<div class="phx-topic abstract-wrapper">Third-party logistics had a better year than President Obama in 2013, but that’s not saying much. Gross revenue topped $150 billion for the first time. All market segments showed growth, with domestic transportation management leading the way. Overall net revenue growth was 4.9 percent.
 </div>

Third-party logistics had a better year than President Obama in 2013, but that’s not saying much. Gross revenue topped $150 billion for the first time. All market segments showed growth, with domestic transportation management leading the way. Overall net revenue growth was 4.9 percent.

<div>[Editorial note: image removed/no longer available]Third-party logistics had a better year than President Obama in 2013, but that’s not saying much. Gross revenue topped $150 billion for the first time. All market segments showed growth, with domestic transportation management leading the way. Overall net revenue growth was 4.9 percent.Domestic transportation management, led by C.H. Robinson, Hub Group, Coyote Logistics and Echo Global Logistics, has been a hugely successful, rapidly growing segment over the last decade. Shippers have continued to outsource to freight brokerages expanding less-than-truckload shipment offerings. For Echo, LTL makes up 45 percent of total shipments. The evolution of...

[Editorial note: image removed/no longer available] Third-party logistics had a better year than President Obama in 2013, but that’s not saying much. Gross revenue topped $150 billion for the first time. All market segments showed growth, with domestic transportation management leading the way. Overall net revenue growth was 4.9 percent. Domestic transportation management, led by C.H. Robinson, Hub Group, Coyote Logistics and Echo Global Logistics, has been a hugely successful, rapidly growing segment over the last decade. Shippers have continued to outsource to freight brokerages expanding less-than-truckload shipment offerings. For Echo, LTL makes up 45 percent of total shipments. The evolution of transportation management systems has mushroomed over the last decade. Transportation management system enterprise solutions allow domestic transportation managers to handle all of a shipper’s daily offerings and optimize networks. Just as importantly, domestic transportation managers have developed efficient models for organizing their business. The key is to separate carrier capacity procurement from account (sales) management. Account managers work with customers intensively, while a capacity procurement section provides capacity. Growth by U.S. 3PL SegmentRevenue, in billions of dollars, and 17-year compound annual growth rate in net revenue. Segments 2013 Gross Revenue 2013 Net Revenue CAGR 1995-2012 Domestic Transportation Management $49.2 $7.2 11.2% International Transportation Management $48.7 $18.8 14.2% Dedicated Contract Carriage $12.1 $11.9 7.3% Value-Added Warehousing/Distribution $37.2 $28.7 13.7% Total $150.3 $66.6 11.8% Source: Armstrong & Associates, www.3plogistics.com Joining the pieces together is transportation management software that gets more sophisticated each year. Coyote, for example, improves its software continuously and has added driver cell phone tracking. CEO Jeff Silver points out that Coyote’s operating staff needs to continue to improve its efficiency and reduce cost of service to maintain net profitability. In a sign of profitability pressure, financial analysts over the last few quarters have challenged C.H. Robinson, the largest DTM. The rising cost of trucking capacity has reduced C.H. Robinson’s gross margin (net revenue). Over the last decade, 15 percent gross margins have become the threshold level for respectability. It was a level C.H. Robinson regularly exceeded. Going forward, however, the company is promising only double-digit gross margins, a consequence that will be reflected for other DTMs. For many smaller DTMs and old-fashioned mom-and-pop freight brokerages, the evolving pressure will mean their demise. Modern domestic transportation managers have a threshold level of sophistication for IT and processes that will allow the larger to grow at the expense of the small. In addition, shippers can be expected to expand the portion of traffic handled by domestic transportation managers. Between some consolidation and expanding market share, domestic transportation management should continue to be the largest growth segment in third-party logistics. In addition to companies that grew from truckload freight brokerage, intermodal marketing companies, led by Hub Group, are an important segment of domestic transportation management. Hub’s Unyson Logistics subsidiary, is a rapidly growing systems DTM. Hub also owns Mode Transportation, a stand-alone transportation manager with traditional truck brokerage and intermodal marketing abilities. Hub itself has developed a significant pool of containers and trucking pickup/delivery capability to expand door-to-door service. Hub does a large amount of business with Union Pacific Railroad, competing heavily with trucking company J.B. Hunt, which has extensive operations with BNSF Railway. For U.S. domestic transportation management activity, Chicago is the control tower. Hub, like Echo and Coyote, is based in Chicago. C.H. Robinson has a regional operation with 650 employees in Chicago. Globally, we estimate the third-party logistics market has grown to $704 billion. Asia-Pacific is the largest region, with 36 percent of the market. The North American market estimate is $177 billion, representing 25 percent of the total. Revenue of top 10 DTMS/freight brokers Full-size chart Growth in third-party logistics should be led by China over the next two to five years. China’s growth should slow from double digits to high single digits and become more domestically oriented. The Asia-Pacific region, outside of China and Japan, should grow in the 4 to 5 percent range. The Americas should be above 4 percent. Europe should lag at 0 to 2 percent. Africa is all the rage, but it’s early in the game. Investments are being made; anecdotal evidence abounds; accumulated 3PL revenues are meager. Global exports have fallen to 31 percent of GDP from 33 percent in 2008. The trend lines aren’t promising, and the days of double-digit growth are over for international transportation management, at least for the next five years or so. Expeditors International of Washington is the poster child for international transportation management. Expeditors’ containerized volumes and air freight trends reflect what is happening in North America. Expeditors handles 870,000 TEUs and 730,000 metric tons of air freight a year, with more than half of its air volume moving between Asia and North America. Benjamin Hartford of Robert W. Baird & Co. estimated that Expeditors’ net and gross revenues grew 3 percent and 1 percent, respectively, in 2013. In addition to slippage in world exports, international transportation management’s share of TEUs has decreased from 39 percent to 35 percent. The container lines are going directly after more business and cutting out the international transportation manager. As a result, we expect overall international transportation management growth to be less than 5 percent outside of the Asia-Pacific. Dedicated contract carriage continues to become a larger part of growth for major motor carriers. Dedicated contract operations are mostly regional in the U.S. Werner Enterprises’ average length of haul is now 455 miles, for example. Our study of major dedicated contract carriers found an average length of haul of 414 miles. Challenges are occurring for all carriers operating multistop runs of 400 miles or more because of new hours of service rules. Particularly vexing is the requirement for two off-duty periods between 1 a.m. and 5 a.m. during the 34-hour restart period for drivers. The restart provisions have disrupted Sunday starts with Monday deliveries, particularly to retail and food/beverage customers. Longer peddle-run drivers also are having trouble completing routes because of the 11-hour driving limits. 3PL revenue by geographic region. Full-size chart Although these rule changes make operations difficult, they ultimately become the customer’s problem. Carriers must add expensive capacity to solve the problems, and the costs get passed through to customers. The other asset-based segment of third-party logistics, value-added warehousing and distribution, continued to expand incrementally. More emphasis is being placed on returns, transportation management system integration, automation and IT improvements. The current economy still limits construction of new warehouses. The major value-added warehousing and distribution companies continue to get better at what they do, and all companies will have to do a better job with what they have. Growth should be in the 5 percent range. It could change if elected officials in Washington can do their part to stimulate economic growth instead of hindering it or we get some extra push from energy independence. But don’t hold your breath. Richard Armstrong is chairman and CEO of supply chain research and consulting firm Armstrong & Associates. Contact him at dick@3plogistics.com .

