Navy Nearing 1,000 COVID-19 Vaccine Denial Separations

The Navy is inching toward 1,000 separations due to COVID-19 vaccine denial, with the sea service approving separations for another 56 sailors over the past week. The Navy currently has 980 total separations due to continued refusal to get vaccinated against COVID-19, according to the service’s weekly COVID-19 update. Of the separations, 861 are active-duty […]

Hospital Corpsman 2nd Class Gregzon Fontanilla, from Guam, prepares a COVID-19 vaccine aboard the America-class amphibious assault ship USS Tripoli (LHA-7) on May 10, 2022. US Navy Photo

The Navy is inching toward 1,000 separations due to COVID-19 vaccine denial, with the sea service approving separations for another 56 sailors over the past week.

The Navy currently has 980 total separations due to continued refusal to get vaccinated against COVID-19, according to the service’s weekly COVID-19 update. Of the separations, 861 are active-duty sailors, while 97 are reservists. The total also includes 22 entry-level separations for sailors within their first 180 days of service.

The current separations are sailors who who have not applied for religious exemptions, as the Navy is currently suspended from separating anyone who requested a religious waiver for the vaccine due to a court ruling. However, any of the separations before the court ruling on March 28 could have included those who had requested a religious exemption and were denied.

The Navy had approved 37 religious exemptions for sailors who were going to retire or voluntarily separate from the service, but those cases were put on hold as a result of the court ruling.

The sea service has also granted 13 religious exemptions for members of the Individual Ready Reserve on the condition that they get vaccinated if called to active-duty or reserve status.

The Navy has also granted 14 permanent and 214 temporary medical exemptions for active-duty sailors and one permanent and 81 temporary medical waivers for reservists.

Worker Shortages Snarl Shipping Even as Shanghai Lockdowns Ease

By Ann Koh and Kyunghee Park (Bloomberg) — China appears to be gradually easing its lockdown of Shanghai, but that won’t bring immediate relief to global supply-chain congestion, according to a major shipping…

By Ann Koh and Kyunghee Park (Bloomberg) — China appears to be gradually easing its lockdown of Shanghai, but that won’t bring immediate relief to global supply-chain congestion, according to a major shipping...

Viewpoint: Shanghai’s reopening pledge nothing more than the boy who cried wolf

COVID workers in Shanghai.When it comes to lifting lockdowns in China, false hope will remain the norm.

COVID workers in Shanghai.

Another week — and another pledge that the lockdown in Shanghai may be lifted. It’s not the first time this has been announced. 

And it won’t be the last.

The city’s vice mayor, Wu Qing, said at a news conference Thursday that there would be an “orderly opening, limited [population] flow and differentiated management.” Yet, no date has been set.

How many times do these false alarms have to be stated? “Actions speak louder than words” applies to this situation. The government’s actions are not reflecting the rhetoric that officials are putting out.

Anyone who has been reading the logistics reports knows the truth. The message is simple: The Chinese government, not the local level, is in control of the flow of manufacturing and trade.

Crane Worldwide Logistics informed clients in its Thursday  update: “For export, we still need to check with suppliers whether their local government allows container drayage or trucking service with truck drivers from Shanghai; or whether they can send cargo to our warehouse in Shanghai. We need to coordinate with the consignee for the document turnover and delivery schedule case by case for import.”

Worldwide Logistics offered a wide breakout on the “zero-COVID” status and impacts across the country to customers.

“We can see the Shanghai pandemic situation is trending towards a good prospect steadily,” the company said. “However, in some areas like Tai cang, Zhang jia gang and Chang shu, the COVID cases figure is rebounding, which causes the problem of cross-city delivery and containers stuffing. It should still take some time for the cross-city transportation to recover to the normal. The whole market is still impacted by the COVID situation, and the recovery depends on when the pandemic situation can be totally controlled in the country.’

(Courtesy of Worldwide Logistics)

Seko Logistics informed clients on Friday, “Trucking in and out of Shanghai requires a traffic permit, which is only valid for 24 hours and only on specific routes. Even with this arranged, it is possible for booked trucks to be commandeered by the government to transport aid supplies.”

This comment after China saying it has increased the list of companies that can reopen under a “closed loop system “ to 2000. The lack of ability for trucks to deliver raw materials into these “closed  loop” companies has impacted companies like Tesla, which had to stop production.

Now the government is trying to help.

The insanity of this situation has created a dense fog, making the logistics planning picture beyond murky. The obstruction created by Shanghai has gummed up vessel schedules.  

American Shipper reviewed a booking confirmation from Oakland, California, to Great Britain where the booking was on its 60th update. The estimated delivery went from late May to late June.

