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<div class="phx-topic abstract-wrapper">The port will see almost half of its container capacity go offline beginning Thursday as the local longshore union declares an unlimited strike against two of Montreal’s largest marine terminals.</div>

The port will see almost half of its container capacity go offline beginning Thursday as the local longshore union declares an unlimited strike against two of Montreal’s largest marine terminals.

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<div class="phx-topic">Two marine terminals handling Mediterranean Shipping Co.’s Montreal container services face a work stoppage starting this week after longshore workers there voted to authorize an indefinite strike targeting nearly half of the port’s container capacity. Termont International said Monday that Local 375 of the Canadian Union of Public Employees (CUPE) notified it that an “unlimited strike” will occur at Montreal’s Maisonneuve and Viau terminals starting Thursday at 11 AM local time. The terminal operator urged shippers with cargo at both terminals to schedule pickups by Wednesday evening. The strike at the two terminals will idle more than 1 million TEUs of Montreal’s total 2.3 million TEUs in terminal capacity. The port’s two other international container terminals, Racine and Cast, won’t be affected by the work stoppage. Termont, a joint venture between MSC’s Terminal Investment Limited, SSA Marine and Canadian stevedore Logistec, primarily handles MSC’s trans-Atlantic and north-south services into Montreal. The services include the Montreal Express 1 from Italy, the Med Canadian service and the Canada Gulf Bridge service that spans Mexico and US Gulf ports. MSC’s current schedule shows at least four of its ships — Anya, Celine, Nahara and England — scheduled to arrive at the Termont terminals by the end of the week. Another two ships in MSC services — Levina III and OOCL St. Lawrence — are scheduled to arrive at Montreal’s other terminals. Local 375’s latest labor action represents a further escalation of pressure tactics against the Maritime Employers Association (MEA), which has yet to agree on a new contract covering the port’s 1,200 longshore workers. Local 375 also started <a href="https://www.joc.com/article/montreal-says-congestion-risk-grows-as-dockworkers-refuse-overtime-5751118">an ongoing boycott of overtime work</a> at the port and held <a href="https://www.joc.com/article/port-of-montreal-to-face-three-day-strike-against-two-terminals-next-week-5737483">a three-day work stoppage at the Viau and Maisonneuve terminals</a> at the start of October. This past Sunday, Local 375 conducted <a href="https://www.joc.com/article/montreal-dockworkers-plan-one-day-port-strike-on-sunday-5773614">a one-day, port-wide strike at Montreal</a>. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a>. </div>

Two marine terminals handling Mediterranean Shipping Co.’s Montreal container services face a work stoppage starting this week after longshore workers there voted to authorize an indefinite strike targeting nearly half of the port’s container capacity. Termont International said Monday that Local 375 of the Canadian Union of Public Employees (CUPE) notified it that an “unlimited strike” will occur at Montreal’s Maisonneuve and Viau terminals starting Thursday at 11 AM local time. The terminal operator urged shippers with cargo at both terminals to schedule pickups by Wednesday evening. The strike at the two terminals will idle more than 1 million TEUs of Montreal’s total 2.3 million TEUs in terminal capacity. The port’s two other international container terminals, Racine and Cast, won’t be affected by the work stoppage. Termont, a joint venture between MSC’s Terminal Investment Limited, SSA Marine and Canadian stevedore Logistec, primarily handles MSC’s trans-Atlantic and north-south services into Montreal. The services include the Montreal Express 1 from Italy, the Med Canadian service and the Canada Gulf Bridge service that spans Mexico and US Gulf ports. MSC’s current schedule shows at least four of its ships — Anya, Celine, Nahara and England — scheduled to arrive at the Termont terminals by the end of the week. Another two ships in MSC services — Levina III and OOCL St. Lawrence — are scheduled to arrive at Montreal’s other terminals. Local 375’s latest labor action represents a further escalation of pressure tactics against the Maritime Employers Association (MEA), which has yet to agree on a new contract covering the port’s 1,200 longshore workers. Local 375 also started an ongoing boycott of overtime work at the port and held a three-day work stoppage at the Viau and Maisonneuve terminals at the start of October. This past Sunday, Local 375 conducted a one-day, port-wide strike at Montreal . Contact Michael Angell at michael.angell@spglobal.com .

Montreal dockworkers target MSC’s terminals for strike this week

<div class="phx-topic abstract-wrapper">It is the second major port investment the Marseilles-based carrier has made recently after paying $1.2 billion last month for a majority stake in Brazil’s largest terminal operator.</div>

It is the second major port investment the Marseilles-based carrier has made recently after paying $1.2 billion last month for a majority stake in Brazil’s largest terminal operator.

<div class="phx-topic">CMA CGM said Tuesday it has signed a joint venture deal with Moroccan port operator Marsa Maroc to equip and operate half the Nador West Med container terminal near the Gibraltar mouth of the Mediterranean. It is the second major port investment the Marseilles-based carrier has made recently after <a href="https://www.joc.com/article/cma-cgm-moves-to-take-over-top-brazilian-terminal-operator-5732689">paying $1.2 billion last month for a majority stake</a> in Brazil’s largest terminal operator Santos Brasil. Rodolphe Saadé, chairman and CEO of the CMA CGM Group, said in a statement Morocco was positioning itself as “a strategic logistics and port hub with strong growth potential.” “The partnership we are entering into with Marsa Maroc marks a key step for the CMA CGM Group, strengthening our presence through the Nador West Med container terminal,” Saadé said. ”Our ambition is to support the country’s development, particularly in the forward-looking sectors of logistics and alternative energies,” he added. The joint venture covers one-half of the Nador West Med container terminal, giving CMA CGM control of 750 meters of quay with a maximum draught of 18 meters, in addition to 35 hectares of an adjacent container yard. Within the framework of a 25-year sub-concession, CMA CGM and Marsa Maroc will jointly invest $280 million into the terminal with the aim of achieving annual output of 1.2 million TEUs. CMA CGM did not provide a timeframe for when that volume target would be reached. CMA CGM has had a long-standing presence in Morocco. Through its subsidiary Terminal Link, the carrier owns 100% of a Casablanca terminal and a 40% stake in the Eurogate Tangiers terminal. “This is a clear strategic path for many of the carriers that need to ensure they have access to terminals they own to avoid supply chain disruption,” Peter Sand, chief analyst at rate benchmarking platform Xeneta, told the Journal of Commerce Tuesday when commenting on the deal. “Interesting to see CMA CGM being more aggressive in this area, but it fits well with a strategy to build up transshipment capacity in Morocco,” Sand added. West Mediterranean terminals have become important transshipment hubs for cargo destined for southern Europe. With the Red Sea mostly unavailable to commercial shipping amid ongoing militant attacks, southern Europe and East Mediterranean cargo is offloaded in terminals at ports such as Tanger Med, Algeciras and Barcelona for onward shipment. Surging volume earlier in the year placed those <a href="https://www.joc.com/article/bottlenecks-flare-in-barcelona-as-port-battles-rise-in-transshipment-volumes-5244343">ports under extreme pressure, especially Barcelona</a>, which is a destination port not suited to large transshipment volume. Nador West Med is also earmarked as a maritime bunkering hub for new synthetic energies in the Mediterranean, including e-methane and e-methanol that will fuel CMA CGM’s growing fleet of dual-fuel LNG and methanol vessels. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

CMA CGM said Tuesday it has signed a joint venture deal with Moroccan port operator Marsa Maroc to equip and operate half the Nador West Med container terminal near the Gibraltar mouth of the Mediterranean. It is the second major port investment the Marseilles-based carrier has made recently after paying $1.2 billion last month for a majority stake in Brazil’s largest terminal operator Santos Brasil. Rodolphe Saadé, chairman and CEO of the CMA CGM Group, said in a statement Morocco was positioning itself as “a strategic logistics and port hub with strong growth potential.” “The partnership we are entering into with Marsa Maroc marks a key step for the CMA CGM Group, strengthening our presence through the Nador West Med container terminal,” Saadé said. ”Our ambition is to support the country’s development, particularly in the forward-looking sectors of logistics and alternative energies,” he added. The joint venture covers one-half of the Nador West Med container terminal, giving CMA CGM control of 750 meters of quay with a maximum draught of 18 meters, in addition to 35 hectares of an adjacent container yard. Within the framework of a 25-year sub-concession, CMA CGM and Marsa Maroc will jointly invest $280 million into the terminal with the aim of achieving annual output of 1.2 million TEUs. CMA CGM did not provide a timeframe for when that volume target would be reached. CMA CGM has had a long-standing presence in Morocco. Through its subsidiary Terminal Link, the carrier owns 100% of a Casablanca terminal and a 40% stake in the Eurogate Tangiers terminal. “This is a clear strategic path for many of the carriers that need to ensure they have access to terminals they own to avoid supply chain disruption,” Peter Sand, chief analyst at rate benchmarking platform Xeneta, told the Journal of Commerce Tuesday when commenting on the deal. “Interesting to see CMA CGM being more aggressive in this area, but it fits well with a strategy to build up transshipment capacity in Morocco,” Sand added. West Mediterranean terminals have become important transshipment hubs for cargo destined for southern Europe. With the Red Sea mostly unavailable to commercial shipping amid ongoing militant attacks, southern Europe and East Mediterranean cargo is offloaded in terminals at ports such as Tanger Med, Algeciras and Barcelona for onward shipment. Surging volume earlier in the year placed those ports under extreme pressure, especially Barcelona , which is a destination port not suited to large transshipment volume. Nador West Med is also earmarked as a maritime bunkering hub for new synthetic energies in the Mediterranean, including e-methane and e-methanol that will fuel CMA CGM’s growing fleet of dual-fuel LNG and methanol vessels. Contact Greg Knowler at greg.knowler@spglobal.com .

CMA CGM shores up West Med transshipment capacity with Moroccan JV

<div class="phx-topic abstract-wrapper">The completion of initial clearance improvements allows CSX to operate double-stack rail service on a temporary route from Baltimore along its network in Pennsylvania, New Jersey, New York and into the Midwest. </div>

The completion of initial clearance improvements allows CSX to operate double-stack rail service on a temporary route from Baltimore along its network in Pennsylvania, New Jersey, New York and into the Midwest.

<div class="phx-topic">CSX Transportation has begun double-stacked intermodal service out of the Port of Baltimore after completing the first round of tunnel and track improvements from the port that will ultimately boost Baltimore’s current container handling capacity by one-third. Maryland Gov. Wes Moore said in a statement Monday the start of double-stacked rail operations from Baltimore comes after the completion of vertical clearance improvements at rail bridges north of the port as part of the Howard Street Tunnel Project. The $466 million Howard Street project, which began in 2022, <a href="https://www.joc.com/article/federal-grant-boost-baltimores-dock-rail-capacity_20220601.html">consists of raising tunnels and bridge clearances and lowering tracks along 22 locations on CSX tracks between Baltimore and Philadelphia</a>. The most complex part of the project involves raising the height of the 1.7-mile Howard Street tunnel. Moore’s office said the completion of the first clearance improvements allows CSX to operate double-stack rail service on a temporary route from Baltimore along its network in Pennsylvania, New Jersey, New York and into the Midwest until the work is complete in 2026. Baltimore has the shortest rail track mileage into Chicago from major East Coast ports. “This is a significant milestone for intermodal rail service between Baltimore and Midwest markets and wouldn’t be possible without the ongoing collaboration between our federal, state, and local project partners,”CSX CEO Joe Hinrichs said in the statement. Once the Howard Street project is fully complete, the double-stacking capability is expected to increase business at the port by approximately 160,000 containers annually. During the 12-month period ending in September, Baltimore handled 457,566 containers, according to data from the Maryland Port Administration. The Seagirt Marine Terminal, which has nominal capacity of 800,000 TEUs annually, is <a href="https://www.joc.com/article/new-msc-backed-baltimore-container-terminal-on-track-for-2028-debut-5220430">undergoing a densification project that will allow it to handle 1.2 million TEUs annually</a>. The Howard Street project will also allow double stacking of containers on intermodal service from Baltimore’s proposed Sparrows Point Container Terminal. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

CSX Transportation has begun double-stacked intermodal service out of the Port of Baltimore after completing the first round of tunnel and track improvements from the port that will ultimately boost Baltimore’s current container handling capacity by one-third. Maryland Gov. Wes Moore said in a statement Monday the start of double-stacked rail operations from Baltimore comes after the completion of vertical clearance improvements at rail bridges north of the port as part of the Howard Street Tunnel Project. The $466 million Howard Street project, which began in 2022, consists of raising tunnels and bridge clearances and lowering tracks along 22 locations on CSX tracks between Baltimore and Philadelphia . The most complex part of the project involves raising the height of the 1.7-mile Howard Street tunnel. Moore’s office said the completion of the first clearance improvements allows CSX to operate double-stack rail service on a temporary route from Baltimore along its network in Pennsylvania, New Jersey, New York and into the Midwest until the work is complete in 2026. Baltimore has the shortest rail track mileage into Chicago from major East Coast ports. “This is a significant milestone for intermodal rail service between Baltimore and Midwest markets and wouldn’t be possible without the ongoing collaboration between our federal, state, and local project partners,”CSX CEO Joe Hinrichs said in the statement. Once the Howard Street project is fully complete, the double-stacking capability is expected to increase business at the port by approximately 160,000 containers annually. During the 12-month period ending in September, Baltimore handled 457,566 containers, according to data from the Maryland Port Administration. The Seagirt Marine Terminal, which has nominal capacity of 800,000 TEUs annually, is undergoing a densification project that will allow it to handle 1.2 million TEUs annually . The Howard Street project will also allow double stacking of containers on intermodal service from Baltimore’s proposed Sparrows Point Container Terminal. Contact Michael Angell at michael.angell@spglobal.com .

