During a five-year time span, the ILWU executed illegal labor actions against the Port of Portland. Despite rulings against it, the union persisted in slowing down operations at the port in order to gain control over two jobs that had always belonged to another union, the International Brotherhood of Electrical Workers (IBEW). The jobs involved plugging and unplugging reefer containers. You know, electricity-related work that it’s not surprising electrical workers did. But, hey, the jobs were at a port, and the ILWU is adamant about taking control of every job at the ports.

ILWU’s slowdowns became so disruptive to operations at the Port of Portland that ocean freight carriers had to stop calling on the port with container ships altogether. This was, of course, extremely expensive for the terminal operator ICTSI Oregon, but also for shippers, and even for the ILWU itself.

Before even getting to the millions the union is now paying, there were about three years when no container ships were calling on the Port of Portland. That means three years of lost union jobs. But maybe it was worth it to the union for those members’ jobs to no longer be there. After all, the ILWU got to flex its muscle, showing everyone how powerful it is.

The ILWU won’t be paying ICTSI nearly as much as it could have been. Originally, the US District Court ordered the ILWU to pay $93 million. So, the ILWU and its Local 8 chapter, which executed the labor actions, filed for bankruptcy. Now the union has settled with ICTSI, as Bill Mongelluzzo reported last week in a Journal of Commerce (JOC) article:

The International Longshore and Warehouse Union (ILWU) and ICTSI Oregon said Thursday they have settled a long-running legal dispute in a deal that will pay ICTSI $20.5 million and end the ILWU’s Chapter 11 bankruptcy case. 

“The ILWU settlement arises from the parties’ participation in several days of mediation during ILWU’s chapter 11 bankruptcy case, which will be voluntarily dismissed as part of the terms of the settlement,” the parties said in a joint statement. 

If you want to revisit the drama, here are some related posts Universal Cargo published through the years:

The post Sad Port Story Finally Concludes with ILWU Paying Over $20M appeared first on Universal Cargo.

Embarking on the global trade journey brings unparalleled opportunities, but it’s not without its challenges. International shipping comes with its own set of risks that can jeopardize your cargo. From damaged goods to the risk of theft, the hazards are real.

So, in this guide, we’ll show you how to steer clear of these risks and insure your cargo for the better. We’ll also share a step-by-step guide on how to choose the right insurance partner.

Let’s dive in!

Potential Risks & Threats to Cargo

An uninsured cargo is always vulnerable to these threats and risks:

1.   Damaged Cargo

Shipping across borders exposes cargo to handling uncertainties, where mishandling or unforeseen incidents can lead to damage. Fragile items (such as glassware, musical instruments, technology products, etc.) are particularly at risk. 

2.   Lost Cargo

The vast expanse of international routes increases the likelihood of cargo going astray. Sometimes shipments are lost completely — and sometimes, misplacement could lead to delayed arrival on destination. If the items being shipped are time-sensitive (such as eatables), they may expire due to the delay .

3.   General Average

General average basically refers to a large loss or a deliberate loss during shipment. For example, when a fire occurs, lots of goods may be lost. Similarly, in certain situations — some goods may be offboarded to secure the rest of the goods for a safe journey ahead. These situations may occur due to legal issues, natural accidents, or as a consequence of human error. 

4.   Stolen Products

Theft is an unfortunate reality in the logistics landscape. Whether due to organized crime or opportunistic theft, cargo security is paramount. This is particularly true for small-sized products like Peshawari chappals, shawls, spoons, or other such good that are being transported in quantities of hundreds or thousands. It’s difficult to track if a pair of Peshawari chappal or one shawl is stolen. But if small thefts occur at multiple checkpoints, the loss can be significant.

How Does Insurance Help?

1.   Peace of Mind

In the unpredictable world of international shipping, peace of mind is a priceless commodity. Insurance alleviates the stress of potential financial losses, allowing businesses to focus on growth and expansion without the constant worry of unforeseen circumstances.

2.   Protects Cash Flow

Unforeseen events can disrupt cash flow and strain financial resources. Cargo insurance acts as a financial safeguard. It ensures that your business remains resilient in the face of unexpected challenges, along with protecting your bottom line and financial stability.

3.   Acts as a Safety Net

According to the NCSC  (National Cargo Security Council), the global financial loss due to damaged freight is over $50 billion. Most shipment carriers only offer a compensation of $2 per pound, meaning you’ll only get $2,000 for a shipment of 10,000 pounds. It’s nearly nothing!

