<div class="phx-topic abstract-wrapper">Ports on the US East and Gulf coasts say they have spare capacity and expect minor disruptions as they process more than 60 ships backlogged by a three-day strike</div>

Ports on the US East and Gulf coasts say they have spare capacity and expect minor disruptions as they process more than 60 ships backlogged by a three-day strike

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<div class="phx-topic">Ports up and down the US East and Gulf coasts expect a generally smooth resumption of cargo flow after reopening early Friday morning thanks to a tentative agreement Thursday that ended a three-day dockworker strike. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), which represents maritime employers, said in a joint statement late Thursday they “have reached a tentative agreement on wages and have agreed to extend the master contract until Jan. 15, 2025, to return to the bargaining table to negotiate all other outstanding issues.” Port leaders say they have spare capacity and expect minimal disruptions in processing a backlog of <a href="https://www.joc.com/article/ships-backing-up-outside-of-strike-shut-us-east-gulf-ports-5741090">more than 60 ships</a>. Reduced volumes through the ports due to frontloading and diversions out of fear of the Oct. 1 strike threat — and the relatively short duration of the strike — will make the return to pre-disruption fluidity a matter of days, rather than weeks. In a Friday press conference, Bethann Rooney, port director for the Port Authority of New York and New Jersey, downplayed concerns about the impact of the strike on the East Coast’s busiest port, noting that the port often closes for two to three days for snow during winter. ”After a closure, we’ve been able to recover in a very quick way,” Rooney said. “I have not seen it take one week for every day of closure.” The total backlog of containers offshore and on the ground in New York-New Jersey amounts to about one week worth of volume at the port. The 19-ship backlog should be cleared by the end of next week, along with servicing ships that are still heading to the port, Rooney said. To the south, there was no waiting line for trucks at the Port of Savannah nor delays in discharging and loading at berths and the Mason Mega-rail facility, Georgia Ports Authority spokesman Tom Boyd said Friday. The port is offering weekend gates. At the Port of Baltimore, officials also compared the operational impact of the stoppage to a winter weather-driven interruption. The Maryland Port Administration, which has extended hours to include Saturday to deal with the backlog, said delayed vessels are being “quickly assimilated into the schedule.” The Port of Virginia said it has opened its reservation system and expects a return to normal operations within 24 hours, “with many components of the operation being restarted in parallel.” <h3>Labor peace ... for now </h3>The <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">tentative agreement between the ILA and the USMX</a> ends a nearly two-year standoff over a new six-year master contract covering 45,000 longshore workers. The agreement ensures labor peace for 90 days, giving both sides time to wrestle with how automation is addressed in the contract. The two sides have agreed on economic terms, however, with container lines represented by the USMX agreeing to hike dockworker pay by more than 60%. The three-month extension, something <a href="https://www.joc.com/article/ila-usmx-remain-at-odds-over-dockworker-wage-increases-daggett-5215515">ILA President Harold Daggett had vehemently opposed</a> in the lead up to expiration of the existing contract on Sept. 30, removes any peak season pressure for the upcoming holiday shopping season. Most goods needed for Black Friday and up until Christmas moved through the East and Gulf coasts before the strike, with toys and electronics coming through the West Coast now. The end of the three-day strike, which grabbed global and popular attention, also takes political pressure off the Biden administration, and by extension, the presidential campaign of Vice President Kamala Harris. With election polling ending Nov. 5, President Joe Biden <a href="https://www.joc.com/article/white-houses-executive-lever-to-prevent-port-strike-is-politically-toxic-5733927">refused to break the strike</a> and risk antagonizing organizing labor and <a href="https://www.joc.com/article/house-republicans-shippers-up-pressure-on-biden-to-stop-us-port-strike-5740135">made no attempt to hide his support of the ILA</a> and scorn for “foreign-owned” ocean carriers. Public attention and emotions rose in the lead up to the tentative agreement. The ILA drew the ire of some for not working ports handling relief supplies for Hurricane Helene in the US Southeast. The union pledged $100,000 to the American Red Cross and asked its locals to contribute as well. The threat of a port takeover from Florida Gov. Ron DeSantis ratcheted up pressure to end the strike. Overnight, Daggett grabbed global attention, and much of it was negative. The New York Post published aerial photos of Daggett’s Sparta, NJ, home, along with his address and details of the union leader’s two salaries as president of the international and a New Jersey ILA local that amount to $900,000 per year. The next day, the ILA said in a statement that Daggett and other union leaders received “threats of violence” directed against them. There was also the doxing of USMX President Dave Adam by publishing his address and phone number on X, formerly Twitter. <h3>The automation elephant </h3>While a tentative agreement has been reached, some details haven’t been released, much less worked. Sources have told the Journal of Commerce the USMX offered longshore workers a $4-per-hour per-year increase to get talks restarted. The offer amounts to a 61.5% increase in the top tier of longshore wages. The USMX’s last offer prior to the strike was a $3-per-hour hike, equal to a 46% raise over the life of the six-year contract, according to a White House presentation shared with the Journal of Commerce last week. Back in June, the USMX initially offered <a href="https://www.joc.com/article/port-employers-urge-ila-to-return-to-contract-talks-5723976">the ILA a $2.50-per-hour (38%) raise</a>, which the <a href="https://www.joc.com/article/ila-halts-talks-over-new-contract-until-maersk-apm-clarify-port-it-projects-5244243">union flatly rejected</a> before breaking off talks. However, the tentative agreement does not address one of the key sticking points between the ILA and USMX: <a href="https://www.joc.com/article/conflicting-post-pandemic-worldviews-bring-ila-employers-to-historic-strike-5738509">automation</a>. The ILA has repeatedly said that it wants a complete ban on any automation project that would eliminate longshore jobs, while the USMX says it wants to keep language from the current contract that allows semi-automation projects to go ahead with the union’s consent. “Unless an agreement is reached on ILA’s very vocal demands to limit automation, disruption and uncertainty could return in January,” Peter Friedmann, executive director of the Agriculture Transportation Coalition said in a statement Friday. “Some who shifted to the West Coast gateways may stay there until the automation negotiations are resolved.” Contact Michael Angell at <a href="michael.angell@spglobal.com">michael.angell@spglobal.com</a>. Contact Laura Robb at <a href="laura.robb@spglobal.com. ">laura.robb@spglobal.com.</a>Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Ports up and down the US East and Gulf coasts expect a generally smooth resumption of cargo flow after reopening early Friday morning thanks to a tentative agreement Thursday that ended a three-day dockworker strike. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), which represents maritime employers, said in a joint statement late Thursday they “have reached a tentative agreement on wages and have agreed to extend the master contract until Jan. 15, 2025, to return to the bargaining table to negotiate all other outstanding issues.” Port leaders say they have spare capacity and expect minimal disruptions in processing a backlog of more than 60 ships . Reduced volumes through the ports due to frontloading and diversions out of fear of the Oct. 1 strike threat — and the relatively short duration of the strike — will make the return to pre-disruption fluidity a matter of days, rather than weeks. In a Friday press conference, Bethann Rooney, port director for the Port Authority of New York and New Jersey, downplayed concerns about the impact of the strike on the East Coast’s busiest port, noting that the port often closes for two to three days for snow during winter. ”After a closure, we’ve been able to recover in a very quick way,” Rooney said. “I have not seen it take one week for every day of closure.” The total backlog of containers offshore and on the ground in New York-New Jersey amounts to about one week worth of volume at the port. The 19-ship backlog should be cleared by the end of next week, along with servicing ships that are still heading to the port, Rooney said. To the south, there was no waiting line for trucks at the Port of Savannah nor delays in discharging and loading at berths and the Mason Mega-rail facility, Georgia Ports Authority spokesman Tom Boyd said Friday. The port is offering weekend gates. At the Port of Baltimore, officials also compared the operational impact of the stoppage to a winter weather-driven interruption. The Maryland Port Administration, which has extended hours to include Saturday to deal with the backlog, said delayed vessels are being “quickly assimilated into the schedule.” The Port of Virginia said it has opened its reservation system and expects a return to normal operations within 24 hours, “with many components of the operation being restarted in parallel.” Labor peace ... for now The tentative agreement between the ILA and the USMX ends a nearly two-year standoff over a new six-year master contract covering 45,000 longshore workers. The agreement ensures labor peace for 90 days, giving both sides time to wrestle with how automation is addressed in the contract. The two sides have agreed on economic terms, however, with container lines represented by the USMX agreeing to hike dockworker pay by more than 60%. The three-month extension, something ILA President Harold Daggett had vehemently opposed in the lead up to expiration of the existing contract on Sept. 30, removes any peak season pressure for the upcoming holiday shopping season. Most goods needed for Black Friday and up until Christmas moved through the East and Gulf coasts before the strike, with toys and electronics coming through the West Coast now. The end of the three-day strike, which grabbed global and popular attention, also takes political pressure off the Biden administration, and by extension, the presidential campaign of Vice President Kamala Harris. With election polling ending Nov. 5, President Joe Biden refused to break the strike and risk antagonizing organizing labor and made no attempt to hide his support of the ILA and scorn for “foreign-owned” ocean carriers. Public attention and emotions rose in the lead up to the tentative agreement. The ILA drew the ire of some for not working ports handling relief supplies for Hurricane Helene in the US Southeast. The union pledged $100,000 to the American Red Cross and asked its locals to contribute as well. The threat of a port takeover from Florida Gov. Ron DeSantis ratcheted up pressure to end the strike. Overnight, Daggett grabbed global attention, and much of it was negative. The New York Post published aerial photos of Daggett’s Sparta, NJ, home, along with his address and details of the union leader’s two salaries as president of the international and a New Jersey ILA local that amount to $900,000 per year. The next day, the ILA said in a statement that Daggett and other union leaders received “threats of violence” directed against them. There was also the doxing of USMX President Dave Adam by publishing his address and phone number on X, formerly Twitter. The automation elephant While a tentative agreement has been reached, some details haven’t been released, much less worked. Sources have told the Journal of Commerce the USMX offered longshore workers a $4-per-hour per-year increase to get talks restarted. The offer amounts to a 61.5% increase in the top tier of longshore wages. The USMX’s last offer prior to the strike was a $3-per-hour hike, equal to a 46% raise over the life of the six-year contract, according to a White House presentation shared with the Journal of Commerce last week. Back in June, the USMX initially offered the ILA a $2.50-per-hour (38%) raise , which the union flatly rejected before breaking off talks. However, the tentative agreement does not address one of the key sticking points between the ILA and USMX: automation . The ILA has repeatedly said that it wants a complete ban on any automation project that would eliminate longshore jobs, while the USMX says it wants to keep language from the current contract that allows semi-automation projects to go ahead with the union’s consent. “Unless an agreement is reached on ILA’s very vocal demands to limit automation, disruption and uncertainty could return in January,” Peter Friedmann, executive director of the Agriculture Transportation Coalition said in a statement Friday. “Some who shifted to the West Coast gateways may stay there until the automation negotiations are resolved.” Contact Michael Angell at michael.angell@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container Shipping News

Port News

Drayage

Marine terminals

Longshore labor

North American ports

US East, Gulf coast ports confident of smooth post-strike reopening

<div class="phx-topic abstract-wrapper">The ports of Los Angeles and Long Beach registered their best year ever in reducing emissions, but they still face daunting challenges as they strive to reduce pollution that remains from vessel, cargo handling, truck and rail sources. </div>

The ports of Los Angeles and Long Beach registered their best year ever in reducing emissions, but they still face daunting challenges as they strive to reduce pollution that remains from vessel, cargo handling, truck and rail sources.

<div class="phx-topic">Reduced vessel arrivals and container volumes, coupled with cleaner cargo-handling equipment from rail to drayage, helped the ports of Los Angeles and Long Beach significantly reduce emissions last year, but the environmental challenges are only mounting. The combined ports’ 2023 emissions inventories released last week show reductions of 91% in diesel particulate matter (DPM), 72% for nitrogen oxides (NOx), 98% for sulfur oxides (SOx) and 20% for greenhouse gas (GHG) from a 2005 baseline. The ports in 2006 adopted their joint Clean Air Action Plan (CAAP) to reduce harmful emissions from all port operations. “These 2023 emission reductions are the most dramatic ever seen at our ports,” Jacqueline Moore, a vice president for the Pacific Merchants Shipping Association (PMSA), which represents carriers and terminal operators on the West Coast, said in a statement Friday. Ocean carriers, marine terminals, truckers, railroads and harbor craft operators have been shifting to cleaner-burning fuels, including zero-emission vehicles and cargo-handling equipment, for nearly two decades in an effort to achieve the goals outlined in the CAAP. Those goals are to operate zero-emission marine terminals by 2030 and drayage trucks by 2035. “Everyone is committed to those goals, but it will require the technology and [fuel] infrastructure to catch up,” PMSA Vice President Michele Grubbs told the Journal of Commerce Friday. <h3>Layered regulatory impact </h3>Port stakeholders must also comply with additional rules imposed by federal, state and regional regulators that in some cases exceed the CAAP targets. Those regulatory mandates, including independent source rules (ISRs) covering the ports, railroads and warehouse operators throughout Southern California, will add significant costs to operating the largest US port complex. In a Sept. 17 letter to the mayors of Los Angeles and Long Beach, shippers, transportation interests and the International Longshore and Warehouse Union said they feared the ISRs would be so restrictive that they would force stakeholders to limit the volume of cargo moving through the port complex. “There is broad agreement among the stakeholders that it would be more effective and productive to forego a Port ISR and instead focus on an infrastructure and streamlined permitting program to support current and future needs related to zero-emission infrastructure and equipment,” the letter said. What’s more, the work needed to further reduce emissions will be even more challenging, according to Gene Seroka, executive director of the Port of Los Angeles. “We are down to the last 9% of diesel particulate matter and last 2% of sulfur oxides from anything with an engine that moves cargo through our gateway,” Seroka said in a statement accompanying the release of the ports’ emissions inventories. “While what remains of these and other pollutants are the toughest to eliminate, we continue to partner with all our stakeholders to drive emissions down to zero.” In its report, Long Beach noted that carriers are operating fewer but larger vessels, which increases efficiency by generating more containers per vessel call. The average discharge per vessel call was 11,168 TEUs in 2023, up from 10,137 TEUs in 2022, according to the report. In addition, more ships are sailing slower within 40 miles of the coast, and more vessels are plugging into shoreside electrical power while at berth, both of which reduce emissions. Long Beach also noted that in the past year, each port has generated $30 million from the Clean Truck Fund that is being distributed in grants to drayage operators to purchase zero-emission trucks and also to develop charging infrastructure in the harbor. The funds are generated by a $10-per-TEU fee on laden containers drayed to and from the ports. Contact Bill Mongelluzzo at <a href="bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Reduced vessel arrivals and container volumes, coupled with cleaner cargo-handling equipment from rail to drayage, helped the ports of Los Angeles and Long Beach significantly reduce emissions last year, but the environmental challenges are only mounting. The combined ports’ 2023 emissions inventories released last week show reductions of 91% in diesel particulate matter (DPM), 72% for nitrogen oxides (NOx), 98% for sulfur oxides (SOx) and 20% for greenhouse gas (GHG) from a 2005 baseline. The ports in 2006 adopted their joint Clean Air Action Plan (CAAP) to reduce harmful emissions from all port operations. “These 2023 emission reductions are the most dramatic ever seen at our ports,” Jacqueline Moore, a vice president for the Pacific Merchants Shipping Association (PMSA), which represents carriers and terminal operators on the West Coast, said in a statement Friday. Ocean carriers, marine terminals, truckers, railroads and harbor craft operators have been shifting to cleaner-burning fuels, including zero-emission vehicles and cargo-handling equipment, for nearly two decades in an effort to achieve the goals outlined in the CAAP. Those goals are to operate zero-emission marine terminals by 2030 and drayage trucks by 2035. “Everyone is committed to those goals, but it will require the technology and [fuel] infrastructure to catch up,” PMSA Vice President Michele Grubbs told the Journal of Commerce Friday. Layered regulatory impact Port stakeholders must also comply with additional rules imposed by federal, state and regional regulators that in some cases exceed the CAAP targets. Those regulatory mandates, including independent source rules (ISRs) covering the ports, railroads and warehouse operators throughout Southern California, will add significant costs to operating the largest US port complex. In a Sept. 17 letter to the mayors of Los Angeles and Long Beach, shippers, transportation interests and the International Longshore and Warehouse Union said they feared the ISRs would be so restrictive that they would force stakeholders to limit the volume of cargo moving through the port complex. “There is broad agreement among the stakeholders that it would be more effective and productive to forego a Port ISR and instead focus on an infrastructure and streamlined permitting program to support current and future needs related to zero-emission infrastructure and equipment,” the letter said. What’s more, the work needed to further reduce emissions will be even more challenging, according to Gene Seroka, executive director of the Port of Los Angeles. “We are down to the last 9% of diesel particulate matter and last 2% of sulfur oxides from anything with an engine that moves cargo through our gateway,” Seroka said in a statement accompanying the release of the ports’ emissions inventories. “While what remains of these and other pollutants are the toughest to eliminate, we continue to partner with all our stakeholders to drive emissions down to zero.” In its report, Long Beach noted that carriers are operating fewer but larger vessels, which increases efficiency by generating more containers per vessel call. The average discharge per vessel call was 11,168 TEUs in 2023, up from 10,137 TEUs in 2022, according to the report. In addition, more ships are sailing slower within 40 miles of the coast, and more vessels are plugging into shoreside electrical power while at berth, both of which reduce emissions. Long Beach also noted that in the past year, each port has generated $30 million from the Clean Truck Fund that is being distributed in grants to drayage operators to purchase zero-emission trucks and also to develop charging infrastructure in the harbor. The funds are generated by a $10-per-TEU fee on laden containers drayed to and from the ports. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port infrastructure

