Peter Tirschwell is Vice President, Maritime, Trade & Supply Chain, which provides a range of data and analytics and intelligence capabilities. He is responsible for all content appearing in Journal of Commerce publications, websites, events, and other products. A career shipping and transportation journalist, Peter has been a reporter, West Coast bureau chief, editor-in-chief, and publisher of the Journal of Commerce in his 30-plus-year career with the company beginning in 1992. He is the founder and chair of the annual <a target="_blank" rel="noopener noreferrer" href="https://tpm.joc.com/en">TPM</a> conference in Long Beach, Calif., the world’s largest container shipping conference. He writes a regular column in the Journal of Commerce print magazine and website covering a range of international logistics topics. He speaks regularly at industry events and has been quoted in mainstream business media including the BBC, The Wall Street Journal, The Financial Times, and The New York Times. He lives in Brooklyn with his family.

<div class="phx-topic abstract-wrapper">If carriers are successful in reducing the number of days shippers can hold containers before being charged detention fees, some shippers may have to adjust warehouse operations so they can unload and return containers to carriers more quickly.</div>

If carriers are successful in reducing the number of days shippers can hold containers before being charged detention fees, some shippers may have to adjust warehouse operations so they can unload and return containers to carriers more quickly.

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<div class="phx-topic">Following a year in which extended possession of containers by many US importers, often due to pandemic-impacted warehouse productivity, resulted in widespread equipment shortages, ocean carriers are signaling they will be specifically taking aim at reducing contracted free time in 2021–22 contracts.To the extent carriers are successful, this will force many shippers to either accept higher per diem charges or take potentially difficult steps to adjust warehouse operations so they can unload and return containers to carriers more quickly. The move by carriers could also impact drayage, forwarders say, by resulting in fewer opportunities for two-way moves by drayage drivers. The global container shortage, which resulted from cargo owners essentially slow-steaming the return of boxes, was one of the key factors in the larger container shipping breakdown that materialized last fall and is expected to continue well into 2021.According to one carrier executive, who asked not to be identified, “There needs to be some pressure on shippers, mainly consignees, to move their boxes quicker — that is, by reducing free time and chassis free time, so that we can see that [is implemented] in the current contracting.”The executive said the pressure on free time will not necessarily mean changes for all shippers, just those who tend to hold equipment for longer periods of time. To avoid higher costs, those shippers will need to examine their warehouse and distribution operations in greater detail.“For some customers, it doesn’t mean anything, because they are managing with 8 days of free time even if they have 20 in their contract,” the executive said. “But for those who have 20 days and it comes down to 10, but they operate at an average of 15 days, that has an implication on their cost exposure; it reflects how effective they are in managing their warehouse and intermodal business.”Others agree. “This will force warehouses to be more rigid with appointment scheduling, missed appointment penalties, possibly even forcing drop/hook facilities to look at more live unloads so they don’t get stuck with per diem,” said Duncan Wright, president of Cleveland-based logistics provider UWL.The focus on free time is part of a larger effort by carriers to reset expectations of shippers, who for much of the past decade enjoyed the benefits of systemic vessel over&amp;shy;capacity and carriers’ willingness to be competitive on contract terms to obtain shippers’ business. Carriers have signaled to US exporters, for example, not to expect free repositioning of empties to remote export origin locations. With carriers having consolidated and exhibiting discipline on capacity, rates will almost certainly go up, but shippers will be forced to address operational issues such as turning containers or risk costs rising even beyond those base rate increases.“In previous years, carriers were compelled to agree to shipper requests like additional free time, extending credit terms, providing chassis, and making legal boilerplate exceptions to retain customers. However, in today’s market, it seems they are now in a position to regain ground in these areas and only compromise with the most influential shippers,” said Bryan Most, senior vice president of retail at the New York Shipping Exchange (NYSHEX), a digital platform on which shippers and carriers can arrange mutually enforceable ocean freight contracts. “With the continued strength of this market, shippers are most likely looking at higher contract rates this year, and if some of the carrier concessions are not available, they will also need to quantify that impact on their operations — in effect, possibly adding additional costs to the supply chain.” The carrier executive said much the same thing.“The balance is coming back in a way where it’s not just a one-sided negotiation. That is the crux of the matter now,” the executive said. “It started last year, when we took a look at the contracts not only in terms of freight rates but with regard to the broader terms, such as credit, free time, all the different aspects, and we have started, beginning last year, to rein in some of those very generous terms that were out there in the market.”Wright believes carriers clamping down on free time will impact drayage operations, as quicker turning of containers would limit drayage drivers’ ability to handle the two-way moves they say are essential to their efficiency.“The drayage market is just as strained right now as the ocean carrier market is and the free time impact will likely have as large if not a larger impact on them as it does on the receiver’s facility,” Wright said. “If free time is impacted, this will put a significant strain on drayage operations, as truckers will likely be forced to spend more time bobtailing [i.e., driving with no container] to pick up containers for large drop-and-hook operations to avoid per diem.”Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@ihsmarkit.com">peter.tirschwell@ihsmarkit.com</a> and follow him on Twitter: <a href="http://www.twitter.com/PeterTirschwell">@petertirschwell</a>.</div>

Container lines

Trans-Pacific carriers aim to curb free time in annual contracts

<div class="phx-topic abstract-wrapper">FMC Commissioner Carl Bentzel said rerouting ships to the ports of Seattle and Tacoma could take up to six weeks, but he doesn’t see a better alternative to easing Southern California port congestion. </div>

FMC Commissioner Carl Bentzel said rerouting ships to the ports of Seattle and Tacoma could take up to six weeks, but he doesn’t see a better alternative to easing Southern California port congestion.