Once the roads are truly open and products can be completed and transported, a flood of containers is expected to arrive in the United States, at least a month or two after a real opening.

“Right now, the Trans Pacific Eastbound market reminds one of being in the eye of a hurricane,” said Alan Baer, CEO of OL USA. “Blue sky, available space and moderation of pricing.  However, soon enough the 100 miles per hour wind and rain could be battering supply chains all over again.”

No slicker or umbrella will protect the fragile U.S. logistics system when this container storm hits. The problems plaguing the Port of  LA and Long Beach are still there, no matter what messaging we hear from the Biden administration on improvements. 

The dwell time of the containers, and the continued long line of vessels waiting for berth, are a physical reminder of the inefficiencies.

More from Lori Ann LaRocco

SONAR charts check temperature of Shanghai’s ailing supply chain

What can go wrong next in China? Now there’s a lockdown in Zhengzhou

COVID-19’s Impact on Seafarer Populations Will be Felt for Years to Come

Here’s what’s at risk tomorrow if we don’t respond to the crew change crisis today. By Hrishi Olickel and Irina Carbunaru – The crew change crisis is raging on, as…

Here’s what’s at risk tomorrow if we don’t respond to the crew change crisis today. By Hrishi Olickel and Irina Carbunaru – The crew change crisis is raging on, as...

Navy Nearing 1,000 COVID-19 Vaccine Denial Separations

The Navy has approved nearly 1,000 separations for sailors who have refused to get the COVID-19 vaccine. The Navy now has 924 separations over the COVID-19 vaccine, an increase of 40 over the previous week. The majority of separations are active-duty sailors, with 836 active-duty sailors separated and 66 reservists. All received honorable characterization of […]

Hospital Corpsman 2nd Class Gregzon Fontanilla, from Guam, prepares a COVID-19 vaccine aboard the America-class amphibious assault ship USS Tripoli (LHA-7) on May 10, 2022. US Navy Photo

The Navy has approved nearly 1,000 separations for sailors who have refused to get the COVID-19 vaccine.

The Navy now has 924 separations over the COVID-19 vaccine, an increase of 40 over the previous week.

The majority of separations are active-duty sailors, with 836 active-duty sailors separated and 66 reservists. All received honorable characterization of service, according to the sea service’s weekly COVID-19 update. There are also 22 sailors who were separated in their first 180 days of service.

The Navy cannot currently separate sailors who have filed a religious exemption for the COVID-19 vaccine due to a class-action lawsuit currently in the Middle District of Florida.

The Navy is seeing sailors who have decided to get vaccinated when faced with separations, Chief of Naval Operations Adm. Michael Gilday testified before the House Armed Services Committee on Wednesday.

There are also sailors who planned to voluntarily separate who are now getting vaccinated in order to stay in the Navy, Gilday said.

The Navy is following a lawful order from the president, Gilday said, but the need for vaccination is also a readiness issue.

Commandant of the Marine Corps Gen. David Berger also testified that the Marine Corps, which have separated 2,117 Marines, as of May 4, is mandating the vaccine because of readiness concerns.

“Every Marine has to be fully medically prepared to deploy anywhere on the globe on short notice,” Berger said.

Even as sailors are getting vaccinated or separated, there are 3,962 active-duty sailors and 3,288 reservists that are not vaccinated, according to the Navy COVID-19 update.

The Navy has approved 14 permanent and 216 temporary medical exemptions for active-duty sailors. The sea service approved one permanent and 83 temporary medical waivers for reservists.

Over 600 Stranded I-Kiribati Seafarers Repatriated, Some After Two Years

Over 600 i-Kiribati seafarers trapped overseas due to the COVID-19 pandemic have now been repatriated, the International Chamber of Shipping announced Monday. The final six seafarers touched down in Tarawa…

Over 600 i-Kiribati seafarers trapped overseas due to the COVID-19 pandemic have now been repatriated, the International Chamber of Shipping announced Monday. The final six seafarers touched down in Tarawa...

COVID-19 Vaccine Refusal Separations Increase to 884

Navy separations due to continued refusal of the COVID-19 vaccine rose by nearly 70 sailors over the past week. Approved separations, which do not necessarily mean the sailor has yet left the service, are now at 884, according to the Navy’s weekly COVID-19 update. The Navy has the second highest number of separations, behind the […]

Seaman Apprentice Johnnese Poomaihealani, from Waianae, Hawaii, receives a COVID-19 vaccine booster shot during a shot event in the foc’sle aboard USS Abraham Lincoln (CVN-72) on Jan. 3, 2022. US Navy Photo

Navy separations due to continued refusal of the COVID-19 vaccine rose by nearly 70 sailors over the past week.