Truck brokers

Logistics Technology News

3PLs Face Slowing Growth in 2014

<div class="phx-topic abstract-wrapper">A lead time of five to seven years to build up domestic crane manufacturing capacity could cripple the US heavy-lift industry if tariffs on imported products are not reduced, industry stakeholders say. </div>

A lead time of five to seven years to build up domestic crane manufacturing capacity could cripple the US heavy-lift industry if tariffs on imported products are not reduced, industry stakeholders say.

Feature image

<div class="phx-topic">US heavy-lift lobbyists are pushing the federal government for relief from tariffs amid growing concerns about potential new trade levies and their repercussions for the project cargo sector. The Specialized Carriers &amp; Rigging Association (SC&amp;RA), the largest trade group representing the US heavy-lift industry, is awaiting federal action after testifying in front of the US International Trade Commission with a request to exempt crane and trailer imports from Canada, the EU and Japan from new Section 301 tariffs. The US Section 301 provision authorizes the Office of the US Trade Representative (USTR) to investigate and impose retaliatory tariffs against foreign countries with trade practices it deems “unfair” to US interests. Those efforts have largely been focused on Chinese trade, but the US has also opened investigations into the practices of several other countries, including Canada, Japan and parts of the EU. Joel Dandrea, president and CEO of the SC&amp;RA, told the Journal of Commerce the 1,350-member international trade group is not opposed to tariffs and supports the Trump administration’s efforts to balance trade fairly. But he said the ever-changing succession of tariffs has made it difficult to budget, plan and forecast for equipment purchases, cargo moves and critical infrastructure projects. ”The tariffs that are placed upon our industry really need to be fair and reasonable, and what we’re seeing at this point are tariff levels that we believe are not reasonable,” Dandrea said. Testifying on behalf of the SC&amp;RA at a May 5 International Trade Commission hearing on tariff investigations, Mike Appling, CEO of LiftHigh Cranes &amp; Rigging, told the ITC that the group supports addressing China’s structural overcapacity. “But the EU, Canada and Japan are proven, trusted allies that do not engage in industrial overcapacity, dumping, forced labor or any other unfair trade practice with respect to these products,” he said. “There is no basis for including their merchandise within the scope of proposed Section 301 action.” Appling said roughly 80% of the cranes used in US construction are imported, and less than 3% of all global all-terrain cranes are manufactured domestically. No US company manufactures tower cranes, and the lead time to build additional domestic manufacturing capacity is five to seven years. “Critical infrastructure projects — data centers, nuclear facilities, LNG terminals, semiconductor fabrication plants, defense installations — cannot pause while that capacity develops,” he said. The problem extends up the supply chain, Appling said, as ultra-high-strength steel grades essential to crane and trailer manufacturing are not produced domestically in sufficient quantities, and US steel manufacturers have indicated there is no compelling business case to do so. During his ITC testimony, Appling outlined a series of requests the SC&amp;RA submitted on April 15 to the USTR: the exemption of cranes, trailers and parts imported from the EU, Canada and Japan from Section 301 tariffs, a 24-month phase-in period for any new tariffs imposed on equipment from those nations, and “proportionate” tariff rates on Chinese products. The proposal included a call for no stacking of Section 301 tariffs on top of existing steel tariffs imposed under Section 232. Citing limited domestic supplies, the SC&amp;RA also proposed tariff exemptions on ultra-high-strength steel, which is used to manufacture cranes and trailers. “This is precisely the wrong moment to impose additional cost burdens on the only viable alternative to Chinese equipment,” Appling said. <h3>High costs, thin margins </h3>The SC&amp;RA’s proposal to the USTR is the latest plea from the association to ease the burdens of tariffs on the heavy-lift and transport industry. Dandrea, who attended the ITC hearing and has been a vocal advocate for tariff relief, said the industry was critical to US construction. “You can have raw steel manufactured, but if there’s no one to transport it, lift it and build with it, it’s of no value,” he said. Dandrea said steel tariffs currently imposed under Section 232, along with related measures, are causing delays for equipment purchases and infrastructure projects while driving up costs — forcing some companies to pause or reconsider those purchases altogether. “When you add $300,000 or $400,000 or $500,000 to the cost of a crane coming from Germany or Japan, or $100,000 or $200,000 to the cost of a highly specialized construction trailer, you can’t just click your fingers from a purchasing standpoint and say we’re going to absorb those costs and quickly turn around and pass those costs onto customers,” he said. The Trump administration in April agreed to adjust Section 232 tariffs on steel derivative products from 50% of their full customs value to 25%. Dandrea said SC&amp;RA would like to see those tariffs reduced further, from 25% to 15%, and for the USTR to ensure that Section 301 tariffs are not stacked on top of those existing tariffs. Dandrea expects it will take until July before the USTR responds to SC&amp;RA’s request, but said the association remains optimistic. “The move to 25% was a move in the right direction,” he said. “But the costs are still too high for an industry operating on thin margins.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