LA-LB port significantly cuts emissions, but tougher challenges await

<div class="phx-topic abstract-wrapper">While shippers and intermodal providers agree that rail cargo theft is a problem, there is no consensus about the right solution.</div>

While shippers and intermodal providers agree that rail cargo theft is a problem, there is no consensus about the right solution.

<div class="phx-topic">Cargo theft is surging along US railways, leaving shippers worried about the safety of high-value goods in transit, and while heavy-duty lock makers claim their products deter theft, industry experts are divided on whether these new security devices make containers safer. In the first half of this year, cargo thefts on trucks and rail jumped 49% to 787 incidents, likely an undercount due to unreported crimes handled without local or federal authorities, according to cargo security firm Overhaul. Punishment remains relatively light, with thieves often released on bail within hours, according to the railroads. “We must come out and explain how this is a $50 billion problem to the US economy and back it up in a court of law, rather than dealing with each case on a per-incident or per-container basis,” Will Johnson, a chief special agent with BNSF Railway Police, said during the Journal of Commerce Inland Distribution Conference 2024 (Inland24). Following the <a href="https://www.nbclosangeles.com/news/local/cargo-theft-container-los-angeles-packages-commerce/2799795/">high-profile incidents</a> <a href="https://www.cnn.com/2022/01/14/economy/la-freight-railroad-theft/index.html">in Los Angeles in 2022</a>, cargo theft has evolved into a <a href="https://www.joc.com/article/us-rail-cargo-crime-on-the-rise-as-thieves-methods-gain-sophistication-5219201">more organized and coordinated threat</a>. In January, Los Angeles police arrested a man allegedly involved in a crime ring responsible for stealing over $5 million in Nike shoes. Criminals often use tools such as portable grinders to break into containers, rendering traditional seals and padlocks ineffective. To counter this, many in the industry are turning to specialized locks, bars and bracing cables. However, opinions are mixed on whether these heavy-duty locks deter criminals or paint a bigger target on containers. “The specialized tools can paint can a bit of a target or bullseye on the box,” Phil Yeager, CEO of Hub Group, said at Inland24. He advocated for alternative strategies, such as placing containers in the bottom well of railcars and strategic parking inside terminals. Supporters of specialized locks, such as War-Lok and the Enforcer lock, argue that these devices make containers more difficult to breach, encouraging thieves to move on to easier targets. “It may make the container a target, but now it’s a harder target than the next one,” Jason Moore, a sergeant with the Memphis Police assigned to the FBI Cargo Crime Task Force, said during the conference. “If you’ve got a War-Lok, and another box has a bolt seal, which one is easier to get into? Obviously, the bolt seal because it’s going to take less time and thus be more attractive.” Shane Blair, senior vice president of intermodal at Swift Transportation, cautioned that these locks also create additional management responsibilities and logistical challenges. “Our customers feel safer with these locks, but who manages the program? Is it us? Is it the railroad?” Blair asked the Inland24 audience. “Who holds the master key? We can’t have 800 sets of keys; it defeats the purpose. While I believe in these locks, they add complexity for rail partners, drivers and shippers.” <h3>Informational risks </h3>The inside threat of people with access to sensitive data using it for criminal purposes is also rising at a troubling rate. Moore said one rail ramp employee was arrested earlier this year in Memphis for allegedly stealing about $1 million worth of cargo inside containers. The senior manager, who was earning over $200,000 annually, was suspected of teaching others how to carry out similar crimes. “He targeted specific brands and flipped the products for profit, but investigators used ramp footage to secure a search warrant and recover stolen goods,” Moore said. Although the transportation industry has embraced information sharing, the risk of sharing too much data can be as significant as sharing too little, according to Rachael Acker, senior director of global logistics at Wolverine Worldwide. She said carriers should know what’s being transported, but not specific brand names. “When we use domestic intermodal or trucking, we use an internal number that no one can look up,” Acker explained. “It’s not associated with any universal product code (UPC), so there’s no way to trace it back to the exact brand.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Cargo theft is surging along US railways, leaving shippers worried about the safety of high-value goods in transit, and while heavy-duty lock makers claim their products deter theft, industry experts are divided on whether these new security devices make containers safer. In the first half of this year, cargo thefts on trucks and rail jumped 49% to 787 incidents, likely an undercount due to unreported crimes handled without local or federal authorities, according to cargo security firm Overhaul. Punishment remains relatively light, with thieves often released on bail within hours, according to the railroads. “We must come out and explain how this is a $50 billion problem to the US economy and back it up in a court of law, rather than dealing with each case on a per-incident or per-container basis,” Will Johnson, a chief special agent with BNSF Railway Police, said during the Journal of Commerce Inland Distribution Conference 2024 (Inland24). Following the high-profile incidents in Los Angeles in 2022 , cargo theft has evolved into a more organized and coordinated threat . In January, Los Angeles police arrested a man allegedly involved in a crime ring responsible for stealing over $5 million in Nike shoes. Criminals often use tools such as portable grinders to break into containers, rendering traditional seals and padlocks ineffective. To counter this, many in the industry are turning to specialized locks, bars and bracing cables. However, opinions are mixed on whether these heavy-duty locks deter criminals or paint a bigger target on containers. “The specialized tools can paint can a bit of a target or bullseye on the box,” Phil Yeager, CEO of Hub Group, said at Inland24. He advocated for alternative strategies, such as placing containers in the bottom well of railcars and strategic parking inside terminals. Supporters of specialized locks, such as War-Lok and the Enforcer lock, argue that these devices make containers more difficult to breach, encouraging thieves to move on to easier targets. “It may make the container a target, but now it’s a harder target than the next one,” Jason Moore, a sergeant with the Memphis Police assigned to the FBI Cargo Crime Task Force, said during the conference. “If you’ve got a War-Lok, and another box has a bolt seal, which one is easier to get into? Obviously, the bolt seal because it’s going to take less time and thus be more attractive.” Shane Blair, senior vice president of intermodal at Swift Transportation, cautioned that these locks also create additional management responsibilities and logistical challenges. “Our customers feel safer with these locks, but who manages the program? Is it us? Is it the railroad?” Blair asked the Inland24 audience. “Who holds the master key? We can’t have 800 sets of keys; it defeats the purpose. While I believe in these locks, they add complexity for rail partners, drivers and shippers.” Informational risks The inside threat of people with access to sensitive data using it for criminal purposes is also rising at a troubling rate. Moore said one rail ramp employee was arrested earlier this year in Memphis for allegedly stealing about $1 million worth of cargo inside containers. The senior manager, who was earning over $200,000 annually, was suspected of teaching others how to carry out similar crimes. “He targeted specific brands and flipped the products for profit, but investigators used ramp footage to secure a search warrant and recover stolen goods,” Moore said. Although the transportation industry has embraced information sharing, the risk of sharing too much data can be as significant as sharing too little, according to Rachael Acker, senior director of global logistics at Wolverine Worldwide. She said carriers should know what’s being transported, but not specific brand names. “When we use domestic intermodal or trucking, we use an internal number that no one can look up,” Acker explained. “It’s not associated with any universal product code (UPC), so there’s no way to trace it back to the exact brand.” Contact Ari Ashe at ari.ashe@spglobal.com .

North-American rail

Intermodal providers

Rail industry split on how to best combat cargo theft

<div class="phx-topic abstract-wrapper">New provisional guidelines from Indian regulators will allow the major shipping alliances to operate at national ports as long as homegrown carriers get guaranteed access to a 5% share of the massive vessel-sharing agreements. </div>

New provisional guidelines from Indian regulators will allow the major shipping alliances to operate at national ports as long as homegrown carriers get guaranteed access to a 5% share of the massive vessel-sharing agreements.

<div class="phx-topic">Amid an ongoing wave of ocean carrier alliance realignments, Indian shipping regulators are seeking a “tradeoff” approach to continue treating vessel-sharing agreements (VSAs), led by carriers operating foreign-flagged fleets, outside of national competition law provisions. The Directorate General of Shipping (DG Shipping) has released provisional guidelines intended to grant such VSAs an extended exemption from antitrust regulations in exchange for Indian companies gaining consortium participation rights. The previous exemption order expired in July. Broadly, a fresh three-year immunity will be provided contingent upon carrier groupings allocating 5% of the total declared space to both Indian-flagged vessels and domestic non-vessel-operating common carriers (NVOs) under their alliance or consortium arrangements. “This draft notification aims to promote fair competition, enhance transparency and ensure better representation of Indian shipping lines and NVOs in the global container trade, while balancing the interests of all stakeholders in the maritime sector,” said the DG Shipping in its draft legislation circulated to industry stakeholders. “A particular focus is on ensuring that the conditions outlined in the notification address current market challenges, including those related to fair space allocation, anti-competitive practices and the inclusion of Indian-flag vessels.” The maritime administrator also noted that it will monitor the operation of VSAs and report any anti-competitive practices, including refusal to negotiate with shippers and indulging in price gouging, to the federal watchdog Competition Commission of India for intervention and regulatory action. Stakeholders have until Oct. 8 to file responses with the authority. <h3>Shielding the homegrown industry </h3>The move is being viewed as a government strategy to rebuild some stakes for local container shipping industry interests, a segment that has become deeply marginalized with no tonnage capabilities. For example, the national carrier, Shipping Corporation of India (SCI), remains confined to a single long-haul VSA partnership with Mediterranean Shipping Co. covering India-Europe trades, contributing one midsize vessel. SCI recently acquired a 9,000-TEU ship, reportedly foreign-flagged on time charter, and is considering adding another five to its fleet for a noticeable comeback into the container market as shipper groups continually press the government for “own ocean capacity” to ease their supply chain pressures. Officials at the Container Shipping Lines Association (CSLA), which spearheads the cause of foreign liners in India, were unavailable for comment. The proposed policy shift was, however, greeted warmly by Indian shipowners and pro-shipper industry sources. “It’s a positive move,” Anil Devli, CEO of the Indian National Shipowners Association (INSA), told the Journal of Commerce. “Indian companies now have the opportunity to invest in container fleets, an area hitherto dominated by foreign carriers, in due course of time, bringing relief to the domestic exporters.” That said, given the operational complexities of global alliances, with the prominent Gemini network between Maersk and Hapag-Lloyd due to begin in February 2025, it’s unlikely that the outlined “give-and-take” engagement will be easily signed on by mega carriers enjoying a fiefdom of the Indian container market. Contact Bency Matthew at <a href="bencymathew@gmail.com">bencymathew@gmail.com</a>.</div>

Amid an ongoing wave of ocean carrier alliance realignments, Indian shipping regulators are seeking a “tradeoff” approach to continue treating vessel-sharing agreements (VSAs), led by carriers operating foreign-flagged fleets, outside of national competition law provisions. The Directorate General of Shipping (DG Shipping) has released provisional guidelines intended to grant such VSAs an extended exemption from antitrust regulations in exchange for Indian companies gaining consortium participation rights. The previous exemption order expired in July. Broadly, a fresh three-year immunity will be provided contingent upon carrier groupings allocating 5% of the total declared space to both Indian-flagged vessels and domestic non-vessel-operating common carriers (NVOs) under their alliance or consortium arrangements. “This draft notification aims to promote fair competition, enhance transparency and ensure better representation of Indian shipping lines and NVOs in the global container trade, while balancing the interests of all stakeholders in the maritime sector,” said the DG Shipping in its draft legislation circulated to industry stakeholders. “A particular focus is on ensuring that the conditions outlined in the notification address current market challenges, including those related to fair space allocation, anti-competitive practices and the inclusion of Indian-flag vessels.” The maritime administrator also noted that it will monitor the operation of VSAs and report any anti-competitive practices, including refusal to negotiate with shippers and indulging in price gouging, to the federal watchdog Competition Commission of India for intervention and regulatory action. Stakeholders have until Oct. 8 to file responses with the authority. Shielding the homegrown industry The move is being viewed as a government strategy to rebuild some stakes for local container shipping industry interests, a segment that has become deeply marginalized with no tonnage capabilities. For example, the national carrier, Shipping Corporation of India (SCI), remains confined to a single long-haul VSA partnership with Mediterranean Shipping Co. covering India-Europe trades, contributing one midsize vessel. SCI recently acquired a 9,000-TEU ship, reportedly foreign-flagged on time charter, and is considering adding another five to its fleet for a noticeable comeback into the container market as shipper groups continually press the government for “own ocean capacity” to ease their supply chain pressures. Officials at the Container Shipping Lines Association (CSLA), which spearheads the cause of foreign liners in India, were unavailable for comment. The proposed policy shift was, however, greeted warmly by Indian shipowners and pro-shipper industry sources. “It’s a positive move,” Anil Devli, CEO of the Indian National Shipowners Association (INSA), told the Journal of Commerce. “Indian companies now have the opportunity to invest in container fleets, an area hitherto dominated by foreign carriers, in due course of time, bringing relief to the domestic exporters.” That said, given the operational complexities of global alliances, with the prominent Gemini network between Maersk and Hapag-Lloyd due to begin in February 2025, it’s unlikely that the outlined “give-and-take” engagement will be easily signed on by mega carriers enjoying a fiefdom of the Indian container market. Contact Bency Matthew at bencymathew@gmail.com .

