proximity of the United States to Mexico and Canada, these two countries represent an important export value to the US. According to the Census Bureau data, the first semester of 2020 Canada represented 16% of the total US export value. They were followed closely by Mexico with 15%. Next was China with 7%. 

This trading activity between countries is analyzed per industry to have clarity on the product´s demand. Three industries represent 43% of the US export value: chemicals, computer & electronics, and transportation equipment. This is directly related to the demand from Canada & Mexico. In the case of Canada, the products highly requested are transportation equipment and chemicals. On the other hand, Mexico is mainly computer & electronic products and transportation equipment. 

Given this context, shipping needs often require an expert in logistics. At LFS, you can find several solutions like FTL & LTL, drayage, and intermodal. We are a one-stop-shop! Let us help ease the process of getting your freight across borders. 

By: LFS Marketing

September 28, 2020

News LFS
Local shipments in Florida highly requested by the Oil & Gas industry

In 2020, Florida was forecasted to move 252.52 million dollars of intra-Florida freight according to the FHWF (Federal Highway Administration). These lanes are mainly consumed by a few specific industries. In Florida, Oil & Gas is number 1 shipper. The forecasted revenue accumulated by Oil & Gas in shipping costs on intra-Florida lanes is 50.5 million dollars per year. However, this is just 20% of the total revenue made off of local FL shipping lanes. There are other industries, like Chemicals which represent 12.55%, this is followed by Food and Kindred Products with 10.12%.

To gain a better understanding of the shipping patterns between states, Florida's main partners are Georgia, Texas & North Carolina. However, these states generate a lower total revenue shipping across state lines vs. intra-Florida shipping.

 LFS offers you great availability in our multiple freight shipping solutions: LTL, Partial, TL, Drayage and Intermodal. If you are looking for a strategic partner in the US, contact us! LFS provides you efficiency, traceability, and connectivity while you delight your customers.

By: LFS Marketing

September 21, 2020

Carriers LFS
News LFS
Container rate records are shattered as US imports surge

According to freight waves, Just how high can Asia-U.S. West Coast spot rates go? They blew past $3,000 per forty-foot equivalent unit (FEU) in early August and have been climbing ever since. They’ve just topped $3,700. Can they reach $4,000?

No one predicted that the container industry would be doing this well, this quickly.

“We’ve been scratching our heads a lot, trying to figure out why ocean freight prices have climbed so high,” commented Eytan Buchman, chief marketing officer of Freightos, on Wednesday.

The bullish view is that import demand will continue to surprise to the upside. Ocean rates evidence a U.S. economic rebound. COVID erased demand for some products and services, but increased demand for other products. Storefront sales won’t recover, but e-commerce sales will offset storefront losses. Government support will counter shutdown fallout.

The bearish view is that the economic-fallout shoe has yet to drop. Demand for ocean container transport is being temporarily juiced by the tail end of waning government support, a switch to higher inventory levels — for both defensive and e-commerce reasons — and by bookings brought forward ahead of Chinese Golden Week (Oct. 1-7).

Another dip ahead?

Panjiva, a unit of S&P Global Market Intelligence, reported Wednesday that U.S. seaborne box imports hit an all-time monthly high in August.

The total came in at 2.71 million twenty-foot equivalent units (TEUs), up 5.9% year-on-year driven by a 14.3% surge from China.

“I find it difficult to see this situation as a permanent stable reversal given the underlying economic issues from the pandemic,” opined Lars Jensen, CEO of SeaIntelligence Consulting. He foresees “another dip for container-shipping volumes” before “getting back on a more permanent upturn.”

According to Buchman, “Demand for ocean freight out of China is still outpacing supply [although] some of the current demand can be attributed to pre-loading ahead of the [Golden Week] break.

“The surge in volumes is leading to equipment shortages in Asia.” he continued. “Some shippers are paying premiums on top of spiking rates to guarantee containers and space. The imbalance is also putting pressure on overwhelmed U.S. ports and importers to process and return empty containers quickly.”

FreightWaves Maritime Expert Henry Byers believes volumes have peaked. “From here, volume will remain on a relatively stable decline through the end of year,” he predicted.

Asia-US rates still soaring

The Shanghai Containerized Freight Index (SCFI) put Asia-West Coast spot rates at $3,758 per FEU for the week ending last Friday. The SCFI estimate for Asia-East Coast spot rate was $4,538 per FEU.

The Freightos Baltic Daily Index shows the same trend but slightly lower numbers. It has Asia-West Coast rates (SONAR: FBXD.CNAW) at $3,727 per FEU as of Tuesday and Asia-East Coast rates (SONAR: FBXD.CNAE) at $4,491 per FEU.

Trans-Pacific earnings ‘remarkable’

According to Alphaliner, “The recent surge in spot rates from Shanghai to California … has made this route the most lucrative for carriers for exports out of China.”

Alphaliner combined the SCFI numbers with a distance calculator to determine earnings per nautical mile for each route out of China. Shanghai-California came in at 65 cents per nautical mile, Shanghai-New York 43 cents and Shanghai-Antwerp just 20 cents.

“The fact that earnings per nautical mile are more than three times as high on the Asia-USWC [U.S. West Coast] route [versus Asia-North Europe] is remarkable, as carriers need less resources on a shorter trade,” said Alphaliner.

“A typical Far East-North Europe service requires … 12 ships, whereas six ships are sufficient for a Trans-Pacific Southwest [U.S.] loop,” it noted, attributing the rate disparity to “very strong cargo demand on the trans-Pacific.”

Inactive fleet down, charter rates rebound

When coronavirus pummeled import demand in the second quarter, carriers reduced sailings. Carriers idled ships and let charters expire. They booked new charters at much lower rates. Now, carriers are scrambling to lease in as much as tonnage as they can — and they’re paying up for it.

The inactive fleet peaked at over 12% of the total fleet in late May. According to Alpahliner, it was down to just 3.4% as of Aug. 31.

Simultaneously, “the charter market continues its rapid recovery, with charter rates in many cases back to or higher than their pre-COVID-19 level,” said Alphaliner.

Ships carrying 7,500-11,000 TEUs “remain sold out.” The 5,500-7,499 TEU segment “is now sold out” after a recent fixture. Meanwhile, rates for the 4,000-5,299 TEU segment “have gone into overdrive,” said Alphaliner.

This should be welcome news for U.S.-listed container-ship leasing companies such as Costamare (NYSE: CMRE), Global Ship Lease (NYSE: GSL) and Danaos Corp. (NYSE: DAC), although their shares have yet to bounce.

By: LFS Marketing

September 21, 2020