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<div class="phx-topic">With gridlock at the Los Angeles-Long Beach port complex “the worst that we’ve ever seen” and shippers increasingly challenged to obtain inventory, a Federal Maritime Commissioner is urging that ships arriving from Asia divert to less-congested Seattle and Tacoma. And, he says, carriers are already weighing that possibility.“The congestion at LA-LB is the worst that we’ve ever seen in terms of container cargo movement,” FMC commissioner Carl Bentzel told JOC.com on Monday. “I believe things have gotten to the point where serious consideration needs to be given to temporarily routing cargo, such as intermodal cargo, temporarily to other ports, for example the Pacific Northwest [PNW] ports that have capacity to handle intermodal cargo.” “We’re in search of operational capacity, and right now there is very little operational capacity left in LA-LB, but PNW ports could provide a temporary safety valve until we can relieve congestion,” he said. Bentzel said the deteriorating conditions at Los Angeles and Long Beach are evident in the inability of terminals to move containers through their facilities at anywhere near their normal pace. He said terminals’ productivity is 50 percent or less than normal due to multiple factors, and that is pushing the time frame for the ports to return to a normal state of operations further out into 2021.Container lines and forwarders tell JOC.com they aren’t seeing any let up of imports into Southern California for at least a month and are telling customers they need to book at least four weeks in advance to get space on ships. US laden imports from Asia through the LA-LB port complex in December jumped 36 percent year over year, according to PIERS, a sister product of JOC.com within IHS Markit. Gene Seroka, executive director of the Port of Los Angeles, said container lines and marine terminals have begun discussions on how to meter incoming cargo to Southern California in order to allow facilities to catch up on the backlog. “We’ve got to stem this tide so we can get back to some semblance of certainty in the supply chain,” Seroka told JOC.com in a Tuesday interview, noting that the congestion would last until June if drastic actions weren’t taken. Hapag-Lloyd’s decision to <a href="https://www.joc.com/maritime-news/container-lines/us-port-delays-force-‘structural’-blank-sailings-asian-services_20210126.html">blank sailings to the LA-LB port complex</a> and <a href="https://www.joc.com/maritime-news/container-lines/cma-cgm/cma-cgm’s-new-oakland-service-offers-southern-california-alternative_20210201.html">CMA CGM’s restructuring of a new Asian service</a> to include Oakland and Seattle and drop the LA call shows that carriers are working to relieve pressure on the port complex, Seroka said. There isn’t one company that can “pull the lever” on metering cargo nor it will simply “be a flick of the switch,” so it will take the broader industry working together. The potential for diverting ships to the PNW ports comes as pressure is growing to resolve the port issues. On Jan. 28,<a href="https://www.joc.com/regulation-policy/transportation-regulations/california-asks-fmc-immediate-action-export-delays_20210201.html"> California Lieutenant Governor Eleni Kounalakis wrote to the FMC</a>, saying “immediate steps must be taken to help alleviate the multitude of challenges being experienced at the ports.”Responding to the lieutenant governor's letter, the Pacific Merchant Shipping Association and the World Shipping Council said the remedies proposed such as reducing or waiving detention and demurrage fees would make the situation worse. Such a move would disincentivize shippers and truckers from picking up imports and returning equipment in a timely manner which is critical to improving port flow, said the groups representing marine terminals and container lines."Rather than encouraging the FMC to become involved in the operational and commercial details of the complex relationships among the users and service providers at our nation’s ports, the operations of which differ markedly across the country, we instead encourage closer dialogue amongst all parties in the supply chain to understand and collaborate to address the challenges we all face during the COVID cargo surge," PMSA President John McLaurin and WSC President John Butler wrote in the Feb. 2. letter. As of Tuesday, 39 container ships were at anchor off of LA-LB, according to Seroka. The number of ships at anchor has been steadily growing over the past month. The earliest of those ships arrived on Dec. 20, but that was an outlier; most of the container ships at anchor arrived after Jan. 20, and thus have been sitting at anchor for as much as two weeks. <h2>Carriers already eyeing PNW ports</h2>As dire as the situation might be, relief won’t come overnight. Bentzel said it would take time, perhaps as much as five to six weeks, before the three carrier alliances could redirect ships to the PNW ports. But he said carriers are already thinking along these lines given the situation at LA-LB.“The carriers operating within three alliances would have to plan to move certain discretionary intermodal cargoes to ports outside of the LA-LB,” Bentzel said. “Planning and achieving congestion mitigation might take some time because of the fact of the distance of the Asian trades, but absent change, there will be substantial increased backlogs at the Southern California ports which will increasingly cause similar impacts in Northern California.” “While it may take a couple of months, I understand that carriers are already considering actions to divert intermodal cargo to PNW ports and further discussions are under way to use that as an alternative,” he added. “Rail connections in the PNW are pretty strong, but I understand that discussions are underway with the railroads to ensure that adequate equipment and resources could be deployed.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@ihsmarkit.com">peter.tirschwell@ihsmarkit.com</a> and follow him on Twitter: <a href="http://www.twitter.com/PeterTirschwell">@petertirschwell</a>.</div>

North American ports

FMC’s Bentzel urges carriers to use PNW as alternative to congested LA–LB

<div class="phx-topic abstract-wrapper">The container shipping industry is in the midst of yet another predictable cycle in which supply chains are upended by unpredictable external forces, relationships between carriers and shippers are tested.</div>

The container shipping industry is in the midst of yet another predictable cycle in which supply chains are upended by unpredictable external forces, relationships between carriers and shippers are tested.