International ports

Container lines

India regulators seek VSA ‘trade-off’ for local carriers and alliances

<div class="phx-topic abstract-wrapper">Maritime employers and the union representing some 45,000 East and Gulf coast dockworkers have reportedly closed the gap in wage expectations to just $1 per hour per year.</div>

Maritime employers and the union representing some 45,000 East and Gulf coast dockworkers have reportedly closed the gap in wage expectations to just $1 per hour per year.

<div class="phx-topic">Maritime employers and the International Longshoremen’s Association (ILA) have reached a tentative deal to reopen container terminals at East and Gulf coast ports after trading new wage offers that would bring dockworker pay up over 60%. Longshore workers will work under a three-month contract extension until a formal deal is reached. Official announcement of the breakthrough is expected Thursday evening, sources told the Journal of Commerce. The White House is scheduled to host a briefing Friday morning on the port strike. The ILA and United States Maritime Alliance (USMX), the employer group that represents ocean carrier and terminal operators in longshore contract negotiations, have yet to respond for a request for comment.Ports are expected to reopen Friday. The USMX is offering the ILA a $4-per-hour increase to get talks restarted on the condition that the ILA agrees to an extension through January 15 on the current contract that would allow ports to reopen while negotiations resume. ILA President Harold Daggett has repeatedly said <a href="">union members would not work under a contract extension</a>.The offer represents a 62% increase in top wages for longshore workers. The USMX gave Biden administration officials a glimpse of their previous offer before the union rejected it on Monday, setting off the first strike along East and Gulf coast ports in 47 years. According to the presentation delivered last week at the White House during a meeting with USMX officials, employers were willing to offer the ILA a $3-per-hour raise in each year of the six-year contract, a total raise of $18 per hour (46%) over the contract’s term.The USMX said in its last statement prior to the strike its latest offer would “increase wages by nearly 50 percent,” although it did not detail the exact dollar amount. The offer is an improvement on <a href="">the $2.50-per-hour (38%) raise the USMX proposed in its first counteroffer to the union and would bring average wages</a>, including overtime and container royalties, to $500,000 per year for a dockworker at the Port of New York and New Jersey.The offer terms also would raise entry-level wages for new ILA members from $20 per hour to $30 per hour.However, <a href="https://www.joc.com/article/ila-seeking-huge-wage-hike-from-maritime-employers-sources-5703094">the union sought a $5-per-hour (77%) wage hike</a>, based on the record profits recorded by ocean carriers during the COVID-19 pandemic. This is a developing story and may be updated as new information is received.Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.		Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>.</div>

Maritime employers and the International Longshoremen’s Association (ILA) have reached a tentative deal to reopen container terminals at East and Gulf coast ports after trading new wage offers that would bring dockworker pay up over 60%. Longshore workers will work under a three-month contract extension until a formal deal is reached. Official announcement of the breakthrough is expected Thursday evening, sources told the Journal of Commerce. The White House is scheduled to host a briefing Friday morning on the port strike. The ILA and United States Maritime Alliance (USMX), the employer group that represents ocean carrier and terminal operators in longshore contract negotiations, have yet to respond for a request for comment. Ports are expected to reopen Friday. The USMX is offering the ILA a $4-per-hour increase to get talks restarted on the condition that the ILA agrees to an extension through January 15 on the current contract that would allow ports to reopen while negotiations resume. ILA President Harold Daggett has repeatedly said union members would not work under a contract extension . The offer represents a 62% increase in top wages for longshore workers. The USMX gave Biden administration officials a glimpse of their previous offer before the union rejected it on Monday, setting off the first strike along East and Gulf coast ports in 47 years. According to the presentation delivered last week at the White House during a meeting with USMX officials, employers were willing to offer the ILA a $3-per-hour raise in each year of the six-year contract, a total raise of $18 per hour (46%) over the contract’s term. The USMX said in its last statement prior to the strike its latest offer would “increase wages by nearly 50 percent,” although it did not detail the exact dollar amount. The offer is an improvement on the $2.50-per-hour (38%) raise the USMX proposed in its first counteroffer to the union and would bring average wages , including overtime and container royalties, to $500,000 per year for a dockworker at the Port of New York and New Jersey. The offer terms also would raise entry-level wages for new ILA members from $20 per hour to $30 per hour. However, the union sought a $5-per-hour (77%) wage hike , based on the record profits recorded by ocean carriers during the COVID-19 pandemic. This is a developing story and may be updated as new information is received. Contact Michael Angell at michael.angell@spglobal.com . Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

ILA, USMX agree on new wage offer and contract extension that reopens ports

<div class="phx-topic abstract-wrapper">Intermodal providers believe shippers of time-sensitive cargo can rely on rail, but some potential customers need to see more evidence of consistent service, executives told the Journal of Commerce Inland Distribution Conference 2024 (Inland24).</div>

Intermodal providers believe shippers of time-sensitive cargo can rely on rail, but some potential customers need to see more evidence of consistent service, executives told the Journal of Commerce Inland Distribution Conference 2024 (Inland24).

<div class="phx-topic">CHICAGO — Domestic intermodal service has improved over the past two years, but many shippers remain cautious and unwilling to entrust time-sensitive freight to the rails, according to intermodal executives at the Journal of Commerce Inland Distribution Conference 2024 (Inland24). Several service metrics tracked by the US Surface Transportation Board (STB) show significant improvement from disruption of the COVID-19 pandemic. Intermodal train speeds among the US Class I railroads averaged 29.5 mph in the third quarter of 2024, up from 28.3 mph in the same 2022 period; the number of intermodal trains held for service issues averaged 20 per day in the third quarter, down from 69 per day two years prior; and about 1,050 intermodal cars in revenue service idled excessively in the third quarter, down from 1,820 in 2022, according to STB data.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="5afe3e20-1240-4d6b-b3f6-ef283209c77b"></dynamic-object></div>Customers have taken notice of the improvement. Nine out of 10 intermodal shippers that responded to the Journal of Commerce <a href="https://www.joc.com/resources/special-reports/domestic-intermodal-service-scorecard">Intermodal Service Scorecard</a> survey indicate they were satisfied with rail service in the first half of the year. Nevertheless, shippers remain concerned that past service failures will resurface, especially during periods of tight truck capacity, and that skepticism is keeping railroads and intermodal providers from capturing up to 10 million loads that are “ripe for intermodal conversion,” according to Hub Group CEO Phil Yeager. These loads include just-in-time and direct-to-customer freight, which intermodal has historically struggled to convert from trucking. “The industry has not always provided a great service,” Yeager said Wednesday at Inland24. “But the railroads are making investments because future growth will come from intermodal.” Carrie Ann Crozier, vice president of intermodal operations for CSX Transportation, agreed that if providers “continue to do everything the same, we’re not going to grow. We’ve got to do it differently.” Recent service disruptions in the ports of <a href="https://www.joc.com/article/la-lb-rail-dwells-on-the-rise-as-port-complex-enters-height-of-peak-season-5712900">Los Angeles, Long Beach</a> and <a href="https://www.joc.com/article/tacoma-marine-terminals-grappling-with-heavy-import-rail-congestion-5706377">Tacoma</a> amid surging import volumes have highlighted ongoing vulnerabilities. Delays moving ocean containers inland have affected domestic shipments, leading to more “miss outs” or “leave behinds” — akin to “rolled cargo” for international shippers. <h3>Reacting ‘within days, not weeks’ </h3>To win time-sensitive freight now moving by truck, railroads must be proactive, anticipating potential disruptions rather than responding to them, Inland24 speakers said. Paul Duncan, consultant at Duncan and Rio Grande and former COO of Norfolk Southern Railway (NS), noted that certain disruptions, such as labor shortages, are more preventable than others. “There’s always going to be a dynamic where domestic and international volumes are competing for capacity, whether in the terminal or on the tracks,” Duncan said. “Railcars are also shared across North America, so during the Canadian labor strife, cars were stuck that were needed on the US West Coast.” That created a ripple effect for both international and domestic shippers as terminal workers spent time constructing and deconstructing stacks rather than loading and unloading trains. “It makes everything exponentially worse for international and domestic intermodal customers,” said John Knight, director of intermodal operations for Watco Companies, who previously spent 13 years at Kansas City Southern Railway’s Wylie terminal outside Dallas. “If the terminal is a shared facility, then a buildup of ocean containers will cannibalize the space allotted to domestic intermodal.” In a just-in-time supply chain, a “leave behind” can result in delays, undermining shipper confidence in intermodal if final delivery timelines are not met. CSX, NS and Union Pacific Railroad use gate reservations to assign containers to specific trains, but these systems don’t always work as intended. Containers with assigned slots sometimes fail to get on the train. “There are times when things go wrong; equipment fails, even with preventative maintenance,” Crozier said. “What we need to do is communicate better with our customers and find every opportunity to recover quickly.” Communication breakdowns are also common in last-mile transportation. Even if a container travels from origin to destination by rail without incident, delays can occur if the railroad fails to provide reliable information on when the container will be available for pickup. Trucking companies struggle to assign drivers and book delivery appointments without accurate estimates. “It goes back to the idea that railroads need to be more proactive in communicating,” Duncan said. “Everyone is part of the ecosystem, so communication must be better on when that container [lifted off the train] will be available for pickup.” Yeager said a lot that work has already been done, adding that even if railroads are still more reactive than proactive, their response time is shorter than ever. “Look at what’s happening right now in the Los Angeles area, where I think we’ve been very quick to respond to the fluctuation in volume and get service right back to where it needs to be, not within weeks, but within days,” Yeager said. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

CHICAGO — Domestic intermodal service has improved over the past two years, but many shippers remain cautious and unwilling to entrust time-sensitive freight to the rails, according to intermodal executives at the Journal of Commerce Inland Distribution Conference 2024 (Inland24). Several service metrics tracked by the US Surface Transportation Board (STB) show significant improvement from disruption of the COVID-19 pandemic. Intermodal train speeds among the US Class I railroads averaged 29.5 mph in the third quarter of 2024, up from 28.3 mph in the same 2022 period; the number of intermodal trains held for service issues averaged 20 per day in the third quarter, down from 69 per day two years prior; and about 1,050 intermodal cars in revenue service idled excessively in the third quarter, down from 1,820 in 2022, according to STB data. Customers have taken notice of the improvement. Nine out of 10 intermodal shippers that responded to the Journal of Commerce Intermodal Service Scorecard survey indicate they were satisfied with rail service in the first half of the year. Nevertheless, shippers remain concerned that past service failures will resurface, especially during periods of tight truck capacity, and that skepticism is keeping railroads and intermodal providers from capturing up to 10 million loads that are “ripe for intermodal conversion,” according to Hub Group CEO Phil Yeager. These loads include just-in-time and direct-to-customer freight, which intermodal has historically struggled to convert from trucking. “The industry has not always provided a great service,” Yeager said Wednesday at Inland24. “But the railroads are making investments because future growth will come from intermodal.” Carrie Ann Crozier, vice president of intermodal operations for CSX Transportation, agreed that if providers “continue to do everything the same, we’re not going to grow. We’ve got to do it differently.” Recent service disruptions in the ports of Los Angeles, Long Beach and Tacoma amid surging import volumes have highlighted ongoing vulnerabilities. Delays moving ocean containers inland have affected domestic shipments, leading to more “miss outs” or “leave behinds” — akin to “rolled cargo” for international shippers. Reacting ‘within days, not weeks’ To win time-sensitive freight now moving by truck, railroads must be proactive, anticipating potential disruptions rather than responding to them, Inland24 speakers said. Paul Duncan, consultant at Duncan and Rio Grande and former COO of Norfolk Southern Railway (NS), noted that certain disruptions, such as labor shortages, are more preventable than others. “There’s always going to be a dynamic where domestic and international volumes are competing for capacity, whether in the terminal or on the tracks,” Duncan said. “Railcars are also shared across North America, so during the Canadian labor strife, cars were stuck that were needed on the US West Coast.” That created a ripple effect for both international and domestic shippers as terminal workers spent time constructing and deconstructing stacks rather than loading and unloading trains. “It makes everything exponentially worse for international and domestic intermodal customers,” said John Knight, director of intermodal operations for Watco Companies, who previously spent 13 years at Kansas City Southern Railway’s Wylie terminal outside Dallas. “If the terminal is a shared facility, then a buildup of ocean containers will cannibalize the space allotted to domestic intermodal.” In a just-in-time supply chain, a “leave behind” can result in delays, undermining shipper confidence in intermodal if final delivery timelines are not met. CSX, NS and Union Pacific Railroad use gate reservations to assign containers to specific trains, but these systems don’t always work as intended. Containers with assigned slots sometimes fail to get on the train. “There are times when things go wrong; equipment fails, even with preventative maintenance,” Crozier said. “What we need to do is communicate better with our customers and find every opportunity to recover quickly.” Communication breakdowns are also common in last-mile transportation. Even if a container travels from origin to destination by rail without incident, delays can occur if the railroad fails to provide reliable information on when the container will be available for pickup. Trucking companies struggle to assign drivers and book delivery appointments without accurate estimates. “It goes back to the idea that railroads need to be more proactive in communicating,” Duncan said. “Everyone is part of the ecosystem, so communication must be better on when that container [lifted off the train] will be available for pickup.” Yeager said a lot that work has already been done, adding that even if railroads are still more reactive than proactive, their response time is shorter than ever. “Look at what’s happening right now in the Los Angeles area, where I think we’ve been very quick to respond to the fluctuation in volume and get service right back to where it needs to be, not within weeks, but within days,” Yeager said. Contact Ari Ashe at ari.ashe@spglobal.com .

Surface

Rail News

Intermodal rail must improve reliability to capture just-in-time freight: execs

<div class="phx-topic abstract-wrapper">Post-election uncertainties in Europe have shined a light on complex problems hampering heavy transport across the EU, writes Ton Klijn, director of the European Association of Abnormal Road Transport and Mobile Cranes (ESTA). </div>

Post-election uncertainties in Europe have shined a light on complex problems hampering heavy transport across the EU, writes Ton Klijn, director of the European Association of Abnormal Road Transport and Mobile Cranes (ESTA).