US heavy-lift lobbyists are pushing the federal government for relief from tariffs amid growing concerns about potential new trade levies and their repercussions for the project cargo sector. The Specialized Carriers & Rigging Association (SC&RA), the largest trade group representing the US heavy-lift industry, is awaiting federal action after testifying in front of the US International Trade Commission with a request to exempt crane and trailer imports from Canada, the EU and Japan from new Section 301 tariffs. The US Section 301 provision authorizes the Office of the US Trade Representative (USTR) to investigate and impose retaliatory tariffs against foreign countries with trade practices it deems “unfair” to US interests. Those efforts have largely been focused on Chinese trade, but the US has also opened investigations into the practices of several other countries, including Canada, Japan and parts of the EU. Joel Dandrea, president and CEO of the SC&RA, told the Journal of Commerce the 1,350-member international trade group is not opposed to tariffs and supports the Trump administration’s efforts to balance trade fairly. But he said the ever-changing succession of tariffs has made it difficult to budget, plan and forecast for equipment purchases, cargo moves and critical infrastructure projects. ”The tariffs that are placed upon our industry really need to be fair and reasonable, and what we’re seeing at this point are tariff levels that we believe are not reasonable,” Dandrea said. Testifying on behalf of the SC&RA at a May 5 International Trade Commission hearing on tariff investigations, Mike Appling, CEO of LiftHigh Cranes & Rigging, told the ITC that the group supports addressing China’s structural overcapacity. “But the EU, Canada and Japan are proven, trusted allies that do not engage in industrial overcapacity, dumping, forced labor or any other unfair trade practice with respect to these products,” he said. “There is no basis for including their merchandise within the scope of proposed Section 301 action.” Appling said roughly 80% of the cranes used in US construction are imported, and less than 3% of all global all-terrain cranes are manufactured domestically. No US company manufactures tower cranes, and the lead time to build additional domestic manufacturing capacity is five to seven years. “Critical infrastructure projects — data centers, nuclear facilities, LNG terminals, semiconductor fabrication plants, defense installations — cannot pause while that capacity develops,” he said. The problem extends up the supply chain, Appling said, as ultra-high-strength steel grades essential to crane and trailer manufacturing are not produced domestically in sufficient quantities, and US steel manufacturers have indicated there is no compelling business case to do so. During his ITC testimony, Appling outlined a series of requests the SC&RA submitted on April 15 to the USTR: the exemption of cranes, trailers and parts imported from the EU, Canada and Japan from Section 301 tariffs, a 24-month phase-in period for any new tariffs imposed on equipment from those nations, and “proportionate” tariff rates on Chinese products. The proposal included a call for no stacking of Section 301 tariffs on top of existing steel tariffs imposed under Section 232. Citing limited domestic supplies, the SC&RA also proposed tariff exemptions on ultra-high-strength steel, which is used to manufacture cranes and trailers. “This is precisely the wrong moment to impose additional cost burdens on the only viable alternative to Chinese equipment,” Appling said. High costs, thin margins The SC&RA’s proposal to the USTR is the latest plea from the association to ease the burdens of tariffs on the heavy-lift and transport industry. Dandrea, who attended the ITC hearing and has been a vocal advocate for tariff relief, said the industry was critical to US construction. “You can have raw steel manufactured, but if there’s no one to transport it, lift it and build with it, it’s of no value,” he said. Dandrea said steel tariffs currently imposed under Section 232, along with related measures, are causing delays for equipment purchases and infrastructure projects while driving up costs — forcing some companies to pause or reconsider those purchases altogether. “When you add $300,000 or $400,000 or $500,000 to the cost of a crane coming from Germany or Japan, or $100,000 or $200,000 to the cost of a highly specialized construction trailer, you can’t just click your fingers from a purchasing standpoint and say we’re going to absorb those costs and quickly turn around and pass those costs onto customers,” he said. The Trump administration in April agreed to adjust Section 232 tariffs on steel derivative products from 50% of their full customs value to 25%. Dandrea said SC&RA would like to see those tariffs reduced further, from 25% to 15%, and for the USTR to ensure that Section 301 tariffs are not stacked on top of those existing tariffs. Dandrea expects it will take until July before the USTR responds to SC&RA’s request, but said the association remains optimistic. “The move to 25% was a move in the right direction,” he said. “But the costs are still too high for an industry operating on thin margins.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Breakbulk carriers

Breakbulk News

Maritime

Heavy-lift trade group lobbies USTR for relief from crane, trailer tariffs

<div class="phx-topic abstract-wrapper">Tirschwell, who most recently served as vice president of the Journal of Commerce, announced his plans to leave the business and continue work as an independent shipping journalist. </div>

Tirschwell, who most recently served as vice president of the Journal of Commerce, announced his plans to leave the business and continue work as an independent shipping journalist.