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<div class="phx-topic">Container shipping plays out in predictable cycles, and another one is under way right now.The cycle goes like this: Normal cargo flow is disrupted by a seismic and surprise external shock — be it a financial crisis, cyber attack, trade war, or global pandemic — precipitating a massive disruption in the system and yet again exposing its underlying weaknesses. Relationships and trust are strained or obliterated as customers are impacted. In response, they complain to regulators while seeking out new providers who can hopefully perform better. Eventually, the system recovers, even as the next unknown crisis looms, whether months or years down the road.The impact on shippers’ revenues, profits, and ability to meet or exceed the expectations of their own customers can’t be minimized. International traders rely on their transportation and logistics suppliers in the same way they rely on any vendor, with high expectations for service on par with the expectations of their own customers. When logistics vendors fail to deliver for their customers — and even worse, when that occurs while rates are at all-time highs — the outrage is as real as the business impact, and corrective action is imperative.As one shipper remarked recently on LinkedIn, reflecting the current environment of conflict, “Accountability and reliability are a thing of the past.”But it’s worth keeping the cycle in perspective because it has now played out multiple times over the past decade alone, and it always exposes the same thing: because the global system of moving containerized cargo is highly vulnerable to external shock, it is unpredictable by its very nature and incapable of quickly recovering.The capacity of the end-to-end container system is limited, including limited numbers of ships, containers, chassis, trucks, and terminal space. And as the market is experiencing currently, not only has capacity proved inadequate, but asset owners including carriers are signaling that they have no plans to invest to support future unpredictable volume surges, such as the spike in demand for personal protective equipment (PPE) and home goods spurred by the COVID‑19 crisis and, most recently prior to that, the front-loading of imports from Asia to beat a Trump administration China tariff deadline at the end of 2019.While the service reliability that shippers expect may in fact be a goal to which carriers and forwarders aspire, the inherent vulnerability of the system is such that during times of crisis, that goal is impossible to achieve, almost predictably so, leaving disappointment, blame, and frayed relationships in its wake.From the shippers’ perspective, it’s not an easy problem to solve. Changing vendors following service failures is part of the cycle, and it’s happening again now. “Due to the service failures we’re seeing currently, I’m seeing many long-standing relationships come to an end as customers seek out new vendors,” said Dave Bennett, chief commercial officer at customs broker and forwarder Farrow.And although that enables shippers to hold vendors accountable — and hopefully emerge with a better relationship — it doesn’t solve the underlying problem. That problem is that system-wide disruption could strike again at any time, undermining the service of even the best-performing providers, and there is no guarantee that when that happens a new provider will perform any more successfully than the prior one did.Another solution could be changing source countries. But finding new source countries less vulnerable to shock, such as Mexico for shippers in North America, is a highly complex, time-consuming, costly, and risky process that many companies are not willing to undertake merely to mitigate transport risk.Technology has not shown itself to be a solution either. Predictive analytics is improving shippers’ ability to forecast when ships will arrive at a particular port based on current weather and prior performance. But that assumes more or less a business-as-usual scenario.External shocks, such as the timing of the next devastating cyber attack or pandemic, are impossible to predict. Visibility can be valuable in supply chains, but if it’s reduced to showing that your container is on a ship anchored off of the Los Angeles–Long Beach port complex, it’s not exactly the most useful information.Neither is increasing safety stock in anticipation of disruption a solution. Besides being costly, holding excess inventory assumes a level of disruption that may not materialize for years to come. Inventory planning, which is complex enough during “normal” times due to rapidly growing e-commerce demand, is evolving using emerging data science tools such as demand sensing. But trying to anticipate the types of disruption that have been visited upon the container system over the past decade is next to impossible. That will be the key challenge going forward into the post-COVID-19 trade environment.Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@ihsmarkit.com">peter.tirschwell@ihsmarkit.com</a> and follow him on Twitter: <a href="http://www.twitter.com/PeterTirschwell">@petertirschwell</a>.</div>

Maritime

Shocks to container system rarely lead to improvements

<div class="phx-topic abstract-wrapper">Rapid collaboration by stakeholders as 2020 wound down helped prevent more than half a billion dollars in tariffs from being imposed on goods waiting at anchorage off the ports of Los Angeles and Long Beach.</div>

Rapid collaboration by stakeholders as 2020 wound down helped prevent more than half a billion dollars in tariffs from being imposed on goods waiting at anchorage off the ports of Los Angeles and Long Beach.