<div class="phx-topic">Long-called-for reforms of the EU’s fragmented and dysfunctional heavy transport industry regulations appeared to be finally coming to fruition earlier this summer, but now these reforms are up in the air. As Europe struggles to boost its economies and respond to global economic challenges, the need for fundamental reform of the rules and regulations governing heavy and abnormal freight transportation has never been greater. Unusable roads and bridges combined with unnecessary, often protectionist, local regulations make the business of moving heavy cargo in Europe less efficient and less safe. Unfortunately, the arrival of new officials and politicians following the elections in June have upset hopes for revisions to the dry-sounding regulation Weights and Dimensions Directive 96/53/EC, intended to standardize heavy-duty transport. These revisions would have addressed the chronic dysfunctions plaguing engineered and heavy-haul transport in Europe, just as similar issues constrict heavy transport in the US. We at ESTA, Europe’s association for the abnormal — i.e., heavy-haul — road transport and mobile crane rental industry, hope that the reform process has just slowed and not stalled. The heavy transport industry may be small in economic terms, but it packs a big punch, and we want to remind our political leaders of that fact. To keep the pressure for reformation on, ESTA published our first ever transport manifesto for change in early September. Our priorities are the harmonization of rules for abnormal road transport, securing access to safe and secure parking spaces, the adoption of sector-specific rules and elimination of country-specific barriers, and the establishment of abnormal load corridors. Regularizing regulations Heavy-transport vehicles are already required to comply with certain rules on weights and dimensions to ensure safety; prevent damage to roads, bridges and tunnels; and ensure fair competition. EU member states should not be able to prevent vehicles that comply with these limits from performing international transport operations within their territories. But in practice — as anyone working in heavy transport knows all too well — heavy and abnormal transport operators and their clients face a plethora of petty, unnecessary and bureaucratic restrictions across the EU. These restrictions differ not just between countries but often between districts, and these local and arbitrary rules often are enforced for what can only be described as protectionist reasons. How can it be sensible, for example, that the rules for marking and lighting abnormal transports are different in every EU country? Why is a side marking board required to be 50 x 50 centimeters in one country but 42.5 x 42.5 centimeters just over the neighboring border? In a similar vein, some regional German authorities say that a permit is invalid if a load weighs 5% less or is 15 centimeters smaller than in the documentation. You read that correctly: these regulations apply when loads are lighter or smaller than expected, despite smaller, lighter loads posing no additional threat to weak roads and bridges, nor to traffic and buildings along the route. Such regulations lack any semblance of common sense. Abnormal road transport operators are regularly confronted with country-specific measures that do not improve safety and hamper the competitiveness and efficiency of the heavy-haul sector. These measures include differing national rules on “angles morts” — blind spots for truck drivers — language requirements for drivers, licensing of drivers of abnormal transport vehicle combinations, marking of escort vehicles and training of the escort vehicle drivers, as well as country-specific provisions on insurance and bank guarantees. These and similar measures should be evaluated at the European level and, where necessary, harmonized or abolished. Heavy transport corridors needed A crucial issue that is not covered by Weights and Dimensions Directive 96/53/EC but desperately needs to be addressed is Europe’s endemic failure to invest sufficiently in infrastructure, especially in the maintenance of roads and bridges. This is severely impacting a wide range of industries. For example, delivering offshore wind turbines from factory to port is often a hugely expensive, unnecessarily time-consuming and complex process that frequently requires navigating detours to avoid weak bridges. ESTA has long called for the establishment of Europe-wide heavy transport corridors on which scarce funds could be focused. This is, interestingly, an idea that NATO has also been discreetly lobbying for, presumably so its heavy military and other equipment could be easily moved in times of need. In a fast-changing and volatile world, the next five years will be crucial, not just for ESTA and our members but for Europe’s wider economy. We need the single market to function. At present, this is more fiction than reality. Apart from infrastructure investment, the measures we are calling for — and those listed in the revised directive — require little in the way of funds. What we need above all is clear, long-term thinking and the political will to effect change. Ton Klijn is director of the European Association of Abnormal Road Transport and Mobile Cranes (ESTA). Contact him at <a href="mailto:director@estaeurope.eu">director@estaeurope.eu.</a></div>

Long-called-for reforms of the EU’s fragmented and dysfunctional heavy transport industry regulations appeared to be finally coming to fruition earlier this summer, but now these reforms are up in the air. As Europe struggles to boost its economies and respond to global economic challenges, the need for fundamental reform of the rules and regulations governing heavy and abnormal freight transportation has never been greater. Unusable roads and bridges combined with unnecessary, often protectionist, local regulations make the business of moving heavy cargo in Europe less efficient and less safe. Unfortunately, the arrival of new officials and politicians following the elections in June have upset hopes for revisions to the dry-sounding regulation Weights and Dimensions Directive 96/53/EC, intended to standardize heavy-duty transport. These revisions would have addressed the chronic dysfunctions plaguing engineered and heavy-haul transport in Europe, just as similar issues constrict heavy transport in the US. We at ESTA, Europe’s association for the abnormal — i.e., heavy-haul — road transport and mobile crane rental industry, hope that the reform process has just slowed and not stalled. The heavy transport industry may be small in economic terms, but it packs a big punch, and we want to remind our political leaders of that fact. To keep the pressure for reformation on, ESTA published our first ever transport manifesto for change in early September. Our priorities are the harmonization of rules for abnormal road transport, securing access to safe and secure parking spaces, the adoption of sector-specific rules and elimination of country-specific barriers, and the establishment of abnormal load corridors. Regularizing regulations Heavy-transport vehicles are already required to comply with certain rules on weights and dimensions to ensure safety; prevent damage to roads, bridges and tunnels; and ensure fair competition. EU member states should not be able to prevent vehicles that comply with these limits from performing international transport operations within their territories. But in practice — as anyone working in heavy transport knows all too well — heavy and abnormal transport operators and their clients face a plethora of petty, unnecessary and bureaucratic restrictions across the EU. These restrictions differ not just between countries but often between districts, and these local and arbitrary rules often are enforced for what can only be described as protectionist reasons. How can it be sensible, for example, that the rules for marking and lighting abnormal transports are different in every EU country? Why is a side marking board required to be 50 x 50 centimeters in one country but 42.5 x 42.5 centimeters just over the neighboring border? In a similar vein, some regional German authorities say that a permit is invalid if a load weighs 5% less or is 15 centimeters smaller than in the documentation. You read that correctly: these regulations apply when loads are lighter or smaller than expected, despite smaller, lighter loads posing no additional threat to weak roads and bridges, nor to traffic and buildings along the route. Such regulations lack any semblance of common sense. Abnormal road transport operators are regularly confronted with country-specific measures that do not improve safety and hamper the competitiveness and efficiency of the heavy-haul sector. These measures include differing national rules on “angles morts” — blind spots for truck drivers — language requirements for drivers, licensing of drivers of abnormal transport vehicle combinations, marking of escort vehicles and training of the escort vehicle drivers, as well as country-specific provisions on insurance and bank guarantees. These and similar measures should be evaluated at the European level and, where necessary, harmonized or abolished. Heavy transport corridors needed A crucial issue that is not covered by Weights and Dimensions Directive 96/53/EC but desperately needs to be addressed is Europe’s endemic failure to invest sufficiently in infrastructure, especially in the maintenance of roads and bridges. This is severely impacting a wide range of industries. For example, delivering offshore wind turbines from factory to port is often a hugely expensive, unnecessarily time-consuming and complex process that frequently requires navigating detours to avoid weak bridges. ESTA has long called for the establishment of Europe-wide heavy transport corridors on which scarce funds could be focused. This is, interestingly, an idea that NATO has also been discreetly lobbying for, presumably so its heavy military and other equipment could be easily moved in times of need. In a fast-changing and volatile world, the next five years will be crucial, not just for ESTA and our members but for Europe’s wider economy. We need the single market to function. At present, this is more fiction than reality. Apart from infrastructure investment, the measures we are calling for — and those listed in the revised directive — require little in the way of funds. What we need above all is clear, long-term thinking and the political will to effect change. Ton Klijn is director of the European Association of Abnormal Road Transport and Mobile Cranes (ESTA). Contact him at director@estaeurope.eu.

Trucking News

Heavy-haul transport

Project cargo

Breakbulk News

EU cannot afford to dither on heavy transport reform: ESTA chief

<div class="phx-topic abstract-wrapper"> Alone among the modes, the railroads are not able to say “no” to the demands of interior point intermodal (IPI), most recently seen in the surge of imports through the US Pacific Northwest and the congestion that followed, writes intermodal analyst Larry Gross. </div>

Alone among the modes, the railroads are not able to say “no” to the demands of interior point intermodal (IPI), most recently seen in the surge of imports through the US Pacific Northwest and the congestion that followed, writes intermodal analyst Larry Gross.

<div class="phx-topic">Container dwell times are up in the Pacific Northwest (PNW) and the undertone of grumbling regarding the railroads’ inability to meet market demands can be heard. But is it reasonable to expect the railroads to be able to react to such giant swings in the market? There’s no doubt <a href="https://www.joc.com/article/rail-container-dwells-in-seattle-tacoma-still-high-but-relief-in-sight-5721796">that imports continue to run strong</a>. Loaded inbound TEUs arriving in the ports of the United States and Western Canada were up more than 18% in July versus 2023. The fact that we are not seeing similar increases in domestic truck demand suggests that there are some special factors at work driving imports. Most likely we are seeing the compound effect of strong retail sales (much more important for imports than for trucking in general) magnified by the desire of importers to get their goods in place earlier than normal. This is a sensible reaction to congestion concerns, the potential US East Coast port strike at the end of September, and the looming threat of big tariff increases, depending on the results of the presidential election. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="77c5d7bd-d3ce-4657-bd57-1af4e55919d8"></dynamic-object></div>But that’s not all, because the share of that import surge that is arriving in the PNW saw a huge spike in June, rising to 5.3% of all inbound loaded TEUs versus an average share over the past 12 months of 4.3%. It has since settled back to average in July but that big bump is still working its way through the system. <h3>Driving the shift </h3>There are good reasons why importers turned to the PNW as a preferred option for freight out of Asia bound for the North American interior. Neighboring Western Canadian ports, normally a sizeable player for freight bound for the US Midwest, were hampered by the prospect of a rail strike on both Canadian National Railway and Canadian Pacific Kansas City (CPKC). While the situation <a href="https://www.joc.com/article/canadian-rail-workers-back-on-job-after-failed-challenge-to-binding-arbitration-5712234">has recently been settled by government intervention</a> (at least for the moment, pending the resolution of legal challenges to the arbitration requirement by the union), from a routing perspective, the next month or two are already baked in. Importers have made their decisions, and the freight is inbound to alternative ports versus Vancouver and Prince Rupert. Things will eventually normalize but not before the bulk of peak season has passed. Southern California is another routing option, but Los Angeles and Long Beach have had their own share of congestion already. What this all means is that there has been a huge upswing in IPI volume moving east out of the Northwest region, as shown by the two charts below. Over the past 6 months, monthly international container originations out of the region have increased by 60%, with July coming in 41% above the prior year. Twenty-thousand more ISO boxes flowed out of the region in July than did in January, roughly 100 more 200-unit trains or about four or five per working day. Based on these numbers, I would say that the railroads have performed quite impressively. <h3>Take it or take it </h3>Alone among the modes, the railroads are not in a position to say ‘no’ to the demands of IPI. No-one seems surprised when the steamship lines roll cargo from one vessel to another during periods of peak demand. Sometimes extra loaders are scheduled, when the ocean carrier deems it to be profitable, but there is certainly not the expectation that the liner companies will automatically ramp up their sailing schedule when demand warrants. Similarly, truckers only accept the loads that they have the capacity to handle. This is normal, expected behavior and the BCO response typically is to start working their way down the company’s list of preferred carriers to place the overflow. But that’s not how IPI works for the railroads. They don’t have the opportunity or ability to say no. The cargo arrives in the port and the expectation is that the railroad will forward it inland without delay, no matter how much volatility or variation in demand. If there is some good news in all this, it’s that it appears that the pressure may be easing. TEUs arriving in PNW ports dropped over 15% from June to July. This has yet to be reflected in the IPI originations but likely we will see some relief when the August figures come out. Further, to the extent that a good chunk of this surge represents up-streamed volume, we should see a more rapid fall-off in demand in the coming months than the normal seasonal drop. Contact Larry Gross at <a href="mailto:lgross@iintermodalindepth.com">lgross@intermodalindepth.com</a>. </div>

Container dwell times are up in the Pacific Northwest (PNW) and the undertone of grumbling regarding the railroads’ inability to meet market demands can be heard. But is it reasonable to expect the railroads to be able to react to such giant swings in the market? There’s no doubt that imports continue to run strong . Loaded inbound TEUs arriving in the ports of the United States and Western Canada were up more than 18% in July versus 2023. The fact that we are not seeing similar increases in domestic truck demand suggests that there are some special factors at work driving imports. Most likely we are seeing the compound effect of strong retail sales (much more important for imports than for trucking in general) magnified by the desire of importers to get their goods in place earlier than normal. This is a sensible reaction to congestion concerns, the potential US East Coast port strike at the end of September, and the looming threat of big tariff increases, depending on the results of the presidential election. But that’s not all, because the share of that import surge that is arriving in the PNW saw a huge spike in June, rising to 5.3% of all inbound loaded TEUs versus an average share over the past 12 months of 4.3%. It has since settled back to average in July but that big bump is still working its way through the system. Driving the shift There are good reasons why importers turned to the PNW as a preferred option for freight out of Asia bound for the North American interior. Neighboring Western Canadian ports, normally a sizeable player for freight bound for the US Midwest, were hampered by the prospect of a rail strike on both Canadian National Railway and Canadian Pacific Kansas City (CPKC). While the situation has recently been settled by government intervention (at least for the moment, pending the resolution of legal challenges to the arbitration requirement by the union), from a routing perspective, the next month or two are already baked in. Importers have made their decisions, and the freight is inbound to alternative ports versus Vancouver and Prince Rupert. Things will eventually normalize but not before the bulk of peak season has passed. Southern California is another routing option, but Los Angeles and Long Beach have had their own share of congestion already. What this all means is that there has been a huge upswing in IPI volume moving east out of the Northwest region, as shown by the two charts below. Over the past 6 months, monthly international container originations out of the region have increased by 60%, with July coming in 41% above the prior year. Twenty-thousand more ISO boxes flowed out of the region in July than did in January, roughly 100 more 200-unit trains or about four or five per working day. Based on these numbers, I would say that the railroads have performed quite impressively. Take it or take it Alone among the modes, the railroads are not in a position to say ‘no’ to the demands of IPI. No-one seems surprised when the steamship lines roll cargo from one vessel to another during periods of peak demand. Sometimes extra loaders are scheduled, when the ocean carrier deems it to be profitable, but there is certainly not the expectation that the liner companies will automatically ramp up their sailing schedule when demand warrants. Similarly, truckers only accept the loads that they have the capacity to handle. This is normal, expected behavior and the BCO response typically is to start working their way down the company’s list of preferred carriers to place the overflow. But that’s not how IPI works for the railroads. They don’t have the opportunity or ability to say no. The cargo arrives in the port and the expectation is that the railroad will forward it inland without delay, no matter how much volatility or variation in demand. If there is some good news in all this, it’s that it appears that the pressure may be easing. TEUs arriving in PNW ports dropped over 15% from June to July. This has yet to be reflected in the IPI originations but likely we will see some relief when the August figures come out. Further, to the extent that a good chunk of this surge represents up-streamed volume, we should see a more rapid fall-off in demand in the coming months than the normal seasonal drop. Contact Larry Gross at lgross@intermodalindepth.com .

