<div class="phx-topic abstract-wrapper">As damage from Helene and Milton is being tallied, logistics experts say the storms won’t do much to accelerate spot and contract truckload pricing in the long term. </div>

As damage from Helene and Milton is being tallied, logistics experts say the storms won’t do much to accelerate spot and contract truckload pricing in the long term.

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<div class="phx-topic">The damage caused by hurricanes Helene and Milton will take months to fully repair, but the impact on freight markets and truckload pricing will not be as great as initially believed, logistics experts told the Journal of Commerce. “We will see an immediate increase in relief activity, and that will drive an inbound spot market surge” in the areas affected by Helene and Milton, Andy Dyer, CEO at Atlanta-based third-party logistics provider (3PL) AFS Logistics, said in an interview Thursday. However, despite <a href="https://www.joc.com/article/back-to-back-hurricanes-roil-us-truck-spot-market-pushing-up-rates-5745302">increases in spot market pricing</a> for dry-van, refrigerated and flatbed tractor-trailers last week, Dyer doesn’t believe relief efforts from the back-to-back hurricanes will siphon off enough trucks to drive up spot pricing beyond the battered Southeast. “With utmost compassion for all the individuals affected, the regions where these hurricanes hit are consumption markets, not production markets,” unlike Houston, which was flooded by Hurricane Harvey in 2017, Dyer said. ”I don’t see this as the beginning of a long-term freight-rate recovery” similar to the one seen in 2017 after Harvey and Hurricane Irma struck Texas and Florida within a month of each other,” he said. “It’s what everybody wants, but this isn’t it.” Dyer was joined by others who rejected a simple comparison between the back-to-back hurricanes of 2017 and this year’s Helene and Milton. “We were already in a bullish truckload spot market when Harvey struck [in August 2017], with freight volumes rising,” said Jason Miller, the Eli Broad professor of supply chain management at Michigan State University and a Journal of Commerce analyst. The current spot market is still traveling along a pricing bottom reached more than a year ago. “I don’t see these hurricanes as being the thing that shifts the freight market in a substantial manner,” Miller said. <h3>Short-term impact </h3>The bulk of the pricing impact will be felt in the immediate post-storm period as relief supplies head south, said David Spencer, vice president of market intelligence at Arrive Logistics, a 3PL in Austin, Texas. But a temporary pricing surge will eventually fade, he said. “While, in some cases, these storms may have been enough to disrupt routing guides, current market fundamentals, including a large contract-to-spot rate spread, should not result in much more than a short-lived surge in demand,” Spencer said. He said he does not expect year-over-year spot rate increases higher than 5% in the fourth quarter. An uptick in pricing may still constrain the overall market by keeping excess capacity on the road. “The recent spot rate volatility could actually work to help keep carriers on the brink of failure in the market longer due to increased spot opportunities,” he said. Spencer expects the increase in dry-van contract rates to reach a peak of 4% to 6% in the fourth quarter of 2025, while spot rates will reach a peak increase of 11% to 13% in the third quarter. <h3>Absorbing capacity </h3>Storm recovery efforts will command a significant amount of truck capacity, but there is more truck capacity available in 2024 than there was after the 2017 hurricanes. “We are still oversupplied to the tune of 100,000 to 120,000 carrier authorities,” Kendra Tucker, CEO of Truckstop.com, said at the Journal of Commerce 2024 Inland Distribution Conference last week. New entrants flooded the market from 2020 through 2022 and the number of carriers with active operating authorities has dropped since then, but “it’s still too many, just given the level of volume that we’ve got,” Tucker said. Kent Williams of Averitt, a less-than-truckload (LTL) and truckload carrier based in Cookeville, Tenn., is slightly more optimistic. “I think the impact of the hurricanes will move the needle on capacity,” although not by much, he told the Journal of Commerce. “I don’t think we’ll go all of a sudden from excess capacity and depressed rates to a market reset,” he said. “We may move closer to a balance in supply and demand.” Capacity can tighten even if trucks aren’t taken out of the market, Williams pointed out. “We’ve had to change routes and transit times because what was once doable under the driver hours of service rules is no longer doable,” he said. For example, LTL truck drivers who used to take Interstate 40 between Charlotte, NC, and Nashville are now rerouting through Atlanta, adding hours and miles to their trip. “That hasn’t affected our service standards between Charlotte and Nashville, but some routes to points on the perimeter can no longer be serviced the next day,” Williams said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The damage caused by hurricanes Helene and Milton will take months to fully repair, but the impact on freight markets and truckload pricing will not be as great as initially believed, logistics experts told the Journal of Commerce. “We will see an immediate increase in relief activity, and that will drive an inbound spot market surge” in the areas affected by Helene and Milton, Andy Dyer, CEO at Atlanta-based third-party logistics provider (3PL) AFS Logistics, said in an interview Thursday. However, despite increases in spot market pricing for dry-van, refrigerated and flatbed tractor-trailers last week, Dyer doesn’t believe relief efforts from the back-to-back hurricanes will siphon off enough trucks to drive up spot pricing beyond the battered Southeast. “With utmost compassion for all the individuals affected, the regions where these hurricanes hit are consumption markets, not production markets,” unlike Houston, which was flooded by Hurricane Harvey in 2017, Dyer said. ”I don’t see this as the beginning of a long-term freight-rate recovery” similar to the one seen in 2017 after Harvey and Hurricane Irma struck Texas and Florida within a month of each other,” he said. “It’s what everybody wants, but this isn’t it.” Dyer was joined by others who rejected a simple comparison between the back-to-back hurricanes of 2017 and this year’s Helene and Milton. “We were already in a bullish truckload spot market when Harvey struck [in August 2017], with freight volumes rising,” said Jason Miller, the Eli Broad professor of supply chain management at Michigan State University and a Journal of Commerce analyst. The current spot market is still traveling along a pricing bottom reached more than a year ago. “I don’t see these hurricanes as being the thing that shifts the freight market in a substantial manner,” Miller said. Short-term impact The bulk of the pricing impact will be felt in the immediate post-storm period as relief supplies head south, said David Spencer, vice president of market intelligence at Arrive Logistics, a 3PL in Austin, Texas. But a temporary pricing surge will eventually fade, he said. “While, in some cases, these storms may have been enough to disrupt routing guides, current market fundamentals, including a large contract-to-spot rate spread, should not result in much more than a short-lived surge in demand,” Spencer said. He said he does not expect year-over-year spot rate increases higher than 5% in the fourth quarter. An uptick in pricing may still constrain the overall market by keeping excess capacity on the road. “The recent spot rate volatility could actually work to help keep carriers on the brink of failure in the market longer due to increased spot opportunities,” he said. Spencer expects the increase in dry-van contract rates to reach a peak of 4% to 6% in the fourth quarter of 2025, while spot rates will reach a peak increase of 11% to 13% in the third quarter. Absorbing capacity Storm recovery efforts will command a significant amount of truck capacity, but there is more truck capacity available in 2024 than there was after the 2017 hurricanes. “We are still oversupplied to the tune of 100,000 to 120,000 carrier authorities,” Kendra Tucker, CEO of Truckstop.com, said at the Journal of Commerce 2024 Inland Distribution Conference last week. New entrants flooded the market from 2020 through 2022 and the number of carriers with active operating authorities has dropped since then, but “it’s still too many, just given the level of volume that we’ve got,” Tucker said. Kent Williams of Averitt, a less-than-truckload (LTL) and truckload carrier based in Cookeville, Tenn., is slightly more optimistic. “I think the impact of the hurricanes will move the needle on capacity,” although not by much, he told the Journal of Commerce. “I don’t think we’ll go all of a sudden from excess capacity and depressed rates to a market reset,” he said. “We may move closer to a balance in supply and demand.” Capacity can tighten even if trucks aren’t taken out of the market, Williams pointed out. “We’ve had to change routes and transit times because what was once doable under the driver hours of service rules is no longer doable,” he said. For example, LTL truck drivers who used to take Interstate 40 between Charlotte, NC, and Nashville are now rerouting through Atlanta, adding hours and miles to their trip. “That hasn’t affected our service standards between Charlotte and Nashville, but some routes to points on the perimeter can no longer be serviced the next day,” Williams said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Truckload

Truck brokers

Surface

Hurricanes not seen as truckload pricing catalyst despite relief demand

<div class="phx-topic abstract-wrapper">The move comes after two UK government officials sharply criticized the March 2022 mass layoffs at DP World subsidiary P&amp;O Ferries while launching new legislation to protect seafarer rights.</div>

The move comes after two UK government officials sharply criticized the March 2022 mass layoffs at DP World subsidiary P&O Ferries while launching new legislation to protect seafarer rights.