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<div class="phx-topic">As the end of 2020 approached and ships started to back up at anchor off the ports of Los Angeles and Long Beach, concern started to stir among members of the trade community — and not just due to growing cargo delays. The issue was that at midnight on Dec. 31 goods on ships at anchor would be subjected to hundreds of millions of dollars in higher tariffs if the ships had not officially arrived in the US by that point. A ship riding at anchor off the coast, even if within sight of land, would not automatically be considered as “arrived” by Customs and Border Protection (CBP), meaning that importers couldn’t file entries or receive release notices. And if the ship hadn’t “arrived” by the hour in question, a number of tariff programs were due to expire that could mean more than half a billion dollars in additional duties assessed on the cargo aboard the ships.A rough estimate was that more than 20 ships — containing a total of $4.5 billion worth of cargo — were supposed to have docked at Los Angeles and Long Beach marine terminals by the end of the year, but remained at anchorage positions due to the backup at the ports as a result of the COVID-19-led import surge. If they were still considered to be in transit by CBP, potentially up to $600 million in additional duty would be owed, although a more precise calculation wasn’t made.As November turned into December, a diverse coalition of trade community representatives — including the two port authorities, the Los Angeles Customs Brokers and Freight Forwarders Association, and the Pacific Merchant Shipping Association — began sounding the alarm.The higher duties would be imposed due to expiration of the Generalized System of Preferences which allows goods from developing countries to enter duty-free, expiration of Section 301 duty exemptions on goods from China, and expiration of tariff reductions under the miscellaneous trade bill which applies to parts and components versus finished goods.The concern triggered a whirlwind series of conversations with officials at CBP, which ultimately resulted in a determination by the agency that the anchorage positions occupied by the 20 ships qualified them as having arrived without having to actually dock at the ports, thus eliminating the worries about additional tariffs.“It became a fire drill,” said David Libatique, deputy executive director at the Port of Los Angeles. “We’ve been experiencing a huge surge of import cargo, so the customs brokers, the [National Retail Federation], [the Agriculture Transportation Coalition], and others raised the very real concern that aboard these ships at anchor there will be a lot of cargo subject to increased tariffs and duties as of midnight on Jan. 1.”“Our plea to CBP was ‘can you help us with this?,’ because we want to help a lot of American businesses and consumers avoid increased prices,” he added. “We estimated a lot of cargo could be left in the lurch if we don’t deal with this quickly. CBP responded very quickly and were very helpful.” <h2>Collaboration lauded</h2>The effort required a delving into regulations and maps and at one point triggered a call to the Marine Exchange of Southern California to determine if ships’ anchorage positions could actually be moved if it were determined that the ships were outside of official port limits, although that step ultimately wasn’t required.“The ports approached the Los Angeles Customs Brokers and Freight Forwarders Association and they asked us what could be done and we looked at the regulations and there was one that talked about ships that could be considered ‘arrived’ once they are within the port limits,” said Daniel Meylor, director of customs administration and compliance with Carmichael International Service.“CBP went back into history with the ports and looked at the maps,” Meylor said. “What they found is that there was an area right outside the breakwater that should have been included as within the limits. This allowed the 20 ships that could not get through the breakwater to the berth to be moored in that area and they could be considered arrived.”“The San Pedro Bay ports and our partners came together to help our shippers,” said Noel Hacegaba, deputy executive director at the Port of Long Beach. “With the new tariffs only days away from implementation, the Port of Long Beach worked with the Port of Los Angeles, US Customs and Border Protection, Marine Exchange of Southern California, port pilots, and ocean carriers to ensure that vessels that were scheduled to arrive prior to December 31 and were within three nautical miles of the port complex were not subject to the new tariffs,” Hacegaba said. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@ihsmarkit.com">peter.tirschwell@ihsmarkit.com</a> and follow him on Twitter: <a href="http://www.twitter.com/PeterTirschwell">@petertirschwell</a>.</div>

Late 2020 scramble saves LA-LB shippers from heavy duties

<div class="phx-topic abstract-wrapper">Rhein left a powerful legacy in shaping the careers of generations of executives, and instilling a commitment to quality, value, and innovation that is reflected today in ocean carriers’ pursuit of value creation.</div>

Rhein left a powerful legacy in shaping the careers of generations of executives, and instilling a commitment to quality, value, and innovation that is reflected today in ocean carriers’ pursuit of value creation.