Rails have limited recourse to PNW import surge: analyst

West

East

Gulf

PIERS containerized US import and export volumes is the transportation industry’s largest US waterborne trade data set, covering 100 percent of US port locations. Every day, the PIERS team processes an average of nearly 60,000 bills of lading filed with US Customs and Border Protection (CBP) and integrates this transactional trade data with standardized company details. PIERS contains US trade data going back to 2003. [PIERS](https://www.spglobal.com/marketintelligence/en/mi/products/piers.html)

Coastal share of US containerized imports from Asia (PIERS)

PIERS TEU market share US coastal imports from Asia (YTD) Gateway

<div class="phx-topic abstract-wrapper">Nearly 30 ships are bound for the Port of New York and New Jersey as marine terminals and ocean carriers prepare for a possible dockworker strike. </div>

Nearly 30 ships are bound for the Port of New York and New Jersey as marine terminals and ocean carriers prepare for a possible dockworker strike.

<div class="phx-topic">Ocean carriers and marine terminals at the Port of New York and New Jersey are working overtime to move as many containers as possible ahead of a potential dockworker strike that would close all US East and Gulf coast ports on Oct. 1, with inland exporters facing the tightest deadline to move their cargo. Contract negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) <a href="https://www.joc.com/article/us-shippers-again-ask-white-house-to-intervene-in-longshore-contract-talks-5729298">remain on hold</a>, with just ten days before the current collective bargaining agreement covering 45,000 dockworkers expires. The ILA has said it will not work without a new contract in place, nor under an extension of the current contract, setting the stage for <a href="https://www.joc.com/article/some-us-ports-extending-gate-hours-ahead-of-strike-deadline-5730261">coastwide container terminal closures</a>. In response, Maher Terminals, operator of the largest container terminal in the Port of New York and New Jersey, said Thursday that it will be keeping its truck gates open until 9 pm — two hours later than usual — through next week. “Although we are hopeful for a positive outcome, we must prepare for a potential work stoppage,” Maher said in a customer advisory. “We strongly encourage you to use the extra hours to pick up your imports.” APM Terminals Elizabeth, too, will have its truck gates open for an additional two hours next week as it seeks to move cargo off-dock ahead of the potential closure. It will also open for the two remaining Saturdays in September. The additional gate hours set the stage for a week of heavy truck traffic throughout the port, which has already been dealing with strong inbound container volumes as shippers frontloaded their imports ahead of a work stoppage. Container imports through New York-New Jersey rose 15% year over year through August, the highest rate of import growth since the comparable 2021 period, according to data from PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Bethann Rooney, port director for the Port Authority of New York and New Jersey (PANYNJ), said the port is expecting heavy cargo flow through the end of September. “There are quite a few ships out there with about 150,000 containers that we expect to receive before the strike,” Rooney said during a PANYNJ board meeting earlier this month. She added that ships arriving in October are likely to anchor, or otherwise drift, outside the port until the threat of a strike has passed. “We’re working to bring in as many ships as possible and encouraging shippers to remove as much of their cargo as possible,” she said. “All the activity taking place now is so we don’t have cargo stuck on the terminal that cannot get on a ship or the rail or a truck.” <h3>D&amp;D charges during strike? </h3>There are currently 36 container ships with a combined 273,000 TEUs in nominal capacity destined for New York-New Jersey, according to maritime tracking service Sea-web, also part of S&amp;P Global. Ten of those ships are expected to arrive after Sept. 30. Hapag-Lloyd said in a customer advisory that it will not be possible to divert containers that are already on the water due to the difficulties of restowing cargo. Any cargo that is not on a ship can be rerouted at origin for a $400 diversion fee, Hapag-Lloyd said, adding that it will honor routings and rates outlined in service agreements. The ocean carrier also announced cut-off dates for shippers to bring refrigerated and hazardous export containers to East Coast ports, with freight at Chicago rail ramps bound for New York-New Jersey being cut off on Friday, while Savannah-bound intermodal freight will be cut off on Monday. Refrigerated containers stuck inside the ports during a strike will not be monitored, Hapag-Lloyd said. Ocean Network Express (ONE) said in an advisory Thursday that it has “paused” new US export bookings for refrigerated containers on vessels scheduled to arrive after Sept. 30, although it is still accepting bookings for dry export containers. Ocean carriers and marine terminals are also laying out how they will handle per diem fees for containers in the event of a strike. APM Terminals Elizabeth said that it will stop the clock on free time for import containers stuck at port during a strike, but any container that is already accruing demurrage will continue to do so during the port’s closure. Hapag-Lloyd said that it would not charge detention on empty or export containers during the port strike. However, it said that empty containers can still be delivered to off-dock depots. ONE said that it will also stop the clock on detention charges for export containers at coastal locations, but export containers at inland locations will be subject to detention “until further notice.” As for empty containers, ONE said it will charge detention based on the availability of returning empties to an off-dock depot. Import containers at inland locations will be subject to detention “as per standard policy,” the carrier said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Ocean carriers and marine terminals at the Port of New York and New Jersey are working overtime to move as many containers as possible ahead of a potential dockworker strike that would close all US East and Gulf coast ports on Oct. 1, with inland exporters facing the tightest deadline to move their cargo. Contract negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) remain on hold , with just ten days before the current collective bargaining agreement covering 45,000 dockworkers expires. The ILA has said it will not work without a new contract in place, nor under an extension of the current contract, setting the stage for coastwide container terminal closures . In response, Maher Terminals, operator of the largest container terminal in the Port of New York and New Jersey, said Thursday that it will be keeping its truck gates open until 9 pm — two hours later than usual — through next week. “Although we are hopeful for a positive outcome, we must prepare for a potential work stoppage,” Maher said in a customer advisory. “We strongly encourage you to use the extra hours to pick up your imports.” APM Terminals Elizabeth, too, will have its truck gates open for an additional two hours next week as it seeks to move cargo off-dock ahead of the potential closure. It will also open for the two remaining Saturdays in September. The additional gate hours set the stage for a week of heavy truck traffic throughout the port, which has already been dealing with strong inbound container volumes as shippers frontloaded their imports ahead of a work stoppage. Container imports through New York-New Jersey rose 15% year over year through August, the highest rate of import growth since the comparable 2021 period, according to data from PIERS, a sister product of the Journal of Commerce within S&P Global. Bethann Rooney, port director for the Port Authority of New York and New Jersey (PANYNJ), said the port is expecting heavy cargo flow through the end of September. “There are quite a few ships out there with about 150,000 containers that we expect to receive before the strike,” Rooney said during a PANYNJ board meeting earlier this month. She added that ships arriving in October are likely to anchor, or otherwise drift, outside the port until the threat of a strike has passed. “We’re working to bring in as many ships as possible and encouraging shippers to remove as much of their cargo as possible,” she said. “All the activity taking place now is so we don’t have cargo stuck on the terminal that cannot get on a ship or the rail or a truck.” D&D charges during strike? There are currently 36 container ships with a combined 273,000 TEUs in nominal capacity destined for New York-New Jersey, according to maritime tracking service Sea-web, also part of S&P Global. Ten of those ships are expected to arrive after Sept. 30. Hapag-Lloyd said in a customer advisory that it will not be possible to divert containers that are already on the water due to the difficulties of restowing cargo. Any cargo that is not on a ship can be rerouted at origin for a $400 diversion fee, Hapag-Lloyd said, adding that it will honor routings and rates outlined in service agreements. The ocean carrier also announced cut-off dates for shippers to bring refrigerated and hazardous export containers to East Coast ports, with freight at Chicago rail ramps bound for New York-New Jersey being cut off on Friday, while Savannah-bound intermodal freight will be cut off on Monday. Refrigerated containers stuck inside the ports during a strike will not be monitored, Hapag-Lloyd said. Ocean Network Express (ONE) said in an advisory Thursday that it has “paused” new US export bookings for refrigerated containers on vessels scheduled to arrive after Sept. 30, although it is still accepting bookings for dry export containers. Ocean carriers and marine terminals are also laying out how they will handle per diem fees for containers in the event of a strike. APM Terminals Elizabeth said that it will stop the clock on free time for import containers stuck at port during a strike, but any container that is already accruing demurrage will continue to do so during the port’s closure. Hapag-Lloyd said that it would not charge detention on empty or export containers during the port strike. However, it said that empty containers can still be delivered to off-dock depots. ONE said that it will also stop the clock on detention charges for export containers at coastal locations, but export containers at inland locations will be subject to detention “until further notice.” As for empty containers, ONE said it will charge detention based on the availability of returning empties to an off-dock depot. Import containers at inland locations will be subject to detention “as per standard policy,” the carrier said. Contact Michael Angell at michael.angell@spglobal.com .

NY-NJ port stakeholders scrambling ahead of strike threat

<div class="phx-topic abstract-wrapper">Despite record import volumes in August, marine terminals at the ports of Los Angeles and Long Beach are experiencing minimal congestion, with elevated rail container dwell times the only problem area.</div>

Despite record import volumes in August, marine terminals at the ports of Los Angeles and Long Beach are experiencing minimal congestion, with elevated rail container dwell times the only problem area.

<div class="phx-topic">Industry stakeholders are pointing to minimal supply chain disruption at the ports of Los Angeles and Long Beach this peak season despite record import volumes, thanks to warehouses throughout Southern California being able to keep churning freight through their facilities. During the height of COVID-related supply chain chaos in 2021–22, warehouses were unable to gear up for import surges and became a major bottleneck in the regional supply chain. That triggered chassis shortages, congested marine terminals and vessel bunching outside the ports. But a steady flow of imports this spring and summer has helped warehouse operators to maintain staffing and equipment at peak performance levels, said Scott Weiss, vice president of technical sales-warehouse and distribution services for North America at A.P. Moller Maersk. “There used to be much more seasonality to imports. Now it’s more spread out,” Weiss told the Journal of Commerce. “Warehouses like when it’s spread out.” “The reason why we are fluid [today] is because the warehouses are keeping up,” Sal Ferrigno, vice president of SSA Marine, which operates three container terminals in Long Beach, told the Journal of Commerce. Unlike during the pandemic when warehouses could not find enough workers, those facilities appear to be fully staffed today, Ferrigno said. The Los Angeles-Long Beach port complex, which accounts for almost 50% of US imports from Asia, handled an all-time high of 849,806 TEUs of Asian imports in August, up 23.7% year over year and about 16% higher than both August 2021 and 2022, according to PIERS, a Journal of Commerce sister product within S&amp;P Global. <h3>Near-dock surge yards a safety valve </h3>Marine terminal operators say there are several additional developments since the pandemic that are fostering improved supply chain fluidity, notably the access to more near-dock “surge” yards that provide temporary storage for inbound containers until they are needed at the warehouses or put on trains headed eastbound. This frees up space at the terminals to handle a continuous discharge of import containers and prevents a backlog of ships in the harbor. “We’re definitely seeing more container dray-offs today,” said Sepehr Matinifar, vice president of logistics services at the Wonderful Company, a developer of industrial and storage space in Southern California. Major retailers such as Amazon and Walmart are heavy users of the near-dock storage yards, he said. Mario Cordero, executive director of the Port of Long Beach, cited the port’s Pier S overflow yard that is helping to keep dwell times for containers that are trucked from the terminals below three days. According to the Pacific Merchant Shipping Association (PMSA), which tracks container dwell times, the average dwell time in the port complex in August for containers leaving by truck was 2.95 days. That’s up from 2.81 days in July but was the 10th consecutive month of sub-three-day dwells since October 2023, according to PMSA. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="155dedc1-99f2-4adf-a449-1c9ab2510f95"></dynamic-object></div>When marine terminals are fluid, vessels move immediately to berth and depart on schedule after they have been worked. That prevents the backlogs that developed during COVID-19, which reached <a href="https://www.joc.com/article/trans-pac-vessel-reliability-ticked-higher-in-march-on-us-west-east-coasts-5243041">a record 109 container ships in January 2022</a>, according to the Marine Exchange of Southern California. The Marine Exchange reported that a record 67 container ships are scheduled to arrive in the LA-LB port complex this week. “Vessels and cargo arriving, departing and shifting around the ports of LA and LB continue to move normally with no labor delays and ample labor,” said Kip Louttit, executive director of the Marine Exchange. The post-COVID environment was also marked by excessive off-terminal chassis dwell times as chassis-container units sat idle in warehouse yards or on the streets waiting for space to open at the warehouses. Chassis street dwells during and immediately after COVID <a href="https://www.joc.com/article/la-port-expects-imports-to-surge-further-in-q2-5205950">spiked to more than 10 days</a>, according to the Pool of Pools, which is managed by the three largest intermodal equipment providers (IEPs) in Southern California. According to the Pool of Pools, the average street dwell time for 40-foot chassis as of Thursday was 5.9 days. That is below the seven-day-plus dwell times that can contribute to port congestion and reduce chassis availability in the LA-LB harbor area. Another reason why there is no significant chassis shortage today is that a number of drayage operators serving the ports now own or lease chassis, which reduces their dependence on shared containers in the Pool of Pools and promotes a more efficient use of chassis, according to Matt Schrap, CEO of the Harbor Trucking Association. <h3>Rail container dwell times still excessive </h3>The only sector of the Southern California supply chain that continues to register below-par performance is intermodal rail. The average dwell time of rail containers on the Los Angeles-Long Beach marine terminals in August was 8.2 days, up from 5.66 days in July and the highest since November 2022. “There are some rail container backlogs now,” said Alan McCorkle, president of Yusen Terminals in Los Angeles. “We’ve had to activate one of our two near-dock areas to handle the rail container backlog.” Rail industry analyst Lawrence Gross, president and founder of Gross Transportation, said record volumes play a major role in the surge of long-dwelling rail containers at the ports. He said that according to the Association of American Railroads, last week was the busiest for North American intermodal rail since June 2021, and inland point intermodal (IPI) traffic is projected to remain strong at least through October. “If the volumes stay this strong for that long, then I think there will unavoidably be some problems. Congestion, but not a meltdown,” said Gross, also a Journal of Commerce analyst. BNSF Railway had its busiest week for IPI moves in the week before Labor Day, and new record volumes are forecast for the coming two weeks, said Jon Gabriel, BNSF’s vice president for innovation, service design and network strategy. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