<div class="phx-topic">Dubai-headquartered port operator DP World has postponed plans to announce a major expansion of its London Gateway container terminal following criticism earlier this week by senior British government officials of a DP World subsidiary, P&amp;O Ferries. Sultan Ahmed bin Sulayem, DP World group chairman and CEO, was to announce plans to build two additional berths at London Gateway, part of a £1 billion ($1.3 billion), 10-year expansion of the port, at an investment summit in London Monday. The two berths are the final phase of the six-berth terminal. But bin Sulayem ordered the cancellation of Monday’s announcement and a review of DP World’s investment at London Gateway, television news outlet Sky News reported Friday. He also cancelled plans to attend the meeting, organized by the UK government, to which hundreds of business leaders and investors have been invited as part of efforts to lure more investment to the UK, Sky News said. DP World declined to comment.The move by DP World comes as work is nearing completion on London Gateway’s $460 million fourth berth, which is due to become fully operational early next year and boost container handling capacity by about 1 million TEUs, to 3.4 million TEUs a year. Bin Sulayem’s anger follows comments made Wednesday by two UK government officials, Deputy Prime Minister Angela Rayner and Transport Secretary Louise Haigh, against P&amp;O Ferries when the government launched new legislation to protect seafarer rights. The new labor laws are intended to avoid a repeat of March 2022 when P&amp;O Ferries sacked nearly 800 sea staff and replaced them with agency workers in an attempt to staunch continuing losses. “What we saw with P&amp;O Ferries was an outrageous example of manipulation by an employer and exactly why we’re taking bold action to improve job security in the UK,” Rayner said while commenting on the new seafarer laws. Describing P&amp;O Ferries as a “rogue operator,” Haigh added: “The mass sacking by P&amp;O Ferries was a national scandal which can never be allowed to happen again. These measures will make sure it doesn’t.” The layoffs were strongly criticized and led to a temporary halt in ferry services between England and Rotterdam and England and Calais in France while agency staff were recruited. Under the new laws, which take effect Dec. 1, seafarers will be paid a minimum wage while shipping firms planning to dismiss 20 or more employees will be legally required to notify the government or face potential prosecution or an unlimited fine. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Dubai-headquartered port operator DP World has postponed plans to announce a major expansion of its London Gateway container terminal following criticism earlier this week by senior British government officials of a DP World subsidiary, P&O Ferries. Sultan Ahmed bin Sulayem, DP World group chairman and CEO, was to announce plans to build two additional berths at London Gateway, part of a £1 billion ($1.3 billion), 10-year expansion of the port, at an investment summit in London Monday. The two berths are the final phase of the six-berth terminal. But bin Sulayem ordered the cancellation of Monday’s announcement and a review of DP World’s investment at London Gateway, television news outlet Sky News reported Friday. He also cancelled plans to attend the meeting, organized by the UK government, to which hundreds of business leaders and investors have been invited as part of efforts to lure more investment to the UK, Sky News said. DP World declined to comment. The move by DP World comes as work is nearing completion on London Gateway’s $460 million fourth berth, which is due to become fully operational early next year and boost container handling capacity by about 1 million TEUs, to 3.4 million TEUs a year. Bin Sulayem’s anger follows comments made Wednesday by two UK government officials, Deputy Prime Minister Angela Rayner and Transport Secretary Louise Haigh, against P&O Ferries when the government launched new legislation to protect seafarer rights. The new labor laws are intended to avoid a repeat of March 2022 when P&O Ferries sacked nearly 800 sea staff and replaced them with agency workers in an attempt to staunch continuing losses. “What we saw with P&O Ferries was an outrageous example of manipulation by an employer and exactly why we’re taking bold action to improve job security in the UK,” Rayner said while commenting on the new seafarer laws. Describing P&O Ferries as a “rogue operator,” Haigh added: “The mass sacking by P&O Ferries was a national scandal which can never be allowed to happen again. These measures will make sure it doesn’t.” The layoffs were strongly criticized and led to a temporary halt in ferry services between England and Rotterdam and England and Calais in France while agency staff were recruited. Under the new laws, which take effect Dec. 1, seafarers will be paid a minimum wage while shipping firms planning to dismiss 20 or more employees will be legally required to notify the government or face potential prosecution or an unlimited fine. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Port News

Marine terminals

International ports

Maritime

DP World postpones planned announcement of London Gateway expansion

<div class="phx-topic abstract-wrapper">Carriers began pulling the charges shortly after the end of the strike was announced last week, while pressure to do so came even earlier from Transportation Secretary Pete Buttigieg.</div>

Carriers began pulling the charges shortly after the end of the strike was announced last week, while pressure to do so came even earlier from Transportation Secretary Pete Buttigieg.

<div class="phx-topic">Ocean carriers have dropped ad hoc surcharges that were linked to last week’s short-lived longshore strike along the US East and Gulf coasts, adding downward pressure to freight rates that have fallen sharply in recent weeks. “The strike fees are dead,” one forwarder told the Journal of Commerce. Carriers began pulling the charges shortly after <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">the end of the strike was announced on Oct. 3</a>. Pressure to do so came even earlier when Transportation Secretary Pete Buttigieg suggested that carriers withdraw any surcharges, saying that “no one should exploit a disruption for profit.” Liners began implementing surcharges on containers whose movement would be disrupted by the International Longshoremen’s Association (ILA) strike. Some of the fees were hefty — Ocean Network Express (ONE), for example, announced a “congestion” surcharge of up to $2,000 per FEU. ONE, CMA CGM and OOCL are among carriers who have withdrawn the surcharges. “The strike-related surcharges were cancelled relatively quickly considering the port operation situation at ports was better than initially expected,” said a carrier source. Added a second freight forwarder: “Contract holders are receiving cancellations of the surcharges. We had most of ours sent late last week and on Monday.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div>Spot rates for Asia to the East Coast were pegged at $4,300 per FEU this week, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. That’s down from $7,350 per FEU on Sept. 6. Ex-Asia cargo into the West Coast was assessed at $4,200 per FEU — marking the narrowest differential with the East Coast ever observed on the Platts index. For the second half of October, some sources have reported observing offers on the two lanes at total parity. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Ocean carriers have dropped ad hoc surcharges that were linked to last week’s short-lived longshore strike along the US East and Gulf coasts, adding downward pressure to freight rates that have fallen sharply in recent weeks. “The strike fees are dead,” one forwarder told the Journal of Commerce. Carriers began pulling the charges shortly after the end of the strike was announced on Oct. 3 . Pressure to do so came even earlier when Transportation Secretary Pete Buttigieg suggested that carriers withdraw any surcharges, saying that “no one should exploit a disruption for profit.” Liners began implementing surcharges on containers whose movement would be disrupted by the International Longshoremen’s Association (ILA) strike. Some of the fees were hefty — Ocean Network Express (ONE), for example, announced a “congestion” surcharge of up to $2,000 per FEU. ONE, CMA CGM and OOCL are among carriers who have withdrawn the surcharges. “The strike-related surcharges were cancelled relatively quickly considering the port operation situation at ports was better than initially expected,” said a carrier source. Added a second freight forwarder: “Contract holders are receiving cancellations of the surcharges. We had most of ours sent late last week and on Monday.” Spot rates for Asia to the East Coast were pegged at $4,300 per FEU this week, according to Platts, a sister company of the Journal of Commerce within S&P Global. That’s down from $7,350 per FEU on Sept. 6. Ex-Asia cargo into the West Coast was assessed at $4,200 per FEU — marking the narrowest differential with the East Coast ever observed on the Platts index. For the second half of October, some sources have reported observing offers on the two lanes at total parity. Contact Laura Robb at laura.robb@spglobal.com .

Container lines

Trans-Pacific

Longshore labor

Strike surcharges disappear as spot rates for US West, East coasts near parity

<div class="phx-topic abstract-wrapper">Some have speculated that specific issues were raised that persuaded at least some of the carrier group CEOs to direct their representatives on the USMX to boost their offer of a pay increase.</div>

Some have speculated that specific issues were raised that persuaded at least some of the carrier group CEOs to direct their representatives on the USMX to boost their offer of a pay increase.

<div class="phx-topic"><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5747257_0.1.jpg"></img></div>If the Biden administration did indeed force the tentative contract deal ending last week’s longshore strike, how exactly did it happen? In other words, what did the White House chief of staff tell ocean carrier group CEOs on a conference call at 5:30 a.m. Washington time on Oct. 3 that within hours resulted in a substantial increase in the wage offer made to the International Longshoremen’s Association (ILA), <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">ending the strike after three days</a>?Some have speculated that specific issues were raised that persuaded at least some of the group CEOs to direct their representatives on the United States Maritime Alliance (USMX) to boost their offer of a pay increase from 50% to 62% over the course of a new six-year contract. The White House has leverage to deploy, such as being able to increase scrutiny of or even reject foreign acquisitions of US marine terminals. The Department of Justice for decades has made no secret of its dislike of ocean shipping alliances, including the remnants of antitrust immunity, chiding any vote by the Federal Maritime Commission (FMC) that allows massive vessel-sharing agreements to take effect rather than seeking a federal injunction to block them. <h3>Relief for White House, Harris campaign </h3>Whatever was said on the call was enough to get the wage increase offer high enough for the ILA to call off its strike and, to the relief of the White House and Kamala Harris, take the issue off the table as a liability for Democrats in the presidential campaign. <a href="https://www.washingtonpost.com/business/2024/10/04/biden-white-house-harris-port-strike/">The Washington Post reported</a> that White House chief of staff Jeff Zients delivered a “stark ultimatum” to the carriers, saying he planned to inform President Joe Biden that a deal had been reached, even though the carriers had agreed to “no such thing.” In doing so, he placed the ball squarely in the carriers’ court to either go along with the “deal” Biden would soon announce to end the strike or to publicly contradict him. The latter was not an option. It would have put the carriers in the risky and ultimately impossible position of being an active player in the election just over a month before the vote. Refusing to give the ILA the raise it wanted to end the strike, with the result that the stoppage continued and economic damage piled up while Biden and the Harris campaign took the blame, could possibly, depending on how the cards fell, have resulted in the carriers themselves being blamed for determining the outcome of the election. That is the last thing a group of non-US based ocean carriers, who have few political friends in the US to begin with, would want. A senior carrier source said container lines would not want to be seen as meddling in any way in US politics. Taking the logic further, with Democrats making the case that the election of Donald Trump could spell the end of democracy in the US, getting anywhere near such a radioactive issue — if Trump prevailing was indeed the outcome — would be to step into dangerous territory indeed. Carriers wanted no part of it. <h3>Carriers live to fight another day </h3>In the end, they had no choice but to accept their fate by giving the union an historic wage increase and living to fight another day. That day could come soon enough; carriers have called the deal “provisional” pending resolution of other issues including automation, royalties and job jurisdiction that will still need to be negotiated ahead of the new Jan. 15 deadline. But the ILA at the very least got most of the increase it was seeking, validating a political strategy set into motion months ago by the union, which walked away from negotiations in June and never returned. Biden, in announcing the reopening of the ports, said “collective bargaining works.” But in reality, at no time since June — up to and including the moment the deal to end the strike was announced — did USMX and the ILA meet face to face despite repeated attempts by the USMX to do so. The ILA calculated correctly that Biden, an overtly pro-labor president, would never invoke the Taft-Hartley Act to force the union back to the table, which would have gone against his values and history and alienated organized labor in the heat of the presidential campaign. They also reasoned, correctly, that Biden and his team would bring intense pressure to bear on ocean carriers by conveniently assigning blame to them for any strike-related port congestion and inflation, as had been done during the pandemic. In the end of round one — pending resolution of the other issues — the winners were the union, the White House and the Harris campaign. The price will be paid by carriers and, to the extent they can pass the higher costs along, US importers and exporters. “I want to thank you for what you did for my union to help us achieve record wage success in negotiations [with the USMX],” ILA President Harold Daggett wrote to Biden on Oct. 7. “The ILA is grateful for your words and deeds.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

