Aiming to provide relevant and up-to-date information to help you navigate your supply chain.
The ocean network is fluid with no significant disruptions reported at the ports. We have begun to see an uptick in cargo flows common to peak season shipping as the flow of back-to-school, fall fashion, and end-of-year holiday goods begin to come into North America.
Panama Canal Update
We continue to closely monitor the draft adjustments announced by the Panama Canal Authority, which are usually issued three weeks in advance of any further draft adjustment. We follow the guidance from the Authority and adapt our cargo intake on relevant services in advance of the departure at origin. As of its June 14th advisory, the Authority communicated that a maximum authorized draft of 44 feet (13.41 m) is in effect for the Neopanamax locks. This latest reduction reflects a drop of six feet since restrictions were first announced on March 1. As local weather conditions directly impact the water levels required for canal operations, draft adjustments may change, so be sure to check the Panama Canal Authority website for the latest conditions.
Capacity is limited due to low water levels in the canal. In compliance with the draft restrictions, we are optimizing our network planning and vessel loading accordingly. We offer multiple sailings per week thru Panama that enable us to reduce the risk of delays for our customers. We also offer services via the Suez Canal as an alternative to Panama if suitable to a customer’s needs.
The Wall Street Journal reported that, according to meteorologists, water levels in Gatún Lake—located in the center of the canal—could hit record lows in July with the climate event El Niño bringing higher temperatures and less rain. The low water levels at the Panama Canal are an example of the effects of climate change in rainfall and weather patterns across the globe, which causes a ripple effect through the supply chain.
Pacific Northwest Port Operations Update
The British Columbia Maritime Employers Association (BCMEA) and the International Longshore & Warehouse Union (ILWU) Canada are currently in negotiations to renew collective agreements. On June 12, the ILWU Canada membership announced approval of a strike vote “if necessary.” The ILWU Canada action does not specify that a strike will take place, only that its leadership team has been authorized to take such action. According to a BCMEA statement, the earliest strike or lockout could occur is 12:01 am Pacific Time, June 24, 2023.
The BCMEA released an update on Monday, June 19 stating that the parties are scheduled to continue to meet beyond the cooling off period, which ends June 21. However, the timeline for possible strike or lockout action has not changed. The parties are continuing to meet with the assistance of Canada’s Federal Mediation and Conciliation Service (FMCS).
There have been no disruptions reported at the ports of Vancouver and Prince Rupert to date. Customers are reminded to secure any cargo that arrives in port as quickly as possible as a best practice. Our teams are monitoring the situation carefully and are developing contingencies should the ports in British Columbia become disrupted.
Landside Updates – Transportation
Our parent company Maersk’s EV Fleet Leading the Charge in Clean Drayage
What would a convoy stretching from San Diego to San Francisco, California, look like?
The 30,000 annual drayage truckloads being hauled by Maersk's EV truck fleet!
On April 28, 2023, the California Air Resources Board (CARB) approved the Advanced Clean Fleets Regulation (ACF), which prescribes new requirements for trucks transporting cargo to and from California's seaports and railyards. The requirements will help the state meet its air quality and climate goals straight away while also helping California reach its goal for 100 percent zero-emission drayage trucks by 2035.
All drayage trucks conducting operations at a California seaport or intermodal railyard must be registered on CARB's new online platform. Combustion-powered trucks must register by December 31, 2023. Only zero-emission drayage trucks can register in the CARB Online System beginning January 1, 2024. Drayage trucks will be required to start transitioning to zero-emission technology beginning in 2024, with full implementation by 2035.
The CARB estimates that the number of zero-emission drayage trucks resulting from ACF's 2025 requirements will be around 3,000. As announced in March 2022, some of Maersk's and PT’s trucking capacity can already be included in those numbers. Maersk's North American warehousing, distribution, and transportation business currently has orders for 300 Einride EV trucks and an additional 126 Volvo VNR electric class 8 trucks on the books, for a total of 426 trucks through 2025.
Today, Maersk and PT have 58 EV trucks in operation which, at full capacity, could haul the equivalent of 30,000 containers annually for customers prioritizing a net zero solution for their first mile cargo. Each month through October, our “convoy” is growing as we bring on an additional 15 Einride trucks for our California operations. EV trucks are already operating in the Chicago market in support of Maersk's inland logistics depot in Elwood, Illinois. By autumn, additional EVs will be operational in New Jersey through PT facilities. Maersk's long-term goal in North America is to move toward a fully electric trucking fleet to offer customers an environmentally friendly alternative for short-haul trucking.
EV drayage represents a strong option for customers looking to reduce their carbon footprint by moving away from diesel-powered drayage.
Maersk has made the investments in trucking capacity, charging infrastructure powered by renewable energy, and operational expertise. What's left is for customers to benefit from the certified tax and carbon savings that come along for the ride, all while staying ahead of the curve of regulation and reducing reliance on fossil fuels.