Industry stakeholders are pointing to minimal supply chain disruption at the ports of Los Angeles and Long Beach this peak season despite record import volumes, thanks to warehouses throughout Southern California being able to keep churning freight through their facilities. During the height of COVID-related supply chain chaos in 2021–22, warehouses were unable to gear up for import surges and became a major bottleneck in the regional supply chain. That triggered chassis shortages, congested marine terminals and vessel bunching outside the ports. But a steady flow of imports this spring and summer has helped warehouse operators to maintain staffing and equipment at peak performance levels, said Scott Weiss, vice president of technical sales-warehouse and distribution services for North America at A.P. Moller Maersk. “There used to be much more seasonality to imports. Now it’s more spread out,” Weiss told the Journal of Commerce. “Warehouses like when it’s spread out.” “The reason why we are fluid [today] is because the warehouses are keeping up,” Sal Ferrigno, vice president of SSA Marine, which operates three container terminals in Long Beach, told the Journal of Commerce. Unlike during the pandemic when warehouses could not find enough workers, those facilities appear to be fully staffed today, Ferrigno said. The Los Angeles-Long Beach port complex, which accounts for almost 50% of US imports from Asia, handled an all-time high of 849,806 TEUs of Asian imports in August, up 23.7% year over year and about 16% higher than both August 2021 and 2022, according to PIERS, a Journal of Commerce sister product within S&P Global. Near-dock surge yards a safety valve Marine terminal operators say there are several additional developments since the pandemic that are fostering improved supply chain fluidity, notably the access to more near-dock “surge” yards that provide temporary storage for inbound containers until they are needed at the warehouses or put on trains headed eastbound. This frees up space at the terminals to handle a continuous discharge of import containers and prevents a backlog of ships in the harbor. “We’re definitely seeing more container dray-offs today,” said Sepehr Matinifar, vice president of logistics services at the Wonderful Company, a developer of industrial and storage space in Southern California. Major retailers such as Amazon and Walmart are heavy users of the near-dock storage yards, he said. Mario Cordero, executive director of the Port of Long Beach, cited the port’s Pier S overflow yard that is helping to keep dwell times for containers that are trucked from the terminals below three days. According to the Pacific Merchant Shipping Association (PMSA), which tracks container dwell times, the average dwell time in the port complex in August for containers leaving by truck was 2.95 days. That’s up from 2.81 days in July but was the 10th consecutive month of sub-three-day dwells since October 2023, according to PMSA. When marine terminals are fluid, vessels move immediately to berth and depart on schedule after they have been worked. That prevents the backlogs that developed during COVID-19, which reached a record 109 container ships in January 2022 , according to the Marine Exchange of Southern California. The Marine Exchange reported that a record 67 container ships are scheduled to arrive in the LA-LB port complex this week. “Vessels and cargo arriving, departing and shifting around the ports of LA and LB continue to move normally with no labor delays and ample labor,” said Kip Louttit, executive director of the Marine Exchange. The post-COVID environment was also marked by excessive off-terminal chassis dwell times as chassis-container units sat idle in warehouse yards or on the streets waiting for space to open at the warehouses. Chassis street dwells during and immediately after COVID spiked to more than 10 days , according to the Pool of Pools, which is managed by the three largest intermodal equipment providers (IEPs) in Southern California. According to the Pool of Pools, the average street dwell time for 40-foot chassis as of Thursday was 5.9 days. That is below the seven-day-plus dwell times that can contribute to port congestion and reduce chassis availability in the LA-LB harbor area. Another reason why there is no significant chassis shortage today is that a number of drayage operators serving the ports now own or lease chassis, which reduces their dependence on shared containers in the Pool of Pools and promotes a more efficient use of chassis, according to Matt Schrap, CEO of the Harbor Trucking Association. Rail container dwell times still excessive The only sector of the Southern California supply chain that continues to register below-par performance is intermodal rail. The average dwell time of rail containers on the Los Angeles-Long Beach marine terminals in August was 8.2 days, up from 5.66 days in July and the highest since November 2022. “There are some rail container backlogs now,” said Alan McCorkle, president of Yusen Terminals in Los Angeles. “We’ve had to activate one of our two near-dock areas to handle the rail container backlog.” Rail industry analyst Lawrence Gross, president and founder of Gross Transportation, said record volumes play a major role in the surge of long-dwelling rail containers at the ports. He said that according to the Association of American Railroads, last week was the busiest for North American intermodal rail since June 2021, and inland point intermodal (IPI) traffic is projected to remain strong at least through October. “If the volumes stay this strong for that long, then I think there will unavoidably be some problems. Congestion, but not a meltdown,” said Gross, also a Journal of Commerce analyst. BNSF Railway had its busiest week for IPI moves in the week before Labor Day, and new record volumes are forecast for the coming two weeks, said Jon Gabriel, BNSF’s vice president for innovation, service design and network strategy. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Maritime

Supply chain

Southern California supply chain fluid despite surging import volumes

<div class="phx-topic abstract-wrapper">Eight straight months of double-digit volume growth and a massive increase in trans-Pacific and Asia-Europe e-commerce volumes, mostly shipped from China by air, has left air cargo capacity in short supply.</div>

Eight straight months of double-digit volume growth and a massive increase in trans-Pacific and Asia-Europe e-commerce volumes, mostly shipped from China by air, has left air cargo capacity in short supply.

<div class="phx-topic">A strike-driven surge in demand for air cargo capacity if ports along the US East and Gulf coasts are shut down from Oct. 1 would come at the worst possible time for an air freight sector that is preparing for a strong peak season with capacity already severely limited. Eight straight months of double-digit growth and a massive increase in trans-Pacific and Asia-Europe e-commerce volumes this year, mostly shipped from China by air, have kept rates elevated and encouraged airlines <a href="https://www.joc.com/article/lure-of-robust-asian-peak-season-a-magnet-for-air-cargo-capacity-5728658">to shift freighter capacity from other trades</a> to the booming ex-Asia markets. Angel Rodriguez, president of ASF Air, said a port strike in the US would quickly create a backlog in shipments of “artificial or unplanned air freight” that would typically have moved by ocean. “Now consider this occurring during the busiest season for air freight with the increased demand for e-commerce, holiday season around the corner and new product launches such as smart phones, all fighting for the same capacity from similar markets,” Rodriguez told the Journal of Commerce. Air freight rates out of China to the US and Europe have been elevated all year with e-commerce volume dominating shipments and longer ship voyages around southern Africa to avoid the Red Sea shifting urgent freight from ocean to the air. Load factors in August were at 87% on Asia-North America and 86% on both the Asia-Europe and Asia-Middle East routes, meaning they are effectively full. Air freight rates are being pushed up by a wide supply-demand imbalance, with supply growth in August increasing 2% year over year while demand was up 11%, according to rate benchmarking platform Xeneta. Data from the Baltic Air Index (BAI) shows that rates for the week ending Sept. 16 from China to the US were up 30% year over year at $5.87 per kilogram and China to Europe up 28%, at $4.10/kg. <h3>Scramble for space </h3>Airline executives estimate the top four Chinese e-commerce platforms use 150 freighters per day to move online orders to destination markets, most of that capacity contracted directly with airlines. That is leaving forwarders serving traditional air freight customers scrambling to find space in an ever-tightening market. Alberto Mathia, regional head of air freight for the Americas at Hellmann Worldwide Logistics, said capacity was a growing issue and that air freight rates, especially from Asia, were already rising, regardless of a potential port strike in the US. “Capacity will become even tighter as passenger flights may reduce after the summer schedule, creating additional challenges for already limited air capacity due to e-commerce from Asia and Red Sea diversions,” Mathia said. Rodriguez said shippers should already be discussing contingency plans with their service providers to identify solutions to keep production lines moving undisturbed. “Many of our clients at ASF have already started looking at full and part charters to have a safety stock in the unfortunate event that a strike does indeed occur,” he said. Charter rates are also rising sharply, however, with reports of a return freighter flight on the Europe-South America trade lane recently contracted for more than $1 million. <h3>‘Storm coming’ to China export markets </h3>Niall van de Wouw, chief air freight officer at Xeneta, said the air cargo industry was facing “an extremely challenging year-end peak season,” when volumes traditionally increase in the run up to Christmas and New Year. “There is a storm coming to the outbound China air freight market,” he warned. “Shippers need to take action now and have a clear plan in place for when the storm hits, such as working with their vendor to minimize the use of spot market capacity, which will likely come at spiraling costs.” While a port strike along the US East and Gulf coasts will impact air cargo exports from China, the trans-Atlantic air freight market could be hit hard, said Glyn Hughes, director general of The International Air Cargo Association (Tiaca). “To satisfy the demand, much of which is driven by e-commerce, air cargo freighter operators have been repositioning freighters to serve these high demand-Asian markets,” Hughes told the Journal of Commerce. “This has resulted in some trans-Atlantic freighter operations being stopped. “If the...port strike goes ahead then some cargo will undoubtedly need to move by air, but capacity will be in short supply,” he added. “There will also be an expected reduction in passenger belly capacity as winter schedules may also see reduced services.” However, the tight capacity will push up air cargo rates, and Hughes said this could lead to airlines moving freighters back to the trans-Atlantic market. “But I think the capacity challenge will act as a form of volume restriction, and I wouldn’t expect to see cargo facilities [in the US] being overrun with air cargo volume,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A strike-driven surge in demand for air cargo capacity if ports along the US East and Gulf coasts are shut down from Oct. 1 would come at the worst possible time for an air freight sector that is preparing for a strong peak season with capacity already severely limited. Eight straight months of double-digit growth and a massive increase in trans-Pacific and Asia-Europe e-commerce volumes this year, mostly shipped from China by air, have kept rates elevated and encouraged airlines to shift freighter capacity from other trades to the booming ex-Asia markets. Angel Rodriguez, president of ASF Air, said a port strike in the US would quickly create a backlog in shipments of “artificial or unplanned air freight” that would typically have moved by ocean. “Now consider this occurring during the busiest season for air freight with the increased demand for e-commerce, holiday season around the corner and new product launches such as smart phones, all fighting for the same capacity from similar markets,” Rodriguez told the Journal of Commerce. Air freight rates out of China to the US and Europe have been elevated all year with e-commerce volume dominating shipments and longer ship voyages around southern Africa to avoid the Red Sea shifting urgent freight from ocean to the air. Load factors in August were at 87% on Asia-North America and 86% on both the Asia-Europe and Asia-Middle East routes, meaning they are effectively full. Air freight rates are being pushed up by a wide supply-demand imbalance, with supply growth in August increasing 2% year over year while demand was up 11%, according to rate benchmarking platform Xeneta. Data from the Baltic Air Index (BAI) shows that rates for the week ending Sept. 16 from China to the US were up 30% year over year at $5.87 per kilogram and China to Europe up 28%, at $4.10/kg. Scramble for space Airline executives estimate the top four Chinese e-commerce platforms use 150 freighters per day to move online orders to destination markets, most of that capacity contracted directly with airlines. That is leaving forwarders serving traditional air freight customers scrambling to find space in an ever-tightening market. Alberto Mathia, regional head of air freight for the Americas at Hellmann Worldwide Logistics, said capacity was a growing issue and that air freight rates, especially from Asia, were already rising, regardless of a potential port strike in the US. “Capacity will become even tighter as passenger flights may reduce after the summer schedule, creating additional challenges for already limited air capacity due to e-commerce from Asia and Red Sea diversions,” Mathia said. Rodriguez said shippers should already be discussing contingency plans with their service providers to identify solutions to keep production lines moving undisturbed. “Many of our clients at ASF have already started looking at full and part charters to have a safety stock in the unfortunate event that a strike does indeed occur,” he said. Charter rates are also rising sharply, however, with reports of a return freighter flight on the Europe-South America trade lane recently contracted for more than $1 million. ‘Storm coming’ to China export markets Niall van de Wouw, chief air freight officer at Xeneta, said the air cargo industry was facing “an extremely challenging year-end peak season,” when volumes traditionally increase in the run up to Christmas and New Year. “There is a storm coming to the outbound China air freight market,” he warned. “Shippers need to take action now and have a clear plan in place for when the storm hits, such as working with their vendor to minimize the use of spot market capacity, which will likely come at spiraling costs.” While a port strike along the US East and Gulf coasts will impact air cargo exports from China, the trans-Atlantic air freight market could be hit hard, said Glyn Hughes, director general of The International Air Cargo Association (Tiaca). “To satisfy the demand, much of which is driven by e-commerce, air cargo freighter operators have been repositioning freighters to serve these high demand-Asian markets,” Hughes told the Journal of Commerce. “This has resulted in some trans-Atlantic freighter operations being stopped. “If the...port strike goes ahead then some cargo will undoubtedly need to move by air, but capacity will be in short supply,” he added. “There will also be an expected reduction in passenger belly capacity as winter schedules may also see reduced services.” However, the tight capacity will push up air cargo rates, and Hughes said this could lead to airlines moving freighters back to the trans-Atlantic market. “But I think the capacity challenge will act as a form of volume restriction, and I wouldn’t expect to see cargo facilities [in the US] being overrun with air cargo volume,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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<div class="phx-topic abstract-wrapper">The Biden administration may have no choice but to invoke the Taft-Hartley Act to stop a US port strike even as broader support for Democrats among transportation unions falters ahead of the presidential election. </div>

The Biden administration may have no choice but to invoke the Taft-Hartley Act to stop a US port strike even as broader support for Democrats among transportation unions falters ahead of the presidential election.

