Trade News

December 9, 2020

Distributing COVID-19 Vaccines Testing Global Supply Chains

With a highly condensed COVID-19 timeline for vaccine readiness and distribution, supply chain capacities are being stretched and tested.

While typical vaccine development takes eight to 12 years, followed by supply chain establishment, and finally a large-scale manufacturing and distribution ramp up, each step of that process has been dramatically accelerated.

Further complicating transportation and supply chain logistics is the issue of cold storage, with vaccines like the one developed by Pfizer needing to be kept below -70 degrees Celsius.

The demand is not entirely unprecedented. Cold food chain systems already exist for seafood and ice cream, for example, but the sheer volume to meet the demand of the global distribution of vaccines is where the challenge lies.

Last month, the FAA lifted its standard dry ice limit so United Airlines can begin flying chartered cargo flights loaded with 15,000 pounds of dry ice — five times more than normally allowed — to support international distribution of Pfizer’s COVID-19 vaccine. The drugmaker reportedly designed suitcase-size boxes to allow for more flexibility and rapid deployment.

American Airlines began its own trial flights from Miami to South America to prepare for its role in transporting the COVID-19 vaccine, stress testing its thermal packaging and operational handling process to ensure the doses are distributed in ample conditions.

Once the vaccine arrives at the distribution hub locally, a whole new set of worries arise. While many anticipate the first few batches of the vaccine to fly off the shelves, once the demand slows the amount of time a vaccine can sit on a shelf or require refrigeration is another concern.

An unbroken cold chain has to be maintained from the time the vaccine comes off the production line at Pfizer’s manufacturing facilities in Kalamazoo, Michigan, and Puurs, Belgium, right through to when it is thawed to be administered.

If the cold chain fails, the vaccine can degrade and even become contaminated with bacteria.

At University Hospital in New Jersey, CEO Shereef Elnahal has assembled what he describes as a “tiger team” staff, involving all facets of his operations, from the pharmacy to legal advisers, to ensure the hospital is complying with all guidelines and recommendations from the federal and state government. The team has been conducting stress tests for several weeks now, to ensure that its vaccine distribution plans and cold storage facilities are foolproof, when the actual doses arrive.

The new chain of storage and distribution being created is likely going to have long-term use.

Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said at the Milken Institute Future of Health Summit Monday that mRNA, the technology used by Pfizer and BioNTech (BNTX), as well as Moderna (MRNA), is the future of vaccines.

Ultimately, execution of vaccine distribution will fall upon the shoulders of logistics workers, such as loading dock operators, truck drivers, air cargo handlers and package sorters.

The American Trucking Associations advocated for truck drivers to receive vaccine priority to minimize distribution delays. The Centers for Disease Control and Prevention has recommended transport workers for “Phase 1b” of inoculation, meaning second in line after healthcare workers to receive the COVID-19 vaccine.

(Source: Yahoo Finance)

December 8, 2020

Container Shortages Plaguing Tradelanes

Some container vessels have been sailing from Asia to Europe under-utilised in recent weeks due to an acute shortage of empty boxes.

All carriers report severe shortages of the popular 40ft high-cubes (HCs) at their depots, and there has also been a run on 40ft standard boxes – even 20ft containers are sometimes showing as unavailable.

The latest container availability index report from Container xChange shows availability across China “still at a record low”.

Forwarders have had to scramble for boxes due to the more lucrative transpacific trade securing the biggest share. However, big spikes in spot rates from Asia to Europe in recent weeks seem to have levelled the playing field on competition for boxes between the two tradelanes.

To mitigate the serious equipment imbalance, ocean carriers have adopted an aggressive strategy for European and US exports, temporarily suspending bookings, preferring to fill backhaul ships with as much empty equipment as possible.

To deter all but the most valuable cargo, European exporters to Asia are being asked to pay in excess of $5,000 per 40ft to secure a December shipment, with many carriers also refusing to accept export bookings until mid-January.

Meanwhile, the empty equipment so desperately needed back in Asia is scattered around depots across Europe, particularly in the UK, where embattled ports have been forced to limit the restoration of containers back onto already overcrowded terminals.

