Commentary

Commentary

CSX's Northwest Ohio intermodal hub is essentially a giant classification yard for intermodal containers, with huge gantry cranes serving as the functional equivalent of switch locomotives. Strategically located at an operational node of the CSX east-west network, it serves CSX in much the same manner as an airline hub. Containers are flown from one train to another rather than cars being switched, although flat switching still occurs when the volume of like-destination cars in a train reaches a certain threshold.
The law governing motor carrier (and rail) freight loss and damage was enacted in 1906, the Carmack Amendment to the Interstate Commerce Act. A lot of transportation law has changed since then, but Carmack hasn’t. Its current incarnation reads the same as did the original, meaning judicial interpretations and applications issued many years ago are as valid today as they were when pronounced by the courts.
Rates in the trans-Pacific eastbound trade from Asia to North America are starting to resemble the paltry Asia-Europe and trans-Pacific westbound numbers. Within a couple weeks, we may have three-digit numbers for spot rates for 40-foot containers moving from China-based ports to Los Angeles and Long Beach. I can’t recall seeing rates this low in my 42 years in the business.
The Los Angeles Board of Harbor Commissioners and officials from the port are packing their bags and heading to Chile and three countries in Asia this month to shore up relations with key shipping lines and fruit exporters impacted by the recent 9-month-long labor dispute at the ports of Los Angeles and Long Beach.
On-time delivery guarantees have existed for more than 30 years for express and 17 years for ground service, but the time has come for parcel carriers to put an end to them.
Some of the most pivotal developments in U.S. container transportation, such as the first double-stack train in 1984 and the launch of the first post-Panamax vessel four years later (both APL innovations), helped fuel the rise of West Coast ports as the primary U.S. container gateways. Now we’re witnessing another game-changing development potentially on par with those earlier ones, although for the West Coast the impact is the opposite.
After shipping a 24-piece order prepaid, f.o.b. destination, a distributor says five pieces were damaged. The price to reorder those five pieces was higher because the quantity was lower. The distributor files a claim with the LTL carrier, but the carrier refuses to pay the higher price, despite the enclosed replacement invoice reflecting the increase in cost. What is the procedure to best handle “special orders?”
The reality of being a trade-dependent company involves understanding and abiding by its governing laws and regulations, and it can’t just be when financial times are good and/or compliance-related problems are inexpensive to fix.
The U.S. is rapidly approaching another watershed moment, with the stopgap funding of the Highway Trust Fund running out at the end of July. Although the likelihood appears to be another kicking of the can down the road, there may be a growing realization even in Congress that the continuation of the status quo is a recipe for decline. For me, it’s hard to imagine a more appropriate function for the federal government than the funding and enhancement of our national transportation system.
Although the actual number of attacks on shipping has diminished, the fact that thieves still manage to get on board ships underway in a navigation channel or alongside at a container terminal makes the case for good watchkeeping. Every potential attack is a potential fatality, and that shouldn’t be overlooked. However, in comparison with the fear that shipping faced in 2010–12, there is a sense of normal business with predictable business risks in mid-2015.
Misdeclaration of cargo and weight by shippers whether unintentional or otherwise has been part of container shipping since its beginning. And the problem is only growing because containers carry a greater percentage of global trade, ships are getting much bigger, and competitive pressures throughout the system often lead players to turn a blind eye to safety. The two fundamental challenges are ensuring the weight and the description of cargo are accurate.
The 1980s brought us Reaganomics. 2012 brought us Abenomics, the economic revitalization effort by Japanese Prime Minister Shinzo Abe. And a year after China’s surprising rejection of the P3 partnership among the world’s three largest ocean carriers, it’s clear container lines have adopted their own form of economics. Call it Alliance-omics. It aims to pull its target beneficiaries out of recession (carriers’ combined losses in the last several years measure in the billions).
It was a secret ballot, but the decision of the 40-strong International Maritime Organization Council was clear: Lim Ki-tack will be the next secretary-general of the IMO, if the IMO Assembly gives its approval in November.
A third-party agent questions the liability for a shipment that was fully crated and signed for a clear delivery by the consignee. Damage was noted after unpacking. The carrier was asked to pay a damage claim, but said it wasn’t alone in the blame. Responsibility should be shared by the shipper, the carrier and the receiver, it said. Is there any recourse?