<div class="phx-topic">Peter Tirschwell this week ended a 34-year tenure at the Journal of Commerce from which he rose from a cub reporter to become the world’s leading maritime journalist, and founder and chair of the largest container shipping conference in the world. Tirschwell, who most recently served as vice president of the Journal of Commerce, announced his plans to leave the business and continue work as an independent shipping journalist. He leaves behind a senior leadership team dedicated to providing the shipping industry with the essential news and analysis that it has for 199 years, while bringing industry stakeholders together at JOC’s three conferences: TPM in Long Beach, Inland Distribution in Chicago, and Breakbulk &amp; Project Cargo in New Orleans. "Peter’s departure from the Journal of Commerce caps a remarkable journey that began as a general assignment reporter in New York and took him to increasingly senior roles as West Coast bureau chief, managing editor, editor-in-chief, and ultimately to leader of the business,” said Chris Brooks, executive director of the Journal of Commerce and Tirschwell’s longtime colleague. “His contributions, including a recent two-year stint in Singapore to promote the Journal of Commerce’s global growth strategy, have been immeasurable.” Tirschwell, a New York City native with figurative saltwater in his veins, helped make the Journal of Commerce the premier global shipping publication and grow TPM from some 150 people in its first year to a global event attracting more than 4,000 people annually. That, along with his regular analysis and reporting and frequent speeches at industry events, helped make him one of the most respected and unbiased voices and experts in the shipping industry. The Journal of Commerce thanks Peter Tirschwell for his leadership, vision, mentorship, and camaraderie as it moves into a new chapter on the eve of its 200th birthday, dedicated to providing the news, information and events the shipping industry depends upon. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Peter Tirschwell this week ended a 34-year tenure at the Journal of Commerce from which he rose from a cub reporter to become the world’s leading maritime journalist, and founder and chair of the largest container shipping conference in the world. Tirschwell, who most recently served as vice president of the Journal of Commerce, announced his plans to leave the business and continue work as an independent shipping journalist. He leaves behind a senior leadership team dedicated to providing the shipping industry with the essential news and analysis that it has for 199 years, while bringing industry stakeholders together at JOC’s three conferences: TPM in Long Beach, Inland Distribution in Chicago, and Breakbulk & Project Cargo in New Orleans. "Peter’s departure from the Journal of Commerce caps a remarkable journey that began as a general assignment reporter in New York and took him to increasingly senior roles as West Coast bureau chief, managing editor, editor-in-chief, and ultimately to leader of the business,” said Chris Brooks, executive director of the Journal of Commerce and Tirschwell’s longtime colleague. “His contributions, including a recent two-year stint in Singapore to promote the Journal of Commerce’s global growth strategy, have been immeasurable.” Tirschwell, a New York City native with figurative saltwater in his veins, helped make the Journal of Commerce the premier global shipping publication and grow TPM from some 150 people in its first year to a global event attracting more than 4,000 people annually. That, along with his regular analysis and reporting and frequent speeches at industry events, helped make him one of the most respected and unbiased voices and experts in the shipping industry. The Journal of Commerce thanks Peter Tirschwell for his leadership, vision, mentorship, and camaraderie as it moves into a new chapter on the eve of its 200th birthday, dedicated to providing the news, information and events the shipping industry depends upon. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Container Shipping News

Supply chain

Peter Tirschwell leaves enduring legacy on Journal of Commerce

<div class="phx-topic abstract-wrapper">James McNamara, who joined the union as it faced tumult from containerization, persisted at his job over four decades to help shape the modern International Longshoremen’s Association.</div>

James McNamara, who joined the union as it faced tumult from containerization, persisted at his job over four decades to help shape the modern International Longshoremen’s Association.