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<div class="phx-topic">Timothy J. Rhein, a towering figure at APL and in container shipping, more broadly, who played a key role in the company’s pioneering innovations in ship design, terminal operations, and intermodal, passed away on Dec. 26 in Carmel, California. He was 79. No cause of death was given. Over a 34-year career at APL that started as a military contract analyst in 1967 after service in Vietnam, during which he received a Bronze Star, Rhein rose to become president and chief executive of a company known for its efforts to create value for customers through innovation. Toward the end of his career, Rhein presided over the company he loved passing out of American ownership after 149 years. The oldest continuously operating US shipping company dating back to 1848 was sold in 1997 to the Singapore state-owned carrier Neptune Orient Lines (NOL) in a deal orchestrated by APL’s lead investor, San Francisco-based Hellman &amp; Friedman, which was dissatisfied with its long-stagnant stock price. That began a long process of change and then decline of the unique APL culture that Rhein had come to define and personify.“Tim Rhein was a formidable competitor, proud and confident of APL’s capabilities and position in the market,” said Flemming Jacobs, a former Maersk partner who served as CEO of NOL after the acquisition of APL. “APL was certainly an innovative industry trendsetter in terminal operations, double-stack rail transportation, 53-footers, just to mention a few.” According to Jacobs, “Tim had to accept shareholders’ decision to sell APL and assisted in the transfer of ownership to NOL and with it the competent and loyal senior management and organization. A long and proud history went with it.”Rhein left a powerful legacy in shaping the careers of generations of executives and instilling a commitment to quality, value, and innovation that is reflected today in ocean carriers’ pursuit of value creation and their attempts to leave behind the commoditization that defined the industry over the past decade or more. “Quite simply, Tim had a greater hand in shaping my career at APL, and all that has followed, than any other individual,” said Ron Widdows, who served as Group CEO of NOL from 2008-2011 after a 30-year career with the company, and is now CEO of Flexi Van Leasing. <h2>Oversaw major innovations</h2>During his career, Rhein was closely associated with the major innovations pioneered by APL. That included introduction of the first double-stack rail service in 1984, extending APL’s historic presence as a West Coast carrier into the North American interior; and deploying the first post-Panamax container ship in 1988, one of the C-10 container ship class, with a capacity of 4,500 TEU, at the time the largest container ships in service. APL also introduced the first 53-foot domestic container in 1989, now a staple in North American domestic intermodal. As early as 1996 it was handling its first transactions over the internet.<div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5255447_1.0.png"></img><a href="https://www.joc.com/s3/files/%2Fsites%2Fdefault%2Ffiles%2Fu4859676%2FRhein.0119_0.png">Timothy J. Rhein</a></div>Rhein “was at the fore in helping APL drive many industry innovations we take for granted today. The first container ships too large for the Panama Canal, the rapid growth of stack train and intermodal services as a premium service differentiator for APL,” said Bob Sappio, CEO of SeaCube Container Leasing, who spent nearly 30 years at APL, including as senior vice president responsible for all of APL’s commercial activities in the Trans Pacific, Trans-Atlantic, and Latin American regions. Rhein infused the APL organization with a key value deeply rooted in its history in the Pacific — premium service. That led many shippers or beneficial cargo owners (BCOs) to greatly appreciate APL, although its ability to provide premium service became increasingly challenged in the 1990s as deregulation led to free market rates, pressure on rates, and a growing unwillingness by customers to pay for premium service. Despite its challenges earning an acceptable return, APL’s legacy lives on in recent premium services introduced by CMA CGM, which acquired NOL in 2015, and at APL Logistics, now part of KWE Group of Japan. The value-creating services that Rhein pioneered, including a 17-day Hong Kong to New York combination ocean and rail service via Seattle geared to the apparel market, were developed and introduced despite growing pricing pressures that were affecting the industry as early as the 1980s. An APL executive lamented in 1982 that shippers have available “fast, dependable liner service at substantially less in real terms or equivalent dollars — 30 percent, 40 percent, even 60 percent cheaper than the cost available when containers first began to be a factor in the Pacific trade in 1967,” according to The Box That Changed The World. “In plain English, we don’t make or keep enough money.”<h2>Earned respect of generations of APL executives</h2>Amicable on the surface and very private, Rhein was a tough-as-nails executive with an aura of quiet intensity and the occasional “volcanic temper,” according to Widdows, yet he earned the abiding respect of generations of APL executives, many of whom, similar to Widdows and Sappio, have gone on to storied careers at other organizations. “Like many who worked for Tim Rhein, our relationship evolved from being the object of his volcanic temper ... an experience I had more than a few times when I screwed up or something in my sphere of influence did not go as it should … to one of trust and mutual respect once I had been sufficiently tempered by his flame and found to meet his expectations for a senior leader in the company that he loved,” Widdows recalled.Rhein “was a tough task master, he didn't suffer fools gladly, but I always found him to be very fair-minded,” Sappio said."He was a demanding, no-nonsense manager. You always knew where you stood with him," said former APL communications director Gil Roeder. "He was supremely organized, clear and concise, with the ability to reduce any problem to one sheet of his yellow legal pad."In multiple roles in senior management at APL, Rhein instilled a sense of service excellence into his team that carries into services offered in the present day. “Tim taught me about what the APL brand stood for, the commitment to excellence, integrity, that as a leader you not only carry the brand but it flows through all you do in your interactions with your colleagues, and those you serve,” Widows said. “That your passion for what it meant to work for APL is infectious, and that you have a greater duty to do what you can to influence or lead in the industry that we toil in.” In the mid-1990s, the growing prospect of APL and other US flag carriers passing out of American hands presented a conundrum for US policymakers given the continuing reliance on private sector merchant tonnage to support military operations in times of crisis. Even if the company was sold to non-Americans, the thinking went, any US flag ships that are part of those companies’ fleets needed to still be controlled in the US to ensure they could be directed by the military in a crisis. A solution was reached under the leadership of then-Maritime Administrator Al Herberger, a retired Navy admiral, who worked with Rhein and others to ensure that foreign owners would continue to operate US-flagged ships, with those ships operated by US-based ship-operating entities and subsidized by the US government to provide for the higher cost of all-US crews. That program, called the Maritime Security Program, was created in 1996 in advance of APL being sold to NOL in 1997, Sealand sold to Maersk in 1999, and Farrell Lines sold to P&amp;O Nedlloyd in 2000. It continues to exist to this day, with 60 ships in the program and APL Marine Services as one of the participants operating nine US-flagged vessels.Rhein “was a strong advocate for the APL brand during the difficult transition where his company, a long-time fixture as one of the predominant maritime companies in the world, was sold to Neptune Orient Lines of Singapore,” said Federal Maritime Commissioner Carl Bentzel, who said he got to know Rhein shortly after he became CEO in the mid-1990s while he was working as maritime counsel for the Senate Commerce Committee. “Tim was always honest, able and respected in advocacy in the US Senate, and particularly proud of his company’s commitment to technological innovation in maritime shipping, and the Senators for whom I served always enjoyed meeting with him to discuss his views on maritime policy.”After Rhein retired in 2001, the following statement was entered into the Congressional Record: “Timothy Rhein was a nimble and gutsy decision maker, and we in Washington will miss his understanding and knowledge as we continue our pursuit of a policy to promote a strong US flag shipping presence.”Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@ihsmarkit.com">peter.tirschwell@ihsmarkit.com</a> and follow him on Twitter: <a href="http://www.twitter.com/PeterTirschwell">@petertirschwell</a>.</div>

Ex-APL executive Timothy Rhein dead at 79

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In today’s competitive logistical landscape, efficiency is an absolute necessity for smooth operations. Yet, in the barge sector, many operators still rely on fragmented systems, delayed updates, and manual tracking methods that slow decision-making and increase operational risk. OpenTug’s new eBook, How Enhanced Visibility Transforms Barge Operations, reveals how unified, real-time data can become your competitive advantage leading to improved voyage management and more actionable insights. Drawing on industry best practices and real-world examples, it explores how operational transparency empowers teams to: ●	Reduce delays with accurate ETAs and proactive scheduling decisions ●	Improve asset utilization by identifying underused equipment and optimizing cargos ●	Strengthen safety and compliance through consistent, accessible documentation and reporting ●	Boost customer satisfaction with transparent status updates and faster response time You’ll learn how visibility can connect every part of your operation into a single, actionable view. The ability to see and act on real-time information transforms the way you plan, execute, and deliver. From managing a small regional fleet to running a large, national operation, this eBook will help you understand the measurable benefits of enhanced visibility and how technology like BargeOS is transforming the way barge logistics is managed. Get your copy today and see how clear insights lead to stronger performance, smarter decisions, and more profitable operations. <a href="https://9315820.fs1.hubspotusercontent-na1.net/hubfs/9315820/eBook/Nav-theFuture-AJW-08.19.25.pdf" rel="noreferrer" class="joc_admin__link">Click here</a><span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-16_9 joc_admin__inline-image-position-left joc_admin__inline-image-size-small" data-figure-size="small" data-figure-position="left" data-figure-aspect-ratio="16:9"><img src="/content-assets/1756152344211_Opentug%20logo.png" alt="" class="joc_admin__inline-image-inherit">