If the Biden administration did indeed force the tentative contract deal ending last week’s longshore strike, how exactly did it happen? In other words, what did the White House chief of staff tell ocean carrier group CEOs on a conference call at 5:30 a.m. Washington time on Oct. 3 that within hours resulted in a substantial increase in the wage offer made to the International Longshoremen’s Association (ILA), ending the strike after three days ? Some have speculated that specific issues were raised that persuaded at least some of the group CEOs to direct their representatives on the United States Maritime Alliance (USMX) to boost their offer of a pay increase from 50% to 62% over the course of a new six-year contract. The White House has leverage to deploy, such as being able to increase scrutiny of or even reject foreign acquisitions of US marine terminals. The Department of Justice for decades has made no secret of its dislike of ocean shipping alliances, including the remnants of antitrust immunity, chiding any vote by the Federal Maritime Commission (FMC) that allows massive vessel-sharing agreements to take effect rather than seeking a federal injunction to block them. Relief for White House, Harris campaign Whatever was said on the call was enough to get the wage increase offer high enough for the ILA to call off its strike and, to the relief of the White House and Kamala Harris, take the issue off the table as a liability for Democrats in the presidential campaign. The Washington Post reported that White House chief of staff Jeff Zients delivered a “stark ultimatum” to the carriers, saying he planned to inform President Joe Biden that a deal had been reached, even though the carriers had agreed to “no such thing.” In doing so, he placed the ball squarely in the carriers’ court to either go along with the “deal” Biden would soon announce to end the strike or to publicly contradict him. The latter was not an option. It would have put the carriers in the risky and ultimately impossible position of being an active player in the election just over a month before the vote. Refusing to give the ILA the raise it wanted to end the strike, with the result that the stoppage continued and economic damage piled up while Biden and the Harris campaign took the blame, could possibly, depending on how the cards fell, have resulted in the carriers themselves being blamed for determining the outcome of the election. That is the last thing a group of non-US based ocean carriers, who have few political friends in the US to begin with, would want. A senior carrier source said container lines would not want to be seen as meddling in any way in US politics. Taking the logic further, with Democrats making the case that the election of Donald Trump could spell the end of democracy in the US, getting anywhere near such a radioactive issue — if Trump prevailing was indeed the outcome — would be to step into dangerous territory indeed. Carriers wanted no part of it. Carriers live to fight another day In the end, they had no choice but to accept their fate by giving the union an historic wage increase and living to fight another day. That day could come soon enough; carriers have called the deal “provisional” pending resolution of other issues including automation, royalties and job jurisdiction that will still need to be negotiated ahead of the new Jan. 15 deadline. But the ILA at the very least got most of the increase it was seeking, validating a political strategy set into motion months ago by the union, which walked away from negotiations in June and never returned. Biden, in announcing the reopening of the ports, said “collective bargaining works.” But in reality, at no time since June — up to and including the moment the deal to end the strike was announced — did USMX and the ILA meet face to face despite repeated attempts by the USMX to do so. The ILA calculated correctly that Biden, an overtly pro-labor president, would never invoke the Taft-Hartley Act to force the union back to the table, which would have gone against his values and history and alienated organized labor in the heat of the presidential campaign. They also reasoned, correctly, that Biden and his team would bring intense pressure to bear on ocean carriers by conveniently assigning blame to them for any strike-related port congestion and inflation, as had been done during the pandemic. In the end of round one — pending resolution of the other issues — the winners were the union, the White House and the Harris campaign. The price will be paid by carriers and, to the extent they can pass the higher costs along, US importers and exporters. “I want to thank you for what you did for my union to help us achieve record wage success in negotiations [with the USMX],” ILA President Harold Daggett wrote to Biden on Oct. 7. “The ILA is grateful for your words and deeds.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

North American ports

Behind-the-scenes White House arm twisting got ILA wage deal done

<div class="phx-topic abstract-wrapper">Port officials say their facilities did not experience widespread flooding but are still being affected by power issues, adding that port tenants will make independent decisions on when to resume their operations.</div>

Port officials say their facilities did not experience widespread flooding but are still being affected by power issues, adding that port tenants will make independent decisions on when to resume their operations.

<div class="phx-topic">Most ports in Florida have returned to normal operations in the wake of Hurricane Milton, although Port Tampa Bay remained effectively shut Friday due to a lack of power. Tampa Bay port officials say the port did not experience widespread flooding but is still being affected by power issues, adding that port tenants will make independent decisions about when to resume their operations. Milton made landfall along the central Gulf Coast of Florida late Wednesday. “We are working with our fuel terminal operators to assess their facilities and learn when they will be able to return to service,” Port Tampa Bay said in an advisory posted on its website. “Our port fuel terminal partners have fuel ready to deploy to our region, but many remain without power. We are hopeful the fuel terminals can be re-established [Friday].” Officials with the Jacksonville Port Authority said Milton was not a significant weather event for them and reopened the Port of Jacksonville’s (Jaxport’s) main gates on Friday morning after completing a post-storm assessment of facilities. The Port of Miami, south of Milton’s path, reopened as scheduled on Thursday and has not seen any operational impacts nor has it hosted any diverted cargo vessels. Port Everglades also reopened on Thursday. “All waterside and landside restrictions were lifted by the U.S. Coast Guard [Thursday] morning,” the Port of Miami said in a statement to the Journal of Commerce. “There were only two days of cargo and cruise vessel traffic restrictions. Cargo yard container operations and rail operations remained open ... There are no diverted cargo vessels. No impacts.” Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Most ports in Florida have returned to normal operations in the wake of Hurricane Milton, although Port Tampa Bay remained effectively shut Friday due to a lack of power. Tampa Bay port officials say the port did not experience widespread flooding but is still being affected by power issues, adding that port tenants will make independent decisions about when to resume their operations. Milton made landfall along the central Gulf Coast of Florida late Wednesday. “We are working with our fuel terminal operators to assess their facilities and learn when they will be able to return to service,” Port Tampa Bay said in an advisory posted on its website. “Our port fuel terminal partners have fuel ready to deploy to our region, but many remain without power. We are hopeful the fuel terminals can be re-established [Friday].” Officials with the Jacksonville Port Authority said Milton was not a significant weather event for them and reopened the Port of Jacksonville’s (Jaxport’s) main gates on Friday morning after completing a post-storm assessment of facilities. The Port of Miami, south of Milton’s path, reopened as scheduled on Thursday and has not seen any operational impacts nor has it hosted any diverted cargo vessels. Port Everglades also reopened on Thursday. “All waterside and landside restrictions were lifted by the U.S. Coast Guard [Thursday] morning,” the Port of Miami said in a statement to the Journal of Commerce. “There were only two days of cargo and cruise vessel traffic restrictions. Cargo yard container operations and rail operations remained open ... There are no diverted cargo vessels. No impacts.” Contact Laura Robb at laura.robb@spglobal.com .

Port Tampa Bay effectively shut due to power outage in aftermath of Milton

<div class="phx-topic abstract-wrapper">Ocean carriers are trying to balance huge investment in their order books with a lack of certainty over the availability of green fuels and a slow-moving regulatory regime critical to supporting shipping’s net-zero transition.</div>

Ocean carriers are trying to balance huge investment in their order books with a lack of certainty over the availability of green fuels and a slow-moving regulatory regime critical to supporting shipping’s net-zero transition.