Landside Updates – Warehousing and Distribution
Driving Warehousing Performance Through Sustainability
Increasingly, our customers are seeking sustainable solutions that address the demands of both their senior leadership teams and consumers. The world is currently facing a climate crisis, and consumers are becoming aware of how their buying habits contribute to climate change. According to a PWC study, over half of global consumers are willing to change their purchasing habits to reduce environmental impact. Meanwhile, two-thirds of Maersk's Top 200 customers have established net-zero carbon or science-based targets.
Warehousing and storage play a crucial role in any decarbonization strategy. Warehouses, and the equipment within, are energy-intensive and have a significant carbon footprint due to their electricity consumption. With the growing demand for warehouse space, it has become increasingly important to couple the expansion of warehousing with sustainable practices that meet market needs and comply with evolving regulations.
Hamburg Süd customers frequently inquire about best practices to enhance their warehousing operations to make them more efficient, sustainable, and cost-effective. Requests for proposals now commonly require detailed information on what is achievable. Our industry leading customers with advanced Environmental, Social & Governance (ESG) programs, are also interested in Hamburg Süd's performance data concerning energy, water, waste management, and other key sustainability metrics.
There is a perception that sustainability initiatives result in higher operational costs. However, the efficiencies gained often outweigh such expenses, particularly in the long term. Additionally, risk mitigation can lead to savings by anticipating future regulations and avoiding fines intended to incentivize stronger sustainability practices. Despite the environmental benefits, cost and operational efficiency remain crucial. Therefore, sustainable warehouses must maintain the same level of service and efficiency as conventional warehouses while minimizing their environmental impact.
Many companies aspire to make progress on the ESG front but are daunted by the challenges of developing and implementing a viable sustainability strategy and choosing the right partners to decarbonize their supply chain. Solutions will vary depending upon the maturity of a given customer’s sustainability profile, as well as their access to greenfield options, as compared to retrofitting existing facilities or even upgrading a shared facility where options may be limited. Nevertheless, even incremental enhancements can make a significant difference over time and benefit the environment.
For our parent company Maersk, the focus areas are energy efficiency, electrification, and renewable energy as pictured in the diagram above. By 2030, Maersk warehouses, cold stores, and depots will employ solutions across each of the key zones of focus and be further along the path of achieving LEED or BREAM ratings.
Regardless of the initiatives adopted, credible sustainability solutions with measurable impact must meet specific criteria. All solutions should be credible, third-party verified, aligned with industry standards, provide immediate reductions in greenhouse gas (GHG) emissions, not disrupt operations, and be easy to contract.
Maersk is proud to be on a path to climate neutrality by 2040, with a short-term goal of reducing GHG emissions from logistics facilities by 90% by 2030. Our low-emission warehousing contributes to our environmental commitment while helping customers meet their own targets.
Maersk increases cargo flight frequency and commits new freighter to global network
In its June 19 announcement, Maersk shared its plans for bolstering its growing freighter network between Mainland China, Southeast Asia, Europe, and the U.S. by increasing frequencies of regular flights as well as introducing additional aircraft.
On the transpacific corridor connecting Chicago Rockford International Airport (RFD) and Hangzhou Xiaoshan International Airport, China (HGH), weekly rotations will double from three to six, while weekly rotations between Greenville-Spartanburg International Airport, South Carolina (GSP), Incheon International Airport, Korea (ICN) and Shenyang Taoxian International Airport, China (SHE) will go from two to three.
By boosting its customer-backed air corridors, Maersk is expected to plug a connectivity gap between the world’s three largest markets for ocean customers, North America, Europe, and Asia-Pacific, with new solutions for time-sensitive and high-value cargo.
Emissions Studio –
A single source of transparent and actionable insights to initiate emissions reductions
Our emissions dashboard consolidates your emissions footprint data across all carriers and modes with an industry leading, GLEC-compliant calculation methodology, and provides recommendations enabling you to:
- Get full visibility over your Scope 3 Supply Chain emissions
- Track progress, identify hot spots and actions to reduce emissions
- Set science-based targets for the future
Across Transport Modes
- Emission reports are made available via an online, browser-accessible dashboard hosted on powerBI.com
- We work with not-for-profit specialist firm, EcoTransIT, for the calculations that adhere to the highest reporting standards
- ETW uses globally recognized GLEC framework for calculation and reporting of greenhouse gas emissions
- Data is refreshed quarterly, semi-annual, or annually based on customer needs
Be sure to visit our parent company Maersk “Insights” pages where we explore the latest trends in supply chain digitization, sustainability, growth, resilience, and integrated logistics.
We value your business and welcome your feedback. Should you have any questions on optimizing your cargo flows, please contact your local Hamburg Süd professional.