Approved separations, which do not necessarily mean the sailor has yet left the service, are now at 884, according to the Navy’s weekly COVID-19 update.

The Navy has the second highest number of separations, behind the Marine Corps, which has now separated 2,117 Marines, according to the service’s monthly COVID-19 update.

The Army is now the branch with the third highest separations at 505, with the Air Force at 351.

 

Navy COVID-19 Vaccine Separations Drop as Injunction Takes Hold

Navy separations due to COVID-19 vaccine refusal dropped over the past week, the result of the injunction preventing the sea service from separating those who applied for religious waivers. The Navy reports approved separations each week in the service’s COVID-19 update. Due to a class-action lawsuit against the Navy and Department of Defense officials, the […]

Hospital Corpsman 3rd Class Lauren Kestell, left, from Oklahoma City, Okla., assigned to USS Harry S. Truman (CVN 75), administers a COVID-19 booster to Chief Fire Controlman (AEGIS) Kellen Smothers, from Clio, Mich., aboard the Arleigh Burke-class guided-missile destroyer USS Mitscher (DDG 57) on Feb.16, 2022. US Navy Photo

Navy separations due to COVID-19 vaccine refusal dropped over the past week, the result of the injunction preventing the sea service from separating those who applied for religious waivers.

The Navy reports approved separations each week in the service’s COVID-19 update. Due to a class-action lawsuit against the Navy and Department of Defense officials, the service cannot separate anyone who submitted a religious exemption request, which halted some of the approved separations, Lt. Travis Callaghan said in an email.

The April 20 COVID-19 report was the first to reflect the injunction, Callaghan said.

Any sailors who submitted a religious exemption for the COVID-19 vaccine can continue in the Navy under the injunction, according to NAVADMIN 102/22.

The NAVADMIN, referencing the injunction, prevents adverse action against sailors who will not get the COVID-19 vaccine and submitted a religious exemptions request.

“This includes: administrative separation, adverse fitness reports or evaluations; officer promotion delay; enlisted advancement withhold or withdrawal; and ineligibility for Navy education opportunities or SkillBridge program opportunities,” Capt. Dave Hecht said in an email.

Under the NAVADMIN, the sea service can still reassign those who are not vaccinated against the virus to non-operational positions.

What constitutes adverse action is a debate between the Navy and sailors currently suing officials over the vaccine mandate. A commanding officer who is currently assigned to shore duty so the Navy could send his ship underway considers his temporary reassignment “adverse action,” his attorney told USNI News, although the Navy does not include it.

Under the NAVADMIN, those who submitted a religious exemption request, including those currently appealing denials, are no longer considered as refusing the vaccine, according to the Navy policy.

The sailors cannot be involuntarily separated under the class action injunction. Sailors may still voluntarily separate if they have not been vaccinated.

Sailors who submitted a religious waiver and requested retirement or resignation in lieu of getting vaccinated can withdraw it under the NAVADMIN.

“Members who submitted requests for religious accommodation may cancel or amend previous voluntary retirement requests or requests to transfer to the Fleet Reserve. Time is of the essence for updated requests,” according to the NAVADMIN.

Sailors with religious exemption requests will also no longer receive adverse fitness reports. They also are no longer disqualified from educational benefits. However, bonuses are considered unearned for personnel who are removed from their assignments due to operational concerns.

“Detachment for cause for COVID-19 vaccine refusal is not authorized. Reassignment decisions, including decisions to relieve members of their assigned duties, remain an operational decision subject to the discretion of the cognizant commander. Previously executed detachments for cause will not be considered adverse at this time, will be removed from permanent records until otherwise directed, and shall not be commented on in subsequent fitness reports or evaluations,” according to the NAVADMIN.

Separations can continue for those who refuse vaccination and did not request a religious exemption.

Under the new NAVADMIN, sailors who were previously denied re-enlistment or an extension are now able to reenlist or extend. This does not apply to those who have already left the service, Hecht said.

“Separations that have already occurred constitute final agency action,” Hecht said in his email. “As litigation continues and ultimately resolves, the Navy will remain committed to implementing all court-ordered requirements and considering the full range of required actions in response to judicial decisions. We are working with the Department of Defense and Department of Justice to determine the scope and impact this injunction may have on those individuals.”

The Navy has now officially separated 798 sailors, down from 804 last week. The Navy has also started to separate officers.

Of the 741 active-duty sailors separated, 662 enlisted and four officers had fewer than six years of service, while 159 enlisted and one officer had more than six, Callaghan said in his email.