<div class="phx-topic">The interim target laid out last year by global maritime regulators calling for a 20% reduction in ship emissions by 2030 has spurred ocean carriers to order 1.2 million TEUs of dual-fuel ship capacity this year capable of burning low- to zero-emission fuels such as methanol or liquified natural gas (LNG), the low-emission fuels with the greatest availability. The vessels come with a significant price tag. The 16,592-TEU dual-fuel methanol-capable Alexandra Maersk that arrived this week in Felixstowe on its maiden voyage, the sixth in an 18-ship order, was built at a cost of more than $150 million. “The carriers are trying to make the best decisions they can based on staying in business and knowing that they’re really trying to reduce emissions, so the dual-fuel pathway is almost the only way that they can go right now,” Angie Farrag-Thibault, associate vice president of global transportation at the not-for-profit Environmental Defence Fund, told the Journal of Commerce this week. About 70% of the total 1.7 million TEUs of ship orders made so far this year were for ships capable of sailing on methanol, LNG or hydrogen, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Growing in tandem with the alternative fuel order book is the urgent need for global regulatory support from the International Maritime Organization (IMO) that is essential to drive an accelerated and large-scale shift to zero-emission fuels. <h3>Fuel availability the problem, not shipping: MSC </h3>Soren Toft, CEO of Mediterranean Shipping Co., this week took issue with the lack of regulatory direction over alternative fuels being provided to the industry. ”The real problem to make shipping green is the availability of fuel — it’s not a problem of the ship; it’s not a problem of the engine,” Toft told the International Association of Ports and Harbors’ (IAPH’s) World Ports Conference in Hamburg. “We have done our own best because we are not getting a lot of help and assistance from policymakers to say we should go this way or that way,” he added. “We are not fuel experts, but we have made a decision to go in the direction of LNG, mainly because we know LNG is available, and because we can see a potential pathway, certainly from fossil [fuels] to bio [fuel], but maybe one day to a synthetic LNG.” While regulatory progress at the IMO typically moves at a glacial pace — the interests of all 176 member states are seldom aligned — there were positive developments at the IMO’s Marine Environment Protection Committee (MEPC) that concluded its 82nd meeting in London last month. Member states appeared to get behind a global pricing mechanism and a marine fuel standard, with the meeting producing a draft legal text for ongoing talks around the <a href="https://www.joc.com/article/midterm-emissions-plan-to-take-center-stage-at-upcoming-imo-meeting-5731399">proposed mid-term measures</a> and how they would be implemented. The plan is to iron out differences and refine the draft text before its approval at MEPC 83 in April 2025 with adoption of the mid-term measures in autumn next year. If the IMO is not able to roll out the mid-term measures in October next year, there are fears the maritime industry will not be able to meet the interim targets. “A decision really must be made next year to make sure that the whole industry will be able to work against a time frame that enables them to stay in business, make the right decisions on buying their assets, but know that those fuels are going to come to market so they can actually run the ships,” Farrag-Thibault noted. <h3>Maersk makes LNG move </h3>The need to keep fuel options open and avoid being locked into one pathway was illustrated in <a href="https://www.joc.com/article/maersks-lng-order-hedges-bet-on-green-fuel-technology-ceo-5703200">a recent Maersk order for dual-fuel vessels totaling 800,000 TEUs</a> capable of sailing on methanol as well as LNG. Ordering LNG-capable ships was a deviation from Maersk’s deep dive into methanol, but Morten Bo Christiansen, the carrier’s head of decarbonization, said methanol would continue to play the leading role in the carriers’ efforts to meet its science-based emissions targets. “But we now believe that biomethane [a cleaner version of LNG] is going to play a meaningful role in the in the green future fuels mix and we need to tap into that market,” Christiansen told the Journal of Commerce in an interview this week. “We expect to get some biomethane in, but we are still relying mostly on methanol because we have a reasonable certainty that we can get the fuel at a reasonable cost,” he noted. Maersk has secured <a href="https://www.joc.com/article/maersk-signs-pact-to-develop-methanol-bunkering-at-japans-yokohama-port-5215332">a significant pipeline of green methanol</a>, but there is not the same certainty of supply for biomethane where production needs to be significantly scaled up. “The influence of first-movers has been critical, and it continues to be critical, but for the entire industry to change, we really need to see demand driven by the policy side as well,” Farrag-Thibault said. <h3>Narrowing the price gap </h3>Several global pricing mechanisms remain on the table at the IMO with the objective of closing the price gap between fossil fuels and the green alternatives. Methanol, for instance, is three to four times more expensive per ton than low sulfur fuel oil. Maersk CCO Karsten Kildahl acknowledged the cost reality for cargo owners that would be required to pay more as shipping transitioned to cleaner energy. But he said more than two-thirds of the carrier’s top 200 customers in any case had their own science-based targets that would have to be met. Transportation falls into the so-called “scope three” emissions category in which a company does not have direct control over the assets that contribute indirectly to its carbon footprint. “When we have an environment when we can penalize the black fuels and support the green fuels and take the dilemma away from the customers, why not do it?” Kildahl told the Journal of Commerce in Felixstowe this week. “The green fuel is far more expensive than tradition fuel and we would like to take the difference between the two fuels and nullify that,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The interim target laid out last year by global maritime regulators calling for a 20% reduction in ship emissions by 2030 has spurred ocean carriers to order 1.2 million TEUs of dual-fuel ship capacity this year capable of burning low- to zero-emission fuels such as methanol or liquified natural gas (LNG), the low-emission fuels with the greatest availability. The vessels come with a significant price tag. The 16,592-TEU dual-fuel methanol-capable Alexandra Maersk that arrived this week in Felixstowe on its maiden voyage, the sixth in an 18-ship order, was built at a cost of more than $150 million. “The carriers are trying to make the best decisions they can based on staying in business and knowing that they’re really trying to reduce emissions, so the dual-fuel pathway is almost the only way that they can go right now,” Angie Farrag-Thibault, associate vice president of global transportation at the not-for-profit Environmental Defence Fund, told the Journal of Commerce this week. About 70% of the total 1.7 million TEUs of ship orders made so far this year were for ships capable of sailing on methanol, LNG or hydrogen, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Growing in tandem with the alternative fuel order book is the urgent need for global regulatory support from the International Maritime Organization (IMO) that is essential to drive an accelerated and large-scale shift to zero-emission fuels. Fuel availability the problem, not shipping: MSC Soren Toft, CEO of Mediterranean Shipping Co., this week took issue with the lack of regulatory direction over alternative fuels being provided to the industry. ”The real problem to make shipping green is the availability of fuel — it’s not a problem of the ship; it’s not a problem of the engine,” Toft told the International Association of Ports and Harbors’ (IAPH’s) World Ports Conference in Hamburg. “We have done our own best because we are not getting a lot of help and assistance from policymakers to say we should go this way or that way,” he added. “We are not fuel experts, but we have made a decision to go in the direction of LNG, mainly because we know LNG is available, and because we can see a potential pathway, certainly from fossil [fuels] to bio [fuel], but maybe one day to a synthetic LNG.” While regulatory progress at the IMO typically moves at a glacial pace — the interests of all 176 member states are seldom aligned — there were positive developments at the IMO’s Marine Environment Protection Committee (MEPC) that concluded its 82nd meeting in London last month. Member states appeared to get behind a global pricing mechanism and a marine fuel standard, with the meeting producing a draft legal text for ongoing talks around the proposed mid-term measures and how they would be implemented. The plan is to iron out differences and refine the draft text before its approval at MEPC 83 in April 2025 with adoption of the mid-term measures in autumn next year. If the IMO is not able to roll out the mid-term measures in October next year, there are fears the maritime industry will not be able to meet the interim targets. “A decision really must be made next year to make sure that the whole industry will be able to work against a time frame that enables them to stay in business, make the right decisions on buying their assets, but know that those fuels are going to come to market so they can actually run the ships,” Farrag-Thibault noted. Maersk makes LNG move The need to keep fuel options open and avoid being locked into one pathway was illustrated in a recent Maersk order for dual-fuel vessels totaling 800,000 TEUs capable of sailing on methanol as well as LNG. Ordering LNG-capable ships was a deviation from Maersk’s deep dive into methanol, but Morten Bo Christiansen, the carrier’s head of decarbonization, said methanol would continue to play the leading role in the carriers’ efforts to meet its science-based emissions targets. “But we now believe that biomethane [a cleaner version of LNG] is going to play a meaningful role in the in the green future fuels mix and we need to tap into that market,” Christiansen told the Journal of Commerce in an interview this week. “We expect to get some biomethane in, but we are still relying mostly on methanol because we have a reasonable certainty that we can get the fuel at a reasonable cost,” he noted. Maersk has secured a significant pipeline of green methanol , but there is not the same certainty of supply for biomethane where production needs to be significantly scaled up. “The influence of first-movers has been critical, and it continues to be critical, but for the entire industry to change, we really need to see demand driven by the policy side as well,” Farrag-Thibault said. Narrowing the price gap Several global pricing mechanisms remain on the table at the IMO with the objective of closing the price gap between fossil fuels and the green alternatives. Methanol, for instance, is three to four times more expensive per ton than low sulfur fuel oil. Maersk CCO Karsten Kildahl acknowledged the cost reality for cargo owners that would be required to pay more as shipping transitioned to cleaner energy. But he said more than two-thirds of the carrier’s top 200 customers in any case had their own science-based targets that would have to be met. Transportation falls into the so-called “scope three” emissions category in which a company does not have direct control over the assets that contribute indirectly to its carbon footprint. “When we have an environment when we can penalize the black fuels and support the green fuels and take the dilemma away from the customers, why not do it?” Kildahl told the Journal of Commerce in Felixstowe this week. “The green fuel is far more expensive than tradition fuel and we would like to take the difference between the two fuels and nullify that,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Lack of clarity over clean energy supply driving dual-fuel ship orders

<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 .

Intermodal providers

Rails have limited recourse to PNW import surge: analyst

World

Asia

China

Datasets are compiled from questionnaire responses from a survey panel of senior purchasing executives (or similar) of about 400 companies.  For each variable, the index is the sum of the percentage of “higher” responses and half the percentage of “no change” responses. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The China PMI is done in conjunction with Caixin. [S&P Global](https://ihsmarkit.com/products/pmi.html)

World, US, Asia, China, EU manufacturing PMIs (S&P Global)

World, US, Asia China, EU US PMI Manufacturing (PMI) by S&P Global Gateway

<div class="phx-topic abstract-wrapper">The huge import volumes that moved across US docks in August are also muting the post-Golden Week bounce that normally occurs in mid-October when retailers ship their high-value holiday merchandise through the West Coast.</div>

The huge import volumes that moved across US docks in August are also muting the post-Golden Week bounce that normally occurs in mid-October when retailers ship their high-value holiday merchandise through the West Coast.