And despite technological advances, containers are sill spending a surprisingly long time empty at depots, incurring storage costs and not earning revenue — a global average of 45 days, but closer to 63 days in regions with low container availability.

(Source: The Loadstar)

December 7, 2020

U.S. Bans Cotton Imports From China Producer XPCC Citing ‘Slave Labour’

The Trump administration expanded economic pressure on China’s western region of Xinjiang, banning cotton imports from a powerful Chinese organization that it says uses the forced labour of detained Uighur Muslims.

The U.S. Customs and Border Protection agency says its “Withhold Release Order” would ban cotton and cotton products from the Xinjiang Production and Construction Corps (XPCC), one of China’s largest producers.

The ban against XPCC, which produced 30% of China’s cotton in 2015, could have a sweeping effect on companies globally involved in selling textiles and apparel to the United States.

It follows a Treasury Department ban in July on all dollar transactions with the sprawling business-and-paramilitary entity, founded in 1954 to settle China’s far west.

The United Nations cites what it says are credible reports that 1 million Muslims held in camps have been put to work. China denies mistreating Uighurs and says the camps are vocational training centres needed to fight extremism.

While the Treasury sanctions target XPCC’s financial structure, Wednesday’s action will force apparel firms and other companies shipping cotton products to the United States to eliminate XPCC-produced cotton fiber from many stages of their supply chains, said Brenda Smith, CBP’s executive assistant commissioner for trade.

Identifying cotton from a specific supplier will sharply raise manufacturing costs, and only the few large companies with fully integrated operations across the complex textile supply chain could guarantee that no XPCC product has been used, the trader said.

(Source: Reuters)

December 4, 2020

UPS Temporarily Stops Picking Up Orders From Six Retailers to Cope With Holiday Surge

As COVID-19 cases and hospitalizations continue to surge across the U.S., more people have turned to online shopping this holiday season—and delivery services can’t keep up.

On Wednesday, the UPS ordered drivers to temporarily stop picking up orders from six retailers after too many packages exceeded the shipping giant’s capacity. The retailers include Gap, Nike, L.L. Bean, Hot Topic, Newegg, and Macy’s.

The move, which some drivers say they had not seen in previous holiday seasons, is likely to ensure the service does not take on more than it can handle. It’s unclear how long the restrictions will last.

A UPS spokesman told CNBC on Wednesday that the carrier had set “specific capacity allocations” for its customers over the holiday season. Retailers were also advised by carriers to spread out online promotions beyond Black Friday, and many started their sales as early as October.

Both UPS and FedEx upped their shipping rates earlier this year, as many retailers have been bombarded with online sales that have pushed carriers to their limits for most of the pandemic. In October, UPS announced it would hire 100,000 workers to accommodate the holiday shipping rush, while FedEx said in September that it planned to hire 70,000.

According to Adobe Analytics, Thanksgiving saw $5.1 billion in online sales, and Black Friday racked up $9 billion. In-store shopping on Black Friday saw a 52% decrease from last year, according to data from Sensormatic Solutions. Cyber Monday brought in $10.8 billion in online sales, a 15% increase from last year.

(Source: Slate)

December 2, 2020

Two New STS Cranes Added to Vanterm Terminal

Global Container Terminals (GCT) has received two modern ship-to-shore (STS) cranes, capable of handling 14,000TEU vessels at GCT Vanterm in Burrard Inlet in Vancouver.

The cranes are part of GCT’s US$160 million private sector investment to modernize and increase the level of operations at GCT Vanterm.

GCT Vanterm’s two newly arrived cranes will be among the most advanced in North America, according to a statement, electrically powered, they feature regenerative drives that can provide power back into the grid and high-efficiency LED lighting.

The cranes will reduce glare and light pollution along with features intended to reduce operational noise, while they have also been painted cloud-white colour to mitigate daytime skyline visibility.

GCT added that the new machines, along with other equipment upgrades and process improvements, will improve safety for the workforce, increase terminal capability, and reduce equipment emissions by 55%, all within the same footprint.