Intermodal providers

First track improvements allow CSX to double-stack containers from Baltimore

<div class="phx-topic abstract-wrapper">A stronger manufacturing recovery is needed to increase demand in both the truckload and LTL sectors, speakers said during a Journal of Commerce webcast. </div>

A stronger manufacturing recovery is needed to increase demand in both the truckload and LTL sectors, speakers said during a Journal of Commerce webcast.

<div class="phx-topic">US trucking demand in the fourth quarter — whether truckload or less-than-truckload (LTL) — is essentially weak, and that isn’t likely to change until US manufacturing output strengthens substantially, speakers said during a Journal of Commerce webcast Thursday. “We’re just not seeing significant signs of a true, meaningful uptick in demand, even if we do have more seasonality,” Jason Miller, Eli Broad professor of supply chain management at Michigan State University said during the peak season trucking outlook webcast. The monthly for-hire trucking ton-mile index Miller produces was down 0.6% year over year in August, the latest month for which data is available. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="6d467649-a5c0-4834-9bf8-3dec9f76e301"></dynamic-object></div>Even after seasonal adjustment to trucking ton-miles data, “we’re coming up flat,” said Miller, who is also a Journal of Commerce analyst. Despite higher US imports in 2024, “we’re not seeing any signs yet of a significant breakout from a demand standpoint.” Similar comments have been made by large publicly owned trucking companies, which over the past week have reported soft demand in their quarterly earnings reports. That makes a strong increase in either truckload or LTL rates unlikely in early 2025. “I don’t expect there to be a real sharp inflection” in truck pricing in the first quarters of 2025, Knight-Swift Transportation Holding CEO Adam Miller said during an Oct. 23 earnings call. “I think it’s somewhat of a grind upwards,” at least for truckload pricing. “Our customers have simply had fewer shipments,” Old Dominion Freight Line (ODFL) CEO Marty Freeman told investment analysts during his company’s Oct. 23 earnings call. ODFL’s daily LTL shipment count dropped 1% year over year in the third quarter. “Looking at all the data, there’s good reason to expect freight volumes today have reverted back to 2019 levels overall,” Miller told the Journal of Commerce. Truck capacity is higher than in 2019 but trucking employment is heading toward pre-pandemic levels, he said. “You combine those two things and you get a market that’s generally soft,” he said. “It’s a shipper’s market, but you still have seasonality.” That seasonality may tighten the truckload spot market in the last two months of 2024, but not by much, Miller forecast. <h3>LTL capacity shrinks </h3>After <a href="https://www.joc.com/article/us-ltl-sector-growth-efficiencies-still-fueled-by-loss-of-yellow-5715785">the collapse of Yellow in 2023</a>, LTL capacity is lower than it was in 2019, according to Miller. The failure of the then third-largest LTL provider took 323 terminals and about 19,000 doors of LTL capacity out of the market, and that capacity hasn’t been replaced. “Half of that [Yellow] capacity has not even been sold yet,” Scooter Sayers, founder of Sayers Logistics and a sales executive for Cubiscan, a maker of dimensioning systems, said during the webcast. Yellow recently put <a href="https://www.joc.com/article/yellow-puts-remaining-112-ltl-terminals-on-the-block-5737425">112 terminals up for auction</a>. “I think the LTL carriers are looking at where they want to be five or 10 years down the road but they’re also looking at where the market is right now,” meaning they may not be too eager to bring terminals they’re buying from Yellow online quickly, Sayers said. While companies such as Estes, Saia, XPO and Knight-Swift have reopened former Yellow terminals, others are going to wait “until the time looks better,” Sayer said. “I think LTL capacity is going to double as the market lifts,” when it eventually does rebound. That could happen in the first half of 2025 if the US Federal Reserve continues to cut interest rates, Miller said. That could drive greater investment in manufacturing and factory output. “Freight volumes are so muted because of the industrial economy,” he said. He cited ongoing weakness in industries such as machine production, fabricated metals, wood products and paper manufacturing. “Paper manufacturing saw a big drop-off starting in the second quarter of 2022, and production is still down almost 10%,” he said. Paper manufacturers are the fourth-largest contributor to US truckload volumes, Miller said. “Paper manufacturing alone generates about seven million truckload shipments a year, as much if not more than all containerized imports,” he said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US trucking demand in the fourth quarter — whether truckload or less-than-truckload (LTL) — is essentially weak, and that isn’t likely to change until US manufacturing output strengthens substantially, speakers said during a Journal of Commerce webcast Thursday. “We’re just not seeing significant signs of a true, meaningful uptick in demand, even if we do have more seasonality,” Jason Miller, Eli Broad professor of supply chain management at Michigan State University said during the peak season trucking outlook webcast. The monthly for-hire trucking ton-mile index Miller produces was down 0.6% year over year in August, the latest month for which data is available. Even after seasonal adjustment to trucking ton-miles data, “we’re coming up flat,” said Miller, who is also a Journal of Commerce analyst. Despite higher US imports in 2024, “we’re not seeing any signs yet of a significant breakout from a demand standpoint.” Similar comments have been made by large publicly owned trucking companies, which over the past week have reported soft demand in their quarterly earnings reports. That makes a strong increase in either truckload or LTL rates unlikely in early 2025. “I don’t expect there to be a real sharp inflection” in truck pricing in the first quarters of 2025, Knight-Swift Transportation Holding CEO Adam Miller said during an Oct. 23 earnings call. “I think it’s somewhat of a grind upwards,” at least for truckload pricing. “Our customers have simply had fewer shipments,” Old Dominion Freight Line (ODFL) CEO Marty Freeman told investment analysts during his company’s Oct. 23 earnings call. ODFL’s daily LTL shipment count dropped 1% year over year in the third quarter. “Looking at all the data, there’s good reason to expect freight volumes today have reverted back to 2019 levels overall,” Miller told the Journal of Commerce. Truck capacity is higher than in 2019 but trucking employment is heading toward pre-pandemic levels, he said. “You combine those two things and you get a market that’s generally soft,” he said. “It’s a shipper’s market, but you still have seasonality.” That seasonality may tighten the truckload spot market in the last two months of 2024, but not by much, Miller forecast. LTL capacity shrinks After the collapse of Yellow in 2023 , LTL capacity is lower than it was in 2019, according to Miller. The failure of the then third-largest LTL provider took 323 terminals and about 19,000 doors of LTL capacity out of the market, and that capacity hasn’t been replaced. “Half of that [Yellow] capacity has not even been sold yet,” Scooter Sayers, founder of Sayers Logistics and a sales executive for Cubiscan, a maker of dimensioning systems, said during the webcast. Yellow recently put 112 terminals up for auction . “I think the LTL carriers are looking at where they want to be five or 10 years down the road but they’re also looking at where the market is right now,” meaning they may not be too eager to bring terminals they’re buying from Yellow online quickly, Sayers said. While companies such as Estes, Saia, XPO and Knight-Swift have reopened former Yellow terminals, others are going to wait “until the time looks better,” Sayer said. “I think LTL capacity is going to double as the market lifts,” when it eventually does rebound. That could happen in the first half of 2025 if the US Federal Reserve continues to cut interest rates, Miller said. That could drive greater investment in manufacturing and factory output. “Freight volumes are so muted because of the industrial economy,” he said. He cited ongoing weakness in industries such as machine production, fabricated metals, wood products and paper manufacturing. “Paper manufacturing saw a big drop-off starting in the second quarter of 2022, and production is still down almost 10%,” he said. Paper manufacturers are the fourth-largest contributor to US truckload volumes, Miller said. “Paper manufacturing alone generates about seven million truckload shipments a year, as much if not more than all containerized imports,” he said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

US trucking demand at 2019 levels, constraining rate hikes: analysts

<div class="phx-topic abstract-wrapper">The Port of Virginia is enjoying a 372% surge in breakbulk cargo volumes thanks largely to handling cargo shipments supporting a 2.6-gigawatt offshore wind project. </div>

The Port of Virginia is enjoying a 372% surge in breakbulk cargo volumes thanks largely to handling cargo shipments supporting a 2.6-gigawatt offshore wind project.

<div class="phx-topic">Progress on a gigantic wind farm off the US mid-Atlantic coast is picking up speed, and it’s driving a surge of project cargo to the Port of Virginia. In the first nine months of 2024, breakbulk cargo volumes through the port shot up 372% year over year to 360,976 tons, according to the Virginia Port Authority (VPA). The cargo windfall is largely coming from the 2.6-gigawatt Coastal Virginia Offshore Wind project, which Virginia utility Dominion Energy is developing in the mid-Atlantic, about 27 miles off the coast of Virginia Beach, VPA spokesman Joe Harris told the Journal of Commerce. The first cargo shipment for the project arrived at the port in October 2023. Since May, Dominion has installed 78 of the 176 total monopile foundations planned for the site, with the remaining installations on track for completion by late 2026, Dominion spokesman Jeremy Slayton told the Journal of Commerce. To ensure the port can handle the weight and size of the offshore wind project’s massive components, over $220 million in upgrades are underway at the 287-acre Portsmouth Marine Terminal, the staging site for the offshore wind project’s components and one of VPA’s two multipurpose terminals in Norfolk Harbor. Harris said the improvements — which include reconstructing the berth, reinforcing the cargo yard’s pavement, and reworking the vessel mooring configuration — are 85% complete and scheduled to be fully complete in January 2025. “We’re still pouring concrete and doing some heavy work, but we are nearing the end,” he said. In the meantime, Dominion is readying to take delivery of the Charybdis, the first US-flag compliant wind turbine installation vessel. The 472-foot vessel, which has been under construction in Brownsville, Texas, since 2020, should be ready for deployment by early 2025, Slayton said. The $715 million Charybdis will ferry wind components from the port to the installation site in compliance with the Jones Act, the federal law requiring that goods shipped between domestic ports are transported on ships that are US-built, owned and operated. “We knew early on that a Jones Act vessel was going to be key to not only our project, but also to offshore wind development in the US,” Slayton said. Components including monopile foundations and pin piles are being directly loaded onto the heavy-lift vessel Orion, owned by Belgium’s DEME Group, at Portsmouth Marine Terminal. From there, Jones Act vessels including tugs and barges will be used to install transition pieces, and then the Charybdis will install wind turbine components once the vessel is ready to go into service. Monopile installations will be paused from Nov. 1 to April 30 to allow for whale migration past the project area. The breakbulk boom in Virginia comes as project development in the US has decelerated “due largely to uncertainty around the presidential election,” according to industry group Oceantic Networks’ third quarter 2024 market report. However, states have revamped their project portfolios <a href="https://www.joc.com/article/transportation-industry-welcomes-project-cargo-reality-check-5703049">after several cancellations and delays in 2023 and early 2024</a>, federal permitting is being simplified, and funding from the Inflation Reduction Act is now being released, setting up the industry for growth, the report said. Contact Autumn Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

Progress on a gigantic wind farm off the US mid-Atlantic coast is picking up speed, and it’s driving a surge of project cargo to the Port of Virginia. In the first nine months of 2024, breakbulk cargo volumes through the port shot up 372% year over year to 360,976 tons, according to the Virginia Port Authority (VPA). The cargo windfall is largely coming from the 2.6-gigawatt Coastal Virginia Offshore Wind project, which Virginia utility Dominion Energy is developing in the mid-Atlantic, about 27 miles off the coast of Virginia Beach, VPA spokesman Joe Harris told the Journal of Commerce. The first cargo shipment for the project arrived at the port in October 2023. Since May, Dominion has installed 78 of the 176 total monopile foundations planned for the site, with the remaining installations on track for completion by late 2026, Dominion spokesman Jeremy Slayton told the Journal of Commerce. To ensure the port can handle the weight and size of the offshore wind project’s massive components, over $220 million in upgrades are underway at the 287-acre Portsmouth Marine Terminal, the staging site for the offshore wind project’s components and one of VPA’s two multipurpose terminals in Norfolk Harbor. Harris said the improvements — which include reconstructing the berth, reinforcing the cargo yard’s pavement, and reworking the vessel mooring configuration — are 85% complete and scheduled to be fully complete in January 2025. “We’re still pouring concrete and doing some heavy work, but we are nearing the end,” he said. In the meantime, Dominion is readying to take delivery of the Charybdis, the first US-flag compliant wind turbine installation vessel. The 472-foot vessel, which has been under construction in Brownsville, Texas, since 2020, should be ready for deployment by early 2025, Slayton said. The $715 million Charybdis will ferry wind components from the port to the installation site in compliance with the Jones Act, the federal law requiring that goods shipped between domestic ports are transported on ships that are US-built, owned and operated. “We knew early on that a Jones Act vessel was going to be key to not only our project, but also to offshore wind development in the US,” Slayton said. Components including monopile foundations and pin piles are being directly loaded onto the heavy-lift vessel Orion, owned by Belgium’s DEME Group, at Portsmouth Marine Terminal. From there, Jones Act vessels including tugs and barges will be used to install transition pieces, and then the Charybdis will install wind turbine components once the vessel is ready to go into service. Monopile installations will be paused from Nov. 1 to April 30 to allow for whale migration past the project area. The breakbulk boom in Virginia comes as project development in the US has decelerated “due largely to uncertainty around the presidential election,” according to industry group Oceantic Networks’ third quarter 2024 market report. However, states have revamped their project portfolios after several cancellations and delays in 2023 and early 2024 , federal permitting is being simplified, and funding from the Inflation Reduction Act is now being released, setting up the industry for growth, the report said. Contact Autumn Giusti at autumn@autumngiusti.com .

Offshore project delivers Virginia cargo windfall

<div class="phx-topic abstract-wrapper">Some freight brokers are increasing the number of loads they can book per day with software that automates repetitive components of the booking process.</div>

Some freight brokers are increasing the number of loads they can book per day with software that automates repetitive components of the booking process.