<div class="phx-topic">Asia-to-US freight rates at the tail end of the peak shipping season are falling faster than is typical for this time of year given the heavy frontloading that occurred months earlier that is also expected to result in weaker-than-normal imports from Asia in November, forwarders tell the Journal of Commerce. Retailers <a href="https://www.joc.com/article/near-record-surge-possible-for-us-imports-in-august-retail-group-5703194">frontloaded holiday season imports in August</a> to ensure they arrived before the <a href="https://www.joc.com/article/despite-tentative-wage-deal-usmx-and-ila-have-bumpy-road-ahead-on-other-key-issues-5743997">strike by East and Gulf coast dockworkers on Oct. 1</a>, which lasted for three days. The huge import volumes that moved across US docks in August are also muting the post-Golden Week bounce that normally occurs in mid-October when retailers ship their high-value holiday merchandise through the West Coast. “The degree of frontloading in 2024 may have been more than some analysts realized,” Paul Bingham, director of transportation consulting for S&amp;P Global Market Intelligence said. “That might account for softness in import demand now and through the rest of the year.” It might also account for rates that have fallen 49% to the East Coast and 25% to the West Coast since Aug. 30, according to Platts, a Journal of Commerce sister company within S&amp;P Global. The East Coast spot rate as of Oct. 7 was $4,300 per FEU, Platts data showed, with the West Coast rate at $4,200. The near parity of rates is unusual because the East Coast typically carries a nearly $1,000 per FEU premium to the West Coast rate. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e7a65aab-9aac-4f07-9b74-1793746c01ef"></dynamic-object></div><h3>Doubts about upcoming GRI </h3>Sources, meanwhile, say at least two trans-Pacific carriers have announced a $600 per FEU general rate increase (GRI) to the West Coast effective Oct. 15, but there is widespread skepticism that the GRI will hold because imports are expected to diminish next month. “[Carriers] are trying to push the market in a direction where it doesn’t make sense to go, based on what we’re seeing in demand,” said Benton Kauffman, senior vice president/head of trans-Pacific air and sea for US logistics at DSV Global Transport and Logistics. Furthermore, while they’re trying to raise rates, most carriers are offering special ad hoc “bullet” rates that undercut the posted spot and freight-all-kinds (FAK) rates. “While the carriers are trying to keep the rates up, they’re cutting deals at the same time,” Jon Monroe, who serves as an adviser to non-vessel-operating common carriers (NVOs), told the Journal of Commerce. Carriers since late spring have been <a href="https://www.joc.com/article/capacity-boost-on-trans-pacific-pushes-carriers-to-compete-for-cargo-5711329">offering bullet rates that are hundreds of dollars lower than the listed spot/FAK rates</a>, especially to the West Coast, where space on vessels is plentiful because carriers this year have <a href="https://www.joc.com/article/some-carriers-seek-to-reopen-202425-fixed-rate-contracts-in-trans-pac-nvos-5727340">launched or reinstated 10 services</a>. It makes sense that carriers are attempting to keep their FAK rates from sinking lower because not all NVOs qualify for the bullet rates either because of the port pairs involved or because they lack the volume carriers are looking for, Monroe said. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4ed96169-fa34-4b46-81e8-b67860854e39"></dynamic-object></div>Forwarders and logistics consultants say West Coast volumes should remain elevated through the end of the month before dropping into November. “October is still strong,” said Sanjay Tejwani, CEO of 365 Logistics. “A lot of volume was [diverted] to the West Coast, so they’re still enjoying a strong October.” <h3>Peak season surcharges heading lower? </h3>In addition to FAK rates sinking lower in November, peak season surcharges (PSSs), which are applied to NVOs’ fixed rates — also known as named account (NAC) rates — are expected to be under pressure next month. Most carriers on May 1 implemented a $2,000 per FEU PSS on forwarders’ NAC rates, and those charges have generally held. Some carriers are telling forwarders they are willing to lower the PSSs effective Nov. 1, said Christian Sur, executive vice president for ocean freight contract logistics at the NVO Unique Logistics International. “They may come down to $1,200 to $1,500 after Oct. 31,” Sur said. The combined NAC plus PSS rate of about $3,000 per FEU will still be lower than the listed FAK rate of about $4,200 per FEU to the West Coast, Sur said. “By and large, November and the first half of December will be pretty quiet,” said James Caradonna, executive vice president of the forwarder M&amp;R Spedag Group. The Lunar New Year holidays, when many factories in Asia close for a week or two, will begin on Jan. 29, so imports of spring merchandise are expected to begin moving in mid-December. Forwarders anticipate a traditional pre-Lunar New Year spike in imports to both coasts, unless the tentative contract between the ILA and employers on the East and Gulf coasts <a href="https://www.joc.com/article/despite-tentative-wage-deal-usmx-and-ila-have-bumpy-road-ahead-on-other-key-issues-5743997">shows signs of fraying as the Jan. 15 deadline to finalize the agreement approaches</a>. If tangible signs of progress in the negotiations are not being shown by about mid-December, retailers could begin to route discretionary cargo through the West Coast, said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. “The ILA deadline is the only wildcard,” Shames said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Asia-to-US freight rates at the tail end of the peak shipping season are falling faster than is typical for this time of year given the heavy frontloading that occurred months earlier that is also expected to result in weaker-than-normal imports from Asia in November, forwarders tell the Journal of Commerce. Retailers frontloaded holiday season imports in August to ensure they arrived before the strike by East and Gulf coast dockworkers on Oct. 1 , which lasted for three days. The huge import volumes that moved across US docks in August are also muting the post-Golden Week bounce that normally occurs in mid-October when retailers ship their high-value holiday merchandise through the West Coast. “The degree of frontloading in 2024 may have been more than some analysts realized,” Paul Bingham, director of transportation consulting for S&P Global Market Intelligence said. “That might account for softness in import demand now and through the rest of the year.” It might also account for rates that have fallen 49% to the East Coast and 25% to the West Coast since Aug. 30, according to Platts, a Journal of Commerce sister company within S&P Global. The East Coast spot rate as of Oct. 7 was $4,300 per FEU, Platts data showed, with the West Coast rate at $4,200. The near parity of rates is unusual because the East Coast typically carries a nearly $1,000 per FEU premium to the West Coast rate. Doubts about upcoming GRI Sources, meanwhile, say at least two trans-Pacific carriers have announced a $600 per FEU general rate increase (GRI) to the West Coast effective Oct. 15, but there is widespread skepticism that the GRI will hold because imports are expected to diminish next month. “[Carriers] are trying to push the market in a direction where it doesn’t make sense to go, based on what we’re seeing in demand,” said Benton Kauffman, senior vice president/head of trans-Pacific air and sea for US logistics at DSV Global Transport and Logistics. Furthermore, while they’re trying to raise rates, most carriers are offering special ad hoc “bullet” rates that undercut the posted spot and freight-all-kinds (FAK) rates. “While the carriers are trying to keep the rates up, they’re cutting deals at the same time,” Jon Monroe, who serves as an adviser to non-vessel-operating common carriers (NVOs), told the Journal of Commerce. Carriers since late spring have been offering bullet rates that are hundreds of dollars lower than the listed spot/FAK rates , especially to the West Coast, where space on vessels is plentiful because carriers this year have launched or reinstated 10 services . It makes sense that carriers are attempting to keep their FAK rates from sinking lower because not all NVOs qualify for the bullet rates either because of the port pairs involved or because they lack the volume carriers are looking for, Monroe said. Forwarders and logistics consultants say West Coast volumes should remain elevated through the end of the month before dropping into November. “October is still strong,” said Sanjay Tejwani, CEO of 365 Logistics. “A lot of volume was [diverted] to the West Coast, so they’re still enjoying a strong October.” Peak season surcharges heading lower? In addition to FAK rates sinking lower in November, peak season surcharges (PSSs), which are applied to NVOs’ fixed rates — also known as named account (NAC) rates — are expected to be under pressure next month. Most carriers on May 1 implemented a $2,000 per FEU PSS on forwarders’ NAC rates, and those charges have generally held. Some carriers are telling forwarders they are willing to lower the PSSs effective Nov. 1, said Christian Sur, executive vice president for ocean freight contract logistics at the NVO Unique Logistics International. “They may come down to $1,200 to $1,500 after Oct. 31,” Sur said. The combined NAC plus PSS rate of about $3,000 per FEU will still be lower than the listed FAK rate of about $4,200 per FEU to the West Coast, Sur said. “By and large, November and the first half of December will be pretty quiet,” said James Caradonna, executive vice president of the forwarder M&R Spedag Group. The Lunar New Year holidays, when many factories in Asia close for a week or two, will begin on Jan. 29, so imports of spring merchandise are expected to begin moving in mid-December. Forwarders anticipate a traditional pre-Lunar New Year spike in imports to both coasts, unless the tentative contract between the ILA and employers on the East and Gulf coasts shows signs of fraying as the Jan. 15 deadline to finalize the agreement approaches . If tangible signs of progress in the negotiations are not being shown by about mid-December, retailers could begin to route discretionary cargo through the West Coast, said Rachel Shames, vice president of pricing and procurement at the forwarder CV International. “The ILA deadline is the only wildcard,” Shames said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

Heavy frontloading sets up US-Asia trade for falling rates, imports

<div class="phx-topic abstract-wrapper">With no improvement in the Red Sea security situation and shippers preparing for 2025 contracts, Gemini has jettisoned the traditional shorter route in favor of the longer transit around southern Africa. </div>

With no improvement in the Red Sea security situation and shippers preparing for 2025 contracts, Gemini has jettisoned the traditional shorter route in favor of the longer transit around southern Africa.

<div class="phx-topic">FELIXSTOWE, UK — Cargo owners’ need to plan Asia-Europe shipments for next year was behind Maersk and Hapag-Lloyd discarding the Suez Canal as an option when their new Gemini Cooperation network launches on Feb. 1 next year. In the clearest signal yet that the carriers do not anticipate a return to Red Sea transits next year, and with shippers already preparing their 2025 contracts, Gemini decided to jettison the shorter route from its network and commit to the longer transit around southern Africa. When the Suez routings are deemed safe from Houthi rebel attacks, the shift by ocean carriers will bring ‘havoc’ to container shipping schedules, said Maersk CCO Karsten Kildahl. Until then, Maersk customers needed lead time certainty so they can plan operations. “The nightmare operation when the canal closed is nothing compared to what it is going to look like when it opens again,” Kildahl told reporters Wednesday at the naming ceremony of the dual-fuel Alexandra Maersk in Felixstowe. “We will have several weeks of something that will look like an operational meltdown. It is not going to be smooth.” When Gemini <a href="https://www.joc.com/article/geminis-hub-and-spoke-model-aims-to-eliminate-blank-sailings-hapag-lloyd-5241030">unveiled its updated network in September</a>, the alliance offered Asia-Europe shippers alternative routings via the Cape of Good Hope and the Suez Canal. However, Maersk told customers in an advisory this week that the Red Sea situation remained “highly dynamic” and that Maersk and Hapag-Lloyd would only return to the route “when it is safe to do so.” ”The reality is that there are still attacks in the Red Sea and it is unsafe to be there. We have seen in the past that it looked safe, and carriers tried to go through, but it wasn’t safe and had to be undone again. You can’t just flip flop,” he said. <h3>Naming ceremony</h3>Kildahl was in Felixstowe for the naming ceremony of Alexandra Maersk, the fifth 16,592-TEU vessel in an 18-ship order of dual-fuel methanol vessels scheduled for delivery in 2024 and 2025. Felixstowe will be the British hub in Gemini Cooperations’ hub and spoke network with three weekly calls at the UK’s largest container port. The other European hubs will be Rotterdam that will have four weekly calls, Hamburg and Bremerhaven that will receive two calls each, with one weekly call at Wilhelmshaven. In Asia, Gemini’s hubs will be mainly in China with three weekly calls at Shanghai, two in Ningbo, two at Yantian and one in Qingdao. The carriers will have five weekly calls at Gemini’s Malaysian hub of Tanjung Pelepas and three at Singapore. A network of shuttles will form the spoke in Gemini’s coverage, and with both the shuttles and the terminals in the network owned or operated by Maersk and Hapag-Lloyd, the carriers are confident <a href="https://www.joc.com/article/geminis-hub-and-spoke-model-aims-to-eliminate-blank-sailings-hapag-lloyd-5241030">they can deliver 90% schedule reliability</a>. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