(Source: Container News)

December 1, 2020

Canada Blocks Exports of Some Bulk Prescription Drugs to U.S. to Prevent Shortages

Canada has blocked bulk exports of prescription drugs to prevent shortages at home, in response to outgoing U.S. President Donald Trump’s efforts to allow imports from Canada to lower some drug prices for Americans.

“Certain drugs intended for the Canadian market are prohibited from being distributed for consumption outside of Canada if that sale would cause or worsen a drug shortage,” Health Minister Patty Hajdu said in a statement.

The Canadian measure went into effect on November 27th, just days before a U.S. “Importation Prescription Drugs” rule that would eventually allow licensed U.S. pharmacists or wholesalers to import in bulk certain prescription drugs intended for the Canadian market.

Trump touted the plan in his first debate with president-elect Joe Biden, who has also said during his campaign that he would set up a similar import plan to try to reduce prescription drug costs for Americans.

“Canada is a small market, representing 2 per cent of global drug sales, that sources 68 per cent of its drugs internationally. The need for vigilance in maintaining the national drug supply continues,” Hajdu’s statement said.

Prime Minister Justin Trudeau said in September he was willing to help other nations with pharmaceutical supplies if possible, adding that his priority was protecting the needs of Canadians.

(Source: CBC News)

November 30, 2020

Cargo Rollovers Rise in October

Demand for ocean cargo surged through October as ocean carriers added nearly as much capacity as possible. The swelling demand to move containers and the lack of additional capacity has resulted in a wave of rolled cargo, with some carriers reportedly rolling as many as 1 in 3 shipments.

The rate of rolled cargo at transshipment ports increased in October to nearly 29%, up from almost 27% in September, and more than 22% in October 2019, according to figures in an emailed release from Ocean Insights.

The second-busiest port in the world, Port of Singapore, saw an increase in its ratio to more than 31% rolled cargo in October from more than 30% in September.

Some areas did see improvement, however, including the busiest port in the world, Port of Shanghai, which had its ratio improve to less than 23% in October from almost 26% in September.

Some trade specialists have pointed towards an import wave that has been building in momentum over the past few months, as retailers restock from low inventory levels, along with a surge of e-commerce shipments for those who have retained their purchasing power amidst the COVID-19 pandemic.

U.S. exporters have voiced frustration with this fact in recent weeks, saying ocean carriers are moving empty containers back to Asia rather than wait for agricultural exports.

With government regulators seemingly unable to rein in the power of the global shipping lines, it could seem that shippers don’t have much power to avoid rolled cargo.

(Source: Supply Chain Dive)

November 25, 2020

Commons Considers Bloc Bill to End Dairy Concessions in Trade Deals

When Canadian trade negotiators begin talks with the United Kingdom next year on a permanent bilateral trade deal, their hands could be tied when it comes to offering any future dairy, egg or poultry concessions — if Parliament passes a new private member’s bill that saw its first hour of debate on Tuesday.

Bloc Québécois MP Louis Plamondon’s legislation, Bill C-216, would amend the Department of Foreign Affairs, Trade and Development Act to state that the minister “must not make any commitment … by future trade treaty or agreement” that would increase the tariff rate quota (TRQ) applicable to dairy products, poultry or eggs, or reduce the tariff applicable to those goods when they are imported in excess of that quota.

Canada protects its agriculture supply management system for these commodities by carefully controlling access to its domestic market. Only small quantities of imports are allowed under strict international quotas — TRQs — with high tariffs keeping any extra imports above and beyond these quotas from being cost-competitive.

But the three major trade deals implemented by the Liberal government over the last four years — the Comprehensive Economic and Trade Agreement (CETA) with the European Union, the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) with 10 other Pacific Rim markets and, most recently, the revised North American Free Trade Agreement (the new NAFTA) — all offered new access to Canada’s domestic market, among other concessions required to land these deals.

If Plamondon’s legislation garners enough support to pass in this Parliament before the next election, the first trade negotiation it could affect is talks between Canada and the United Kingdom to reach a permanent, comprehensive deal to liberalize their bilateral trade post-Brexit.

