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Issue 4 2020 - FBJNA From the Editor


Praises, and more praises


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MATT WEIDNER Tel: + 1 610 486 6525 matt.weidner@fj-online.com


JOHN SAUNDERS - PUBLISHER Tel: +44 (0)151 427 6800 Mobile: +44 (0)7932 102026 john.saunders@fj-online.com


EDITORIAL


KAREN THUERMER-EDITOR karen.thuermer@fbj-online.com CONTRIBUTING EDITORS: PETER BUXBAUM MARK CALDWELL HANK DONNELLY JOHN JETER AMANDA LOUDIN


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LORRAINE CHRISTIAN Tel: +44 (0)151 427 6800 lorraine.christian@fj-online.com


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By Karen E. Thuermer


The logistics industry remains challenged by the depth and reach of the coronavirus. Never in the history of supply chain logistics – with perhaps the exception of world war – has the industry faced so many problems. The waterborne side of the industry has witnessed scores of blank sailings by


the ocean container carriers, temporary marine terminal closures and slowdowns, and an upheaval in the intermodal transportation system. In response, the Federal Maritime Commission has revised its Procedures for Exemption from Service Contract Regulatory Requirements and, starting April 27, allows such exemptions to be granted without providing an opportunity for a hearing. According to the FMC, the current COVID-19 pandemic and its effect on the


international supply chain and commercial operations has demonstrated a need for Commission flexibility to provide immediate regulatory relief in appropriate circumstances. “This is particularly true in the case of service contracts given the challenges that the current situation presents to contract negotiation, formation, and filing by the carriers and their customers,” FMC wrote in a statement. “To that end, the FMC is revising its exemption procedures for past 530 to allow for exemptions for the regulatory requirements in that part to be granted without notice and opportunity for a hearing.” Meanwhile seaports across the country and worldwide have been closely following


instructions and protocols from appropriate federal agencies to quickly respond to the coronavirus threat. Officials at Port Tampa Bay, for example, have been working alongside Ports America and its terminal service providers to allow normal gate hours and operations for customers. This, officials there say, has enabled providers to deliver diverse goods to the South Florida and Gulf region. Operations also continued to function uninterrupted at the Port of New Orleans (Port


NOLA). But as officials there and at other seaports emphasize, the longer the pandemic continues, the more it will impact the bottom line of seaports worldwide. “As we budget for fiscal year 2021, we are in close contact with our partners, tenants


and others to assess the variables and develop a feasible budget,” said Brandy D. Christian, Port NOLA President/CEO, CEO of the New Orleans Public Belt Railroad Corp. Helping seaports like Port NOLA are s diversity of business lines. “We still plan to


invest in infrastructure that supports our future needs,” she said. “Recognizing the challenges and short-term barriers, our approach during this budget season is to plan strategically, prioritize projects appropriately, and identify potential long-term savings.” The airline industry has been in the mainstream news regarding its severe


cancellations of passenger service, parked aircraſt, and mounting financial losses. An entire runway was closed at Hartsfield-Jackson Atlanta International Airport to park aircraſt. American Airlines has parked many planes in Tulsa, OK not to mention the scores of aircraſt grounded at Southern California Logistics Airport in Victorville. CA. In late March, Delta and American Airlines grounded more than 1,000 planes combined because of the steep drop in demand for air travel and flight restrictions to international destinations. Data provided by the International Air Transport Association (IATA) indicated that


during March global demand for air cargo fell by over 15% compared to the previous year. Capacity plummeted almost 23%. Belly capacity for international air cargo shrank nearly 44%. The only silver lining was a 6.2% increase in capacity through expanded use of freighter aircraſt, including the use of idle passenger aircraſt for all-cargo operations. In April, IATA’s Director General and CEO Alexandre de Juniac reported that the


industry did not have enough capacity to meet the remaining demand for air cargo. He warned that the gap between global demand and capacity needed to be addressed quickly. “Vital supplies must get to where they are needed most,” he said. With most of the passenger fleet sitting idle, airlines are doing their best to meet


demand by adding freighter services, including adapting passenger aircraſt to all-cargo activity. Brandon Fried, executive director of the Airforwarders Association, commented to


FBJNA about the role freight forwarders have been playing during the crisis. “Freight forwarders are essentially intermediaries so our members neither control air capacity (supply) nor the demand which is the freight from shippers,” he said. “However,


forwarders are continuing to do what we do best, which is to rapidly adapt to market swings and customer demands.” He stressed how most of the US trade-related regulatory agencies such as TSA


and CBP continue to operate as they normally do, although the Federal Emergency Management Agency (FEMA) has kept a close watch on the export movement of essential medical supplies, including personal protection equipment (PPE). “Overseas in China, government authorities have been conducting quality checks on PPE exports to other countries which are creating significant bottlenecks, especially from Shanghai,” he said. Fried stresses that the biggest challenge right now is dealing with the complexity


of the federal stimulus packages including the Paycheck Protection Program (PPP) under the CARES Act. “We remain concerned that the allocated funds may not be sufficient in the long-run and hope that Congress is prepared to provide more easily available assistance soon,” he said. “Our transportation and logistics network will lead the way to full economic recovery, but freight forwarders cannot operate in a state of diminished capacity.” Meanwhile, airlines have stepped up and are offering their passenger planes for


cargo flights. “This has been tremendously helpful,” Fried said. “In fact, about a third of our


members have and continue to use these flights on a frequent basis.” Over time, Fried says he expects the industry will see an evolution of these offerings,


first as exclusive charters and now as part-charter arrangements involving several forwarders using the same aircraſt on scheduled flights. “The Airforwarders Association encourages our airline partners to continue these


flights and looks forward to aviation regulatory agencies such as the FAA to allow the utilization of passenger planes exclusively for cargo purposes,” he said. FJBNA praises all faucets of the logistics community in finding solutions to supply chain challenges as we continue to face dire needs from the public of which it serves.


///NEWS


Freight Business Journal North America - FBJNA reaches out to the decision makers and influencers involved in international freight transport and logistics. FBJNA boasts the most informative and authoritative source of information with unrivalled in depth knowledge of the rapidly changing freight business environment. Our complimentary website www.fbjna. com provides the most up to date news and analysis from within the international shipping industry.


If you have any stories or letters which should be of interest or any feedback on FBJNA, please contact our editor Karen Thuermer - karen.thuermer@fbj-online.com


next issue >>


Our next issue will include features on: MidWest and Inland Ports, Intermodalism and Pharma.


For further details contact: Matt Weidner - T: + 1 610 486 6525 E: matt.weidner@fbj-online.com


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