FELIXSTOWE, UK — Cargo owners’ need to plan Asia-Europe shipments for next year was behind Maersk and Hapag-Lloyd discarding the Suez Canal as an option when their new Gemini Cooperation network launches on Feb. 1 next year. In the clearest signal yet that the carriers do not anticipate a return to Red Sea transits next year, and with shippers already preparing their 2025 contracts, Gemini decided to jettison the shorter route from its network and commit to the longer transit around southern Africa. When the Suez routings are deemed safe from Houthi rebel attacks, the shift by ocean carriers will bring ‘havoc’ to container shipping schedules, said Maersk CCO Karsten Kildahl. Until then, Maersk customers needed lead time certainty so they can plan operations. “The nightmare operation when the canal closed is nothing compared to what it is going to look like when it opens again,” Kildahl told reporters Wednesday at the naming ceremony of the dual-fuel Alexandra Maersk in Felixstowe. “We will have several weeks of something that will look like an operational meltdown. It is not going to be smooth.” When Gemini unveiled its updated network in September , the alliance offered Asia-Europe shippers alternative routings via the Cape of Good Hope and the Suez Canal. However, Maersk told customers in an advisory this week that the Red Sea situation remained “highly dynamic” and that Maersk and Hapag-Lloyd would only return to the route “when it is safe to do so.” ”The reality is that there are still attacks in the Red Sea and it is unsafe to be there. We have seen in the past that it looked safe, and carriers tried to go through, but it wasn’t safe and had to be undone again. You can’t just flip flop,” he said. Naming ceremony Kildahl was in Felixstowe for the naming ceremony of Alexandra Maersk, the fifth 16,592-TEU vessel in an 18-ship order of dual-fuel methanol vessels scheduled for delivery in 2024 and 2025. Felixstowe will be the British hub in Gemini Cooperations’ hub and spoke network with three weekly calls at the UK’s largest container port. The other European hubs will be Rotterdam that will have four weekly calls, Hamburg and Bremerhaven that will receive two calls each, with one weekly call at Wilhelmshaven. In Asia, Gemini’s hubs will be mainly in China with three weekly calls at Shanghai, two in Ningbo, two at Yantian and one in Qingdao. The carriers will have five weekly calls at Gemini’s Malaysian hub of Tanjung Pelepas and three at Singapore. A network of shuttles will form the spoke in Gemini’s coverage, and with both the shuttles and the terminals in the network owned or operated by Maersk and Hapag-Lloyd, the carriers are confident they can deliver 90% schedule reliability . Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Maersk rules out Suez Canal routings for Gemini launch

<div class="phx-topic abstract-wrapper">If ports operated by ILA labor were for decades a dependable alternative to those reliant on the ILA’s perpetually disruptive West Coast counterpart, the ILWU, that assumption no longer holds true, writes Peter Tirschwell. </div>

If ports operated by ILA labor were for decades a dependable alternative to those reliant on the ILA’s perpetually disruptive West Coast counterpart, the ILWU, that assumption no longer holds true, writes Peter Tirschwell.

<div class="phx-topic">Over several months beginning last November when the International Longshoremen’s Association (ILA) first mentioned the possibility of a strike — an innocuous reference in an unrelated press release — a realization slowly dawned on shippers that a sea change was occurring on the US East and Gulf coasts. If ports operated by ILA labor were for decades a dependable alternative to those reliant on the ILA’s perpetually disruptive West Coast counterpart, the International Longshore and Warehouse Union (ILWU), that assumption no longer holds true. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5745032_0.1.jpg"></img></div>The assumption of labor peace, demonstrated over the course of 13 peaceful contract negotiations since 1977 (the year of the last coastwide strike), was one of the key factors — along with demographic shifts and the 2016 expansion of the Panama Canal — that lead importers of goods from Asia to divert significant volumes from the West Coast to ports along the East and Gulf coasts. As every West Coast contract negotiation since the late 1990s was met with disruption on the docks and delays to cargo, the consistently peaceful waterfront along the East and Gulf coasts served as a reminder to shippers that a viable alternative to the West Coast exists, and they took advantage. The diversions were so predictable during the most recent disruptive West Coast negotiations that the Pacific Maritime Association (PMA) called it out in June 2023 in response to “coordinated and disruptive work actions” by the ILWU as the contract was being negotiated. “The ILWU’s repeated disruptive work actions at strategic ports along the West Coast are increasingly causing companies to divert cargo to more customer-friendly and reliable locations along the Gulf and East coasts,” <a href="https://www.pmanet.org/wp-content/uploads/2023/06/PMA-Update-6.9.23.pdf">the PMA said</a>. <h3>The ground has shifted </h3>The message of labor peace on the East and Gulf coasts wasn’t just an impression; at industry conferences at Savannah, Charleston and other ports, ILA dockworkers took the mic when shippers were on stage, pledging support for their cargo and promising continued reliability. Such statements would never be heard on the West Coast. Now, even though the strike <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">was suspended after three days</a> when employers increased their offer to a 62% wage increase over the term of a new six-year contract, shippers believe something more profound has changed. Just prior to the strike, Jonathan Gold, the vice president of Supply Chain and Customs Policy at the National Retail Federation, said even the threat of a work stoppage “will have an impact on the confidence that retailers have in labor stability at those ports.” “Retailers have diversified their supply chains over the years, and we expect some to re-evaluate their use of certain ports moving forward, especially for discretionary cargo,” Gold said. It wasn’t just the mounting concern about the possibility of a strike that left the impression of a changed labor landscape. The dispute over jurisdiction of crane driver and yard worker jobs at Southeast ports, which led the <a href="https://www.joc.com/article/zim-becomes-first-carrier-to-commit-to-reopened-leatherman-terminal-5735909">new Hugh K. Leatherman Terminal</a> in Charleston to be all but shut down three years after it opened in 2021, sent tremors that labor stability was no longer guaranteed. Contributing to the impression of shippers of an altered landscape on the East and Gulf coasts was how the contract negotiations played out this year, or more appropriately, didn’t. The ILA walked out of negotiations with the United States Maritime Alliance (USMX) in June and never returned to the table; even the terms of the tentative deal that ended the strike last week were mediated entirely through Biden administration officials, not face-to-face with the USMX. <h3>Permanent acrimony? </h3>For 40-plus years, the ILA and USMX resolved their issues at the bargaining table, forging a shared commitment to stability that was understood by shippers watching the relationship from the sidelines and making supply chain decisions accordingly. Thus, even for carrier executives with long experience in dealing with the ILA, the inability to return to the table despite repeated invitations — which ultimately led the USMX <a href="https://www.joc.com/article/usmx-tries-to-force-ila-back-to-contract-talks-with-nlrb-complaint-5736646">to file an unfair labor practice case with the National Labor Relations Board</a> — was wholly unfamiliar. Carriers being repeatedly demonized by union officials as “greedy” — among other adjectives — was also unfamiliar, further reinforcing the notion that the landscape had changed. Shippers are now wondering if the acrimony that has long characterized labor-management relations on the West Coast will become a permanent feature on the East and Gulf coasts as well. That possibility will be a contributing factor in internal corporate discussions over issues such as outsourcing. Certainly, the next contract negotiation will be watched much more carefully than it was in the past and likely will prompt diversions that would never have been needed in prior years. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Over several months beginning last November when the International Longshoremen’s Association (ILA) first mentioned the possibility of a strike — an innocuous reference in an unrelated press release — a realization slowly dawned on shippers that a sea change was occurring on the US East and Gulf coasts. If ports operated by ILA labor were for decades a dependable alternative to those reliant on the ILA’s perpetually disruptive West Coast counterpart, the International Longshore and Warehouse Union (ILWU), that assumption no longer holds true. The assumption of labor peace, demonstrated over the course of 13 peaceful contract negotiations since 1977 (the year of the last coastwide strike), was one of the key factors — along with demographic shifts and the 2016 expansion of the Panama Canal — that lead importers of goods from Asia to divert significant volumes from the West Coast to ports along the East and Gulf coasts. As every West Coast contract negotiation since the late 1990s was met with disruption on the docks and delays to cargo, the consistently peaceful waterfront along the East and Gulf coasts served as a reminder to shippers that a viable alternative to the West Coast exists, and they took advantage. The diversions were so predictable during the most recent disruptive West Coast negotiations that the Pacific Maritime Association (PMA) called it out in June 2023 in response to “coordinated and disruptive work actions” by the ILWU as the contract was being negotiated. “The ILWU’s repeated disruptive work actions at strategic ports along the West Coast are increasingly causing companies to divert cargo to more customer-friendly and reliable locations along the Gulf and East coasts,” the PMA said . The ground has shifted The message of labor peace on the East and Gulf coasts wasn’t just an impression; at industry conferences at Savannah, Charleston and other ports, ILA dockworkers took the mic when shippers were on stage, pledging support for their cargo and promising continued reliability. Such statements would never be heard on the West Coast. Now, even though the strike was suspended after three days when employers increased their offer to a 62% wage increase over the term of a new six-year contract, shippers believe something more profound has changed. Just prior to the strike, Jonathan Gold, the vice president of Supply Chain and Customs Policy at the National Retail Federation, said even the threat of a work stoppage “will have an impact on the confidence that retailers have in labor stability at those ports.” “Retailers have diversified their supply chains over the years, and we expect some to re-evaluate their use of certain ports moving forward, especially for discretionary cargo,” Gold said. It wasn’t just the mounting concern about the possibility of a strike that left the impression of a changed labor landscape. The dispute over jurisdiction of crane driver and yard worker jobs at Southeast ports, which led the new Hugh K. Leatherman Terminal in Charleston to be all but shut down three years after it opened in 2021, sent tremors that labor stability was no longer guaranteed. Contributing to the impression of shippers of an altered landscape on the East and Gulf coasts was how the contract negotiations played out this year, or more appropriately, didn’t. The ILA walked out of negotiations with the United States Maritime Alliance (USMX) in June and never returned to the table; even the terms of the tentative deal that ended the strike last week were mediated entirely through Biden administration officials, not face-to-face with the USMX. Permanent acrimony? For 40-plus years, the ILA and USMX resolved their issues at the bargaining table, forging a shared commitment to stability that was understood by shippers watching the relationship from the sidelines and making supply chain decisions accordingly. Thus, even for carrier executives with long experience in dealing with the ILA, the inability to return to the table despite repeated invitations — which ultimately led the USMX to file an unfair labor practice case with the National Labor Relations Board — was wholly unfamiliar. Carriers being repeatedly demonized by union officials as “greedy” — among other adjectives — was also unfamiliar, further reinforcing the notion that the landscape had changed. Shippers are now wondering if the acrimony that has long characterized labor-management relations on the West Coast will become a permanent feature on the East and Gulf coasts as well. That possibility will be a contributing factor in internal corporate discussions over issues such as outsourcing. Certainly, the next contract negotiation will be watched much more carefully than it was in the past and likely will prompt diversions that would never have been needed in prior years. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Supply chain

Brief ILA strike alters once-placid labor landscape on East, Gulf coasts

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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">With the 62% wage increase being an unprecedented offer to the union, the USMX will be hard-pressed to give in on other key demands the ILA is making, sources tell the Journal of Commerce. </div>

With the 62% wage increase being an unprecedented offer to the union, the USMX will be hard-pressed to give in on other key demands the ILA is making, sources tell the Journal of Commerce.

