What to Expect this Summer?
Welcome to the summer edition of the Netchem Newsletter, where we dive into what to prepare for this season.
Ocean Freight
Steamship lines are planning additional General Rate Increases (GRIs) in June3. It looks like we might see a substantial GRI of around $1000 USD per container at the beginning of June with another possible increase mid-June3. Spot rates hit their highest they’ve been in 20 months last week1. With carriers already booked through mid-June, space is becoming scarcer, and rates are climbing. We expect this to continue increasing due to limited availability and emerging container shortages. Please be reminded that the peak ocean shipping season runs from August to October, however container scarcity has already started this summer. We strongly advise planning ahead for potential delays due to increased volume during this period.
CN RAIL STRIKE UPDATE
The Canada Industrial Relations Board (CIRB) is reviewing agreements related to the CN and CPKC rail services, prompted by Minister of Labour Seamus O’Regan2. These agreements state that no services need to be maintained during a strike or lockout. O’Regan has requested that the CIRB assess if these agreements comply with section 87.4(1) of the Canada Labour Code, which mandates the continuation of essential services to prevent immediate danger to public safety or health during such work stoppages2. CIFFA has expressed concerns about the logistical challenges of distinguishing and managing essential products during consolidated shipments, emphasizing that Canada’s supply chain cannot quickly transition to alternative modes of transportation3.
What does this mean for Supply Chains? The Canada Industrial Relations Board’s (CIRB) review of agreements that could halt all services during strikes or lockouts poses significant risks. If these agreements are upheld without requiring any essential services to continue, there could be severe disruptions in the supply chain, as alternative transportation modes cannot quickly compensate for the loss of rail services. This situation could lead to logistical challenges, delays, and increased costs, making it crucial for companies to plan for potential interruptions and advocate for the recognition of rail services as essential to ensure minimal impact during labor disputes.
Stay tuned for our next newsletter in September for more updates and insights. Until then, wishing you a great summer and third quarter!
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1Goldstone, C. (2024, May 30). Getting containers in the right place at the right time is now “impossible.” The Loadstar. [source]
2Maintenance of activities at CN/CPKC. Canada Industrial Relations Board. (2024, May 13). [source]
3Ramos, A. (2024, May 21). June 1st GRI: Secure your space now. Global Logistical Connections, Inc. [source]