<div class="phx-topic">The Port of New York and New Jersey’s maritime industry honored James McNamara, chief of staff for the International Longshoremen’s Association (ILA), for his 45 years in the business, rising in the union’s ranks along with current leadership to shape the ILA into a modern organization. On Wednesday, McNamara was inducted into the Maritime Association of the Port of New York &amp; New Jersey’s Hall of Fame, along with John Murray, chief executive officer of the Canaveral Port Authority; Bob Burke, chief executive officer of Ridgebury Tankers; and Ted Tregurtha, president of tug operator Moran Towing. McNamara, then a 26-year-old local reporter who lived far from the port in Queens, joined the ILA in August of 1981, after sending an unsolicited, typed cover letter and resume in search of a public relations job. ILA President Harold Daggett was a business agent for longshore mechanics when he first met McNamara. At the event, Daggett highlighted McNamara’s ILA charity work alongside the United States Maritime Alliance (USMX), with the two raising $20 million for St. Jude Children’s Hospital. “I couldn’t be more happy to have that guy on board,” Daggett said. “He’s like me having 10 wives, honest to God. I made him chief of staff. I had to. He was doing my job.” McNamara also came up the ranks with current Secretary-Treasurer Stephen Knott and John Baker, a general organizer and previous head of the ILA’s Great Lakes District Council. <h3>‘Deeply compassionate and very intelligent’ </h3>McNamara told the Journal of Commerce his only knowledge of the ILA came from a couple of assignments briefly interviewing Thomas “Teddy” Gleason, who had been the union’s president since 1963. After working for a newspaper, McNamara said going to a longshore union was a bit of culture shock. Gleason himself had been held as a material witness in a 1947 shooting of a New York stevedore. He was also called in 1981 to testify before a Senate committee about alleged associations the union had with New York organized crime. “The way they came across was very scary,” McNamara said. “They were tough guys. They came from the docks. That wasn’t ballet school. It was a tough environment.” Despite that initial impression, “I quickly learned that [longshore workers] were deeply compassionate and friendly and very intelligent,” McNamara said, adding that the latter especially came into play during contract negotiations. “Longshoremen would have the most intricate questions that went to the heart of the contract, perhaps more so than the officers and general counsel,” McNamara said. “Longshoremen, and especially their spouses, were the best analysts and professors of contracts.” They had to be, McNamara said, because the New York-New Jersey shipping industry was changing dramatically. At the time, New York City still had few finger piers that handled breakbulk cargo. But the New York-based ILA had to confront the industry’s move to containerization and the ceding of longshore jobs to New Jersey’s port. Gleason, who had led three wildcat strikes as a union organizer, sought to stabilize longshore work through establishing three-year contracts, improved benefits for his members, and the guaranteed annual income for union members most impacted by containerization. He also established benefit funds for ILA members and opened the union to more Black longshore workers. Even so, the ILA could not stem the tide of job loss. McNamara said the New York-New Jersey port had about 27,000 longshore workers when he joined the union, compared with the roughly 5,000 today that work “when we’re lucky.” Yet, the ILA sought to work with employers to ensure those members had the best possible working environment. Even though container terminals became busier and more congested with equipment than ever, only one ILA longshore equipment operator had a job-related fatality. The ILA also saw <a href="https://www.joc.com/article/ny-nj-looks-to-boost-longshore-workforce-with-covid-19-vaccines-5250297">at least 22 members perish while the union worked during COVID-19</a>. “Those 5,000 ILA members work in a clean environment on modern, safe equipment, keeping up the same productivity as the 27,000 that had been there before,” McNamara said. McNamara said one of his greatest accomplishments was taking part in negotiations with the USMX over the ILA’s current contract, in which the union <a href="https://www.joc.com/article/ila-ratifies-new-six-year-deal-with-higher-entry-pay-automation-protection-5951338">secured its largest pay raise ever and additional protections against port automation</a>. “Let me do a little bragging tonight,” McNamara said during his speech. “Of the four honorees, I am the only one here introduced by the greatest labor leader of all time, my friend of 45 years, Harold Daggett.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Port of New York and New Jersey’s maritime industry honored James McNamara, chief of staff for the International Longshoremen’s Association (ILA), for his 45 years in the business, rising in the union’s ranks along with current leadership to shape the ILA into a modern organization. On Wednesday, McNamara was inducted into the Maritime Association of the Port of New York & New Jersey’s Hall of Fame, along with John Murray, chief executive officer of the Canaveral Port Authority; Bob Burke, chief executive officer of Ridgebury Tankers; and Ted Tregurtha, president of tug operator Moran Towing. McNamara, then a 26-year-old local reporter who lived far from the port in Queens, joined the ILA in August of 1981, after sending an unsolicited, typed cover letter and resume in search of a public relations job. ILA President Harold Daggett was a business agent for longshore mechanics when he first met McNamara. At the event, Daggett highlighted McNamara’s ILA charity work alongside the United States Maritime Alliance (USMX), with the two raising $20 million for St. Jude Children’s Hospital. “I couldn’t be more happy to have that guy on board,” Daggett said. “He’s like me having 10 wives, honest to God. I made him chief of staff. I had to. He was doing my job.” McNamara also came up the ranks with current Secretary-Treasurer Stephen Knott and John Baker, a general organizer and previous head of the ILA’s Great Lakes District Council. ‘Deeply compassionate and very intelligent’ McNamara told the Journal of Commerce his only knowledge of the ILA came from a couple of assignments briefly interviewing Thomas “Teddy” Gleason, who had been the union’s president since 1963. After working for a newspaper, McNamara said going to a longshore union was a bit of culture shock. Gleason himself had been held as a material witness in a 1947 shooting of a New York stevedore. He was also called in 1981 to testify before a Senate committee about alleged associations the union had with New York organized crime. “The way they came across was very scary,” McNamara said. “They were tough guys. They came from the docks. That wasn’t ballet school. It was a tough environment.” Despite that initial impression, “I quickly learned that [longshore workers] were deeply compassionate and friendly and very intelligent,” McNamara said, adding that the latter especially came into play during contract negotiations. “Longshoremen would have the most intricate questions that went to the heart of the contract, perhaps more so than the officers and general counsel,” McNamara said. “Longshoremen, and especially their spouses, were the best analysts and professors of contracts.” They had to be, McNamara said, because the New York-New Jersey shipping industry was changing dramatically. At the time, New York City still had few finger piers that handled breakbulk cargo. But the New York-based ILA had to confront the industry’s move to containerization and the ceding of longshore jobs to New Jersey’s port. Gleason, who had led three wildcat strikes as a union organizer, sought to stabilize longshore work through establishing three-year contracts, improved benefits for his members, and the guaranteed annual income for union members most impacted by containerization. He also established benefit funds for ILA members and opened the union to more Black longshore workers. Even so, the ILA could not stem the tide of job loss. McNamara said the New York-New Jersey port had about 27,000 longshore workers when he joined the union, compared with the roughly 5,000 today that work “when we’re lucky.” Yet, the ILA sought to work with employers to ensure those members had the best possible working environment. Even though container terminals became busier and more congested with equipment than ever, only one ILA longshore equipment operator had a job-related fatality. The ILA also saw at least 22 members perish while the union worked during COVID-19 . “Those 5,000 ILA members work in a clean environment on modern, safe equipment, keeping up the same productivity as the 27,000 that had been there before,” McNamara said. McNamara said one of his greatest accomplishments was taking part in negotiations with the USMX over the ILA’s current contract, in which the union secured its largest pay raise ever and additional protections against port automation . “Let me do a little bragging tonight,” McNamara said during his speech. “Of the four honorees, I am the only one here introduced by the greatest labor leader of all time, my friend of 45 years, Harold Daggett.” Contact Michael Angell at michael.angell@spglobal.com .

Port News

North American ports

NY-NJ maritime industry honors ILA’s McNamara

<div class="phx-topic abstract-wrapper">The speech by Bobby Olvera sends a warning shot to employers and cargo owners ahead of the expiration of its longshore contract in 2028.</div>

The speech by Bobby Olvera sends a warning shot to employers and cargo owners ahead of the expiration of its longshore contract in 2028.

