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Supply
Chain by the Numbers |
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- April 22, 2021
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Suez Canal Holding Beached Cargo Until Ship Owner Pays Up; Big Rival Bid for Kansas City Southern; Prices for New and Used Shipping Containers Surging; Dollar General Bets on Brick and Mortar Sales |
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$916 Million |
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That is how much the Suez Canal Authority seeks from the owner of the container ship that turned sideways in strong winds and blocked the canal for six day in early April. That to compensate the Authority says were the cost of the operation to free the ship and other expenditures. The ship was operated by container line Evergreen Marine, but is owned by Japan-based Shoei Kisen Kaisha Ltd. As yet, the ship has not been allowed to move out of the canal pending payment of the damage fee, leaving owners of the goods in 18,000 TEU-worth of containers unable to receive their shipments. That left Evergreen considering removing containers from the ship and putting them on other vessels for delivery to scheduled ports – if canal management will allow that. Shifting the cargo to other ships would be a physical challenge and could require moving the vessel from its anchorage in the canal’s Great Bitter Lake to Egypt’s nearby Port Said. Adding to the complexity, Shoei Kisen has invoked a shipping legal principle known as “general average” that requires companies with cargo on a vessel in distress to share in the cost of the ship’s recovery.
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| That’s what it costs to buy a used water tight 20-foot ocean shipping container in China right now, up from $1000 or so before the pandemic, as box prices are soaring given the months-long container shortage. That according to a report on theloadstar.com web site. Prices for new containers in Shanghai have skyrocketed by 64% this year to an average of $3,390. In fact, used container prices for a five-year-old box in good condition are now much higher than the cost of a new one prior to the pandemic. However, a source in the sector told The Loadstar availability of a water-tight 20-foot box on the resale market was “almost zero”, adding: “When we do get offered a box, it’s at a take it or leave it rate that’s gone in 24-hours.” |
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2.8% |
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That is about how much Canadian National Railways has now bid to acquire US rail carrier Kansas City Southern, 21% higher than the offer initially accepted for KCS from fellow Canadian carrier Canadian Pacific. Canadian National offered $325 for each Kansas City Southern share, versus an initial $275 per share tender from Canadian Pacific. KSC is the smallest of the five major freight railroads in the US, but has invested a lot to build a Mexico to the US and back network. With other operations in the US, both Canadian National and Canadian Pacific tout that a KSC acquisition will enable the first Mexico to Canada rail network. Either deal would have to be given the green light from US regulators, which is far from assured. The Surface Transportation Board requires major railroad combinations to be in the public interest and enhance competition. KCS says it is now evaluating the new Canadian National offer. |
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That is how many new stores Dollar General plans to open in the US in 2021, as the “dollar store” chain continues to thrive. That would add to the 17,000 or so stores it currently operates, and this week company executives said that current number could double over a number of years. As part of the store expansion, Dollar General said it will hire 20,000 new workers this year, many of those drivers for its expanded private truck fleet, according to a press release this week. In March, the company said it would continue to expand its own fleet, which accounted for 20% of store deliveries by the end of last year. The private fleet expansion is driven by higher rates and fuel costs, and Dollar General says it can reduce miles driven by optimizing its own fleet operations. It also has said the private fleet growth will help better ensure it has enough capacity, with load-to-truck ratios currently rising quickly.