<div class="phx-topic">Freight brokers are harnessing automation to increase the number of loads each employee books with truckload carriers daily, efficiency gains that translate into easier access to capacity for shippers. Among the myriad potential use cases where automation might take hold in the logistics industry — from quoting to appointment scheduling to invoice auditing — freight brokers are already rapidly expanding their daily truckload booking capacity, industry experts say. “Decades of business process change is getting compressed down into two to three years,” Anthony Sutardja, CEO of brokerage automation software provider Parade, said at DAT Freight &amp; Analytics’ DATCon event in Kansas City, Missouri, Thursday. “You’ll see the incremental shift on productivity versus like $800,000 [of annual revenue] per head, then $1 million, then $1.5 million.” The most common metric brokers and the vendors that support them track is loads per day per employee. Historically, that number has been in the range of four to six loads per day. But automation of certain tasks associated with the booking process is unlocking more productivity, and some brokers are booking 10 or more loads per day per person. “Some brokers don’t know what the number is, but those that do monitor it very strictly,” John Tozer, chief operating officer at freight marketplace newtrul, told the Journal of Commerce. “The goal that I’ve seen is 10 bookings per day per rep. Once you get to 10, you’ve unlocked the ability to get to 15 or 20. It becomes exponential at that point.” Tozer said automating the booking process, a focus for newtrul, enables more capacity in other parts of a broker’s business, independent of whether those other functions eventually get automated. “This is a little simplistic, but brokers basically have three phases: you win freight, you build freight, and you book freight,” he said. “If you aren’t able to get to the point where you book 10 or more loads per rep, you don’t have the capacity to win more freight.” <h3>Raising the bar </h3>Speaking in early October on a panel at the Journal of Commerce Inland Distribution Conference in Chicago, Sutardja said the goal should eventually be 50 loads booked per day per person. At DATCon, he said Parade has broker customers that are, in certain instances, hitting that 50-load productivity target. That radical increase in loads booked per day is also being sought by the industry’s biggest brokerages. “We should be driving to a point where reps can move two or three times as many loads, not 20% more, but 200% to 300% more,” Scott Friesen, executive vice president of strategic analytics at Echo Global Logistics, said at DATCon. Friesen said it’s difficult for brokers to wrap their head around the idea that they could book three times the number of loads in the same amount of time. “The initial gut response is, there’s not enough time, there are too many things I have to do,” he said. “That’s the part that you have to challenge in your own mind. What are all those tasks that I’m doing, and which of those tasks should just be taken care of in an automated way.” Friesen’s advice to other brokers is to list out all the tasks associated with booking a load to see what can be automated. “What are business tasks that we do at volume, things that we spend a lot of time with human labor doing?” he asked, mentioning processes such as shipment tracking, order building, tender acceptance and carrier vetting. The broader question of how automation will change the brokerage workforce underpins many of these considerations. Software vendors and forward-thinking brokers tend to revert to the idea that people whose daily tasks will be automated will be deployed in other areas of the business, such as in managing carrier or shipper relationships. Sutardja, for instance, said automating rote components of the booking process enables brokers to address how to serve carriers better. “How do you help manage the relationships truly at scale?” he said. “You can go the backhaul lanes of a carrier and understand if they can they do a pickup on Fridays. These are conversations that require quality time. “Time is the one resource that keeps moving forward then we don’t get back,” he added. With these technologies, the focus is on enabling these folks to get that time back, to have conversations not with 20 carriers, but with 100 or 1,000 carriers on an individual basis. We’re already here today, and there’s a lot more to come in the next 12 months.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Freight brokers are harnessing automation to increase the number of loads each employee books with truckload carriers daily, efficiency gains that translate into easier access to capacity for shippers. Among the myriad potential use cases where automation might take hold in the logistics industry — from quoting to appointment scheduling to invoice auditing — freight brokers are already rapidly expanding their daily truckload booking capacity, industry experts say. “Decades of business process change is getting compressed down into two to three years,” Anthony Sutardja, CEO of brokerage automation software provider Parade, said at DAT Freight & Analytics’ DATCon event in Kansas City, Missouri, Thursday. “You’ll see the incremental shift on productivity versus like $800,000 [of annual revenue] per head, then $1 million, then $1.5 million.” The most common metric brokers and the vendors that support them track is loads per day per employee. Historically, that number has been in the range of four to six loads per day. But automation of certain tasks associated with the booking process is unlocking more productivity, and some brokers are booking 10 or more loads per day per person. “Some brokers don’t know what the number is, but those that do monitor it very strictly,” John Tozer, chief operating officer at freight marketplace newtrul, told the Journal of Commerce. “The goal that I’ve seen is 10 bookings per day per rep. Once you get to 10, you’ve unlocked the ability to get to 15 or 20. It becomes exponential at that point.” Tozer said automating the booking process, a focus for newtrul, enables more capacity in other parts of a broker’s business, independent of whether those other functions eventually get automated. “This is a little simplistic, but brokers basically have three phases: you win freight, you build freight, and you book freight,” he said. “If you aren’t able to get to the point where you book 10 or more loads per rep, you don’t have the capacity to win more freight.” Raising the bar Speaking in early October on a panel at the Journal of Commerce Inland Distribution Conference in Chicago, Sutardja said the goal should eventually be 50 loads booked per day per person. At DATCon, he said Parade has broker customers that are, in certain instances, hitting that 50-load productivity target. That radical increase in loads booked per day is also being sought by the industry’s biggest brokerages. “We should be driving to a point where reps can move two or three times as many loads, not 20% more, but 200% to 300% more,” Scott Friesen, executive vice president of strategic analytics at Echo Global Logistics, said at DATCon. Friesen said it’s difficult for brokers to wrap their head around the idea that they could book three times the number of loads in the same amount of time. “The initial gut response is, there’s not enough time, there are too many things I have to do,” he said. “That’s the part that you have to challenge in your own mind. What are all those tasks that I’m doing, and which of those tasks should just be taken care of in an automated way.” Friesen’s advice to other brokers is to list out all the tasks associated with booking a load to see what can be automated. “What are business tasks that we do at volume, things that we spend a lot of time with human labor doing?” he asked, mentioning processes such as shipment tracking, order building, tender acceptance and carrier vetting. The broader question of how automation will change the brokerage workforce underpins many of these considerations. Software vendors and forward-thinking brokers tend to revert to the idea that people whose daily tasks will be automated will be deployed in other areas of the business, such as in managing carrier or shipper relationships. Sutardja, for instance, said automating rote components of the booking process enables brokers to address how to serve carriers better. “How do you help manage the relationships truly at scale?” he said. “You can go the backhaul lanes of a carrier and understand if they can they do a pickup on Fridays. These are conversations that require quality time. “Time is the one resource that keeps moving forward then we don’t get back,” he added. With these technologies, the focus is on enabling these folks to get that time back, to have conversations not with 20 carriers, but with 100 or 1,000 carriers on an individual basis. We’re already here today, and there’s a lot more to come in the next 12 months.” Contact Eric Johnson at eric.johnson@spglobal.com .

Automation key to improving broker efficiency metrics: experts

<div class="phx-topic abstract-wrapper">Despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for shippers to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market, writes Kristian Ording, consultant and former logistics director </div>

Despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for shippers to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market, writes Kristian Ording, consultant and former logistics director

<div class="phx-topic">Over the past few years, the lack of true partnership in international container shipping has been laid bare. Carriers are quick to point fingers at shippers bailing from contracted rates to dip into spot market bookings during slack season or when the supply/demand balance is out of whack. Shippers turn that around, pointing to times when carriers have refused bookings during peak seasons or when geopolitical or weather-related disruptions disproportionately impact supply. And so, back and forth it goes with no real end in sight. Is there a solution? Can true partnerships be built, trusted and maintained? The answer is not always, and attempts can lead to frustration, but they are decidedly worth it for shippers trying to get the most value out of their ocean container supply chains. An anecdote helps explain. In 2014, I had the opportunity to speak on a procurement panel at TPM. At that time, we had a decentralized operating environment but a centralized procurement team responsible for gathering, leveraging and contracting all requirements for 10 individual business units across direct and indirect categories. Our approach was to bring historically decentralized negotiation processes together, resulting in master contracts at the corporate level featuring consistent key terms for each of the businesses — for ocean freight matters such as floating bunker, payment terms, free time, etc. While our process was certainly more analytical and pragmatic in nature, we did spend quite a lot of time building relationships and eventually what felt like partnerships across several carriers. This included developing a virtual quarterly business review (QBR) process and in-person annual reviews at the carrier headquarters in Europe and Asia to track contract progress and maintain open dialogue at senior levels. In August 2017, following our company’s merger with another large consumer package goods company, our team coordinated meetings with our top carriers and non-vessel operating common carriers to present our integrated company but also, in the spirit of partnership, to directly request feedback regarding best practices and what we could be doing better as we combined our approaches. We solicited feedback regarding our legacy request for proposals (RFPs), but also about contracting, key terms and post RFQ items such as allocation management, QBR cadence, etc. I’m not one to ever shy away from a good pun, and we had special labels printed on Yankee Candles featuring our new company logo and the phrase “Shoring Up the PartnerShip.” Our team took the time over the course of a week to host the carriers in our corporate headquarters with the intention of gathering feedback to ultimately build stronger partnerships. Some insight from the carriers were that longer term contracts would add value. Also, forecasting shipments further out and more accurately would help pre-confirm our space. Later in the year, we followed up those meetings with in-person meetings at the carrier headquarters in Europe and then also in Asia and further incorporated elements from these meetings into our process. Our 2018 RFP incorporated much of what the carriers had suggested to build stronger partnerships. One key item was building a biweekly, eight-week, forward-looking forecasting system starting with our trans-Pacific volumes that would be communicated directly to the carriers’ origin offices. As our businesses operated in separate ERPs, all the information had to be normalized and converted to a meaningful container forecast. Consolidating business unit container forecasts on a week, container size, lane, carrier basis process took a lot of effort, but the hope was that there would be real mutual value on the other side. Some carriers were quick to engage with our forecasting process, every two weeks confirming or denying each updated allocation using our requested format and approach. Our forwarders and booking entities were instructed to document any booking rejection including a reason code. We also built an internal mechanism to analyze successive forecasts against previous ones but more importantly to monitor actual bookings against forecasts. This information was then included in our carrier QBRs to elevate transparency and foster trust. Did taking these steps help build partnerships, and, at the end of the day, help confirm space on the ships? Sometimes. We built and refined the forecasting process and continued allocations during both slack and peak, lower market and higher market. However, as capacity tightened, unfortunately many of the carriers resorted to not confirming forecasts until the last minute, and in some cases either not confirming at all or accepting less bookings than forecast (and at times even than allocated). In other words, we tried but didn’t quite get there with all our partners. Should we continue trying? Absolutely. At the end of the day, the keys to partnership are communication and trust. One is relatively easy to do and maintain. The other takes many, many years to build and can unfortunately evaporate very quickly. That said, despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for beneficial cargo owners to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market. I hope shippers keep this in mind as we all gear up for the 2025 contracting cycle. Kristian Ording, a consultant who led global logistics and procurement at Newell Brands and most recently at Element Solutions, can be reached at <a href="ordingassociates@gmail.com">ordingassociates@gmail.com</a>.</div>

Over the past few years, the lack of true partnership in international container shipping has been laid bare. Carriers are quick to point fingers at shippers bailing from contracted rates to dip into spot market bookings during slack season or when the supply/demand balance is out of whack. Shippers turn that around, pointing to times when carriers have refused bookings during peak seasons or when geopolitical or weather-related disruptions disproportionately impact supply. And so, back and forth it goes with no real end in sight. Is there a solution? Can true partnerships be built, trusted and maintained? The answer is not always, and attempts can lead to frustration, but they are decidedly worth it for shippers trying to get the most value out of their ocean container supply chains. An anecdote helps explain. In 2014, I had the opportunity to speak on a procurement panel at TPM. At that time, we had a decentralized operating environment but a centralized procurement team responsible for gathering, leveraging and contracting all requirements for 10 individual business units across direct and indirect categories. Our approach was to bring historically decentralized negotiation processes together, resulting in master contracts at the corporate level featuring consistent key terms for each of the businesses — for ocean freight matters such as floating bunker, payment terms, free time, etc. While our process was certainly more analytical and pragmatic in nature, we did spend quite a lot of time building relationships and eventually what felt like partnerships across several carriers. This included developing a virtual quarterly business review (QBR) process and in-person annual reviews at the carrier headquarters in Europe and Asia to track contract progress and maintain open dialogue at senior levels. In August 2017, following our company’s merger with another large consumer package goods company, our team coordinated meetings with our top carriers and non-vessel operating common carriers to present our integrated company but also, in the spirit of partnership, to directly request feedback regarding best practices and what we could be doing better as we combined our approaches. We solicited feedback regarding our legacy request for proposals (RFPs), but also about contracting, key terms and post RFQ items such as allocation management, QBR cadence, etc. I’m not one to ever shy away from a good pun, and we had special labels printed on Yankee Candles featuring our new company logo and the phrase “Shoring Up the PartnerShip.” Our team took the time over the course of a week to host the carriers in our corporate headquarters with the intention of gathering feedback to ultimately build stronger partnerships. Some insight from the carriers were that longer term contracts would add value. Also, forecasting shipments further out and more accurately would help pre-confirm our space. Later in the year, we followed up those meetings with in-person meetings at the carrier headquarters in Europe and then also in Asia and further incorporated elements from these meetings into our process. Our 2018 RFP incorporated much of what the carriers had suggested to build stronger partnerships. One key item was building a biweekly, eight-week, forward-looking forecasting system starting with our trans-Pacific volumes that would be communicated directly to the carriers’ origin offices. As our businesses operated in separate ERPs, all the information had to be normalized and converted to a meaningful container forecast. Consolidating business unit container forecasts on a week, container size, lane, carrier basis process took a lot of effort, but the hope was that there would be real mutual value on the other side. Some carriers were quick to engage with our forecasting process, every two weeks confirming or denying each updated allocation using our requested format and approach. Our forwarders and booking entities were instructed to document any booking rejection including a reason code. We also built an internal mechanism to analyze successive forecasts against previous ones but more importantly to monitor actual bookings against forecasts. This information was then included in our carrier QBRs to elevate transparency and foster trust. Did taking these steps help build partnerships, and, at the end of the day, help confirm space on the ships? Sometimes. We built and refined the forecasting process and continued allocations during both slack and peak, lower market and higher market. However, as capacity tightened, unfortunately many of the carriers resorted to not confirming forecasts until the last minute, and in some cases either not confirming at all or accepting less bookings than forecast (and at times even than allocated). In other words, we tried but didn’t quite get there with all our partners. Should we continue trying? Absolutely. At the end of the day, the keys to partnership are communication and trust. One is relatively easy to do and maintain. The other takes many, many years to build and can unfortunately evaporate very quickly. That said, despite sometimes disappointing outcomes even following the best of intentions, it is still worth the effort for beneficial cargo owners to take the steps toward building partnerships with carriers and forwarders that can withstand the ever more frequent swings in the market. I hope shippers keep this in mind as we all gear up for the 2025 contracting cycle. Kristian Ording, a consultant who led global logistics and procurement at Newell Brands and most recently at Element Solutions, can be reached at ordingassociates@gmail.com .