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Transform Barge Operations with Total Visibility

At SSA Marine Mexico, we firmly believe that business development must go hand in hand with social and environmental well-being. Our vision is not solely focused on operating efficiently, but also on creating a meaningful and positive impact in the communities where we are present. Since 1995, we have reaffirmed this commitment through tangible actions that reflect our core values of responsibility, solidarity, and sustainability. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584535914_Photo%201.jpg" alt="" class="joc_admin__inline-image-inherit"> A Year of Major Achievements Over the past year, we allocated more than $107,000 USD to the implementation of 60 social and environmental projects, positively impacting over 7,800 people across various regions of Mexico. Each initiative was designed with a holistic approach, addressing key areas that contribute to long-term community development. Education: Laying the Foundation for the Future Education is one of the most powerful tools to promote social mobility and equitable development. At SSA Marine Mexico, we support academic initiatives that inspire and empower the next generation of leaders. One of our most impactful partnerships was with the University of Colima, where we sponsored the “Reto Camp” program. This initiative encourages university students to develop innovative solutions in the fields of sustainability, logistics, and port operations, offering them mentorship, tools, and real-world challenges to solve. In addition, we donated microscopes, school supplies, and educational materials to institutions in underserved communities, helping to improve the learning environment and provide students with the resources they need to succeed. Health and Sports: Promoting Wellness We believe that healthy communities are strong communities. We have supported several local sporting events and provided direct assistance to talented athletes, enabling them to pursue their passions and represent their regions with pride. Beyond sports, we also strengthened our collaboration with critical emergency response organizations such as the Mexican Red Cross and Civil Protection. Our contributions helped enhance their readiness and capabilities in times of crisis, ensuring better outcomes for those affected by emergencies. Supporting Vulnerable Groups: Reaching Those Who Need It Most A core part of our social responsibility efforts is directed toward supporting vulnerable populations. We have contributed to a range of initiatives focused on children, migrants, and at-risk families. These efforts included donations to orphanages and shelters, as well as support for the National Institute of Migration and grassroots organizations dedicated to protecting and empowering people facing adversity. By standing with those in need, we reinforce our commitment to inclusion and social justice, values that are central to our identity as a responsible company. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584944645_Photo%202.png" alt="" class="joc_admin__inline-image-inherit">Culture: Strengthening Community Identity Cultural identity is a key element in building resilient and united communities. At SSA Marine Mexico, we actively participate in the organization and sponsorship of cultural events that celebrate local traditions and foster civic pride. Working alongside port authorities and municipal governments, we helped bring music, art, and heritage to the forefront, creating spaces for community engagement and intercultural dialogue. Environment: Investing in the Planet Our commitment to sustainability goes beyond operations—it’s a philosophy that drives every decision we make. We have partnered with environmental institutions to carry out reforestation campaigns, beach cleanups, and conservation efforts. In collaboration with the Institute for the Environment, we supported initiatives aimed at decarbonization, biodiversity protection, and environmental education. By involving our employees and local volunteers in these actions, we also foster a culture of environmental stewardship throughout our organization and our surrounding communities. Innovation for a Sustainable Future Sustainability is not just about doing good—it’s also about doing things better. In 2024, we invested $22 million USD in the acquisition of 11 state-of-the-art E-RTG cranes. These electric rubber-tired gantry cranes represent a significant technological advancement in port equipment. Seven of them are already operating on clean electric energy, resulting in a reduction of nearly 4,000 tons of CO₂ emissions and improving operational efficiency by 7%. The remaining four cranes are fully compatible with future electrification, underscoring our long-term strategy to modernize our operations in an environmentally responsible way. This investment is part of a broader innovation roadmap that includes digitalization, automation, and cleaner energy sources—all designed to ensure that our ports continue to grow without compromising the health of our planet. Building a Better Tomorrow, Together At SSA Marine Mexico, we understand that sustainability is a shared and ongoing responsibility. True impact requires collaboration across sectors, long-term vision, and unwavering commitment. That is why we continue to work hand-in-hand with local authorities, non-profit organizations, universities, and our own employees to create solutions that are both scalable and sustainable. Our journey is far from over. In the years ahead, we will continue to deepen our community engagement, explore cleaner technologies, and strengthen the social fabric of the regions where we operate. Each initiative, no matter the size, is a step toward building a future where business success goes hand-in-hand with human and environmental prosperity. We are proud of what we have achieved in 2024, but we are even more excited about what lies ahead. SSA Marine Mexico — Moving the World, Caring for People and Planet. LINK: <a href="https://www.ssamarine.mx/" rel="noreferrer" class="joc_admin__link">https://www.ssamarine.mx/</a>

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SSA Marine Mexico: True Commitment to Sustainability

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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Filling the Supply Chain Education Gap with LTL Education Courses

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Quarterly Intelligence

<div class="phx-topic abstract-wrapper">Some shipping executives believe that with trans-Pac eastbound space sold out through Chinese New Year, the ongoing impact of the pandemic on buying patterns favoring household goods versus travel and leisure will extend the import surge well into 2021.</div>

Some shipping executives believe that with trans-Pac eastbound space sold out through Chinese New Year, the ongoing impact of the pandemic on buying patterns favoring household goods versus travel and leisure will extend the import surge well into 2021.

