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Transpacific Market Report

Drought and Power shortage force China crucial factories to stop production

With high temperatures baking a large area of China over 50 days, several provinces such as Jiangsu, Anhui, Hebei and Sichuan have issued executive orders asking industrial enterprises to limit electricity use to meet the requirements of people’s daily livelihoods.

Chongqing city and neighboring Sichuan province are famous for rich hydropower resources which generate 80% of its power. However, the drought and high temperatures gave a heavy blow to local industrial production. 51 rivers and 24 reservoirs in Chongqing have dried up. All industrial power users in the province have ceased production and will take a six-day break from Monday to Saturday. According to the city authority, peak load in Chongqing has reached historic highs, while more than half the load comes from air conditioning due to extreme heat wave which peaked at 45 C on last Thursday. The city has taken a number of measures to save power. Shopping malls and office buildings are required to adjust their operation hours, the urban districts are rolling blackouts, and residents are encouraged to save electricity at home. The Sichuan region, as a key manufacturing region of raw material, battery, semiconductor and solar panel industries, has become very important in the past 10 years.

Due to electricity rationing of the office building, HLS Chongqing office has closed and all staff WFH from 23 August until further notice.


Port situation

Savannah: The berth congestion remains high with 32 vessels at anchor and dwell up to 16+ days.

Houston: The berth congestion remains high with 23 vessels at anchor and dwell up to 18+ days.

Vancouver: The terminal congestion continues for lack of rail capacity coupled with inland ramp restrictions. The waiting time for berth has been up to 17+ days.

( THEA/PN2 service will omit Vancouver from WK33 to WK36, while PN4 service will omit PRR from WK34 to WK37. )

LA/LB: According to the port authorities, “Even with today’s rail challenges, our container terminals are in pretty good shape. Dwell time for truck-bound containers is now at four days, close to more traditional times and a significant decline from the high of 11 days.”

US inland: The congestion is persistent causing containers to be ground stacked at the rail terminals. The dwell time for IPI cargo is at least 7 to 10 days, and deteriorate in off-dock IPI service up to 23 days. Temporary service pauses and train metering by the railroads is on-going.

Due to heavy backlogs at ports and terminals, HPL has started to limited IPI (via PSW) booking acceptance and put restriction on rail services.

Hapag-Lloyd Trans-Pacific Rail Import On Off dock Rail Chart – PSW
Terminal YTI Trapac WBCT ITS TTI
End Location FP1/FTP/PS5 PS3 / PS6 PS4 FP2/PS7/WSN PS8
Atlanta Yes No No No No
Chicago – Joliet Yes Yes Yes Yes Yes
Council Bluffs – Omaha No No No No No
Dallas Yes Yes Yes Yes Yes
Denver Yes Yes No Yes Yes
Houston Yes Yes No Yes No
Huntsville No No No No No
Kansas City Yes Yes No No No
Laredo No No No No No
Memphis – Marion Yes Yes Yes Yes Yes
Minneapolis – St. Paul No No No No No
New Orleans No No No No No
Salt Lake City Yes Yes No Yes Yes
Santa Teresa – El Paso Yes Yes No Yes No
St. Louis – E. St. Louis Yes No Yes No Yes

Source: Oceanwide Logistics Global Network 

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