BCO partnerships with carriers often fail but are still critical

<div class="phx-topic abstract-wrapper">Today, there are armies of the modern-day equivalent of longshoremen who, instead of moving heavy bags of sugar using steel hooks, are keying and rekeying the same data between various systems.</div>

Today, there are armies of the modern-day equivalent of longshoremen who, instead of moving heavy bags of sugar using steel hooks, are keying and rekeying the same data between various systems.

<div class="phx-topic">On April 26, 1956, 58 containers were transported from the Port of Newark to the Port of Houston on Ideal-X’s maiden voyage. Upon its arrival, 58 trucks were waiting to pick up the cargo and bring the containers to their respective destinations. With this unremarkable journey, Malcom McLean unwittingly ushered in a new era for global trade that would end up contributing to significant growth of that trade and in the process lifted many developing countries out of poverty. Although containers were used before, it was McLean’s vision of using them for intermodal transportation that was truly disruptive. The net results over the last 70 years are remarkable. Containerization substantially reduced the cost and time of shipping. Just-in-time supply chains led to the reduction in inventories held by companies, which in turn reduced their working capital needs. As a result, businesses are conducting trade with far-flung suppliers and coordinating an ever-more intricate web of partners. Yet today we are seeing clouds gathering that threaten the status quo. The world is grappling with increased volatility, exemplified by events such as the Red Sea crisis and the COVID-19 pandemic. Geopolitical tensions are contributing toward a systematic reconfiguration of existing trade networks. Meanwhile, the change in consumer spending patterns amid the rise of cross-border e-commerce requires an ever-more-responsive supply chain. The increased complexity requires companies to become more resilient either through the use of new technologies or by building more slack in the system through redundancy at a far greater cost. Over the years, local and global digital solution providers have emerged to tackle this problem. Yet they typically address only limited geographies or narrow verticals within the supply chain. One of the main challenges standing in the way is the difficulty to exchange data across many heterogenous systems across the world. Paradoxically in this modern age, it is often easier to move goods internationally than to move data seamlessly across the supply chain. Today, there are armies of the modern-day equivalent of longshoremen who, instead of moving heavy bags of sugar using steel hooks, are keying and rekeying the same data between various systems. Rather than recording each item of the cargo on a tally sheet, they are trading Excel sheets and PDFs over email in an attempt to string together the disparate islands of data that exist along the supply chain. This begs the question: What would the late McLean do if confronted with such a sad state of affairs? I believe he would recognize the electronic Bill of Lading (eBL) as the digital equivalent of a physical container. eBL as a “data container” could simplify the process of exchanging data along the supply chain because it offers three new digital abilities. First, eBL as a digital single source of truth of a shipment: The eBL could become a universal “data container” for all data related to the shipment throughout its international journey. This includes data such as certificate of origin, packing list and commercial invoices, as well as visibility information. Second, eBL as a digital tool to control data access rights of a shipment: The eBL could control what each party in the supply chain can and cannot see. With clear access rights, the data for a single shipment can be shared securely through a unique “data container,” with the right parties accessing their needed data. Banks might need to see the invoice and packing list but may not need to have the visibility data. Finally, eBL as a digital up-to-date timeline of events related to a shipment: The eBL could enable instant financial settlements without the need for a third party to play the role of escrow since the payment flow can be directly matched with the digital transfer of rights as captured within the digital timeline of the “data container.” With this unique combination of eBL’s digital properties, supply chain data can be easily stitched together for any shipment. This allows the best solution providers for each use case to be bundled together, offering bespoke end-to-end solutions that meet each customer’s needs regardless of their geographies or verticals. The outcome is accurate and timely insights, empowering supply chain professionals to focus on handling disruptions instead of being glorified data janitors. McLean didn’t set out with some grandiose mission, but with a simple goal to offer cheaper means of transportation. But as the industry embraced containers, the world witnessed an entire economic revolution. Today, in our simple quest for resiliency, we have similarly stumbled upon the “data container” to enable the seamless exchange of data. Let’s work together as an industry to figure out how best to put eBLs to use. Who knows where we might end up? Contact Bertrand Chen at <a href="mailto:bertrand@gsbn.trade">bertrand@gsbn.trade</a>. </div>

On April 26, 1956, 58 containers were transported from the Port of Newark to the Port of Houston on Ideal-X’s maiden voyage. Upon its arrival, 58 trucks were waiting to pick up the cargo and bring the containers to their respective destinations. With this unremarkable journey, Malcom McLean unwittingly ushered in a new era for global trade that would end up contributing to significant growth of that trade and in the process lifted many developing countries out of poverty. Although containers were used before, it was McLean’s vision of using them for intermodal transportation that was truly disruptive. The net results over the last 70 years are remarkable. Containerization substantially reduced the cost and time of shipping. Just-in-time supply chains led to the reduction in inventories held by companies, which in turn reduced their working capital needs. As a result, businesses are conducting trade with far-flung suppliers and coordinating an ever-more intricate web of partners. Yet today we are seeing clouds gathering that threaten the status quo. The world is grappling with increased volatility, exemplified by events such as the Red Sea crisis and the COVID-19 pandemic. Geopolitical tensions are contributing toward a systematic reconfiguration of existing trade networks. Meanwhile, the change in consumer spending patterns amid the rise of cross-border e-commerce requires an ever-more-responsive supply chain. The increased complexity requires companies to become more resilient either through the use of new technologies or by building more slack in the system through redundancy at a far greater cost. Over the years, local and global digital solution providers have emerged to tackle this problem. Yet they typically address only limited geographies or narrow verticals within the supply chain. One of the main challenges standing in the way is the difficulty to exchange data across many heterogenous systems across the world. Paradoxically in this modern age, it is often easier to move goods internationally than to move data seamlessly across the supply chain. Today, there are armies of the modern-day equivalent of longshoremen who, instead of moving heavy bags of sugar using steel hooks, are keying and rekeying the same data between various systems. Rather than recording each item of the cargo on a tally sheet, they are trading Excel sheets and PDFs over email in an attempt to string together the disparate islands of data that exist along the supply chain. This begs the question: What would the late McLean do if confronted with such a sad state of affairs? I believe he would recognize the electronic Bill of Lading (eBL) as the digital equivalent of a physical container. eBL as a “data container” could simplify the process of exchanging data along the supply chain because it offers three new digital abilities. First, eBL as a digital single source of truth of a shipment: The eBL could become a universal “data container” for all data related to the shipment throughout its international journey. This includes data such as certificate of origin, packing list and commercial invoices, as well as visibility information. Second, eBL as a digital tool to control data access rights of a shipment: The eBL could control what each party in the supply chain can and cannot see. With clear access rights, the data for a single shipment can be shared securely through a unique “data container,” with the right parties accessing their needed data. Banks might need to see the invoice and packing list but may not need to have the visibility data. Finally, eBL as a digital up-to-date timeline of events related to a shipment: The eBL could enable instant financial settlements without the need for a third party to play the role of escrow since the payment flow can be directly matched with the digital transfer of rights as captured within the digital timeline of the “data container.” With this unique combination of eBL’s digital properties, supply chain data can be easily stitched together for any shipment. This allows the best solution providers for each use case to be bundled together, offering bespoke end-to-end solutions that meet each customer’s needs regardless of their geographies or verticals. The outcome is accurate and timely insights, empowering supply chain professionals to focus on handling disruptions instead of being glorified data janitors. McLean didn’t set out with some grandiose mission, but with a simple goal to offer cheaper means of transportation. But as the industry embraced containers, the world witnessed an entire economic revolution. Today, in our simple quest for resiliency, we have similarly stumbled upon the “data container” to enable the seamless exchange of data. Let’s work together as an industry to figure out how best to put eBLs to use. Who knows where we might end up? Contact Bertrand Chen at bertrand@gsbn.trade .

Develop ‘data container’ for seamless data exchange throughout supply chain

Shanghai to N. Europe

{name} 
{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {N_Europe_YoY.formatNumber("##.#'%'")}

 Shanghai to Mediterranean

{name} 
{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {Med_YoY.formatNumber("##.#'%'")}

The Shanghai Shipping Exchange’s (SSE) Shanghai Containerized Freight Index (SCFI) reflects spot rates and associated seaborne charges for containerized exports from Shanghai. The SCFI includes indices of freight rates in 13 individual shipping routes and a composite index, using Oct. 16, 2009, as the base period (Oct. 16, 2009 = 1000). [SSE](https://en.sse.net.cn/indices/scfinew.jsp)

Shanghai to North Europe and Mediterranean container spot rates (SSE)

Shanghai to Europe container spot rates (SCFI-Weekly) Gateway

<div class="phx-topic abstract-wrapper">Forwarders say their containers are sitting at some terminals for 10 days or longer before they can be retrieved, although some relief in import volumes and dwell times is expected next month.</div>

Forwarders say their containers are sitting at some terminals for 10 days or longer before they can be retrieved, although some relief in import volumes and dwell times is expected next month.

<div class="phx-topic">Rail container dwell times in the ports of Los Angeles and Long Beach surged to a two-year high in September as the largest US port complex handled record one-month volumes of imports from Asia, driven in part by retailers diverting cargo from East and Gulf coast ports ahead of the longshore strike there. And while dwell times for containers leaving the LA-LB complex by truck hit their highest level since October 2023, terminal operators say the average of 3.21 days is not contributing to congestion. The Los Angeles-Long Beach port complex in September handled 874,730 TEUs of imports from Asia, besting the previous one-month record of 873,196 TEUs in May 2022 during the post-COVID import boom, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. The record imports in September sent rail container dwell times in LA-LB soaring to an average of 9.25 days, up from 8.2 days in August and the highest dwells since 14.2 days in October 2022, according to the Pacific Merchant Shipping Association (PMSA), which represents terminal operators and shipping lines on the West Coast. “The situation is bad and it’s getting worse,” said Stephen A. Nothdurft, vice president of sales/North America at the forwarder MOL Consolidation Service (MCS). “As always, it’s a terminal-by-terminal situation.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="155dedc1-99f2-4adf-a449-1c9ab2510f95"></dynamic-object></div>Forwarders say their containers are sitting at some LA-LB terminals for 10 days or longer before they can be retrieved. “We’ve had about three times our normal inventory on dock for about six weeks now,” said Alan McCorkle, president of Yusen Terminals in Los Angeles. With two weeks remaining in the peak shipping season, terminal operators expect imports will soften in the normally slow month of November. US imports from Asia hit 1.76 million TEUs in July, the highest since May 2022. That figure has gradually decreased — 1.74 million TEUs in August and 1.72 million TEUs in September — but continues to hover near two-year highs nonetheless. Carriers have <a href="https://www.joc.com/article/carriers-to-deploy-extra-loaders-to-los-angeles-long-beach-amid-import-surge-5714861">deployed 28 extra-loader vessels in September and October</a>, in addition to their normal weekly services, to handle the huge import volumes in the eastbound trans-Pacific headed to Los Angeles-Long Beach. But each port said just two extra-loaders are currently scheduled to call at their terminals in November, a sign that import volumes — and rail dwells — will decline. <h3>Terminals deploy different operating procedures </h3>Some terminals have been able to weather the elevated rail container dwells without experiencing significant congestion. “Our [on-dock] inventory is 40% higher than we would like, but our [rail] dwells are still about four days,” said Anthony Otto, president of Long Beach Container Terminal (LBCT). LBCT is a fully automated container terminal and normally has among the lowest rail container dwells and truck turn times in the port complex. McCorkle said that when Yusen’s on-dock inventory surged last month, the terminal activated its near-dock temporary storage yard so inbound containers could be moved from the terminal as soon as they were discharged from the vessels. “This has helped tremendously. There has been some backup, but we’ve kept our terminal fluid,” he said. The rail and truck container dwell times as tracked by PMSA vary widely from terminal to terminal based on their individual operating plans, the configuration of their on-dock railyards and the number of railcars positioned at their facilities. Noel Hacegaba, COO at the Port of Long Beach, said the average rail container dwell at the port’s six container terminals was seven days. While that was up from four days in July, it was about two days less than PMSA’s average dwell time for the LA-LB gateway. Overall operations at Long Beach’s six container terminals remain fluid, he said. “We are busy, but not congested,” Hacegaba said. “We are at 73% capacity and still have room to handle additional volume.” <h3>Imports, rail container dwells expected to peak soon </h3>Imports are projected to peak in Los Angeles at 125,882 TEUs during the week of Oct. 20 before dropping to 111,713 TEUs the next week, while Long Beach’s imports are expected to fall from 102,756 TEUs next week to 87,780 TEUs in the week of Oct. 27, according to data from the ports. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="217f56e4-413e-45e2-9df5-fc12cc20fc70"></dynamic-object></div>November is normally a slow month in the eastbound trans-Pacific because most of the holiday merchandise arrives at the ports by late October so retailers can stock their shelves in time for the Black Friday sales on the day after Thanksgiving. While that should be the case again this year, Los Angeles-Long Beach could capture a higher share of total US imports from Asia if the contract negotiations between the International Longshoremen’s Association (ILA) and East and Gulf coast employers drag on next month and through December. The ILA ended its three-day strike on Oct. 3 with a tentative agreement on wages and agreed to extend the deadline for reaching a new coastwide contract until Jan. 15 <a href="https://www.joc.com/article/despite-tentative-wage-deal-usmx-and-ila-have-bumpy-road-ahead-on-other-key-issues-5743997">so the two sides could negotiate other key issues</a>. Retailers with time-sensitive spring merchandise will likely continue to ship through Southern California until a final contract is reached, forwarders 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>