<div class="phx-topic">It’s hard to exaggerate how politically toxic the invocation of the Taft-Hartley Act by the Biden administration to stop a potential strike by the International Longshoremen’s Association (ILA) would be to the Harris presidential campaign. That will no doubt temper the White House’s response if the ILA follows through with its Oct. 1 strike threat. The law that would allow the federal government to shut down a strike at US East and Gulf coast ports is reviled among labor — and for good reason. After the busiest period of strikes in US history, involving coal miners to Hollywood stagehands, Congress in 1947 overrode President Harry Truman’s veto to pass the Labor Management Relations Act, delivering a sharp rebuke to workers from big business. Named after its Republican co-authors, Taft-Hartley underpins modern labor relations, including prohibitions on wildcat strikes and secondary boycotts. Invoking the act, as some states have already begun early voting, would send a damaging message to organized transportation labor already tilting away from its conventional Democratic support. The ILA endorsed Biden in 2020, but hasn’t yet backed either Kamala Harris or Donald Trump. Last November, ILA President Harold Daggett said he had a productive 90-minute meeting with Trump, where the union leader stressed “the threat of automation to American workers.” The invoking of Taft-Hartley by the Biden administration could also likely spark criticism of Democrats protecting foreign-owned container lines at the expense of blue-collar workers. The importance of that narrative can be seen in how Harris, Biden and Trump decry the takeover of Pennsylvania-based US Steel by Japan’s Nippon Steel Corp. rather than risk losing votes in the critical swing state. <h3>Stewarding the economy</h3>Yet, the Biden administration may have no choice but to invoke the executive bane on the ILA, given there’s scant hope for a breakthrough in the months-long stalemate with the US Maritime Alliance (USMX). The alternative of cutting off some $588 billion in annual trade flowing through US East and Gulf coast ports for more than day, however, looks even more politically damaging. The Biden administration — and by extension the Harris campaign — doesn’t want to be seen as weak on economic stewardship. Republicans are ready to pounce on any perceived weakness. In a Sept. 20 letter to Biden urging him to prevent an economic fallout from a strike, House Republicans criticized federal officials’ “lack of engagement” in the negotiations between the ILA and employers, as represented by the USMX. Compared with the last two bargaining cycles involving US West Coast longshore labor, <a href="https://www.joc.com/article/anxious-white-house-weighing-options-as-ila-contract-deadline-nears-5725622">there has been less outreach from the White House</a> amid ILA-USMX negotiations, two people familiar with US longshore negotiations told the Journal of Commerce. The calculations for the Biden administration are made even harder because of new signs of faltering support among transportation unions. Last week, the Teamsters, which endorsed Biden in 2020, declined to formally back either Trump or Harris. Trump, whose Republican convention in July hosted Teamsters chief Sean O’Brien — a first for the GOP — not surprisingly proclaimed the lack of any endorsement a win for his campaign. Teamsters support for Democrats has eroded significantly in just four years. According to a Teamsters phone polling of its members, workers favored Trump over Harris by more than two to one. Many Teamsters locals and the union’s national Black caucus, however, have endorsed Harris. Despite his boast of being the most pro-union president in modern times, Biden last year angered rail unions who were seeking 15 days of paid sick day leave but received just four in the contact that was ultimately forced upon them by Congress. The last time Taft-Hartley was invoked was in 2002, when President George W. Bush ended an 11-day lockout at West Coast ports. The economy was slowing then, too, but Bush didn’t have the same political consideration to maintain union support. In the meantime, the importance of trade to the US economy has only grown. In 2002, the ratio of the share of US trade to GDP was 22.9%, according to the Bureau of Economic Analysis. Last year, it was 27.6%. The bureau won’t publish fourth quarter GDP readings until late January — well after the election. So much for small favors. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

It’s hard to exaggerate how politically toxic the invocation of the Taft-Hartley Act by the Biden administration to stop a potential strike by the International Longshoremen’s Association (ILA) would be to the Harris presidential campaign. That will no doubt temper the White House’s response if the ILA follows through with its Oct. 1 strike threat. The law that would allow the federal government to shut down a strike at US East and Gulf coast ports is reviled among labor — and for good reason. After the busiest period of strikes in US history, involving coal miners to Hollywood stagehands, Congress in 1947 overrode President Harry Truman’s veto to pass the Labor Management Relations Act, delivering a sharp rebuke to workers from big business. Named after its Republican co-authors, Taft-Hartley underpins modern labor relations, including prohibitions on wildcat strikes and secondary boycotts. Invoking the act, as some states have already begun early voting, would send a damaging message to organized transportation labor already tilting away from its conventional Democratic support. The ILA endorsed Biden in 2020, but hasn’t yet backed either Kamala Harris or Donald Trump. Last November, ILA President Harold Daggett said he had a productive 90-minute meeting with Trump, where the union leader stressed “the threat of automation to American workers.” The invoking of Taft-Hartley by the Biden administration could also likely spark criticism of Democrats protecting foreign-owned container lines at the expense of blue-collar workers. The importance of that narrative can be seen in how Harris, Biden and Trump decry the takeover of Pennsylvania-based US Steel by Japan’s Nippon Steel Corp. rather than risk losing votes in the critical swing state. Stewarding the economy Yet, the Biden administration may have no choice but to invoke the executive bane on the ILA, given there’s scant hope for a breakthrough in the months-long stalemate with the US Maritime Alliance (USMX). The alternative of cutting off some $588 billion in annual trade flowing through US East and Gulf coast ports for more than day, however, looks even more politically damaging. The Biden administration — and by extension the Harris campaign — doesn’t want to be seen as weak on economic stewardship. Republicans are ready to pounce on any perceived weakness. In a Sept. 20 letter to Biden urging him to prevent an economic fallout from a strike, House Republicans criticized federal officials’ “lack of engagement” in the negotiations between the ILA and employers, as represented by the USMX. Compared with the last two bargaining cycles involving US West Coast longshore labor, there has been less outreach from the White House amid ILA-USMX negotiations, two people familiar with US longshore negotiations told the Journal of Commerce. The calculations for the Biden administration are made even harder because of new signs of faltering support among transportation unions. Last week, the Teamsters, which endorsed Biden in 2020, declined to formally back either Trump or Harris. Trump, whose Republican convention in July hosted Teamsters chief Sean O’Brien — a first for the GOP — not surprisingly proclaimed the lack of any endorsement a win for his campaign. Teamsters support for Democrats has eroded significantly in just four years. According to a Teamsters phone polling of its members, workers favored Trump over Harris by more than two to one. Many Teamsters locals and the union’s national Black caucus, however, have endorsed Harris. Despite his boast of being the most pro-union president in modern times, Biden last year angered rail unions who were seeking 15 days of paid sick day leave but received just four in the contact that was ultimately forced upon them by Congress. The last time Taft-Hartley was invoked was in 2002, when President George W. Bush ended an 11-day lockout at West Coast ports. The economy was slowing then, too, but Bush didn’t have the same political consideration to maintain union support. In the meantime, the importance of trade to the US economy has only grown. In 2002, the ratio of the share of US trade to GDP was 22.9%, according to the Bureau of Economic Analysis. Last year, it was 27.6%. The bureau won’t publish fourth quarter GDP readings until late January — well after the election. So much for small favors. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Transport, Trade and Regulation News

White House’s executive lever to prevent port strike is politically toxic

<div class="phx-topic abstract-wrapper">The International Longshoremen’s Association (ILA) rejected a last-minute offer from maritime employers that included higher wages and retirement contributions, as the first strike by East and Gulf coast port workers since 1977 got underway. </div>

The International Longshoremen’s Association (ILA) rejected a last-minute offer from maritime employers that included higher wages and retirement contributions, as the first strike by East and Gulf coast port workers since 1977 got underway.

<div class="phx-topic">ELIZABETH, NJ — The head of the International Longshoremen’s Association (ILA) in the early hours of Tuesday pledged he would secure a “great contract” that he would like to complete by the end of the month, just hours after hundreds of union dockworkers at US East and Gulf coast ports went on strike at midnight. “Whether it’s one week, two — I’m hoping by three it’s over, I’m hoping — you are making history here,” ILA President Harold Daggett told the crowd, noting the significance of the union’s first strike since 1977. “We are going to walk away with a great contract.” The ILA rebuffed a last-minute contract extension from maritime employers that aimed to head off the strike. Daggett has said previously the ILA would neither work past the expiration of the current contract nor extend it. The union said in a statement early Tuesday morning the United States Maritime Alliance’s (USMX) latest offer “fell far short of what ILA rank-and-file members are <a href="">demanding in wages</a> and <a href="https://www.joc.com/article/ila-halts-talks-over-new-contract-until-maersk-apm-clarify-port-it-projects-5244243">protections against automation</a>.” The strike, which has forced <a href="https://www.joc.com/article/some-us-ports-extending-gate-hours-ahead-of-strike-deadline-5730261">the closure of all major container terminals from Maine to Texas</a>, has scrambled the expected arrival during October of 62 container ships originally destined for ports along the East and Gulf coasts, according to Sea-web, a sister product of the Journal of Commerce within S&amp;P Global. The total capacity of those vessels is approximately 485,725 TEUs. Ships are already planning to discharge cargo at non-affected ports. Hapag-Lloyd said Monday that vessels in its Caribbean Express Service that would have called the Port of Virginia this week now plan to call Canada’s Port of Saint John. In addition, the carrier’s South America East Coast Service is now preparing to call Mexico’s Port of Altamira instead of the US Gulf Coast ports it normally calls. <h3>Digging in </h3>Speaking outside of APM Terminals in Elizabeth, NJ, where he walked a picket line in 1977 as a longshore worker, Daggett said the contract offers from employers “didn’t work out, so I told them, ‘So long and goodbye.’” Although no new talks are scheduled, ILA leadership is “always willing to sit down when the right number is offered,” he added. Daggett braced union members for the impact of what will be the first strike for the vast majority of them, recounting how the 1977 strike lasted three months and stemmed from the union’s demand for an 80 cent-per-hour raise. “Back then, the companies didn’t make the kind of money they do today,” he said. “They might have made $10 million; now, it’s billions, off our backs.” Daggett also maintained the union’s stance against marine terminal operators implementing any form of automation. He said the rollout of automated straddle carriers at APM Terminals’ Los Angeles facility cost up to 1,000 longshore jobs, vowing that the ILA would seek even stricter contract protections regarding automation than it had previously. “If it was up to them, [maritime employers] would like to see automation up and down in every port, from here to Houston,” Daggett said. “That is never going to happen with me. I’ve got strong language that’s going to go into the new contract.” Daggett said he’s hoping to get those protections against automation — and the economic terms of the contract — in place before a mid-October meeting of the ILA and the International Dockworkers Council (IDC) in Portugal. He said the ILA would join efforts by other overseas dockworker unions to halt further port automation. “I’m going to go to Portugal along with every maritime union and take these companies on over automation,” Daggett said. “If they want to automate a pier in Chile, we’re shutting them down for three weeks around the world.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

ELIZABETH, NJ — The head of the International Longshoremen’s Association (ILA) in the early hours of Tuesday pledged he would secure a “great contract” that he would like to complete by the end of the month, just hours after hundreds of union dockworkers at US East and Gulf coast ports went on strike at midnight. “Whether it’s one week, two — I’m hoping by three it’s over, I’m hoping — you are making history here,” ILA President Harold Daggett told the crowd, noting the significance of the union’s first strike since 1977. “We are going to walk away with a great contract.” The ILA rebuffed a last-minute contract extension from maritime employers that aimed to head off the strike. Daggett has said previously the ILA would neither work past the expiration of the current contract nor extend it. The union said in a statement early Tuesday morning the United States Maritime Alliance’s (USMX) latest offer “fell far short of what ILA rank-and-file members are demanding in wages and protections against automation .” The strike, which has forced the closure of all major container terminals from Maine to Texas , has scrambled the expected arrival during October of 62 container ships originally destined for ports along the East and Gulf coasts, according to Sea-web, a sister product of the Journal of Commerce within S&P Global. The total capacity of those vessels is approximately 485,725 TEUs. Ships are already planning to discharge cargo at non-affected ports. Hapag-Lloyd said Monday that vessels in its Caribbean Express Service that would have called the Port of Virginia this week now plan to call Canada’s Port of Saint John. In addition, the carrier’s South America East Coast Service is now preparing to call Mexico’s Port of Altamira instead of the US Gulf Coast ports it normally calls. Digging in Speaking outside of APM Terminals in Elizabeth, NJ, where he walked a picket line in 1977 as a longshore worker, Daggett said the contract offers from employers “didn’t work out, so I told them, ‘So long and goodbye.’” Although no new talks are scheduled, ILA leadership is “always willing to sit down when the right number is offered,” he added. Daggett braced union members for the impact of what will be the first strike for the vast majority of them, recounting how the 1977 strike lasted three months and stemmed from the union’s demand for an 80 cent-per-hour raise. “Back then, the companies didn’t make the kind of money they do today,” he said. “They might have made $10 million; now, it’s billions, off our backs.” Daggett also maintained the union’s stance against marine terminal operators implementing any form of automation. He said the rollout of automated straddle carriers at APM Terminals’ Los Angeles facility cost up to 1,000 longshore jobs, vowing that the ILA would seek even stricter contract protections regarding automation than it had previously. “If it was up to them, [maritime employers] would like to see automation up and down in every port, from here to Houston,” Daggett said. “That is never going to happen with me. I’ve got strong language that’s going to go into the new contract.” Daggett said he’s hoping to get those protections against automation — and the economic terms of the contract — in place before a mid-October meeting of the ILA and the International Dockworkers Council (IDC) in Portugal. He said the ILA would join efforts by other overseas dockworker unions to halt further port automation. “I’m going to go to Portugal along with every maritime union and take these companies on over automation,” Daggett said. “If they want to automate a pier in Chile, we’re shutting them down for three weeks around the world.” Contact Michael Angell at michael.angell@spglobal.com .

ILA’s Daggett promises dockworkers ‘great contract’ as strike begins

<div class="phx-topic abstract-wrapper">The White House may finally be looking to take a firmer hand in stalled talks between the ILA and maritime employers with an expected strike just days away.</div>

The White House may finally be looking to take a firmer hand in stalled talks between the ILA and maritime employers with an expected strike just days away.

<div class="phx-topic">The head of the United States Maritime Alliance (USMX) met with Biden administration officials at the White House Friday, sources said, as the administration reached out to maritime employers along the East and Gulf coasts just days before what would be the first coastwide longshore work stoppage since 1977. Three sources with knowledge of the matter told the Journal of Commerce that USMX Chairman and Chief Executive Dave Adam traveled to Washington for a meeting at the White House. A source familiar with the meeting’s attendees said Adam met with Acting Labor Secretary Julie Su, Transportation Secretary Pete Buttigieg and Biden economic advisor Lael Brainard. International Longshoremen’s Association President Harold Daggett did not receive a similar invitation, according to those familiar with the matter. The invitation to the White House comes a day after <a href="https://www.joc.com/article/usmx-tries-to-force-ila-back-to-contract-talks-with-nlrb-complaint-5736646">the USMX filed a charge with the National Labor Relations Board alleging the ILA has refused to bargain in good faith</a> for a new master contract covering 14 East and Gulf coast ports. The move reflected the mounting frustration of maritime employers in trying to reach a deal before the current contract expires on Sept. 30. The two sides have not met since June. It’s not clear what levers the White House has to pull in the stalled negotiations. <a href="https://www.joc.com/article/anxious-white-house-weighing-options-as-ila-contract-deadline-nears-5725622">The Biden administration has said it is not ready to prevent a strike</a> by invoking the Taft-Hartley Act, a move that would be seen as <a href="https://www.joc.com/article/white-houses-executive-lever-to-prevent-port-strike-is-politically-toxic-5733927">politically toxic for Democrats vying for the labor vote in the 2024 elections</a>. ILA’s Daggett has said the union does not welcome federal intervention. Still, the Biden administration has fielded an increasing number of calls about doing more to avert a strike. Last week, <a href="https://www.joc.com/article/us-shippers-again-ask-white-house-to-intervene-in-longshore-contract-talks-5729298">69 House Republicans sent a letter to White House</a> asking that it “do everything in its power to prevent a work stoppage at East and Gulf coast ports.” The letter followed another from 177 US trade groups also requesting that Biden intercede. <h3>ONE skips Charleston, Savannah </h3>Ocean Network Express (ONE), meanwhile, has announced that it will skip Charleston and Savannah on its trans-Pacific EC1 service because of the strike threat. The container ship Hong Kong Express will now terminate its voyage at Norfolk on Sept. 28–29, ONE said in a customer advisory. The ship is currently five days late after being delayed at Manzanillo in Mexico. Under its revised schedule, the vessel wasn’t due at Charleston until Sept. 30–Oct. 1 and Savannah until Oct. 2–3. ONE said those calls will now be omitted due to the potential strike. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. Special Correspondent Keith Wallis contributed to this story.</div>