The ranks for active-duty sailors range from seamen recruit to chief petty officer for enlisted and ensign to lieutenant commander for officers.

Of the 35 reservists separated, 25 had fewer than six years of service, while 14 had more than six.

The Navy also separated 22 sailors who were in their first 180 days of service.

The Navy has approved 13 permanent and 179 temporary medical exemptions for active-duty sailors, while the sea service granted one permanent and 18 temporary medical exemptions for reservists.

The sea service had approved 27 conditional religious exemptions for sailors who were in the process of retiring or separating from the Navy. Those have been put on hold as a result of the class-action lawsuit.

The Navy has also approved 10 conditional religious waivers for members of the Individual Ready Reserve.

Xi’s lockdowns will pull the rug out from under US truckers this summer

The Port of Shanghai. (Photo: Shutterstock)FreightWaves founder and CEO Craig Fuller writes about the impact of Chinese lockdowns on global supply chains and the U.S. trucking industry.

The Port of Shanghai. (Photo: Shutterstock)

Whenever the trucking market slows, truck drivers look for someone to blame. Normally, a slowdown is just a function of supply and demand. The market has too much dispatchable capacity compared to the total number of loads on any given day. 

This summer, the trucking market could have one of its steepest declines in recent years and there is an entity that deserves much of the blame – the Chinese Communist Party and its draconian and inhumane lockdowns. 

A containership that says China shipping line on it.
A Chinese containership. (Photo: ship-technology.com)

While the motivations of the Chinese government are unclear, one thing is certain – anyone subjected to a Chinese state lockdown compares it to being imprisoned in their own homes. As seen in several widely shared media posts, the Chinese government has started to erect metal barricades to block people from leaving their homes, preventing passage even for food or medicine. 

While Americans watch in horror as innocent Chinese citizens are caught up in an ill-conceived, reckless, or nefarious – take your pick – act by the Chinese Communist Party, there is little Americans can do about it. But like most geopolitical events these days, the lockdowns in Shanghai and other Chinese cities are also a supply chain story that will have a dramatic effect on domestic freight markets. 

The recent slowdown in U.S. truckload markets is likely a precursor to a steeper decline in the coming weeks. The lockdowns in China were not a factor in slowing U.S. truckload volumes in February and March, as evidenced by record container imports at nearly all major U.S. ports. 

But that shouldn’t give anyone comfort because the slowdown is about to hit U.S. ports – and the trucking companies that service them – in a dramatic way. FreightWaves estimates that container imports from China represent approximately 16% of U.S. truckload volumes and an even larger percentage of U.S. dry van truckloads. After all, nearly half of the containers that come into the United States originate in China. 

The lockdowns in Shanghai began on April 2 and the lockdowns in Guangzhou began on April 11. As geopolitical analyst Peter Zeihan described the situation on Twitter: 

A screen capture of a social media post from Peter Zeihan

Beijing, which is the political capital of China, was expected to be spared the lockdowns by many analysts. This appears to be wishful thinking and Twitter lit up on April 2 with reports of Chinese state police starting to implement similar measures to those seen in the preparation for lockdowns in other cities.

The three largest cities in China are going to be removed from the world market. According to analysts, at least 40% of China’s GDP has been taken offline and this was before lockdowns began in Beijing. The vast majority of this GDP is directly related to global manufacturing. Removing it means removing the flow of containers from the world economy. 

Container volumes from China to the United States started to fall on April 6. It hasn’t been a direct line down; more like a roller coaster. In the first 10 days, container volumes dropped by 31%. Volumes have since rebounded about halfway, to “just” a 16% drop. But according to FreightWaves SONAR’s volume booking forecast, volumes have started to drop once again and could fall to 50% of the April 6 number by May 9. This would be nearly the same level of a drop that China to U.S. exports saw during the Chinese New Year in 2022 and lower than any other point since July 2020. 

A blue chart with the text FreightWaves SONAR showing effects of lockdowns in China
A blue chart with the text FreightWaves SONAR showing effects of lockdowns in China

Chinese ports are operating, but the bigger risk is with Chinese trucking operations. According to a report in Bloomberg, only 20% of Shanghai’s trucking capacity is operating. Trucking is a bigger part of the flow of containers in and out of the Chinese ports than in the United States. Over 75% of container volumes in China ports enter or exit on a truck, while in the U.S. both trucks and railroads move freight from our ports.

The loss of trucking capacity in China means that raw materials and components can’t get from the ports to factories and finished goods can’t leave the factories to the ports to be put on ships for export. The temporary blip (dead cat bounce) was likely containers that were already in the queue at the port prior to the lockdowns. 