Rail container dwell times in the ports of Los Angeles and Long Beach surged to a two-year high in September as the largest US port complex handled record one-month volumes of imports from Asia, driven in part by retailers diverting cargo from East and Gulf coast ports ahead of the longshore strike there. And while dwell times for containers leaving the LA-LB complex by truck hit their highest level since October 2023, terminal operators say the average of 3.21 days is not contributing to congestion. The Los Angeles-Long Beach port complex in September handled 874,730 TEUs of imports from Asia, besting the previous one-month record of 873,196 TEUs in May 2022 during the post-COVID import boom, according to PIERS, a sister company of the Journal of Commerce within S&P Global. The record imports in September sent rail container dwell times in LA-LB soaring to an average of 9.25 days, up from 8.2 days in August and the highest dwells since 14.2 days in October 2022, according to the Pacific Merchant Shipping Association (PMSA), which represents terminal operators and shipping lines on the West Coast. “The situation is bad and it’s getting worse,” said Stephen A. Nothdurft, vice president of sales/North America at the forwarder MOL Consolidation Service (MCS). “As always, it’s a terminal-by-terminal situation.” Forwarders say their containers are sitting at some LA-LB terminals for 10 days or longer before they can be retrieved. “We’ve had about three times our normal inventory on dock for about six weeks now,” said Alan McCorkle, president of Yusen Terminals in Los Angeles. With two weeks remaining in the peak shipping season, terminal operators expect imports will soften in the normally slow month of November. US imports from Asia hit 1.76 million TEUs in July, the highest since May 2022. That figure has gradually decreased — 1.74 million TEUs in August and 1.72 million TEUs in September — but continues to hover near two-year highs nonetheless. Carriers have deployed 28 extra-loader vessels in September and October , in addition to their normal weekly services, to handle the huge import volumes in the eastbound trans-Pacific headed to Los Angeles-Long Beach. But each port said just two extra-loaders are currently scheduled to call at their terminals in November, a sign that import volumes — and rail dwells — will decline. Terminals deploy different operating procedures Some terminals have been able to weather the elevated rail container dwells without experiencing significant congestion. “Our [on-dock] inventory is 40% higher than we would like, but our [rail] dwells are still about four days,” said Anthony Otto, president of Long Beach Container Terminal (LBCT). LBCT is a fully automated container terminal and normally has among the lowest rail container dwells and truck turn times in the port complex. McCorkle said that when Yusen’s on-dock inventory surged last month, the terminal activated its near-dock temporary storage yard so inbound containers could be moved from the terminal as soon as they were discharged from the vessels. “This has helped tremendously. There has been some backup, but we’ve kept our terminal fluid,” he said. The rail and truck container dwell times as tracked by PMSA vary widely from terminal to terminal based on their individual operating plans, the configuration of their on-dock railyards and the number of railcars positioned at their facilities. Noel Hacegaba, COO at the Port of Long Beach, said the average rail container dwell at the port’s six container terminals was seven days. While that was up from four days in July, it was about two days less than PMSA’s average dwell time for the LA-LB gateway. Overall operations at Long Beach’s six container terminals remain fluid, he said. “We are busy, but not congested,” Hacegaba said. “We are at 73% capacity and still have room to handle additional volume.” Imports, rail container dwells expected to peak soon Imports are projected to peak in Los Angeles at 125,882 TEUs during the week of Oct. 20 before dropping to 111,713 TEUs the next week, while Long Beach’s imports are expected to fall from 102,756 TEUs next week to 87,780 TEUs in the week of Oct. 27, according to data from the ports. November is normally a slow month in the eastbound trans-Pacific because most of the holiday merchandise arrives at the ports by late October so retailers can stock their shelves in time for the Black Friday sales on the day after Thanksgiving. While that should be the case again this year, Los Angeles-Long Beach could capture a higher share of total US imports from Asia if the contract negotiations between the International Longshoremen’s Association (ILA) and East and Gulf coast employers drag on next month and through December. The ILA ended its three-day strike on Oct. 3 with a tentative agreement on wages and agreed to extend the deadline for reaching a new coastwide contract until Jan. 15 so the two sides could negotiate other key issues . Retailers with time-sensitive spring merchandise will likely continue to ship through Southern California until a final contract is reached, forwarders said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .Contact Laura Robb at laura.robb@spglobal.com .

LA-LB rail dwells spike to two-year high amid record imports in September

<div class="phx-topic abstract-wrapper">Ocean carriers have so far been unable to stem the rate slide in the traditionally slow post-Golden Week period that followed an early peak season on the trade lane, but they are pulling hard on capacity management levers in a bid to balance supply and demand.</div>

Ocean carriers have so far been unable to stem the rate slide in the traditionally slow post-Golden Week period that followed an early peak season on the trade lane, but they are pulling hard on capacity management levers in a bid to balance supply and demand.

<div class="phx-topic">Forwarders expect freefalling Asia-North Europe ocean spot rates to bottom out in October and then climb through the remainder of the year as carriers increase blank sailings and roll out rate hikes to target early Chinese New Year demand. In an advisory to customers this week, a Europe-based global forwarder said there is less volume currently on the Asia-Europe trade because some factories and shippers were holding cargo back in anticipation of rates falling further. But that will change. “November demand is expected to be strong because the blank sailings will limit capacity and the Chinese New Year peak will be earlier because of the longer transit times [around southern Africa],” the advisory noted. Lunar New Year will be earlier in 2025, falling on Jan. 29 compared with Feb. 10 this year. The head of ocean freight at a Germany-based forwarder who did not want to be identified agreed that rate levels were likely to rise through November with demand picking up from early in the month amid carriers withdrawing capacity. Carriers have so far been unable to stem the rate slide in the traditionally slow post-Golden Week period that followed an early peak season on Asia-Europe, but they are pulling hard on capacity management levers in a bid to balance supply and demand. “As a consequence of the decline in demand, Maersk is looking to balance the network accordingly,” the carrier told customers in an advisory this week. Data from visibility provider eeSea shows carriers are so far expected to blank 118,545 TEUs in November on Asia-Europe, representing 10% of available capacity on the trade. That’s about the same as October but a significant jump from 4.5% blanked in September. Total Asia-North Europe capacity — comprising both available and blanked capacity — was 1.21 million TEUs in November, compared with just over 1 million TEUs during the same month last year, according to eeSea. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="874fb71b-dde8-4286-b65b-1bef7790a9f3"></dynamic-object></div>Carriers this year have kept idle capacity at low levels while adding significant numbers of new vessels. So far this year, capacity delivered in the “ultra-large” vessel segment of 14,501 TEUs and above is at is at 658,048 TEUs, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. On a global level, shipping association BIMCO has forecast cargo volume growth at 3% to 4% in both 2024 and 2025, which will be easily outstripped by fleet growth due to top 9.5% in 2024 and 4.9% in 2025. “In 2024, 478 container ships with a capacity of 3.1 million TEUs are scheduled for delivery, beating the 2023 record by 41%,” Niels Rasmussen, BIMCO’s chief shipping analyst, told the Journal of Commerce in a recent interview. <h3>Nov. 1 rate hikes </h3>The Asia-North Europe capacity cuts have yet to exert any upward pressure on rates during the traditionally slow post-Golden Week period in early October that followed an early peak season on Asia-Europe. Spot rates from Asia to North Europe have lost more than $5,500 since early July, when prices hit a 2024 high of $8,500 per FEU. The average rate this week was $2,900 per FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Several carriers have announced freight-all-kinds (FAK) rate levels from Nov. 1 in a move to capitalize on any rising demand and finish the year strongly. The increases are led by Mediterranean Shipping Co., which is setting its rate at $5,000 per FEU. Maersk has told customers there will be a rate increase from Nov. 4, but did not provide a figure. Hapag-Lloyd, however, is setting its rate at $2,500 per FEU, lower than the current market. Potentially aiding carrier attempts to raise rate levels will be weather-related congestion that has been disrupting ports at both ends of the Asia-North Europe trade. Kuehne + Nagel’s visibility platform SeaExplorer is reporting the current average waiting time at Hamburg is near 1.17 days, but yard utilization is at 102% with the German port limiting empty returns for all carriers. Labor shortages at night and on weekends are adding to delays. Across the English Channel in Felixstowe, SeaExplorer is reporting heavy disruption at the UK’s largest container hub and noted that operator Hutchison Ports has threatened to close its gates to empties if stock levels are not reduced below 5,000 TEUs. The recent typhoons Bebinca and Pulasan in Asia caused the bunching of vessels with the average waiting time in Shanghai over the past seven days at 2.61 days, according to SeaExplorer. Heavy berth congestion at the port’s Waigaoqiao terminals is causing three-day delays while the larger Yangshan terminals are facing waiting times of up to two days. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Forwarders expect freefalling Asia-North Europe ocean spot rates to bottom out in October and then climb through the remainder of the year as carriers increase blank sailings and roll out rate hikes to target early Chinese New Year demand. In an advisory to customers this week, a Europe-based global forwarder said there is less volume currently on the Asia-Europe trade because some factories and shippers were holding cargo back in anticipation of rates falling further. But that will change. “November demand is expected to be strong because the blank sailings will limit capacity and the Chinese New Year peak will be earlier because of the longer transit times [around southern Africa],” the advisory noted. Lunar New Year will be earlier in 2025, falling on Jan. 29 compared with Feb. 10 this year. The head of ocean freight at a Germany-based forwarder who did not want to be identified agreed that rate levels were likely to rise through November with demand picking up from early in the month amid carriers withdrawing capacity. Carriers have so far been unable to stem the rate slide in the traditionally slow post-Golden Week period that followed an early peak season on Asia-Europe, but they are pulling hard on capacity management levers in a bid to balance supply and demand. “As a consequence of the decline in demand, Maersk is looking to balance the network accordingly,” the carrier told customers in an advisory this week. Data from visibility provider eeSea shows carriers are so far expected to blank 118,545 TEUs in November on Asia-Europe, representing 10% of available capacity on the trade. That’s about the same as October but a significant jump from 4.5% blanked in September. Total Asia-North Europe capacity — comprising both available and blanked capacity — was 1.21 million TEUs in November, compared with just over 1 million TEUs during the same month last year, according to eeSea. Carriers this year have kept idle capacity at low levels while adding significant numbers of new vessels. So far this year, capacity delivered in the “ultra-large” vessel segment of 14,501 TEUs and above is at is at 658,048 TEUs, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. On a global level, shipping association BIMCO has forecast cargo volume growth at 3% to 4% in both 2024 and 2025, which will be easily outstripped by fleet growth due to top 9.5% in 2024 and 4.9% in 2025. “In 2024, 478 container ships with a capacity of 3.1 million TEUs are scheduled for delivery, beating the 2023 record by 41%,” Niels Rasmussen, BIMCO’s chief shipping analyst, told the Journal of Commerce in a recent interview. Nov. 1 rate hikes The Asia-North Europe capacity cuts have yet to exert any upward pressure on rates during the traditionally slow post-Golden Week period in early October that followed an early peak season on Asia-Europe. Spot rates from Asia to North Europe have lost more than $5,500 since early July, when prices hit a 2024 high of $8,500 per FEU. The average rate this week was $2,900 per FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global. Several carriers have announced freight-all-kinds (FAK) rate levels from Nov. 1 in a move to capitalize on any rising demand and finish the year strongly. The increases are led by Mediterranean Shipping Co., which is setting its rate at $5,000 per FEU. Maersk has told customers there will be a rate increase from Nov. 4, but did not provide a figure. Hapag-Lloyd, however, is setting its rate at $2,500 per FEU, lower than the current market. Potentially aiding carrier attempts to raise rate levels will be weather-related congestion that has been disrupting ports at both ends of the Asia-North Europe trade. Kuehne + Nagel’s visibility platform SeaExplorer is reporting the current average waiting time at Hamburg is near 1.17 days, but yard utilization is at 102% with the German port limiting empty returns for all carriers. Labor shortages at night and on weekends are adding to delays. Across the English Channel in Felixstowe, SeaExplorer is reporting heavy disruption at the UK’s largest container hub and noted that operator Hutchison Ports has threatened to close its gates to empties if stock levels are not reduced below 5,000 TEUs. The recent typhoons Bebinca and Pulasan in Asia caused the bunching of vessels with the average waiting time in Shanghai over the past seven days at 2.61 days, according to SeaExplorer. Heavy berth congestion at the port’s Waigaoqiao terminals is causing three-day delays while the larger Yangshan terminals are facing waiting times of up to two days. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe carriers target pre-Lunar New Year demand with rate hikes, blank sailings

<div class="phx-topic abstract-wrapper">While longshore wages will not increase until a formal contract is signed, the container shipping industry is starting to tally up the billions in new costs that will come with the almost 62% wage hike, according to a Journal of Commerce analysis</div>