Insurance, on the other hand, guarantees that you retrieve an almost equivalent amount. Even if the loss occurs, the insurance acts as a safety net!

4.   Safeguards Against Theft

Theft is a pervasive risk in international shipping. Cargo insurance serves as a robust defense against theft. It offers financial compensation that enables businesses to recover swiftly and maintain the integrity of their supply chain.

How to Insure Cargo?

As promised, here’s a practical guide to help you ensure that your cargo is adequately protected:

1. Assess Your Needs

Before diving into the insurance market, conduct a comprehensive assessment of your cargo and shipping requirements. Consider the nature of your products, shipping routes, and the potential risks involved. This foundational step will guide you in selecting the most suitable insurance coverage for your specific needs.

2. Understand Insurance Types

Cargo insurance comes in various forms, each tailored to specific risks. Common types include:

• All-Risk
• Named Perils
• Total Loss Only

Familiarize yourself with these options and choose coverage that aligns with the unique challenges your cargo may face during transit.

3. Work with Reputable Insurers

Research and choose insurers with a proven track record in cargo insurance. Look for companies with a global presence and a history of efficiently handling claims. Read customer reviews and seek recommendations to ensure the credibility and reliability of your chosen insurer.

4. Negotiate Terms and Coverage

Engage in open and transparent discussions with your insurance provider. Clearly communicate your cargo’s specifics and negotiate terms that offer comprehensive coverage.

Be mindful of deductibles, coverage limits, and potential exclusions that could be applicable. Customizing your insurance policy to fit your unique needs is key to maximizing its effectiveness.

5. Implement Risk Management Practices

While insurance provides financial protection, implementing proactive risk management practices is equally crucial. So, consider investing in robust packaging, proper labeling, and secure loading practices to minimize the likelihood of damage or loss.

6. Document and Communicate Clearly

In order to be able to claim your insurance, you need to have documented proof. So, maintain accurate records of your shipments, including invoices, packing lists, and shipping documents.

Communicate clearly with your insurer throughout the process. Make sure you provide timely and detailed information in the event of a claim.

8. Monitor and Evaluate Performance

Regularly monitor the performance of your chosen insurance coverage. Evaluate its effectiveness in mitigating risks and providing the expected financial protection.

If necessary, be prepared to adjust your insurance strategy to better align with the evolving demands of your business and the global shipping landscape.

Final Words

When it comes to global trade, securing your cargo with insurance is not just a choice; it’s a strategic imperative. It can effectively tackle unpredictable challenges and serve as your guardian.

Before we sign off, here’s a bonus tip: focus on cultivating robust relationships with your logistics partners; a collaborative approach enhances the protective shield of insurance!          

This was a guest post by Arslan Hassan.

Author Bio:

Arslan Hassan, an electrical engineer and the founder of The Pro Linkers, has assisted numerous businesses in building a robust online presence. His passion lies in facilitating the online growth of brands and companies.

The post International Shipping: Why Insuring Your Cargo Is Important? appeared first on Universal Cargo.

How many is a bunch? It’s a little unclear.

In a White House briefing room release, a summary sentence said, “President Biden will unveil more than 30 new actions to strengthen America’s supply chains,” but the first sentence of the actual statement said, “President Biden is announcing nearly 30 new actions to strengthen supply chains critical to America’s economic and national security.” More than 30, nearly 30… let’s just say around 30. The Biden Administration is announcing around 30 new actions aimed at the American supply chain. Maybe.

When the release got to listing actions, there appeared to be only about half as many actions as the statement claimed. I counted 14. I included the text listing and describing the new actions below. The Biden Administration could be counting multiple actions, which aren’t clearly delineated yet, within the new actions the release listed. Or maybe the release only listed some of the actions that would be announced at the first meeting of the Council on Supply Chain Resilience (the formation of which is one of the new actions).

With the inaugural meeting also happening yesterday, I read the transcript of President Biden’s speech at the inaugural meeting. That didn’t contain the 30 actions (instead, it contained things like the president saying, “this Thanksgiving dinner was the fourth-cheapest ever on record”). Maybe he announced the actions just to the council itself rather than to the public in his speech. Maybe there are simply more actions he’s announcing in the near future.