Since factories can’t receive new components or raw materials, they will also stop operating once their supplies are exhausted. Supply chains involve large webs of suppliers that are interconnected and just because one supplier is online does not mean that other suppliers are. Once they shut down, it will take much longer to bring them up to full productivity. 

According to SONAR’s ocean intelligence dashboard, it takes  27 days for a vessel to travel from a Chinese port to a U.S. port. Since the volume of containers from China to the U.S. started its drop on April 6, it will likely be May 3 before U.S. ports experience a drop in volume. 

A purple graph with the text FreightWaves SONAR

It takes approximately 10 days to three weeks after a vessel arrives in the U.S. before the containers that traveled on board enter the domestic surface freight market. This would put a slowdown in trucking freight volumes related to Chinese imports between May 13 and May 24.

We have seen this play out before. 

During the second half of Donald Trump’s presidency, the U.S. declared a trade war on Chinese imports. The first tariffs on Chinese goods were set at 10% and went into effect in December 2018. That was intended to be a shot across the bow and had little effect on import volumes. However, President Trump also threatened that if his demands for Chinese policy changes were not met, he would raise the tariffs to 25% by March 31, 2019. 

Reacting to a threat that most importers and Chinese manufacturers thought had legitimacy, a surge of goods started to flow from China to the U.S. in what was described as a “pull-forward.” 

The last of the “pull-forward” surge containers to leave Chinese ports was on April 7, 2019. SONAR’s Ocean TEU Volume Index of containers leaving Chinese ports to the U.S. dropped by 28% from April 8, 2019 to April 16, 2019. 

The first signs of U.S. trucking volumes dropping took place 35 days after the drop in container volumes out of China. From May 9, 2019, to May 16, 2019, U.S. national contract truckload volumes (OTVI.USA) dropped by 6%. 

In Asian import-heavy Los Angeles, the drop was much worse. Truckload volumes dropped by an astounding 28% from May 8, 2019 to May 16, 2019. The drop was so significant that I wrote my first article warning of the freight recession and stated that “Conditions for fleets are deteriorating and it will get bloody.”

The recent drop in container volumes is eerily similar to the one that took place in 2019. 

The drop in 2019 started with the same speed and depth as the one we are currently facing. The trucking industry had just come through one of the hottest freight markets in history in 2018, with more new fleets entering the market than in any previous period in history.  

The abrupt drops in container outflows from China in 2019 and 2022 happened almost exactly three years to the day, which means the freight market seasonal calendar was roughly identical and makes for easy comparables. 

Since April 2019, maritime shipments from China to the U.S. have grown by 28%, while U.S. truckload volumes have increased by 24% in that same timeframe. 

A line graph showing imports from China to the United States, declining in recently

A slowdown in freight volumes from China in May 2022 will be more equitably distributed throughout the U.S. and less concentrated in Southern California, as compared to the 2019 slowdown. 

Why? While Southern California’s ports are still the primary ports of entry for Chinese goods, recent port congestion has encouraged importers to shift volumes away from the ports of Los Angeles and Long Beach. This is showing up in SONAR’s truckload market share data (OTMS).  

In April/May 2019, the Los Angeles and Ontario freight markets represented 7.69% of all U.S. contracted truckload shipments. Today, those two markets represent just 6.74%. 

A list of top cities in the US for marketshare in the US truckload market
Outbound Tender Market Share (OTMS) in SONAR represents the percent of contract truckload freight out of the U.S. by market. 

Watching daily market conditions will be critical to fleet operators in their search for headhaul markets. A headhaul market is a freight market in which there are more loads than dispatchable trucks. In SONAR, this map is updated daily and markets are shaded in blue. The deeper the blue, the better conditions for fleets. 

We always coach trucking companies to go “blue to blue” to stay loaded, and since the data comes from tenders and not load board activity, it is far more accurate of current conditions in the market because it avoids “ghost loads” from brokers. 

Eventually, the lockdowns will end and Chinese production will begin once again. However, the longer China stays offline, the longer it will take for production to ramp up. Supply chains don’t come online instantly. 

A white drayage truck picking up cargo at the Port of Los Angeles.
A drayage truck picking up cargo at the Port of Los Angeles. (Photo: Jim Allen/FreightWaves)

And just how long it takes for the lockdowns to end and the supply chains to begin operating again is a guessing game. But there is reason to believe that the Chinese lockdowns are far from over.  

FreightWaves’ Eric Kulisch reported on April 15, 2022, that BBVA suggested that the lockdowns in China could continue until June. 

If this prediction plays out, it will be a difficult summer for many U.S. trucking operators.