While longshore wages will not increase until a formal contract is signed, the container shipping industry is starting to tally up the billions in new costs that will come with the almost 62% wage hike, according to a Journal of Commerce analysis

<div class="phx-topic">The tentative wage deal agreed to between longshore workers and maritime employers along the US East and Gulf coasts could create as much as $5 billion in new waterfront labor costs over the six-year life of the next contract, according to estimates compiled by the Journal of Commerce. While a high number itself — other estimates put it much higher — marine terminal operators hope the wage deal will spur greater productivity and efficiency that will help pay for the increased costs. The agreement struck Oct. 3 between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) will provide dockworkers with a 61.5% increase in the top wage scale over six years, the ILA said in a statement. That was enough to get <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">the ILA to agree to a contract extension that reopened East and Gulf coast ports after a three-day strike at the start of October</a>. The wage increase comes in tiers of $6 per hour in the first year, $5 in the second year, $4 in the third year and $3 per hour over the balance of the contract. The salary hike, though, remains contingent upon both sides negotiating a final master contract by Jan. 15 that covers other thorny issues, including work jurisdiction, automation and coastwide benefits. Neither side has publicly said what the wage deal would cost the industry overall, and the actual costs depend on many unknowns such as actual hours worked and container volumes handled. But a Journal of Commerce analysis based on the current growth rate in work hours at East and Gulf coast ports and cumulative hourly raises per year shows $4.95 billion in additional labor costs through 2030. The estimate assumes work hours at the ports under the ILA master contract grow at an annual average of 4.3% over the next six years, the same rate of growth in coastwide longshore work hours seen since 2013, according to data from the USMX. That assumption would put total work hours at 64.4 million by 2030, up from 47.8 million in 2023. In the first year of the deal, overall wages could increase by $312 million. The cumulative raise in the second year would bring wages up another $572 million. The third and fourth years add another $781 million and $937 million, respectively, while over $1 billion in additional labor costs could come in each of the contract’s final two years. The estimate also assumes that the wage increases are paid as straight-time, rather than as overtime hours. Overtime pay can be a significant part of longshore worker income. While the container shipping industry will bear most of the costs, cruise ship and roll-on/ roll-off carrier segments will also pay for the higher wages. This method is about as good as any for estimating an unknown cost, according to Jason Miller, professor of Supply Chain Management at Michigan State University and a Journal of Commerce contributor. Miller’s own approximate estimate considers the cost of moving a marine container, with that amount assumed to be evenly split between labor costs and other operating and capital expenses. If lift fees are between $400 and $500 per container, Miller said a 61.5% rise in wages amounts to anywhere between a $125 to $150 increase in per-container lift costs. If East and Gulf coast import volumes hover near 13 million TEUs per year, approximately 7 million containers through 2030, that translates to anywhere between $5.2 billion and $6.3 billion in added labor costs, Miller said. “It seems like a reasonable number and why the ocean carriers would have been willing to agree to the wage increase,” he said. “How much revenue are carriers getting each year for 13 million TEUs of imports each year? “Think about the value of the goods that will be coming through the East and Gulf coasts,” Miller added. “That number is getting into the trillions. The ILA wage deal is a relatively small share of that.” <h3>‘Burundi-size’ cost? </h3>But an executive with the terminal subsidiary of a European-based ocean carrier told the Journal of Commerce that the cost of the wage deal also needs to be measured against the cost of export and empty container moves, for which there is little to no revenue. East and Gulf coast ports are on track to handle about 19 million containers in total, full and empty, in 2024, according to the ocean carrier’s data. The new wage deal will increase its terminal unit’s labor costs by $170 per container. Assuming a nearly similar increase across other terminal operators, the wage deal would cost the container shipping industry $3.2 billion per year in additional labor costs — or more than $19 billion over the life of the new contract — a cost the executive said will be borne directly by US consumers. “The extra cost that US consumers will pay exceeds the entire GDP of a country like Burundi that has a population of 13 million inhabitants,” the executive said. “Somebody is paying for the empties as well and it is not the carriers,” the source added. “The trade imbalance, and the resulting amount of empties, gets all priced in into what is being paid for the full import and export boxes.” The USMX does not release figures on what it paid longshore workers. However, based on the dues contribution rate reported by the ILA in its most recent annual report to the US Department of Labor, its members were paid $2.9 billion in wages during 2023. The ILA said in a statement about the tentative agreement that the 61.5% wage increase “is unprecedented and serves as a testament to the union’s commitment to securing fair compensation for its members.” The wage deal comes as ocean carriers are expected to continue reporting multi-billion-dollar profits. Among publicly traded ocean carriers, combined net income is expected to reach $16.8 billion in 2024, according to S&amp;P Global consensus analyst estimates. <h3>New wages add to lift costs </h3>The ILA’s wage increases will flow through the industry via annual rate adjustments to the container lift agreements that ocean carriers have with marine terminals, a US-based terminal executive told the Journal of Commerce. Ocean carrier members of the USMX cover 70% of the ILA’s annual wage increases, while marine terminals and stevedores are responsible for the remainder. So the $6 per hour wage hike in the first year of the tentative agreement, which represents a 15% increase, means ocean carriers face a 10.7% increase from their share, plus an annual increase indexed to overall inflation, in container lift rates. The terminal executive said US terminal lift rates generally hover near $300 per container, while higher-cost regions such as the Northeast have lift costs at approximately $400 per container. Labor costs charged by US marine terminals can account for up to 60% of their revenue, the highest share of such costs globally. Whether terminal automation would temper costs remains unclear, the executive added, due to high upfront costs of automation technology and the uncertainty around its payback. The most successful automated and semi-automated terminals were originally designed from the ground up specifically for those operations, meaning that it’s difficult to bolt on automation technology to an existing operation. The hope with the new wage deal is that it will be accompanied by efficiency gains to move more boxes per hour, the executive said, noting that <a href="https://www.joc.com/article/chinas-ports-still-lead-performance-rankings-while-indias-move-higher-cppi-5213974">US container ports generally rank very low versus their overseas peers in terms of efficiency</a>. “Look at Europe where the longshoremen are unionized and many of the terminals are automated, but are much more productive,” the executive said. “When there is efficiency, it helps our ability to offset the wage increases. We’ll pay the higher wages but want to get something out of it in terms of productivity, not just increasing man-hours. Otherwise, this is just further inflationary pressure.” Another US-based terminal executive said the total cost of the wage deal should be juxtaposed against the size of the investment needed to automate US terminals. The source said the higher wages are a necessary investment in maintaining stable longshore workforces along the East and Gulf coasts, but those workers still need to hit benchmarks seen at other global ports. “How can vessel services keep their schedules when there’s 35 moves per hour at Southeast Asia ports and 19 moves per hour at US ports?” the executive asked. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

The tentative wage deal agreed to between longshore workers and maritime employers along the US East and Gulf coasts could create as much as $5 billion in new waterfront labor costs over the six-year life of the next contract, according to estimates compiled by the Journal of Commerce. While a high number itself — other estimates put it much higher — marine terminal operators hope the wage deal will spur greater productivity and efficiency that will help pay for the increased costs. The agreement struck Oct. 3 between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) will provide dockworkers with a 61.5% increase in the top wage scale over six years, the ILA said in a statement. That was enough to get the ILA to agree to a contract extension that reopened East and Gulf coast ports after a three-day strike at the start of October . The wage increase comes in tiers of $6 per hour in the first year, $5 in the second year, $4 in the third year and $3 per hour over the balance of the contract. The salary hike, though, remains contingent upon both sides negotiating a final master contract by Jan. 15 that covers other thorny issues, including work jurisdiction, automation and coastwide benefits. Neither side has publicly said what the wage deal would cost the industry overall, and the actual costs depend on many unknowns such as actual hours worked and container volumes handled. But a Journal of Commerce analysis based on the current growth rate in work hours at East and Gulf coast ports and cumulative hourly raises per year shows $4.95 billion in additional labor costs through 2030. The estimate assumes work hours at the ports under the ILA master contract grow at an annual average of 4.3% over the next six years, the same rate of growth in coastwide longshore work hours seen since 2013, according to data from the USMX. That assumption would put total work hours at 64.4 million by 2030, up from 47.8 million in 2023. In the first year of the deal, overall wages could increase by $312 million. The cumulative raise in the second year would bring wages up another $572 million. The third and fourth years add another $781 million and $937 million, respectively, while over $1 billion in additional labor costs could come in each of the contract’s final two years. The estimate also assumes that the wage increases are paid as straight-time, rather than as overtime hours. Overtime pay can be a significant part of longshore worker income. While the container shipping industry will bear most of the costs, cruise ship and roll-on/ roll-off carrier segments will also pay for the higher wages. This method is about as good as any for estimating an unknown cost, according to Jason Miller, professor of Supply Chain Management at Michigan State University and a Journal of Commerce contributor. Miller’s own approximate estimate considers the cost of moving a marine container, with that amount assumed to be evenly split between labor costs and other operating and capital expenses. If lift fees are between $400 and $500 per container, Miller said a 61.5% rise in wages amounts to anywhere between a $125 to $150 increase in per-container lift costs. If East and Gulf coast import volumes hover near 13 million TEUs per year, approximately 7 million containers through 2030, that translates to anywhere between $5.2 billion and $6.3 billion in added labor costs, Miller said. “It seems like a reasonable number and why the ocean carriers would have been willing to agree to the wage increase,” he said. “How much revenue are carriers getting each year for 13 million TEUs of imports each year? “Think about the value of the goods that will be coming through the East and Gulf coasts,” Miller added. “That number is getting into the trillions. The ILA wage deal is a relatively small share of that.” ‘Burundi-size’ cost? But an executive with the terminal subsidiary of a European-based ocean carrier told the Journal of Commerce that the cost of the wage deal also needs to be measured against the cost of export and empty container moves, for which there is little to no revenue. East and Gulf coast ports are on track to handle about 19 million containers in total, full and empty, in 2024, according to the ocean carrier’s data. The new wage deal will increase its terminal unit’s labor costs by $170 per container. Assuming a nearly similar increase across other terminal operators, the wage deal would cost the container shipping industry $3.2 billion per year in additional labor costs — or more than $19 billion over the life of the new contract — a cost the executive said will be borne directly by US consumers. “The extra cost that US consumers will pay exceeds the entire GDP of a country like Burundi that has a population of 13 million inhabitants,” the executive said. “Somebody is paying for the empties as well and it is not the carriers,” the source added. “The trade imbalance, and the resulting amount of empties, gets all priced in into what is being paid for the full import and export boxes.” The USMX does not release figures on what it paid longshore workers. However, based on the dues contribution rate reported by the ILA in its most recent annual report to the US Department of Labor, its members were paid $2.9 billion in wages during 2023. The ILA said in a statement about the tentative agreement that the 61.5% wage increase “is unprecedented and serves as a testament to the union’s commitment to securing fair compensation for its members.” The wage deal comes as ocean carriers are expected to continue reporting multi-billion-dollar profits. Among publicly traded ocean carriers, combined net income is expected to reach $16.8 billion in 2024, according to S&P Global consensus analyst estimates. New wages add to lift costs The ILA’s wage increases will flow through the industry via annual rate adjustments to the container lift agreements that ocean carriers have with marine terminals, a US-based terminal executive told the Journal of Commerce. Ocean carrier members of the USMX cover 70% of the ILA’s annual wage increases, while marine terminals and stevedores are responsible for the remainder. So the $6 per hour wage hike in the first year of the tentative agreement, which represents a 15% increase, means ocean carriers face a 10.7% increase from their share, plus an annual increase indexed to overall inflation, in container lift rates. The terminal executive said US terminal lift rates generally hover near $300 per container, while higher-cost regions such as the Northeast have lift costs at approximately $400 per container. Labor costs charged by US marine terminals can account for up to 60% of their revenue, the highest share of such costs globally. Whether terminal automation would temper costs remains unclear, the executive added, due to high upfront costs of automation technology and the uncertainty around its payback. The most successful automated and semi-automated terminals were originally designed from the ground up specifically for those operations, meaning that it’s difficult to bolt on automation technology to an existing operation. The hope with the new wage deal is that it will be accompanied by efficiency gains to move more boxes per hour, the executive said, noting that US container ports generally rank very low versus their overseas peers in terms of efficiency . “Look at Europe where the longshoremen are unionized and many of the terminals are automated, but are much more productive,” the executive said. “When there is efficiency, it helps our ability to offset the wage increases. We’ll pay the higher wages but want to get something out of it in terms of productivity, not just increasing man-hours. Otherwise, this is just further inflationary pressure.” Another US-based terminal executive said the total cost of the wage deal should be juxtaposed against the size of the investment needed to automate US terminals. The source said the higher wages are a necessary investment in maintaining stable longshore workforces along the East and Gulf coasts, but those workers still need to hit benchmarks seen at other global ports. “How can vessel services keep their schedules when there’s 35 moves per hour at Southeast Asia ports and 19 moves per hour at US ports?” the executive asked. Contact Michael Angell at michael.angell@spglobal.com .

Longshore wage deal at East, Gulf ports to add at least $5 billion in labor costs

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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">Maritime employers and the longshore union representing dockworkers along the US East and Gulf coasts will restart negotiations in New Jersey next month, with automation the main issue at hand. </div>

Maritime employers and the longshore union representing dockworkers along the US East and Gulf coasts will restart negotiations in New Jersey next month, with automation the main issue at hand.

