January at-a-glance…materials & handling
Expect continued international shipping delays
Numerous internal freight forwarders are reminding customers of further delays due to COVID-19 and the approaching Chinese New Year. U.S. and Canadian ports were already congested due to COVID-19 precautions. For example, more than 20 vessels are sitting outside the Port of Los Angeles awaiting berths. As a result, available capacity between China and North America is booked approximately 6-8 weeks out.
This situation will be exacerbated with the approaching Chinese New Year. During this significant Chinese holiday, factories close for two-three weeks and many freight forwarders also leave for a two-week vacation. Space on cargo-carrying planes and ships is at a premium prior to the holiday as companies increase order quantities and try to arrange shipping before workers depart for the holidays. Chinese New Year is February 12. Workers are on vacation from Feb. 11 – 17. However, many leave up to a week early to travel as many as 3,000 miles by train and bus to their rural homes. It takes an equally long time to return to the job.
Steel shortages to continue through Q1
Steel shortages are expected to continue through the first quarter, according to numerous sources. S&P Global Platts, which monitors global pricing, reports that, since early August, mill lead times have lengthened to the longest levels in more than a decade. This is due to decreased production at America’s steel producing plants attributed to planned facility slowdowns plus unplanned COVID-19-related shutdowns. According to S&P Global Platts, “any potential import relief for U.S. buyers is at best a late first quarter aid.”
Meanwhile, prices continue to escalate. The Steelbenchmarker™ reports that prices for U.S. and Western Europe steel are up 8.5 percent and 4.7 percent respectively, while prices for China steel were down 1.6 percent. These figures represent 10 consecutive price increases for U.S. steel, 12 consecutive increases for Western Europe steel, and the fifth consecutive decrease for Chinese steel.
ASHRAE revisiting Standard 15
ASHRAE is considering updates to Standard 15 that specifies the safe design, construction, installation and operation of refrigeration systems. Proposed changes could impact the charge sizes for a variety of refrigerants. Members are encouraged to watch for a pending letter ballot from ASHRAE. NAFEM also will continue to monitor.