The government won’t release details of exactly what’s in that transitional agreement until the legal text is ready, which usually takes another two to four weeks. But Doug Forsyth, Canada’s lead negotiator in the talks, confirmed previously that the British were seeking additional tariff-free access to Canada’s cheese market.

“I want to be very clear that there is no new market access for cheese here in this transition agreement,” International Trade Minister Mary Ng told CBC News at Saturday’s announcement.

But yesterday at the Commons trade committee, Ng’s parliamentary secretary, Rachel Bendayan, said that language in the transitional deal commits both sides to returning to the table to reach what Prime Minister Justin Trudeau has called a “bespoke” bilateral deal by 2024.

That means the British could make another play to get more U.K. cheeses into Canada.

Based on remarks made during Tuesday’s first hour of debate, it appears Conservative MPs may not support this bill, although a party spokesperson has yet to comment on it or confirm how the Official Opposition will vote.

MPs will vote on the bill at second reading after its second hour of debate, expected later this winter.

(Source: CBC News)

November 25, 2020

Mixed Reaction to Reduced U.S. Duties on Canadian Softwood Lumber

Canada’s international trade minister says newly reduced duties on softwood lumber imported to the United States are “a step in the right direction,” but added any additional fees are “unwarranted and unfair.”

The U.S. Department of Commerce on Tuesday set a new duty rate of 8.9 per cent on average after completing its first administrative review on softwood lumber imports from Canada.

The new rate is down from the original 20.2 per cent average duty imposed in 2017 by the U.S., which alleged Canada was both unfairly subsidizing its industry and then dumping wood into the U.S. at unfair prices.

International Trade Minister Mary Ng said her ministry will continue to seek a negotiated settlement with the U.S. through both the World Trade Organization (WTO) and the new Canada-U.S.-Mexico Agreement. She said a settlement is “not only possible, but in the interests of both our countries.”

Ng has joined Prime Minister Justin Trudeau and other federal government officials in saying the U.S. duties have only served to drive up construction costs on both sides of the border, further hurting a lumber industry already impacted by climate change and other issues like pine beetle infestations.

The BC Lumber Trade Council called the remaining duties “frustrating and disappointing,” and said U.S. demand for lumber has outpaced domestically produced product.

In its own statement, the U.S. Lumber Coalition argued the reduced duty rate “understates true levels of subsidies and dumping” by the Canadian industry and expressed hope the rate will increase after the completion of a second review, which began in March.

“The U.S. lumber industry will continue to push for the trade laws to be enforced to the fullest extent possible in the second administrative review to allow U.S. manufacturers and workers the chance to prosper,” coalition co-chair Jason Brochu said.

(Source: Global News)

November 23, 2020

Canada and Britain Agree On Post-Brexit Rollover Trade Agreement

Britain and Canada have struck a rollover trade deal to protect the flow of $27 billion-worth of goods and services between them after Brexit, and vowed to start talks on a custom agreement next year.

As Britain prepares to end its transition out of the European Union on Dec. 31, it has negotiated multiple rollover bilateral deals to maintain trade, with many simply replacing the terms the bloc had already agreed.

British Prime Minister Boris Johnson joined Canada’s Justin Trudeau and their respective trade ministers on an online call to mark the deal, which paves the way for a tailor-made agreement covering more areas such as digital trade, small businesses, the environment and women’s economic empowerment.

The Canada-United Kingdom Trade Continuity Agreement (CUKTCA), would preserve the main benefits of the Comprehensive Economic and Trade Agreement (CETA) and allow for a continuation of trade and market access between Canada and the UK.

The Canadian Parliament must approve legislation that would enable the deal to come into effect.

Britain is Canada’s fifth largest trading partner after the United States, China, Mexico, and Japan.

In less than two years, Britain has agreed to trade deals with 53 countries, accounting for 164 billion pounds ($217.82 billion) of British bilateral trade.

The UK-Canada Trade Continuity Agreement will be subject to final legal checks before it is formally signed.

(Source: Reuters)