The head of the United States Maritime Alliance (USMX) met with Biden administration officials at the White House Friday, sources said, as the administration reached out to maritime employers along the East and Gulf coasts just days before what would be the first coastwide longshore work stoppage since 1977. Three sources with knowledge of the matter told the Journal of Commerce that USMX Chairman and Chief Executive Dave Adam traveled to Washington for a meeting at the White House. A source familiar with the meeting’s attendees said Adam met with Acting Labor Secretary Julie Su, Transportation Secretary Pete Buttigieg and Biden economic advisor Lael Brainard. International Longshoremen’s Association President Harold Daggett did not receive a similar invitation, according to those familiar with the matter. The invitation to the White House comes a day after the USMX filed a charge with the National Labor Relations Board alleging the ILA has refused to bargain in good faith for a new master contract covering 14 East and Gulf coast ports. The move reflected the mounting frustration of maritime employers in trying to reach a deal before the current contract expires on Sept. 30. The two sides have not met since June. It’s not clear what levers the White House has to pull in the stalled negotiations. The Biden administration has said it is not ready to prevent a strike by invoking the Taft-Hartley Act, a move that would be seen as politically toxic for Democrats vying for the labor vote in the 2024 elections . ILA’s Daggett has said the union does not welcome federal intervention. Still, the Biden administration has fielded an increasing number of calls about doing more to avert a strike. Last week, 69 House Republicans sent a letter to White House asking that it “do everything in its power to prevent a work stoppage at East and Gulf coast ports.” The letter followed another from 177 US trade groups also requesting that Biden intercede. ONE skips Charleston, Savannah Ocean Network Express (ONE), meanwhile, has announced that it will skip Charleston and Savannah on its trans-Pacific EC1 service because of the strike threat. The container ship Hong Kong Express will now terminate its voyage at Norfolk on Sept. 28–29, ONE said in a customer advisory. The ship is currently five days late after being delayed at Manzanillo in Mexico. Under its revised schedule, the vessel wasn’t due at Charleston until Sept. 30–Oct. 1 and Savannah until Oct. 2–3. ONE said those calls will now be omitted due to the potential strike. Contact Michael Angell at michael.angell@spglobal.com . Special Correspondent Keith Wallis contributed to this story.

USMX chief meets with Biden administration officials as port strike deadline looms

<div class="phx-topic abstract-wrapper">Nearly five decades of labor peace on the US East and Gulf Coast are coming to an end, with carriers loathe to see high US operating costs high, labor aware of a historic opportunity, and the Biden admiration reluctant to intervene. </div>

Nearly five decades of labor peace on the US East and Gulf Coast are coming to an end, with carriers loathe to see high US operating costs high, labor aware of a historic opportunity, and the Biden admiration reluctant to intervene.

<div class="phx-topic">How did nearly 50 years of labor peace on the US East and Gulf coasts, so consistent that it was a key factor in a multiyear erosion of West Coast market share, bring the industry to the eve of a strike? Although the impasse may still see an 11th hour resolution, that appears increasingly unlikely given that the union has announced it will walk off the job at midnight. Even if averted, the threat of a strike has spurred importers <a href="https://www.joc.com/article/southern-california-supply-chain-fluid-despite-surging-import-volumes-5730931">to frontload shipments by two months</a> or more to avoid having holiday season goods stuck outside an East or Gulf coast port. What got the two sides to this place was two worldviews, both of which were heavily influenced by the COVID-19 pandemic and its impact on containerized shipping. On one hand, the impasse in talks over a new coastwide contract is the result of a union and its powerful leader sensing a historic moment and seizing it, with a willingness over many months to drive the process down a road leading directly to a strike upon the end of the current contract, with no off-ramps or diversions. On the other hand, the <a href="https://www.joc.com/article/ila-locals-prepping-for-coordinated-strike-at-us-east-gulf-coast-ports-5721164">disagreement over “economic” terms</a> — i.e., wages and benefits — and automation is the result of ocean carriers unafraid of the consequences of not conceding to union demands, as they had in many US longshore negotiations over the past 30 years. In their view, the chronically low productivity of US ports does not justify some of the highest port costs in the world and their inability to recoup those costs as they do elsewhere around the world. Thus, beginning with a brief mention inside a Nov. 7, 2023, <a href="https://ilaunion.org/ila-south-atlantic-and-gulf-coast-district-educational-conference-2023-opens-in-nashville-with-officers-focusing-remarks-on-future-negotiations/">press release</a> on an unrelated topic, the International Longshoremen’s Association (ILA) and its president Harold Daggett have been increasingly vocal in statements, essays and videos in preparing their rank and file and the broader public, as well as policymakers, for a strike. The union’s logic, so far correct, is that the Biden administration will be too concerned about alienating union voters just weeks away from the presidential election to <a href="https://www.joc.com/article/white-houses-executive-lever-to-prevent-port-strike-is-politically-toxic-5733927">force workers</a> back to work using the Taft-Hartley Act. “I don’t believe in Taft-Hartley,” President Joe Biden told reporters Sunday. In the absence of such a measure, because a dockworker strike would have a snowballing impact on the US economy, pressure will build on both sides as days turn into weeks, possibly such that the ILA could extract a deal it is happy with. Efficiency in the spotlight Although carriers, acting through multi-employer bargaining group the United States Maritime Alliance (USMX), are <a href="https://www.joc.com/article/ila-unmoved-by-latest-industry-leading-wage-offer-from-usmx-5703227">holding fast to a 32% wage increase</a>, the union could extract other face-saving concessions. Those include further limits on technology and automation, and guarantees to represent dockworkers in the US Southeast, a long-sought goal on which the union has made progress in recent months via litigation. But that carriers appear, at least so far, to be united in an unwillingness to reward the union for what they see as chronically low productivity, gaining such concessions may prove difficult even in the heat of a strike. Charleston is the highest-ranking US port on the <a href="https://documents1.worldbank.org/curated/en/099060324114539683/pdf/P17583313892300871be641a5ea7b90e0e6.pdf#:~:text=%E2%80%94Please%20cite%20the%20work%20as%20follows:%20The%20World%20Bank,%202024.">2023 Container Port Performance Index</a> published by the World Bank and S&amp;P Global, parent company of the Journal of Commerce, at No. 52, meaning no US ports are in the top 50 in efficiency globally. “The fact is that for the volumes that US ports handle, the cost-productivity relationship is among the lowest in the world,” said James Caradonna, executive vice president of the forwarder M&amp;R Spedag Group. “A lack of productivity and high cost is the main reason why carriers have not introduced larger ships on the trans-Pacific trade into the West and East coasts, thereby depriving their shippers of the cost savings that come from the lower unit costs and higher economies of scale that larger ships provide.” Furthermore, carriers have virtually no ability outside of a few small trade lanes to recoup US terminal operating costs, given that they are <a href="https://www.joc.com/article/lack-of-terminal-handling-charges-emerges-as-a-factor-in-ila-talks-5733652">unable to collect terminal handling charges (THCs)</a> as they do in almost all other ports around the world due to longstanding business practice in the US. If the carriers could impose THCs in the US, they could be as high as $500 per FEU, which would be the highest in the world; costs that the carriers can only currently pass along to US shippers as part of the base freight rate. Thus, when freight rates are high, port costs — along with other costs such as detention and demurrage — can be wholly or partly recouped, but during down markets, the carriers eat those costs. Shippers argue it is extreme carrier competition that led to their inability to recoup terminal handing fees. But from carriers’ points of view, the costs remain a sticking point within the context of these negotiations, as any concessions will come directly out of their pockets. Nevertheless, some believe the responsibility to avoid a strike — or end it if it begins — rests with the ocean carriers that comprise the majority of the USMX board. If the carriers wanted to, the logic goes, they could simply agree to the ILA’s demands for a 77% pay increase over the course of a new six-year contract. “I’m not asking for the world,” Daggett said in a <a href="https://www.linkedin.com/posts/joselmontoya_ilwu-logistics-supplychian-activity-7245916167620460546-tQci/?utm_source=share&amp;utm_medium=member_desktop">video posted on social media</a>. “They know what I want.” Settle or not? Settling with the union was the implicit suggestion of William Doyle, former US federal maritime commissioner and executive director of the Maryland Port Administration, who said it is the carriers who have the power to determine what happens next. “The 5 people in the world who can stop the madness to either avert or end a job action if it begins are the following,” Doyle wrote, listing the global CEOs of CMA CGM, MSC, COSCO, Ocean Network Express and Maersk by name, in a Saturday LinkedIn post that has since been removed. Daggett also believes the ball is in the carriers’ court. In his view, his members deserve a share of the record profits earned by the carriers during the pandemic — estimated at a combined $400 billion — for showing up on the docks and keeping trade flowing during a historic national emergency. “Everybody went to work during COVID,” he said in the video. “Nobody stayed home. Well, I want to be compensated for that.” To those ends, the ILA has remained steadfast in advancing toward a strike. After saying repeatedly that it would not work beyond the expiration of the current contract on Sept. 30, the union <a href="https://www.joc.com/article/ila-halts-talks-over-new-contract-until-maersk-apm-clarify-port-it-projects-5244243">suspended negotiations in June</a> and has reportedly declined more than 10 overtures by USMX to restart negotiations. That led the employer group to <a href="https://www.joc.com/article/usmx-tries-to-force-ila-back-to-contract-talks-with-nlrb-complaint-5736646">petition the National Labor Relations Board</a> to force the union back to the table on Sept. 26, citing the ILA’s “repeated refusal to come to the table and bargain on a new Master Contract.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

How did nearly 50 years of labor peace on the US East and Gulf coasts, so consistent that it was a key factor in a multiyear erosion of West Coast market share, bring the industry to the eve of a strike? Although the impasse may still see an 11th hour resolution, that appears increasingly unlikely given that the union has announced it will walk off the job at midnight. Even if averted, the threat of a strike has spurred importers to frontload shipments by two months or more to avoid having holiday season goods stuck outside an East or Gulf coast port. What got the two sides to this place was two worldviews, both of which were heavily influenced by the COVID-19 pandemic and its impact on containerized shipping. On one hand, the impasse in talks over a new coastwide contract is the result of a union and its powerful leader sensing a historic moment and seizing it, with a willingness over many months to drive the process down a road leading directly to a strike upon the end of the current contract, with no off-ramps or diversions. On the other hand, the disagreement over “economic” terms — i.e., wages and benefits — and automation is the result of ocean carriers unafraid of the consequences of not conceding to union demands, as they had in many US longshore negotiations over the past 30 years. In their view, the chronically low productivity of US ports does not justify some of the highest port costs in the world and their inability to recoup those costs as they do elsewhere around the world. Thus, beginning with a brief mention inside a Nov. 7, 2023, press release on an unrelated topic, the International Longshoremen’s Association (ILA) and its president Harold Daggett have been increasingly vocal in statements, essays and videos in preparing their rank and file and the broader public, as well as policymakers, for a strike. The union’s logic, so far correct, is that the Biden administration will be too concerned about alienating union voters just weeks away from the presidential election to force workers back to work using the Taft-Hartley Act. “I don’t believe in Taft-Hartley,” President Joe Biden told reporters Sunday. In the absence of such a measure, because a dockworker strike would have a snowballing impact on the US economy, pressure will build on both sides as days turn into weeks, possibly such that the ILA could extract a deal it is happy with. Efficiency in the spotlight Although carriers, acting through multi-employer bargaining group the United States Maritime Alliance (USMX), are holding fast to a 32% wage increase , the union could extract other face-saving concessions. Those include further limits on technology and automation, and guarantees to represent dockworkers in the US Southeast, a long-sought goal on which the union has made progress in recent months via litigation. But that carriers appear, at least so far, to be united in an unwillingness to reward the union for what they see as chronically low productivity, gaining such concessions may prove difficult even in the heat of a strike. Charleston is the highest-ranking US port on the 2023 Container Port Performance Index published by the World Bank and S&P Global, parent company of the Journal of Commerce, at No. 52, meaning no US ports are in the top 50 in efficiency globally. “The fact is that for the volumes that US ports handle, the cost-productivity relationship is among the lowest in the world,” said James Caradonna, executive vice president of the forwarder M&R Spedag Group. “A lack of productivity and high cost is the main reason why carriers have not introduced larger ships on the trans-Pacific trade into the West and East coasts, thereby depriving their shippers of the cost savings that come from the lower unit costs and higher economies of scale that larger ships provide.” Furthermore, carriers have virtually no ability outside of a few small trade lanes to recoup US terminal operating costs, given that they are unable to collect terminal handling charges (THCs) as they do in almost all other ports around the world due to longstanding business practice in the US. If the carriers could impose THCs in the US, they could be as high as $500 per FEU, which would be the highest in the world; costs that the carriers can only currently pass along to US shippers as part of the base freight rate. Thus, when freight rates are high, port costs — along with other costs such as detention and demurrage — can be wholly or partly recouped, but during down markets, the carriers eat those costs. Shippers argue it is extreme carrier competition that led to their inability to recoup terminal handing fees. But from carriers’ points of view, the costs remain a sticking point within the context of these negotiations, as any concessions will come directly out of their pockets. Nevertheless, some believe the responsibility to avoid a strike — or end it if it begins — rests with the ocean carriers that comprise the majority of the USMX board. If the carriers wanted to, the logic goes, they could simply agree to the ILA’s demands for a 77% pay increase over the course of a new six-year contract. “I’m not asking for the world,” Daggett said in a video posted on social media . “They know what I want.” Settle or not? Settling with the union was the implicit suggestion of William Doyle, former US federal maritime commissioner and executive director of the Maryland Port Administration, who said it is the carriers who have the power to determine what happens next. “The 5 people in the world who can stop the madness to either avert or end a job action if it begins are the following,” Doyle wrote, listing the global CEOs of CMA CGM, MSC, COSCO, Ocean Network Express and Maersk by name, in a Saturday LinkedIn post that has since been removed. Daggett also believes the ball is in the carriers’ court. In his view, his members deserve a share of the record profits earned by the carriers during the pandemic — estimated at a combined $400 billion — for showing up on the docks and keeping trade flowing during a historic national emergency. “Everybody went to work during COVID,” he said in the video. “Nobody stayed home. Well, I want to be compensated for that.” To those ends, the ILA has remained steadfast in advancing toward a strike. After saying repeatedly that it would not work beyond the expiration of the current contract on Sept. 30, the union suspended negotiations in June and has reportedly declined more than 10 overtures by USMX to restart negotiations. That led the employer group to petition the National Labor Relations Board to force the union back to the table on Sept. 26, citing the ILA’s “repeated refusal to come to the table and bargain on a new Master Contract.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

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