It’s possible the Biden Administration, when counting the number of new actions, included how it “continues to deepen engagement with allies and partners to strengthen global supply chains.” The release listed several examples. However, it listed them as “in addition to the announcements above,” which made me think the deepening engagements the Biden Administration is allegedly making with other countries and global partners are separate from the new actions Biden and his administration are announcing.

That list included things like establishing a trilateral Sub-Committee on Emergency Response with Canada and Mexico through the United States-Mexico-Canada Agreement (USMCA), which was negotiated by the Trump Administration. The trilateral sub-committee was formed close to a year ago, back in February. Other items on this additional list go back further than that, making them not exactly feel new. However, there are 12 items on this additional list. That doesn’t quite get us to 30, but maybe close enough at 26. So let’s count them as new actions – “new” is a subjective term, after all.

Including all the text below that lists actions and partnerships from the White House’s release gives 30-ish new-ish actions-ish from the Biden Administration. The administration’s spin on the items won’t give us exactly how these actions will be implemented or what their results will be. Unfortunately, increased government involvement in an industry or sector often results in it being bogged down by overregulation and it becoming more expensive, particularly for consumers. Hopefully, that won’t end up being the case here with the supply chain. However, President Biden’s track record doesn’t fill me with confidence.

White House Text Listing Biden Administration’s “New Actions to Strengthen America’s Supply Chains, Lower Costs for Families, and Secure Key Sectors”

• The creation of the Council on Supply Chain Resilience. Today, President Biden will convene the inaugural meeting of the White House Council on Supply Chain Resilience, which will advance his long-term, government-wide strategy to build enduring supply chain resilience. The Council will be co-chaired by the National Security Advisor and National Economic Advisor, and include the Secretaries of Agriculture, Commerce, Defense, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, the Interior, Labor, State, Transportation, the Treasury, and Veterans Affairs; the Attorney General; the Administrators of the Environmental Protection Agency and the Small Business Administration; the Directors of National Intelligence, the Office of Management and Budget, and the Office of Science and Technology Policy; the Chair of the Council of Economic Advisers; the U.S. Trade Representative; and other senior officials from the Executive Office of the President and other agencies.
   
• Use of the Defense Production Act to make more essential medicines in America and mitigate drug shortages. President Biden will issue a Presidential Determination to broaden the Department of Health and Human Services’ (HHS) authorities under Title III of the Defense Production Act (DPA) to enable investment in domestic manufacturing of essential medicines, medical countermeasures, and critical inputs that have been deemed by the President as essential to the national defense. HHS has identified $35 million for investments in domestic production of key starting materials for sterile injectable medicines. HHS will also designate a new Supply Chain Resilience and Shortage Coordinator for efforts to strengthen the resilience of medical product and critical food supply chains, and to address related shortages. HHS intends to institutionalize this coordination to advance the department’s supply chain resilience and shortage mitigation goals over the long term. The Department of Defense (DOD) will also soon release a new report on pharmaceutical supply chain resilience aimed at reducing reliance on high-risk foreign suppliers. These actions are a subset of the Administration’s broader work to increase access to essential medicines and medical products.
   
• New cross-governmental supply chain data-sharing capabilities. The Administration has developed several cross-government partnerships to improve supply chain monitoring and strategy, including:
  • The Department of Commerce’s new, first-of-its-kind Supply Chain Center is integrating industry expertise and data analytics to develop innovative supply chain risk assessment tools, and is coordinating deep-dive analyses on select critical supply chains to drive targeted actions to increase resilience. This Center is building broad partnerships across government, industry, and academia, including collaborating with the Department of Energy (DOE) to conduct deep-dive analyses on clean energy supply. Additionally, Commerce is partnering with HHS to assess industry and import data that can help address foreign dependency vulnerabilities and points of failure for critical drugs.
  • The Department of Transportation’s (DOT) Freight Logistics Optimization Works (“FLOW”) program is a public-private partnership that brings together U.S. supply chain stakeholders to create a shared, common picture of supply chain networks and facilitate a more reliable flow of goods. DOT is announcing a new milestone for FLOW, in which participants are beginning to utilize FLOW data to inform their logistics decision making, helping to avoid bottlenecks, shorten lead times for customers, and enable a more resilient and globally competitive freight network through earlier warnings of supply chain disruption. As the effort continues to mature, DOT will work with the Department of Agriculture (USDA) to increase data transparency for containerized shipments of agricultural products in the United States, efforts that can help producers and sellers avoid disruptions that can increase food prices.
  • These new analytical capabilities will enable the Council to coordinate a more complete, whole-of-government critical supply chain monitoring function.