<div class="phx-topic">The 90-day clock has started for the International Longshoremen’s Association (ILA) and US East and Gulf coast longshore employers, who haven’t been at the contract negotiating table since June, to restart the talks and hash out details on a range of complex issues including automation, royalties, work rules and job jurisdiction. Salary increases — <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">as were agreed to in a tentative deal to end the three-day strike last week</a> — seem pedestrian compared with the scale of challenge facing both sides. The deal on wages that ended the strike was merely “provisional,” according to one management source, just one element of those several others that still need to be negotiated between now and the new deadline of Jan. 15. Yet several factors suggest agreement on those points in upcoming negotiations, which are expected to resume within weeks, will be difficult to achieve, according to sources. The issues are detailed and complex. Still, the United States Maritime Alliance (USMX) and the ILA have not sat down face to face since the union suspended negotiations last June, despite over 10 failed attempts by the USMX to restart negotiations. The union’s lack of response <a href="https://www.joc.com/article/usmx-tries-to-force-ila-back-to-contract-talks-with-nlrb-complaint-5736646">led the USMX on Sept. 26 to file an unfair labor practices case with the National Labor Relations Board</a> seeking to force the union back to the table. The inability of the USMX to get formal negotiations restarted continued throughout the intensive two-week stretch leading up to the strike and over the course of the three-day work stoppage, where what was described as multiple efforts by employers to discuss the wage issue directly with the union, rather than through Biden administration intermediaries, never resulted in face-to-face dialogue with the union. With the 62% wage increase being an unprecedented offer to the union, the USMX will be hard-pressed to give in on other key demands the ILA is making, sources say, especially as the offer merely reinforces the longstanding disconnect in the view of ocean carriers between high US port costs primarily driven by longshore labor and low productivity. That is why, sources say, the USMX will do its best to resist the union’s demand for a rolling back of employers’ automation rights as enshrined in prior contracts. The ILA is seeking <a href="http://go.microsoft.com/fwlink/p/?LinkId=255141">“absolute, airtight language</a> that there be no automation or semi-automation,” according to ILA President Harold Daggett, a longtime vocal opponent of automation. If that language is agreed to in a final contract, it would disallow future implementation of semi-automation installed at ports in Virginia and at Global Container Terminal in Bayonne, NJ. <h3>Preserving growth opportunities </h3>The reason why the USMX will resist that demand is to preserve growth opportunities in the US market. Carriers want to be able to grow, but with hardly any new terminals being built — the Hugh K. Leatherman facility that opened in Charleston in 2021 was the first new US terminal opened since 2009 – a key means of facilitating container TEU growth is by densifying terminals, and the only way to do that is through automation. That is not to say that every port aspires to automate – most do not given the cost – but carriers do not want to forestall the possibility because if they give in now, they may never get back the right to automate at a later date. “It is critical that terminals have the capability to densify as American consumer demand and exports continue to rise,” the USMX confidentially told the Biden administration last week, according to documents shared with the Journal of Commerce. “There is not enough land or berth capacity in US ports to handle future trade growth without implementing new technology.” Finally, the USMX appears in no mood to concede on key points such as automation after what was described as a demoralizing experience over the last week, when they were prevented at every turn from returning to direct bargaining with the union — a practice that was standard procedure for decades in negotiating prior contracts — and ultimately saw their unified position on wages and the need to negotiate in person disintegrate on Thursday on orders from some carrier headquarters. <h3>Pressure from the White House </h3>The USMX board members — both carriers and marine terminal operators — displayed unity in holding firm on their approximately 50% wage increase offer despite intense pressure during multiple virtual and in-person meetings with the Biden administration over the past two weeks. They were then overruled on Oct. 3 by carrier head offices following a group CEO-only virtual meeting held early in the early morning hours of Oct. 3 EST, according to one source. That White House pressure manifested itself in what management sources said was a two-week, gradually intensifying campaign by Biden administration officials, including Transportation Secretary Pete Buttigieg, Acting Labor Secretary Julie Su and White House Chief of Staff Jeff Zients. What started as what executives described as a polite phone call from Su to the USMX a few weeks before the strike led to a series of more senior-level meetings with industry officials and ultimately to a group CEO-only conference call, after which the tentative deal was swiftly concluded. It included USMX senior staff and board members being summoned to Washington on short notice as well as separate conference calls with US-based carrier CEOs and marine terminal operator CEOs. Throughout the series of meetings, according to sources, Biden administration officials consistently voiced the same or similar messages as that of the union: basically, that because carriers earned record profits during the pandemic, it is their duty pay up to avoid further disruption at the ports. Ever-present, officials said, was the upcoming presidential election and what appeared to be a determination by the administration to avoid a politically damaging distraction in the final weeks of the campaign, which is what they feared from a protracted strike. Now, USMX will have to regroup, as negotiations with the union will likely resume in the coming weeks after what had been a cordial, even cooperative working relationship that led to several contracts and labor peace since 1977 shattered over the course of the last several months, culminating in the strike last week. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

The 90-day clock has started for the International Longshoremen’s Association (ILA) and US East and Gulf coast longshore employers, who haven’t been at the contract negotiating table since June, to restart the talks and hash out details on a range of complex issues including automation, royalties, work rules and job jurisdiction. Salary increases — as were agreed to in a tentative deal to end the three-day strike last week — seem pedestrian compared with the scale of challenge facing both sides. The deal on wages that ended the strike was merely “provisional,” according to one management source, just one element of those several others that still need to be negotiated between now and the new deadline of Jan. 15. Yet several factors suggest agreement on those points in upcoming negotiations, which are expected to resume within weeks, will be difficult to achieve, according to sources. The issues are detailed and complex. Still, the United States Maritime Alliance (USMX) and the ILA have not sat down face to face since the union suspended negotiations last June, despite over 10 failed attempts by the USMX to restart negotiations. The union’s lack of response led the USMX on Sept. 26 to file an unfair labor practices case with the National Labor Relations Board seeking to force the union back to the table. The inability of the USMX to get formal negotiations restarted continued throughout the intensive two-week stretch leading up to the strike and over the course of the three-day work stoppage, where what was described as multiple efforts by employers to discuss the wage issue directly with the union, rather than through Biden administration intermediaries, never resulted in face-to-face dialogue with the union. With the 62% wage increase being an unprecedented offer to the union, the USMX will be hard-pressed to give in on other key demands the ILA is making, sources say, especially as the offer merely reinforces the longstanding disconnect in the view of ocean carriers between high US port costs primarily driven by longshore labor and low productivity. That is why, sources say, the USMX will do its best to resist the union’s demand for a rolling back of employers’ automation rights as enshrined in prior contracts. The ILA is seeking “absolute, airtight language that there be no automation or semi-automation,” according to ILA President Harold Daggett, a longtime vocal opponent of automation. If that language is agreed to in a final contract, it would disallow future implementation of semi-automation installed at ports in Virginia and at Global Container Terminal in Bayonne, NJ. Preserving growth opportunities The reason why the USMX will resist that demand is to preserve growth opportunities in the US market. Carriers want to be able to grow, but with hardly any new terminals being built — the Hugh K. Leatherman facility that opened in Charleston in 2021 was the first new US terminal opened since 2009 – a key means of facilitating container TEU growth is by densifying terminals, and the only way to do that is through automation. That is not to say that every port aspires to automate – most do not given the cost – but carriers do not want to forestall the possibility because if they give in now, they may never get back the right to automate at a later date. “It is critical that terminals have the capability to densify as American consumer demand and exports continue to rise,” the USMX confidentially told the Biden administration last week, according to documents shared with the Journal of Commerce. “There is not enough land or berth capacity in US ports to handle future trade growth without implementing new technology.” Finally, the USMX appears in no mood to concede on key points such as automation after what was described as a demoralizing experience over the last week, when they were prevented at every turn from returning to direct bargaining with the union — a practice that was standard procedure for decades in negotiating prior contracts — and ultimately saw their unified position on wages and the need to negotiate in person disintegrate on Thursday on orders from some carrier headquarters. Pressure from the White House The USMX board members — both carriers and marine terminal operators — displayed unity in holding firm on their approximately 50% wage increase offer despite intense pressure during multiple virtual and in-person meetings with the Biden administration over the past two weeks. They were then overruled on Oct. 3 by carrier head offices following a group CEO-only virtual meeting held early in the early morning hours of Oct. 3 EST, according to one source. That White House pressure manifested itself in what management sources said was a two-week, gradually intensifying campaign by Biden administration officials, including Transportation Secretary Pete Buttigieg, Acting Labor Secretary Julie Su and White House Chief of Staff Jeff Zients. What started as what executives described as a polite phone call from Su to the USMX a few weeks before the strike led to a series of more senior-level meetings with industry officials and ultimately to a group CEO-only conference call, after which the tentative deal was swiftly concluded. It included USMX senior staff and board members being summoned to Washington on short notice as well as separate conference calls with US-based carrier CEOs and marine terminal operator CEOs. Throughout the series of meetings, according to sources, Biden administration officials consistently voiced the same or similar messages as that of the union: basically, that because carriers earned record profits during the pandemic, it is their duty pay up to avoid further disruption at the ports. Ever-present, officials said, was the upcoming presidential election and what appeared to be a determination by the administration to avoid a politically damaging distraction in the final weeks of the campaign, which is what they feared from a protracted strike. Now, USMX will have to regroup, as negotiations with the union will likely resume in the coming weeks after what had been a cordial, even cooperative working relationship that led to several contracts and labor peace since 1977 shattered over the course of the last several months, culminating in the strike last week. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Despite tentative wage deal, USMX and ILA have bumpy road ahead on other key issues

<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

<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 an average $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 an average $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 .

Drayage

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

<div class="phx-topic abstract-wrapper">Shippers on the trans-Atlantic will find space in short supply by the end of October with bottlenecks on both ends of the trade lane reducing capacity.</div>

Shippers on the trans-Atlantic will find space in short supply by the end of October with bottlenecks on both ends of the trade lane reducing capacity.