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<div class="phx-topic">For anyone who might have thought the arrival of the new year would bring relief from the crushing port congestion and global deceleration of container flows, disappointment arrived promptly and will likely linger for months to come.Evidence of the continuing, if not growing, impact of the COVID-19 pandemic on container trade — the highest spot rates ever recorded by the Shanghai Containerized Freight Index (SCFI), factories in China brought to a halt by completed orders that can’t be shipped out, and smaller “dead ports” in Asia that will at least temporarily not be served due to shortage of containers — all point to a system in the continuing throes of global crisis as 2021 begins.If prognosticators in the fall were speculating as to the duration of the unusual late year- surge in import trade, some now believe that with trans-Pacific eastbound space sold out through Chinese New Year in early February, the ongoing impact of the pandemic on buying patterns favoring household goods versus travel and leisure will extend the surge well into 2021.“It’s not going to slow down. We typically get a March/April slack, but that is definitely not happening this year and soon we’ll be back to peak season in June and July and then it starts all over again,” said Patrick Fay, co-founder and president of the Boston-based forwarder BOC International.Concern over continuing tight capacity in the eastbound trans-Pacific led a number of large importers last fall to extend existing contracts through 2022 at much higher rates as an alternative to being forced into an even higher spot market. In the current market, carriers including Mediterranean Shipping Co., CMA CGM, and Yang Ming are commanding rates far in excess of published spot rates for their premium services that guarantee equipment, space on the ship, and expedited flow through the destination terminal. But even premium space is not guaranteed, say forwarders.Beneficial cargo owners “are shopping multiple [non-vessel operating common carriers] looking for space, wherever they can get it. The challenge remains that even paying up [premium rates] doesn’t guarantee the space,” said John Hextall, chief executive of the logistics provider De Well Group. “If you are not already booked for the pre-CNY rush, you probably missed it.”“The end of 2020 did not bring any respite to the container shipping markets, as both spot rates as well as contract rate indices continued to soar,” Alan Murphy, Sea-Intelligence Maritime Analysis CEO, wrote in the firm’s Jan. 3 Sunday Spotlight newsletter.Last week, the SCFI rate from Shanghai to the East Coast of South America exceeded $8,000 per TEU, the first time an SCFI rate went above $8,000, according to Lars Jensen, CEO of SeaIntelligence Consulting and a JOC analyst.<h2>Some contract extensions to April 2022</h2>According to forwarder sources, a handful of large importers agreed to contract extensions with carriers by rewriting contracts in November to expire in April 2022 at rates of about $2,500 per FEU versus prior rates of $1,500 per FEU. That’s preventing those shippers from “being forced into a premium panic market,” said one forwarder.With carriers having restored all the capacity and more that was withdrawn during the depths of the initial COVID-19 lockdowns last spring, the major issues remain container vessel capacity and a shortage of container equipment, which by its nature is a global pool.“At present, the containership charter market is effectively ‘sold out’ across vessel sizes,” Daniel Richards, a senior analyst for Maritime Strategies International <a href="https://splash247.com/containership-owners-toast-a-sold-out-christmas-season/">wrote</a> in a mid-December commentary for shipping news outlet Splash 24/7.Sea-Intelligence reported on Jan. 3 that, “Six weeks from Chinese New Year, very few blank sailings have been announced, with only 2 to 4 percent of the total three-week CNY capacity blanked on trans-Pacific [services].”Much of the focus has been on shortages of container equipment that began materializing in mid-2020 and only became more severe as the year went on. The global container fleet grew at a cumulative annual rate of nearly 5 percent over the past decade, according to container lessor Textainer. But according to Drewry, that growth slowed to just 1 percent in 2020, likely due to the early year impact of the pandemic in China on major manufacturers such as China International Marine Containers (CIMC), which produces approximately half of dry containers globally. That has created painful shortages on the ground at Asian load ports that have reverberated throughout the container supply chain. US exporters have complained to politicians about their inability to obtain bookings as carriers in some cases are <a href="https://www.joc.com/maritime-news/container-lines/fmc-gauging-whether-ag-export-booking-rejections-violate-shipping-act_20201208.html">choosing to reposition empty containers back to Asia</a> to pick up higher paying imports, rather than carrying low value exports.With forwarders telling JOC.com that factories in China are begging them to come pick up completed products but can’t due to lack of containers, the issue has attracted the interest of the Chinese Ministry of Transportation (MOT). In a potentially significant statement, the MOT <a href="http://www.gov.cn/hudong/2020-12/29/content_5574123.htm">said</a> Dec. 29 that it will “supervise and coordinate all relevant shipping companies to further increase the capacity and supply of empty containers.”The shortage has become so severe that certain smaller Asia ports may no longer be served for the foreseeable future. “Smaller ‘dead ports’ in Asia where carriers cannot get containers — they will cease to serve them as they tighten the loop on their port rotations to get equipment repositioned,” Hextall said. “The container equipment imbalance is out of control and will likely not return to normalcy until US imports slow down.”Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@ihsmarkit.com">peter.tirschwell@ihsmarkit.com</a> and follow him on Twitter: <a href="http://www.twitter.com/PeterTirschwell">@petertirschwell</a>.</div>

No end in sight for container shipping dysfunction

<div class="phx-topic abstract-wrapper">South Carolina Ports Authority on Wednesday filed an unfair labor practice charge alleging an illegal secondary boycott in violation of the National Labor Relations Act. 
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South Carolina Ports Authority on Wednesday filed an unfair labor practice charge alleging an illegal secondary boycott in violation of the National Labor Relations Act.