<div class="phx-topic">The president of the International Longshore and Warehouse Union (ILWU) on Wednesday slammed US West Coast employers as being dominated by foreign shipping companies, accusing them of caring more about the profits they send back to their headquarters than the port communities in which they operate. The message, delivered by Bobby Olvera at the annual meeting of the Agriculture Transportation Coalition (AgTC) in Tacoma, Washington, sends a warning shot to employers — and cargo owners — ahead of the expiration of the union’s coastwide contract in 2028. The previous contract, in which the ILWU scored a <a href="https://www.joc.com/article/ilwu-scores-32-wage-increase-70-million-bonus-in-tentative-new-contract-5223607">32% increase in wages for its members</a>, was finalized in 2022 after <a href="https://www.joc.com/article/west-coast-ports-hit-with-new-round-of-cargo-handling-disruptions-5226851">work stoppages and slowdowns</a> that resulted in a significant diversion of cargo to East and Gulf Coast ports. “The foreign shipping lines, they should not be operating our terminals here in the United States. That should be American stevedoring companies,” Olvera told the AgTC event. “They don’t care about our ports. It’s all [about] profit generating. It’s control generating.” Olvera said the ILWU is using this period to advocate for strong West Coast ports and their customers, which include agricultural importers and exporters, before the appropriate state and federal agencies regarding legislation and regulations that impact the flow of cargo. “But things have changed. What they’ve done, in my opinion, is turned the PMA into a one-trick pony. All they advocate [and] lobby for are tax incentives, tax breaks, dollars for tax breaks and tax funds for the terminals,” Olvera said. The Pacific Maritime Association (PMA), which represents ocean carrier and terminal operator employers in negotiations with the ILWU, said that is not the case at all. “PMA is focused each day on promoting strong and efficient West Coast ports that support the nation’s supply chain and sustain thousands of jobs at port terminals and millions of jobs throughout the US economy,” the association said in a statement Thursday. <h3>The role of private equity </h3>Former shipping company executive and Journal of Commerce contributor Ted Prince noted that the phenomenon of ocean carriers dominating terminal operators in a vertically-integrated operation developed decades ago, but that model has been changing due to investments by private equity and infrastructure funds in ports and marine terminals. “How do you deal with this silent force of private equity that in my mind is going to increasingly call the shots?” Prince asked Olvera during the event. “It starts and stops with the ports, with our public port authorities,” Olvera said. “I think we fail to recognize that they’re owned by the citizens. They’re owned by the communities. The port authority has an obligation when they execute 30- and 40-year leases on the terminals to ask the right questions.” Those “right questions” involve how to make their facilities more responsive to port users and their needs for sufficient gate hours and efficient operations, he added. A California-based agriculture exporter told Olvera that the lack of trust between the PMA and the ILWU has hurt the supply chain by imposing higher costs on shippers, which has resulted in a diversion of cargo to East and Gulf Coast ports. She suggested that some forms of technology that are now common at marine terminals are designed to reduce costs and improve efficiency, not to eliminate longshore jobs. “That’s where the technology comes in — to move more cargo,” she said. Olvera responded that he was not going to talk about automation at the ports. The West Coast longshore labor contract allows for automation, but anticipated union resistance has resulted in a new dynamic in which port authorities are working with terminal operators and the ILWU to ensure that <a href="https://www.joc.com/article/hesitation-from-port-authorities-slows-automation-in-southern-california-6199922">future projects move forward with the cooperation of both parties</a>. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

The president of the International Longshore and Warehouse Union (ILWU) on Wednesday slammed US West Coast employers as being dominated by foreign shipping companies, accusing them of caring more about the profits they send back to their headquarters than the port communities in which they operate. The message, delivered by Bobby Olvera at the annual meeting of the Agriculture Transportation Coalition (AgTC) in Tacoma, Washington, sends a warning shot to employers — and cargo owners — ahead of the expiration of the union’s coastwide contract in 2028. The previous contract, in which the ILWU scored a 32% increase in wages for its members , was finalized in 2022 after work stoppages and slowdowns that resulted in a significant diversion of cargo to East and Gulf Coast ports. “The foreign shipping lines, they should not be operating our terminals here in the United States. That should be American stevedoring companies,” Olvera told the AgTC event. “They don’t care about our ports. It’s all [about] profit generating. It’s control generating.” Olvera said the ILWU is using this period to advocate for strong West Coast ports and their customers, which include agricultural importers and exporters, before the appropriate state and federal agencies regarding legislation and regulations that impact the flow of cargo. “But things have changed. What they’ve done, in my opinion, is turned the PMA into a one-trick pony. All they advocate [and] lobby for are tax incentives, tax breaks, dollars for tax breaks and tax funds for the terminals,” Olvera said. The Pacific Maritime Association (PMA), which represents ocean carrier and terminal operator employers in negotiations with the ILWU, said that is not the case at all. “PMA is focused each day on promoting strong and efficient West Coast ports that support the nation’s supply chain and sustain thousands of jobs at port terminals and millions of jobs throughout the US economy,” the association said in a statement Thursday. The role of private equity Former shipping company executive and Journal of Commerce contributor Ted Prince noted that the phenomenon of ocean carriers dominating terminal operators in a vertically-integrated operation developed decades ago, but that model has been changing due to investments by private equity and infrastructure funds in ports and marine terminals. “How do you deal with this silent force of private equity that in my mind is going to increasingly call the shots?” Prince asked Olvera during the event. “It starts and stops with the ports, with our public port authorities,” Olvera said. “I think we fail to recognize that they’re owned by the citizens. They’re owned by the communities. The port authority has an obligation when they execute 30- and 40-year leases on the terminals to ask the right questions.” Those “right questions” involve how to make their facilities more responsive to port users and their needs for sufficient gate hours and efficient operations, he added. A California-based agriculture exporter told Olvera that the lack of trust between the PMA and the ILWU has hurt the supply chain by imposing higher costs on shippers, which has resulted in a diversion of cargo to East and Gulf Coast ports. She suggested that some forms of technology that are now common at marine terminals are designed to reduce costs and improve efficiency, not to eliminate longshore jobs. “That’s where the technology comes in — to move more cargo,” she said. Olvera responded that he was not going to talk about automation at the ports. The West Coast longshore labor contract allows for automation, but anticipated union resistance has resulted in a new dynamic in which port authorities are working with terminal operators and the ILWU to ensure that future projects move forward with the cooperation of both parties . Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Marine terminals

ILWU chief slams ‘foreign shipping companies’ ahead of contract expiration

<div class="phx-topic abstract-wrapper">The alignment between demand and the supply of capacity has individual dynamics across each trade lane and different consequences for the newbuild, second-hand and charter markets, writes Jeremy Masters. </div>

The alignment between demand and the supply of capacity has individual dynamics across each trade lane and different consequences for the newbuild, second-hand and charter markets, writes Jeremy Masters.