<div class="phx-topic">The International Longshoremen’s Association (ILA) and maritime employers along the US East and Gulf coasts said Friday they will resume negotiations in November on the remaining terms of a new master contract following a tentative wage deal that ended a three-day dockworkers strike earlier this month. The ILA and the United States Maritime Alliance (USMX) said in a joint statement talks will take place in New Jersey next month on a six-year master contract. After settling on <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">a wage offer on Oct. 3 that would increase longshore pay 62%</a>, the two sides agreed to a contract extension until Jan. 15 to negotiate other outstanding issues. “The ILA and USMX welcome the opportunity to return to the bargaining table and get a new agreement in place as soon as possible,” the two sides said in the statement, adding that no further details about the negotiations will be available prior to those meetings. The biggest remaining issue has to do with contractual language around <a href="https://www.joc.com/article/us-port-automation-holds-promise-but-hardly-a-sure-shot-5772709">the use of marine terminal automation and new technology</a>. Under the previous master contract that expired at the end of September, the ILA and USMX allowed marine terminals to implement semi-automated equipment provided that both the union and terminal agreed on staffing. But it completely barred the development of fully automated terminals. The ILA has struck a more hardline tone during this bargaining cycle, calling for <a href="https://www.joc.com/article/ilas-daggett-promises-dockworkers-great-contract-as-strike-begins-5739618">a ban on the use of any type of automation</a>. “The ILA is steadfastly against any form of automation — full or semi — that replaces jobs or historical work functions,” the union said in an Oct. 1 statement, <a href="https://www.joc.com/article/ilas-daggett-promises-dockworkers-great-contract-as-strike-begins-5739618">the day its members walked off the job</a>. “We will not accept the loss of work and livelihood for our members due to automation.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The International Longshoremen’s Association (ILA) and maritime employers along the US East and Gulf coasts said Friday they will resume negotiations in November on the remaining terms of a new master contract following a tentative wage deal that ended a three-day dockworkers strike earlier this month. The ILA and the United States Maritime Alliance (USMX) said in a joint statement talks will take place in New Jersey next month on a six-year master contract. After settling on a wage offer on Oct. 3 that would increase longshore pay 62% , the two sides agreed to a contract extension until Jan. 15 to negotiate other outstanding issues. “The ILA and USMX welcome the opportunity to return to the bargaining table and get a new agreement in place as soon as possible,” the two sides said in the statement, adding that no further details about the negotiations will be available prior to those meetings. The biggest remaining issue has to do with contractual language around the use of marine terminal automation and new technology . Under the previous master contract that expired at the end of September, the ILA and USMX allowed marine terminals to implement semi-automated equipment provided that both the union and terminal agreed on staffing. But it completely barred the development of fully automated terminals. The ILA has struck a more hardline tone during this bargaining cycle, calling for a ban on the use of any type of automation . “The ILA is steadfastly against any form of automation — full or semi — that replaces jobs or historical work functions,” the union said in an Oct. 1 statement, the day its members walked off the job . “We will not accept the loss of work and livelihood for our members due to automation.” Contact Michael Angell at michael.angell@spglobal.com .

ILA, USMX say to resume talks on new master contract in November

<div class="phx-topic abstract-wrapper">The ruling from the Canada Industrial Relations Board said union longshore foremen moved too late in raising the issue of automation’s impact on jobs at the Port of Vancouver.</div>

The ruling from the Canada Industrial Relations Board said union longshore foremen moved too late in raising the issue of automation’s impact on jobs at the Port of Vancouver.

<div class="phx-topic">Longshore foremen knew that new automation was being installed at DP World’s Port of Vancouver marine terminal but failed to negotiate early with maritime employers about the project’s impact on staffing, Canada’s labor tribunal has ruled, determining the foremen’s union bargained in bad faith with maritime employers. The Canada Industrial Relations Board (CIRB) ruled Wednesday in favor of the British Columbia Maritime Employer’s Association (BCMEA), which <a href="https://www.joc.com/article/dp-worlds-centerm-project-at-heart-of-employer-union-dispute-in-vancouver-5225162">filed a bad-faith bargaining complaint against Local 514 of the International Longshore and Warehouse Union in May</a>. Local 514, which represents about 730 longshore foremen throughout British Columbia, was “generally aware that automation of operations at (DP World’s) Centerm terminal was being developed and would be implemented” as early as 2022, the CIRB said. As part of a plan <a href="https://www.joc.com/article/centerm-terminal-expansion-gives-vancouver-critical-boost-in-capacity-5227056">to increase its capacity by 60% to 1.5 million TEUs</a>, Centerm completed the installation of remotely operated rail mounted gantry cranes (RMGs) early in 2023. When Local 514 started to bargain with British Columbia maritime employers for a new collective bargaining agreement that year, it became clear by August that “remote and semi-automated operations of RMGs would result in some changes to the manning model” at Centerm, the CIRB said. However, “the union did not make every reasonable effort to reach a collective agreement by waiting until April 2024” to put forward a proposal on Centerm’s manning, the CIRB said. After the BCMEA filed its complaint with the CIRB, <a href="https://www.joc.com/article/ilwu-canada-illegal-strike-ruling-averts-vancouver-shutdown-5192250">Local 514 held a vote for a strike against the Centerm facility</a>. The CIRB also blocked that move as illegal. The BCMEA said in a statement Wednesday that the decision is the third such ruling against the union, as the CIRB struck down another last-minute proposal about DP World’s Nanaimo terminal in Vancouver. “For almost two years, the BCMEA has proposed comprehensive offers that would have resulted in a competitive and balanced deal to Local 514 members, and if accepted, would have provided all forepersons with significant gains in wages and benefits, without any concession requests from employers,” the BCMEA said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Longshore foremen knew that new automation was being installed at DP World’s Port of Vancouver marine terminal but failed to negotiate early with maritime employers about the project’s impact on staffing, Canada’s labor tribunal has ruled, determining the foremen’s union bargained in bad faith with maritime employers. The Canada Industrial Relations Board (CIRB) ruled Wednesday in favor of the British Columbia Maritime Employer’s Association (BCMEA), which filed a bad-faith bargaining complaint against Local 514 of the International Longshore and Warehouse Union in May . Local 514, which represents about 730 longshore foremen throughout British Columbia, was “generally aware that automation of operations at (DP World’s) Centerm terminal was being developed and would be implemented” as early as 2022, the CIRB said. As part of a plan to increase its capacity by 60% to 1.5 million TEUs , Centerm completed the installation of remotely operated rail mounted gantry cranes (RMGs) early in 2023. When Local 514 started to bargain with British Columbia maritime employers for a new collective bargaining agreement that year, it became clear by August that “remote and semi-automated operations of RMGs would result in some changes to the manning model” at Centerm, the CIRB said. However, “the union did not make every reasonable effort to reach a collective agreement by waiting until April 2024” to put forward a proposal on Centerm’s manning, the CIRB said. After the BCMEA filed its complaint with the CIRB, Local 514 held a vote for a strike against the Centerm facility . The CIRB also blocked that move as illegal. The BCMEA said in a statement Wednesday that the decision is the third such ruling against the union, as the CIRB struck down another last-minute proposal about DP World’s Nanaimo terminal in Vancouver. “For almost two years, the BCMEA has proposed comprehensive offers that would have resulted in a competitive and balanced deal to Local 514 members, and if accepted, would have provided all forepersons with significant gains in wages and benefits, without any concession requests from employers,” the BCMEA said. Contact Michael Angell at michael.angell@spglobal.com .

BC longshore foremen bargained in bad faith: Canada labor board

<div class="phx-topic abstract-wrapper">A report from the US Governmental Accountability Office shows the possible, but narrow, path for adoption of automation at US ports as maritime employers and longshore labor along the East and Gulf coasts attempt to hammer out a new master contract. </div>

A report from the US Governmental Accountability Office shows the possible, but narrow, path for adoption of automation at US ports as maritime employers and longshore labor along the East and Gulf coasts attempt to hammer out a new master contract.

<div class="phx-topic"><div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5772658_0.1.jpg"></img></div>A report released this year by the US Congressional watchdog about port automation provides a sobering read, showing the possible, but narrow, path for adoption amid overexuberance over technology’s potential and doomsaying on its impact on labor. That the reality of automation potential at US ports is somewhere in between, as described <a href="https://www.gao.gov/assets/d24106498.pdf">by the US Government Accountability Office (GAO)</a>, is worth remembering in the context of whatever employers and longshore workers <a href="https://www.joc.com/article/ila-usmx-agree-on-new-wage-offer-and-contract-extension-that-reopens-ports-5741882">agree to or reject come the Jan. 15 deadline</a> for a labor contract along the East and Gulf coasts. The International Longshoremen’s Association (ILA) wants to strike language allowing any degree of automation, while the United States Maritime Alliance (USMX) wants to not only retain the automation allowed in past contracts, but also create a mechanism to consider more in consultation with the union.The GAO report, released in March, details the possibilities of automation, but also the numerous hurdles, including the high costs and opposition from longshore labor, and cases when it’s just not economically feasible. In the report, the feedback from port directors and marine terminal operators highlights the nuances of when automation works, in what form and where. But in some cases, automation can hurt productivity or fail to match that of human labor, the GAO’s survey of stakeholders at the top US ports revealed. Some unidentified US port directors and terminal operators told the GAO it could take a decade or two to recover the investment costs of automation — with the technology potentially becoming outdated during that long wait. Half of the stakeholders interviewed by GAO deemed larger supply chain issues, including cargo visibility and operating hours of nearby warehouses, more pressing than the adoption of automation. Or, as the GAO report noted, based on feedback from a port representative and a terminal operator: "Unless other parts of the supply chain — such as ground transportation and warehousing — can increase the speed and the efficiency of their operations, any gains in capacity or efficiency that terminals make by adopting automated equipment or other approaches will be lost further down the chain.” Yet the release of the GAO report, as required by Congress through the Ocean Shipping Reform Act of 2022 (OSRA-22), also shows how automation can help space-constrained ports and marine terminals squeeze out more functional capacity. Automated gate technologies at the Port of Virginia helped it reduce truck dwells, cutting harmful emissions, according to the report. Separately, the port has also credited its semi-automated stacking cranes at Norfolk International Terminals for helping it better handle import surges. The hard physical separation of the stacking cranes from the drayage trucks also improves safety by reducing the chances of multi-ton equipment hitting drivers and longshore workers. <h3>Process over equipment</h3>Ultimately, it’s automating processes rather than automating equipment that holds the most promise, US port stakeholders told the GAO. So-called port community systems that share key information with terminals, truckers, chassis providers and other stakeholders have reduced trucking dwells and are in place at eight of the top 10 US ports, according to the report. But when it comes to the next level of automation processing, such as adopting AI and machine learning, US ports lag their top foreign counterparts, the GAO report concluded. US ports lag even further when it comes to digital twin technologies. The creation of a “digital twin” to its physical container counterpart allows for not just monitoring, but predicting snags and autonomously adjusting for them. In terms of adoption of automated port handling equipment, the US also trails its foreign counterparts, the GAO concluded. That includes automated guided vehicles, remotely operated ship-to-shore cranes and automated gantry cranes. US ports lag the automation adoption of foreign ports, including being absent from the top 50 most productive ports as measured by the S&amp;P Global Port Performance database, but one can argue that it doesn’t make much competitive difference. That’s not because other ports aren’t more productive. But like premier soccer leagues or professional baseball leagues in the United States and Japan, US ports can be compared with foreign ports, but they rarely compete with them. One exception is how the Northwest Seaport Alliance of Seattle and Tacoma competes with Vancouver, British Columbia, for US exports and US-bound imports. More often though, US ports compete with each other. While East and Gulf coast ports fight among themselves for a greater share of cargo, they arguably compete even more with West Coast ports for discretionary cargo. Still, even with greater, but limited, automation on the West Coast, it would be hard to find a shipper that routes discretionary cargo through, say, Los Angeles’ TraPac terminal — the most automated facility in North America — for that reason alone. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

A report released this year by the US Congressional watchdog about port automation provides a sobering read, showing the possible, but narrow, path for adoption amid overexuberance over technology’s potential and doomsaying on its impact on labor. That the reality of automation potential at US ports is somewhere in between, as described by the US Government Accountability Office (GAO) , is worth remembering in the context of whatever employers and longshore workers agree to or reject come the Jan. 15 deadline for a labor contract along the East and Gulf coasts. The International Longshoremen’s Association (ILA) wants to strike language allowing any degree of automation, while the United States Maritime Alliance (USMX) wants to not only retain the automation allowed in past contracts, but also create a mechanism to consider more in consultation with the union. The GAO report, released in March, details the possibilities of automation, but also the numerous hurdles, including the high costs and opposition from longshore labor, and cases when it’s just not economically feasible. In the report, the feedback from port directors and marine terminal operators highlights the nuances of when automation works, in what form and where. But in some cases, automation can hurt productivity or fail to match that of human labor, the GAO’s survey of stakeholders at the top US ports revealed. Some unidentified US port directors and terminal operators told the GAO it could take a decade or two to recover the investment costs of automation — with the technology potentially becoming outdated during that long wait. Half of the stakeholders interviewed by GAO deemed larger supply chain issues, including cargo visibility and operating hours of nearby warehouses, more pressing than the adoption of automation. Or, as the GAO report noted, based on feedback from a port representative and a terminal operator: "Unless other parts of the supply chain — such as ground transportation and warehousing — can increase the speed and the efficiency of their operations, any gains in capacity or efficiency that terminals make by adopting automated equipment or other approaches will be lost further down the chain.” Yet the release of the GAO report, as required by Congress through the Ocean Shipping Reform Act of 2022 (OSRA-22), also shows how automation can help space-constrained ports and marine terminals squeeze out more functional capacity. Automated gate technologies at the Port of Virginia helped it reduce truck dwells, cutting harmful emissions, according to the report. Separately, the port has also credited its semi-automated stacking cranes at Norfolk International Terminals for helping it better handle import surges. The hard physical separation of the stacking cranes from the drayage trucks also improves safety by reducing the chances of multi-ton equipment hitting drivers and longshore workers. Process over equipment Ultimately, it’s automating processes rather than automating equipment that holds the most promise, US port stakeholders told the GAO. So-called port community systems that share key information with terminals, truckers, chassis providers and other stakeholders have reduced trucking dwells and are in place at eight of the top 10 US ports, according to the report. But when it comes to the next level of automation processing, such as adopting AI and machine learning, US ports lag their top foreign counterparts, the GAO report concluded. US ports lag even further when it comes to digital twin technologies. The creation of a “digital twin” to its physical container counterpart allows for not just monitoring, but predicting snags and autonomously adjusting for them. In terms of adoption of automated port handling equipment, the US also trails its foreign counterparts, the GAO concluded. That includes automated guided vehicles, remotely operated ship-to-shore cranes and automated gantry cranes. US ports lag the automation adoption of foreign ports, including being absent from the top 50 most productive ports as measured by the S&P Global Port Performance database, but one can argue that it doesn’t make much competitive difference. That’s not because other ports aren’t more productive. But like premier soccer leagues or professional baseball leagues in the United States and Japan, US ports can be compared with foreign ports, but they rarely compete with them. One exception is how the Northwest Seaport Alliance of Seattle and Tacoma competes with Vancouver, British Columbia, for US exports and US-bound imports. More often though, US ports compete with each other. While East and Gulf coast ports fight among themselves for a greater share of cargo, they arguably compete even more with West Coast ports for discretionary cargo. Still, even with greater, but limited, automation on the West Coast, it would be hard to find a shipper that routes discretionary cargo through, say, Los Angeles’ TraPac terminal — the most automated facility in North America — for that reason alone. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

US port automation holds promise, but hardly a sure shot

<div class="phx-topic abstract-wrapper">The move comes as container shipping affiliate Cosco Shipping Holdings is expanding services between China and Thailand and as overall shipping capacity is growing between the two countries.</div>

The move comes as container shipping affiliate Cosco Shipping Holdings is expanding services between China and Thailand and as overall shipping capacity is growing between the two countries.