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<div class="phx-topic">(This story has been updated to include a statement from South Carolina Attorney General Alan Wilson)Arguing that the master East and Gulf coast longshore labor agreement is interfering with its plans to divert services to the first new US marine terminal since 2009, South Carolina Ports Authority (SCPA) on Wednesday filed an unfair labor practice charge alleging an illegal secondary boycott in violation of the National Labor Relations Act.The action represents a rare flare-up in what for years has been a tranquil environment at East and Gulf coast ports for longshore labor relations in contrast to the West Coast, which has seen a series of disruptive longshore labor actions since the mid-1990s that contributed to a shift in market share to the East and Gulf coasts.Two carrier alliances — the Ocean and THE alliances — told the South Carolina Port Authority they were unwilling to agree to the port’s request to relocate four services, three serving Asia and one serving Europe, to the <a href="https://www.joc.com/port-news/us-ports/port-charleston/scpa-says-leatherman-terminal-spur-volume-recovery-2021_20201028.html">new $1.7 billion Hugh K. Leatherman Terminal</a> set to open on 300 acres of a former Navy base in March, from the port’s existing Wando Welch terminal. In refusing the port’s request to relocate, the carriers cited a clause in the master collective bargaining agreement between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), the umbrella employer group that negotiates the coastwise master contract with the ILA covering ports on the US East and Gulf coasts. That clause, originally inserted into the master agreement in 2013 and incorporated the master contract agreed to in 2018, requires that at newly opened terminals, longshore work which traditionally had been handled by nonunion employees at the state-run ports of Charleston, Savannah, and Wilmington — including operating the ship to shore cranes and yard equipment — be handled by ILA labor. The Leatherman terminal is the first test of that clause since it was incorporated into the master contract. “This is two parties [the ILA and USMX] trying to dictate how a third party runs its business and we think that’s illegal,” said James Newsome, executive director of South Carolina Ports Authority. Among other legal arguments, South Carolina said the provision does not apply because it was added to the master contract after the Leatherman terminal received necessary permits and construction had commenced. The port said the 2013 contract applies to ports “contemplating or intending to develop” a new container handling facility, whereas the Leatherman terminal by that point had progressed well beyond the contemplation stage. “After the [Leatherman terminal] was permitted and construction had commenced, the ILA in 2013 belatedly added a two-part provision to its master contract with the USMX that the ILA now is claiming applies to the HLT to pressure ocean carrier customers or others to boycott the HLT in an attempt to take away the state waterfront jobs, which the SCPA believes constitutes an illegal secondary boycott of the HLT,” South Carolina Ports said in a statement. “It’s not a new terminal as far as we’re concerned under the master contract, so that alone would disqualify the application of this clause to the Leatherman terminal,” Newsome said in an interview with JOC.com.<h2>ILA pressures on the hybrid model</h2>At the port of Charleston, as well as at Savannah and Wilmington, the state port authority uses a so-called “hybrid” work model where the port authority employs a state employee workforce of crane and lift machine operators as well as heavy lift maintenance staff. Those dockworkers work alongside three crafts of the ILA — deep sea, clerks, and checkers — a system the port said has contributed to a doubling of container volume at Charleston since 2009 and is “the competitive standard for the South Atlantic port market” which is “multi-generational in nature and forms a proud heritage to be respected and appreciated.”The ILA for its part <a href="https://www.joc.com/port-news/longshoreman-labor/international-longshoremen’s-association/ila-renews-push-south-atlantic-port-jobs_20170926.html">has long sought to bring the state employee jobs</a> into the union workforce similar to how they are at ports on the West Coast and at other major container ports within the jurisdiction of the ILA, including Houston. The union’s local leadership in Charleston, including longtime president Kenny Riley, author of a recent <a href="https://www.amazon.com/Kenny-Riley-Black-Union-Charleston/dp/1476677727">book</a> on longshore labor, is supportive of the effort. “The ILA has long aspired to perform all of the waterfront work undertaken in South Atlantic ports. This includes work historically and currently performed by the state employees of the SCPA,” South Carolina said in its statement. Newsome said the port authority opted not to incorporate automation into the design of the Leatherman terminal and recently offered a compromise to the ILA and USMX whereby it would agree to establish four “house gangs” of ILA labor who would in effect be full-time labor paid whether or not work is to be done, addressing a longtime concern that the ILA workers, as opposed to the state workers, are a temporary workforce who only get called when work requires it. Newsome also said the port authority is precluded by state law from entering into any collective bargaining with a union.South Carolina Attorney General Alan Wilson, who filed the charge on behalf of the port, issued a statement emphasizing how the union action conflicts with South Carolina being a right-to-work state, the principle that allows workers the freedom to choose whether or not to join a union.“The union is expected to follow the rule of law like everyone else,” Wilson <a href="http://www.scag.gov/archives/41804#ixzz6itBqzMcN">said in the statement</a>, issued Wednesday. “South Carolina has long been a staunch right-to-work state and the union cannot undermine our laws guaranteeing the right to work. Those laws do not permit the union to take over jobs from state employees.”<h2>Potential implications for Savannah</h2>The issue may come up again in Savannah, which in 2019 announced plans to expand its facilities to a 200-acre site on Hutchinson Island across the Savannah River from its existing 1,200-acre Garden City terminal, adding 2.5 to 3 million TEU of capacity. It is not clear whether that would be considered an expansion of the existing Garden City terminal or a new terminal as defined in the ILA-USMX agreement. Longshore labor disruption has been rare on the US East Coast, and there was no immediate indication that the action by South Carolina Ports would change that. Recent instances of disruption are few and far between, including a one-day wildcat strike on Jan. 29, 2016 at the Port of New York and New Jersey and a walkout at Baltimore in Nov. 2018 that prompted the Steamship Trade Association of Baltimore to file suit in US District Court claiming members of ILA Local 333 violated the no-strike clause in the coastwide master contract when they walked off the job.</div>

Peter Tirschwell, Vice Presidentmail

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