<div class="phx-topic">When a linkage is made between trade conditions and capacity evolution, there is a tendency to focus exclusively on the big ship trades. The reality is that the alignment between demand and supply of space has individual dynamics across each trade lane and different consequences for the newbuild, second-hand and charter markets. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6225328_0.1.jpg"></img></div>The big ship trades are predominantly inhabited by carrier-owned tonnage or long-term charters that often go back-to-back with non-operating owners (NOOs) making newbuild orders. Suffice it to say there is not a heavily-traded short-term charter market. Alphaliner’s May monthly monitor reported that there was a staggering 91.4% increase of the existing fleet in newbuild orders for 18,000-TEU to 24,000-TEU ships. It’s very tough to see that amount of capacity being successfully absorbed by an expansion of trades using big ships, slow-steaming and retaining southern Africa routings if the Red Sea fully opens. Scrapping is not relevant in this tier or indeed in the next two or three size tiers down due to the youth of the fleet. There are, of course, trades where existing loops can be upgraded — Far East to Europe being the most obvious — but if a trade already has a fragile balance, there will be a limit to absorption levels and cascading will potentially export oversupply contagion. <h3>Smaller trades, different dynamics </h3>If we switch to short-sea, regional, and smaller deep-sea trades, we enter a different set of dynamics. To illustrate the stark differences, we can look at the versatile 2,000-TEU to 5,099-TEU capacity category. It’s not just a case where these size ships fit the weekly volumes being generated, but also the capability of the ports served to take the ship sizes and turn them around quickly. In looking at why this ship size has been in such high demand and charter rates so robust, we can look at natural trade strength in a number of the feeder/regional trades they inhabit, such as intra-Asia, but structural issues are also at play: <ul><li>Carriers chartering and buying a tremendous amount of tonnage from NOOs to run their own regional/feeder systems </li><li>New deployments created to overcome disruption to normal ship systems, such as the Red Sea and Strait of Hormuz. </li><li>Congestion consistently reducing networking capacity. </li></ul>Gemini Cooperation’s hub-and-spoke system, for instance, increased demand for smaller tonnage but did not necessarily maximize usage of those assets. Unlike a nimble third-party feeder specialist who would swap sizes, adapt schedules and get enough carrier clients on board to fill ships on an ongoing basis, Gemini is, by design, running a fixed set of connections forcing it to sail its spoke ships on time at whatever utilization is possible with Gemini-only cargo. That’s not to question the business logic of vertical integration for the carriers. The combined effect of new ship systems being created and not maximizing the use of assets is, however, greater demand at a time the reduction of NOO tonnage has created inelasticity and high prices in both the charter and second-hand market. <h3>Newbuild fracture </h3>What seems counterintuitive in the smaller trades where demand is high, second-hand ships are hard to come by, and charter rates are extremely robust, is that the newbuild order book is considerably lower than in the big-ship categories. Alphaliner’s May monthly monitor reported the following percentages of the existing fleet on newbuild orders: 2,000 to 2,999 TEUs (12.8%), 3,000 to 3,999 TEUs (35.7%), and 4,000 to 5,099 TEUs (16.9%). These percentages have been moving up in recent months but are a quantum leap below the 89.4% in the 18,000-TEU to 24,000-TEU range. According to Sea-web, a sister product of the Journal of Commerce within S&amp;P Global, some 2.43 million TEUs were on order in 2025 for ships of 15,001 TEUs and up. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="fdc6bd37-a5e0-4c29-abde-4be9dbd2ba3e"></dynamic-object></div>Have carriers and NOO’s overcooked their orders in the big ships and undercooked them at the lower end? The answer on the big ships looks to be “yes,” and there is a built-in carrier driver for this: There is not a well-populated second-hand or short-term charter market for newer, bigger ships, so if you need energy-efficient, low-slot cost vessels to be competitive in particular trades going forward, there is a pressure to order even if you have overcapacity concerns. There is a simpler and more pervasive explanation: The move from three major east-west networks ( 2M, Ocean, THEA ) to four ( MSC, Ocean, Gemini, Premier) catalyzed an arms race that continues today and will only be resolved by further carrier and/or consortium consolidation. Jeremy Masters is managing director of Shipping Masters. Contact him at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

When a linkage is made between trade conditions and capacity evolution, there is a tendency to focus exclusively on the big ship trades. The reality is that the alignment between demand and supply of space has individual dynamics across each trade lane and different consequences for the newbuild, second-hand and charter markets. The big ship trades are predominantly inhabited by carrier-owned tonnage or long-term charters that often go back-to-back with non-operating owners (NOOs) making newbuild orders. Suffice it to say there is not a heavily-traded short-term charter market. Alphaliner’s May monthly monitor reported that there was a staggering 91.4% increase of the existing fleet in newbuild orders for 18,000-TEU to 24,000-TEU ships. It’s very tough to see that amount of capacity being successfully absorbed by an expansion of trades using big ships, slow-steaming and retaining southern Africa routings if the Red Sea fully opens. Scrapping is not relevant in this tier or indeed in the next two or three size tiers down due to the youth of the fleet. There are, of course, trades where existing loops can be upgraded — Far East to Europe being the most obvious — but if a trade already has a fragile balance, there will be a limit to absorption levels and cascading will potentially export oversupply contagion. Smaller trades, different dynamics If we switch to short-sea, regional, and smaller deep-sea trades, we enter a different set of dynamics. To illustrate the stark differences, we can look at the versatile 2,000-TEU to 5,099-TEU capacity category. It’s not just a case where these size ships fit the weekly volumes being generated, but also the capability of the ports served to take the ship sizes and turn them around quickly. In looking at why this ship size has been in such high demand and charter rates so robust, we can look at natural trade strength in a number of the feeder/regional trades they inhabit, such as intra-Asia, but structural issues are also at play: Carriers chartering and buying a tremendous amount of tonnage from NOOs to run their own regional/feeder systems New deployments created to overcome disruption to normal ship systems, such as the Red Sea and Strait of Hormuz. Congestion consistently reducing networking capacity. Gemini Cooperation’s hub-and-spoke system, for instance, increased demand for smaller tonnage but did not necessarily maximize usage of those assets. Unlike a nimble third-party feeder specialist who would swap sizes, adapt schedules and get enough carrier clients on board to fill ships on an ongoing basis, Gemini is, by design, running a fixed set of connections forcing it to sail its spoke ships on time at whatever utilization is possible with Gemini-only cargo. That’s not to question the business logic of vertical integration for the carriers. The combined effect of new ship systems being created and not maximizing the use of assets is, however, greater demand at a time the reduction of NOO tonnage has created inelasticity and high prices in both the charter and second-hand market. Newbuild fracture What seems counterintuitive in the smaller trades where demand is high, second-hand ships are hard to come by, and charter rates are extremely robust, is that the newbuild order book is considerably lower than in the big-ship categories. Alphaliner’s May monthly monitor reported the following percentages of the existing fleet on newbuild orders: 2,000 to 2,999 TEUs (12.8%), 3,000 to 3,999 TEUs (35.7%), and 4,000 to 5,099 TEUs (16.9%). These percentages have been moving up in recent months but are a quantum leap below the 89.4% in the 18,000-TEU to 24,000-TEU range. According to Sea-web, a sister product of the Journal of Commerce within S&P Global, some 2.43 million TEUs were on order in 2025 for ships of 15,001 TEUs and up. Have carriers and NOO’s overcooked their orders in the big ships and undercooked them at the lower end? The answer on the big ships looks to be “yes,” and there is a built-in carrier driver for this: There is not a well-populated second-hand or short-term charter market for newer, bigger ships, so if you need energy-efficient, low-slot cost vessels to be competitive in particular trades going forward, there is a pressure to order even if you have overcapacity concerns. There is a simpler and more pervasive explanation: The move from three major east-west networks ( 2M, Ocean, THEA ) to four ( MSC, Ocean, Gemini, Premier) catalyzed an arms race that continues today and will only be resolved by further carrier and/or consortium consolidation. Jeremy Masters is managing director of Shipping Masters. Contact him at jeremy@shippingmastershk.com .