<div class="phx-topic">Cosco Shipping Ports, part of China’s largest state-controlled shipping group, is making its debut in Thailand’s port market after agreeing to pay $110 million for ownership stakes in two container terminals controlled by Hong Kong’s Hutchison Port group. The terminals are at Laem Chabang, Thailand’s largest port, which handled almost 9 million TEUs last year. Cosco Ports, in a filing to the Hong Kong stock exchange Wednesday, said it would acquire a 30% stake in Hutchison Laemchabang Terminal Ltd. (HLT) and a 12.5% interest in Thai Laemchabang Terminal Co. (TLT). The stake in Hutchison Laemchabang Terminal includes 26% currently held by Hutchison Port Holdings, which will see its holding in the terminal company drop to 51% as a result of the share sale. The balance of the stake in HLT and the interest in TLT are being acquired from Sapphire Terminal (Thailand), whose shareholders include an equity fund sponsored by the Export-Import Bank of China. ”Investing in Laem Chabang Port would provide the Cosco group with enhanced access to the growing markets of Southeast Asia, China and the broader Asia-Pacific region,” Cosco Ports said in a statement. “With the active support of the Thailand government in the development of Laem Chabang Port, the Cosco group can benefit from a stable and favorable regulatory environment, which minimizes operational risks,” Cosco Ports added. “Additionally, ongoing infrastructure development projects, such as the Eastern Economic Corridor initiative, further strengthen the long-term growth and prospects of Laem Chabang Port and the surrounding region.” The move comes as container shipping affiliate Cosco Shipping Holdings is expanding services between China and Thailand and as overall shipping capacity is growing between the two countries. Figures from transport consultancy MDS Transmodal show scheduled quarterly capacity between China and Thailand increased to 2.6 million TEUs in the third quarter, up from 2.4 million TEUs in the year-ago period. The number of services increased to 60 from 57, according to MDS Transmodal data. These include a regional service launched by Cosco Shipping calling at Laem Chabang and the South China ports of Shekou, Nansha and Qinzhou. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Cosco Shipping Ports, part of China’s largest state-controlled shipping group, is making its debut in Thailand’s port market after agreeing to pay $110 million for ownership stakes in two container terminals controlled by Hong Kong’s Hutchison Port group. The terminals are at Laem Chabang, Thailand’s largest port, which handled almost 9 million TEUs last year. Cosco Ports, in a filing to the Hong Kong stock exchange Wednesday, said it would acquire a 30% stake in Hutchison Laemchabang Terminal Ltd. (HLT) and a 12.5% interest in Thai Laemchabang Terminal Co. (TLT). The stake in Hutchison Laemchabang Terminal includes 26% currently held by Hutchison Port Holdings, which will see its holding in the terminal company drop to 51% as a result of the share sale. The balance of the stake in HLT and the interest in TLT are being acquired from Sapphire Terminal (Thailand), whose shareholders include an equity fund sponsored by the Export-Import Bank of China. ”Investing in Laem Chabang Port would provide the Cosco group with enhanced access to the growing markets of Southeast Asia, China and the broader Asia-Pacific region,” Cosco Ports said in a statement. “With the active support of the Thailand government in the development of Laem Chabang Port, the Cosco group can benefit from a stable and favorable regulatory environment, which minimizes operational risks,” Cosco Ports added. “Additionally, ongoing infrastructure development projects, such as the Eastern Economic Corridor initiative, further strengthen the long-term growth and prospects of Laem Chabang Port and the surrounding region.” The move comes as container shipping affiliate Cosco Shipping Holdings is expanding services between China and Thailand and as overall shipping capacity is growing between the two countries. Figures from transport consultancy MDS Transmodal show scheduled quarterly capacity between China and Thailand increased to 2.6 million TEUs in the third quarter, up from 2.4 million TEUs in the year-ago period. The number of services increased to 60 from 57, according to MDS Transmodal data. These include a regional service launched by Cosco Shipping calling at Laem Chabang and the South China ports of Shekou, Nansha and Qinzhou. Contact Keith Wallis at keithwallis@hotmail.com .

Cosco Ports pays $110 million for Thailand terminal stakes as Hutchison sells down

<div class="phx-topic abstract-wrapper">Carriers are making up for lost time and accept, as the reality of doing business in this market, that actions that benefit them often work to the disadvantage of their customers, writes Peter Tirschwell.</div>

Carriers are making up for lost time and accept, as the reality of doing business in this market, that actions that benefit them often work to the disadvantage of their customers, writes Peter Tirschwell.

<div class="phx-topic">Over any number of pre-pandemic years, a word commonly heard at industry conferences, in reference to ocean freight rates, was “unsustainable.” It was almost always uttered by ocean carrier executives lamenting chronic pressure on rates and inadequate profits earned by their companies as a consequence. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/5772658_0.1.jpg"></img></div>The point intended to be made wasn’t usually clear, other than to suggest that the industry faced a problem that would need to be rectified — a reckoning of some kind that would arrive one day. When that day would come, no one knew, nor did they know how such a reckoning would take place. Would “unsustainably” low rates lead carriers to go bankrupt or withdraw from the market, leaving the US with no one to carry its containerized cargo? That was hinted at frequently, but no such result ever occurred other than a sole major carrier bankruptcy, <a href="https://www.joc.com/article/us-judge-allows-hanjin-creditor-to-sell-container-interests-5198250">Hanjin in 2016</a>, whose market share was immediately absorbed by other carriers. Also suggested was that continuous consolidation would occur, and as it did, shippers would be faced with less choice and more pricing power by carriers — which has, in fact, occurred. But to the extent that rates are “unsustainable” and that shippers should take note and somehow act on that basis, was lost on shippers. They are and have always been rightly wary of paying rates at the low end of the pricing spectrum, or rates that raise their costs relative to their competition. But the idea never remotely took hold that they could somehow influence what was an aggregate industry problem, as to avoid an ill-defined undesirable outcome sometime in the future. <h3>Little shippers can do </h3>And that is how it played out: Shippers individually optimized cost reduction, and in the absence of inconsistent or unreliable service — as that was only a periodic presence in the market — they went about their business, happy to let overcapacity set the market with few tangible worries about the long-term consequences. In fact, they had no choice. Shippers optimize their own interests, and while some may have agreed that the status quo was “unsustainable,” they could do nothing about it. But in ways that could not be anticipated back then, carriers who spoke of the dangers of unsustainably low rates were on to something. They could not foresee, of course, COVID-19 and its impact, transforming a chronically underperforming industry financially and making it wildly profitable while resetting carrier expectations about their ability to make money. That realization, and the actions that are flowing from it, is what carriers, without knowing it at the time, were referring to those many years ago. Low rates were unsustainable, and carriers are now doing everything possible to eke out profits while riding the good fortune of global upheaval. For shippers, who had optimized their own bottom lines thanks to a chronically weak freight rate market, carriers are now doing the same. The idea of mutual value creation, always an elusive concept in ocean shipping and freight transport generally, was obliterated as shippers’ prior, if “unsustainable,” value proposition of good value at a low price flipped on a dime to poor value at a high price. <h3>Market at ‘unpleasant crossroads’ </h3>Yet carriers, who have not forgotten the absence of sympathy extended to them when they were barely making money, see no crime in watching the zero-sum game play out as long as possible in seeking to extract maximum revenue for as long as possible, knowing a cliff of overcapacity might be looming, especially if the Suez Canal route becomes safe to navigate. That has left the market at an unpleasant crossroads. Shipper organizations well beyond logistics teams see no reason why the old status quo shouldn’t continue indefinitely, and they equate low reliability and high price with being ripped off. That makes it hard for the logistics teams to find ways to work with carriers in productive ways. Carriers are making up for lost time and accept, as the reality of doing business in this market, that actions that benefit them often work to the disadvantage of their customers. Forwarders, for their part, have their own struggles in dealing with carriers who have their own grievances against forwarders, whose service to their own customers is impacted by carriers’ behavior toward them. So actually, the carriers were right — the low rates seen over many years were “unsustainable” in the sense that having experienced genuine profitability for the first time, they have no desire to go back to what for shippers were the good old days. That does not bode well for shippers and carriers working productively and efficiently together. It means the quest for shippers to create value within an ocean container supply chain has become more difficult, and perhaps permanently so. Contact Peter Tirschwell at peter.tirschwell@spglobal.com. </div>

Over any number of pre-pandemic years, a word commonly heard at industry conferences, in reference to ocean freight rates, was “unsustainable.” It was almost always uttered by ocean carrier executives lamenting chronic pressure on rates and inadequate profits earned by their companies as a consequence. The point intended to be made wasn’t usually clear, other than to suggest that the industry faced a problem that would need to be rectified — a reckoning of some kind that would arrive one day. When that day would come, no one knew, nor did they know how such a reckoning would take place. Would “unsustainably” low rates lead carriers to go bankrupt or withdraw from the market, leaving the US with no one to carry its containerized cargo? That was hinted at frequently, but no such result ever occurred other than a sole major carrier bankruptcy, Hanjin in 2016 , whose market share was immediately absorbed by other carriers. Also suggested was that continuous consolidation would occur, and as it did, shippers would be faced with less choice and more pricing power by carriers — which has, in fact, occurred. But to the extent that rates are “unsustainable” and that shippers should take note and somehow act on that basis, was lost on shippers. They are and have always been rightly wary of paying rates at the low end of the pricing spectrum, or rates that raise their costs relative to their competition. But the idea never remotely took hold that they could somehow influence what was an aggregate industry problem, as to avoid an ill-defined undesirable outcome sometime in the future. Little shippers can do And that is how it played out: Shippers individually optimized cost reduction, and in the absence of inconsistent or unreliable service — as that was only a periodic presence in the market — they went about their business, happy to let overcapacity set the market with few tangible worries about the long-term consequences. In fact, they had no choice. Shippers optimize their own interests, and while some may have agreed that the status quo was “unsustainable,” they could do nothing about it. But in ways that could not be anticipated back then, carriers who spoke of the dangers of unsustainably low rates were on to something. They could not foresee, of course, COVID-19 and its impact, transforming a chronically underperforming industry financially and making it wildly profitable while resetting carrier expectations about their ability to make money. That realization, and the actions that are flowing from it, is what carriers, without knowing it at the time, were referring to those many years ago. Low rates were unsustainable, and carriers are now doing everything possible to eke out profits while riding the good fortune of global upheaval. For shippers, who had optimized their own bottom lines thanks to a chronically weak freight rate market, carriers are now doing the same. The idea of mutual value creation, always an elusive concept in ocean shipping and freight transport generally, was obliterated as shippers’ prior, if “unsustainable,” value proposition of good value at a low price flipped on a dime to poor value at a high price. Market at ‘unpleasant crossroads’ Yet carriers, who have not forgotten the absence of sympathy extended to them when they were barely making money, see no crime in watching the zero-sum game play out as long as possible in seeking to extract maximum revenue for as long as possible, knowing a cliff of overcapacity might be looming, especially if the Suez Canal route becomes safe to navigate. That has left the market at an unpleasant crossroads. Shipper organizations well beyond logistics teams see no reason why the old status quo shouldn’t continue indefinitely, and they equate low reliability and high price with being ripped off. That makes it hard for the logistics teams to find ways to work with carriers in productive ways. Carriers are making up for lost time and accept, as the reality of doing business in this market, that actions that benefit them often work to the disadvantage of their customers. Forwarders, for their part, have their own struggles in dealing with carriers who have their own grievances against forwarders, whose service to their own customers is impacted by carriers’ behavior toward them. So actually, the carriers were right — the low rates seen over many years were “unsustainable” in the sense that having experienced genuine profitability for the first time, they have no desire to go back to what for shippers were the good old days. That does not bode well for shippers and carriers working productively and efficiently together. It means the quest for shippers to create value within an ocean container supply chain has become more difficult, and perhaps permanently so. Contact Peter Tirschwell at peter.tirschwell@spglobal.com.

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