<div class="phx-topic">Ship delays resulting from the three-day strike at ports along the US East and Gulf coasts last week will come on top of port congestion across several European hubs, significantly reducing the available trans-Atlantic capacity this month. Sea-Intelligence Maritime Analysis noted that capacity from Mediterranean and North European routes was already heading for a 10% to 14% reduction by the end of October, but additional post-strike delays in clearing waiting ships would dramatically increase the capacity cuts. “We can see that North European shippers should prepare for a capacity reduction of up to 14% in week 44,” the analyst noted in its Sunday Spotlight newsletter. “If clearing the USEC congestion adds another four days, this could potentially reach a temporary capacity reduction of up to 30%.” The three-day strike will reduce Mediterranean-US East Coast capacity by 10% in week 43 starting Oct. 21, with a full-week effect from worsening congestion resulting in a short-term 24% reduction in capacity, Sea-Intelligence noted. Maritime employers and the International Longshoremen’s Association (ILA) <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">reached a tentative deal</a> to reopen container terminals at East and Gulf coast ports on Oct. 3 following a strike that began at midnight Oct. 1. Ports up and down the US East and Gulf coasts <a href="https://www.joc.com/article/us-east-gulf-coast-ports-confident-of-smooth-post-strike-reopening-5742607">expect a generally smooth resumption of cargo flows</a>, noting that they have spare capacity and expect minimal disruptions in processing a <a href="https://www.joc.com/article/ships-backing-up-outside-of-strike-shut-us-east-gulf-ports-5741090">backlog of more than 60 ships</a>. Reduced volumes through the ports due to frontloading and diversions ahead of the strike threat — and the relatively short duration of the stoppage — will make the return to pre-disruption fluidity a matter of days, rather than weeks. <h3>Domino effect </h3>But the domino effect on the trans-Atlantic trade lane will be exacerbated by port congestion in North Europe. Kuehne + Nagel’s digital ocean shipping platform SeaExplorer indicates “heavily disrupted operations” at Hamburg. “The yard utilization is at 112% with back-to-back vessel arrivals until mid-October,” a SeaExplorer advisory noted, with rail waiting times at Container Terminal Burchardkai (CTB), Hamburg’s largest terminal, nearly 14 hours. Operations at Southampton in the UK are also classed as “heavily disrupted” by the K+N platform as high import volumes are creating bottlenecks in clearing containers, with disruption also reported at London Gateway. Several ports in the Mediterranean are experiencing “slightly disrupted operations,” including Barcelona and transshipment hub Algeciras. The inland transport of containers in Europe is also being affected by severe flooding that last month impacted transportation networks and container terminal depots in central Europe. Seasonal low water levels on the Rhine River are also affecting container movement. Inland barge operator Contargo last week reported handling delays of 73 hours at Rotterdam and 33 hours at Antwerp. Rate levels on the trans-Atlantic took off last week, with North Europe to the US East Coast prices rising $600 to $2,700 per FEU, up 157% year over year, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ship delays resulting from the three-day strike at ports along the US East and Gulf coasts last week will come on top of port congestion across several European hubs, significantly reducing the available trans-Atlantic capacity this month. Sea-Intelligence Maritime Analysis noted that capacity from Mediterranean and North European routes was already heading for a 10% to 14% reduction by the end of October, but additional post-strike delays in clearing waiting ships would dramatically increase the capacity cuts. “We can see that North European shippers should prepare for a capacity reduction of up to 14% in week 44,” the analyst noted in its Sunday Spotlight newsletter. “If clearing the USEC congestion adds another four days, this could potentially reach a temporary capacity reduction of up to 30%.” The three-day strike will reduce Mediterranean-US East Coast capacity by 10% in week 43 starting Oct. 21, with a full-week effect from worsening congestion resulting in a short-term 24% reduction in capacity, Sea-Intelligence noted. Maritime employers and the International Longshoremen’s Association (ILA) reached a tentative deal to reopen container terminals at East and Gulf coast ports on Oct. 3 following a strike that began at midnight Oct. 1. Ports up and down the US East and Gulf coasts expect a generally smooth resumption of cargo flows , noting that 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 ahead of the strike threat — and the relatively short duration of the stoppage — will make the return to pre-disruption fluidity a matter of days, rather than weeks. Domino effect But the domino effect on the trans-Atlantic trade lane will be exacerbated by port congestion in North Europe. Kuehne + Nagel’s digital ocean shipping platform SeaExplorer indicates “heavily disrupted operations” at Hamburg. “The yard utilization is at 112% with back-to-back vessel arrivals until mid-October,” a SeaExplorer advisory noted, with rail waiting times at Container Terminal Burchardkai (CTB), Hamburg’s largest terminal, nearly 14 hours. Operations at Southampton in the UK are also classed as “heavily disrupted” by the K+N platform as high import volumes are creating bottlenecks in clearing containers, with disruption also reported at London Gateway. Several ports in the Mediterranean are experiencing “slightly disrupted operations,” including Barcelona and transshipment hub Algeciras. The inland transport of containers in Europe is also being affected by severe flooding that last month impacted transportation networks and container terminal depots in central Europe. Seasonal low water levels on the Rhine River are also affecting container movement. Inland barge operator Contargo last week reported handling delays of 73 hours at Rotterdam and 33 hours at Antwerp. Rate levels on the trans-Atlantic took off last week, with North Europe to the US East Coast prices rising $600 to $2,700 per FEU, up 157% year over year, according to Platts, a sister company of the Journal of Commerce within S&P Global. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

US port strike, Europe congestion heralds trans-Atlantic capacity crunch

<div class="phx-topic abstract-wrapper">Last week’s three-day longshore strike on the East and Gulf coasts is not expected to disrupt transportation supply chains ahead of the traditional beginning of the holiday shopping season, the National Retail Federation said.</div>

Last week’s three-day longshore strike on the East and Gulf coasts is not expected to disrupt transportation supply chains ahead of the traditional beginning of the holiday shopping season, the National Retail Federation said.

<div class="phx-topic">US retailers are forecasting a modest year-over-year increase in imports this month to close out the 2024 peak shipping season, with most of the holiday merchandise already having entered the country due to the frontloading of imports from Asia this summer. Furthermore, <a href="https://www.joc.com/article/despite-tentative-wage-deal-usmx-and-ila-have-bumpy-road-ahead-on-other-key-issues-5743997">the brief three-day strike by the International Longshoremen’s Association (ILA)</a> on the East and Gulf coasts is not expected to disrupt transportation supply chains ahead of the traditional beginning of the holiday shopping season, the National Retail Federation (NRF) said Tuesday. “It was a huge relief for retailers, their customers and the nation’s economy that the strike was short-lived,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said in the group’s latest Global Port Tracker (GPT). “It will take the affected ports a couple of weeks to recover, but we can rest assured that all ports across the country will be working hard to meet demand, and no impact on the holiday shopping season is expected,” Gold said. The GPT is published monthly by the NRF and Hackett Associates. The NRF is forecasting that 2024 retail sales, excluding automobile dealers, gasoline stations and restaurants, will grow between 2.5% and 3.5% over 2023. The latest GPT forecasts that US imports in October will be up 3.1% from October 2023. That is higher than the 1.3% increase it forecast in last month’s report. November imports are now expected to be up 0.9% year over year, down from the previous forecast of a 1.6% increase, while imports in December are projected to be up 0.2%, compared with the previous forecast of a 1.6% increase from December 2023. <h3>Action shifts to West Coast ports </h3>August saw the highest volume of US imports since the record set in May 2022 due to the frontloading of imports this summer. West Coast ports are expected to outperform East and Gulf coast ports in October as retailers ship their time-sensitive holiday merchandise in time for the Black Friday sales after Thanksgiving. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4ed96169-fa34-4b46-81e8-b67860854e39"></dynamic-object></div>“The surge in imports over the past few months has clearly been the result of contingency imports by wholesalers, retailers and industrial companies in anticipation of the East and Gulf coast port strike, rather than a sudden increase in demand,” said Ben Hackett, founder of Hackett Associates. “We may see <a href="https://www.joc.com/article/southern-california-supply-chain-fluid-despite-surging-import-volumes-5730931">some short-term congestion on the West Coast</a>, but nothing significant, and <a href="https://www.joc.com/article/us-east-gulf-coast-ports-confident-of-smooth-post-strike-reopening-5742607">East Coast delays should be limited</a>,” Hackett added. GPT forecasts total imports in 2024 will be up 12.1% from 2023. Imports in January, meanwhile, are forecast to be up 0.8% from January 2024, compared with the previous forecast of a 0.3% decrease. In its first forecast for February, GPT says imports will be down 11.2% year over year as many factories in Asia will be closed for a week or two for the 2025 Lunar New Year holidays that begin on Jan. 29. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com ">bill.mongelluzzo@spglobal.com</a>.</div>

US retailers are forecasting a modest year-over-year increase in imports this month to close out the 2024 peak shipping season, with most of the holiday merchandise already having entered the country due to the frontloading of imports from Asia this summer. Furthermore, the brief three-day strike by the International Longshoremen’s Association (ILA) on the East and Gulf coasts is not expected to disrupt transportation supply chains ahead of the traditional beginning of the holiday shopping season, the National Retail Federation (NRF) said Tuesday. “It was a huge relief for retailers, their customers and the nation’s economy that the strike was short-lived,” Jonathan Gold, NRF’s vice president for supply chain and customs policy, said in the group’s latest Global Port Tracker (GPT). “It will take the affected ports a couple of weeks to recover, but we can rest assured that all ports across the country will be working hard to meet demand, and no impact on the holiday shopping season is expected,” Gold said. The GPT is published monthly by the NRF and Hackett Associates. The NRF is forecasting that 2024 retail sales, excluding automobile dealers, gasoline stations and restaurants, will grow between 2.5% and 3.5% over 2023. The latest GPT forecasts that US imports in October will be up 3.1% from October 2023. That is higher than the 1.3% increase it forecast in last month’s report. November imports are now expected to be up 0.9% year over year, down from the previous forecast of a 1.6% increase, while imports in December are projected to be up 0.2%, compared with the previous forecast of a 1.6% increase from December 2023. Action shifts to West Coast ports August saw the highest volume of US imports since the record set in May 2022 due to the frontloading of imports this summer. West Coast ports are expected to outperform East and Gulf coast ports in October as retailers ship their time-sensitive holiday merchandise in time for the Black Friday sales after Thanksgiving. “The surge in imports over the past few months has clearly been the result of contingency imports by wholesalers, retailers and industrial companies in anticipation of the East and Gulf coast port strike, rather than a sudden increase in demand,” said Ben Hackett, founder of Hackett Associates. “We may see some short-term congestion on the West Coast , but nothing significant, and East Coast delays should be limited ,” Hackett added. GPT forecasts total imports in 2024 will be up 12.1% from 2023. Imports in January, meanwhile, are forecast to be up 0.8% from January 2024, compared with the previous forecast of a 0.3% decrease. In its first forecast for February, GPT says imports will be down 11.2% year over year as many factories in Asia will be closed for a week or two for the 2025 Lunar New Year holidays that begin on Jan. 29. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

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