Container lines

Asia-Europe

Evolution of ocean capacity linked to varied dynamics of trade needs

Use code GTT26W at checkout and save $900 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Arm your team with the most trusted information portal for the international container shipping industry.

Group Subscriptions - Wide Box

Get into a group subscription today

Use code FTW25 at checkout to save 25% on a Silver or Silver Plus annual subscription! 

Subscribe Now - FT to S/SP - Wide Box

SUBSCRIBE AND SAVE

Use code GW595 and upgrade to Gold for just $595! Valid for first year of subscription.

Upgrade Subscription - S/SP to Gold - Wide Box

SAVE $900 ON A GOLD SUBSCRIPTION

Choose a subscription plan that works best for you!

Subscribe Now - Anonymous to S/SP - Wide Box

Subscribe Today

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Use code GW995 at checkout to save $500 on first year of a Gold subscription!

Subscribe Now - FT to Gold - Wide Box

Subscribe Now - Anonymous to Gold - Wide Box

SUBSCRIBE TODAY

Subscribe and Save: Use code FTW25 to save 25% on first year of a Silver or Silver Plus annual subscription!


Subscribe Now - FT to S/SP - Offer Box

Subscribe and Save

GET INTO A GROUP SUBSCRIPTION: Arm your team with unlimited Journal of Commerce content

Group Subscriptions - Offer Box

Group Subscriptions

SUBSCRIBE TODAY: Choose a subscription plan that works best for you!

Subscribe Now - Anonymous to S/SP - Offer Box

UPGRADE TO GOLD AND SAVE: Use code GTT26W at checkout and save $900 on first year of a Gold subscription!

Upgrade Subscription

Subscribe Now - Anonymous to Gold - Offer Box

SAVE $900 ON A GOLD SUBSCRIPTION: Use code GW595 and upgrade to Gold for just $595! Valid on first year of subscription.

Upgrade Subscription - S/SP to Gold - Offer Box

SUBSCRIBE AND SAVE: Use code GW995 and save $500 on the first year of a Gold subscription!

Subscribe Now - FT to Gold - Offer Box

A must-attend conference for shippers & logistics providers moving goods inland

Inland Conference - Rectangle Box

Attend Inland26

Monthly publication providing an editorial deep dive into global supply chain news

Journal of Commerce Magazine - Rectangle Box

Journal of Commerce Magazine

A premium access index of savings using domestic intermodal vs. OTR 

ISI Report - Rectangle Box

Intermodal Savings Index

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

An extensive dashboard of charts organized by trade lane, mode, and topic

Gateway - Rectangle Box

Gateway

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

Explore today’s cutting-edge global logistics technology news and analysis by the Journal of Commerce. Coverage includes logistics technology startups, logistics technology solutions, venture capital, management and impact, freight forwarder technology and the latest supply chain and logistics technology.

Our logistics technology news include logistics technology startups, solutions, and the impact of technology on logistics and supply chain management.

Logistics Technology News | Journal of Commerce

The Journal of Commerce’s supply chain news and analysis impacting the management of end-to-end supply chains reports on supply chain strategies, cargo visibility, inventory trends, sourcing, customs certification and contract logistics. Supply chain news coverage also delves into refrigerated shipping advancements and management of inventory status, regulatory updates and government funding projects.

Stay informed with the latest regulation news and trade updates. Explore comprehensive transportation news and trade regulations today.

Transport, Trade and Regulation News | Journal of Commerce

Transport, Trade and Regulation News

A thorough cool cargoes news by Journal of Commerce. Learn about the latest trends in refrigerated cargo transportation, weight capacity, technology, and more.

Cool Cargo News | Journal of Commerce

Cool Cargo News

Journal of Commerce keeps you informed on the latest last mile news with comprehensive coverage of carriers, logistics, and last mile transportation solutions.

Last Mile News | Journal of Commerce

Last Mile News

Discover the latest industrial real estate news and trends. Covering projects, real estate supply chain, logistics, pricing, cross dock facilities, and more.

Industrial Real Estate News | Journal of Commerce

Industrial Real Estate News

Stay updated on supply chain strategies, cargo visibility, inventory trends and more with our comprehensive supply chain news and analysis.

Latest News

More News & Analysis

Heavy-lift trade group lobbies USTR for relief from crane, trailer tariffs

Peter Tirschwell leaves enduring legacy on Journal of Commerce

NY-NJ maritime industry honors ILA’s McNamara