Additional actions to support stronger supply chains and access to affordable, reliable energy and critical technology:

Investing in critical supply chains:

• DOE today announced $275 million in grant selections for its Advanced Energy Manufacturing and Recycling Grant Program, investments that will revitalize communities affected by coal mine or coal power plant closures through investment in clean energy supply chains, including production of critical materials, components for grid-scale batteries and electric vehicles, onshore wind turbines, and energy conservation technologies. DOE also announced up to $10 million of funding for a “critical material accelerator” and a $5.6-million prize to develop circular clean energy supply chains. These efforts build on action by President Biden to authorize DOE’s use of the DPA to increase domestic production of five key clean energy technologies—including electric heat pumps—as well as DOE’s recently announced $3.5-billion investment through the Bipartisan Infrastructure Law to boost domestic production of advanced batteries and battery materials needed for essential clean energy technologies such as stationary storage and electric vehicles.
• USDA is making investments worth $196 million to strengthen our domestic food supply chains and create more opportunity for farmers and entrepreneurs in 37 states and in Puerto Rico. These investments—which build on prior investments in diversified food processing, resilient agricultural markets, and fertilizer production—expand farmer income opportunities, create economic opportunities for people and businesses in rural areas, and lower food costs.
• DOD, building on the $714 million in DPA investments it has made in 2023 to support defense-critical supply chains, will publish the first ever National Defense Industrial Strategy (NDIS). The NDIS will guide engagement, policy development, and investment in the defense industrial base over the next three to five years. It will ensure a coordinated, whole-of-government approach to and focus on the multiple layers of suppliers and sub-suppliers that make up these critical supply chains.

Planning for long-term industrial resilience and future supply chain investments:

• Launch of the quadrennial supply chain review. The Council will complete the first quadrennial supply chain review by December 31, 2024. As part of the review, the Council will update criteria on industries, sectors, and products defined as critical to national and economic security. In addition, 12 months after the Council promulgates the criteria, and annually thereafter, the Council will apply the criteria to review and update the list of critical sectors, as appropriate.
• Smart manufacturing plan. DOE’s Office of Energy Efficiency and Renewable Energy (EERE) Advanced Materials and Manufacturing Technologies Office (AMMTO) is sponsoring a study by the National Academies of Science, Engineering, and Medicine to develop a nationwide plan for smart manufacturing. The report will establish key priorities for investment to support new digital and artificial intelligence technologies. These investments will enhance the productivity and security of the manufacturing systems that are critical for maintaining domestic supply chains.

Deploying new capabilities to monitor existing and emerging risks:

• New Resilience Center and tabletop exercises for supply chain disruptions. The Department of Homeland Security (DHS) is announcing the launch of a new Supply Chain Resilience Center (SCRC), which will be dedicated to ensuring the resilience of supply chains for critical infrastructure needed to deliver essential services to the American people. Near-term priorities will include addressing supply chain risks resulting from threats and vulnerabilities inside U.S. ports. Additionally, in 2024, in collaboration with other federal agencies and foreign governments, DHS will facilitate at least two tabletop exercises designed to test the resilience of critical cross-border supply chains. Further, DHS and the Department of Commerce will collaborate to continue to strengthen the semiconductor supply chain and further the implementation of the CHIPS and Science Act.
• Launch of DOT Multimodal Freight Office. As part of the Bipartisan Infrastructure Law (“BIL”) implementation, DOT is launching its Office of Multimodal Freight Infrastructure and Policy (“Multimodal Freight Office”). This office is responsible for maintaining and improving the condition and performance of the nation’s multimodal freight network including through the development of the National Multimodal Freight Network, review of State Freight Plans, and the continued advancement of the FLOW initiative in partnership with the Bureau of Transportation Statistics.
• Monitoring of climate impacts. The White House National Security Council, Office of Science and Technology Policy, and the Council of Economic Advisers will co-lead an interagency effort in partnership with the National Oceanic and Atmospheric Administration to monitor global developments related to El Niño, including this climate phenomenon’s impact on U.S. and global commodity prices, agriculture and fishery output, disruptions to global and trade supply chains, and resulting impacts on food security, human health, and social instabilities.
• Energy and critical mineral supply chain readiness. To more consistently track risk and opportunity across energy supply chains, DOE is developing an assessment tool that accounts for raw materials, manufacturing, workforce, and logistics considerations. Additionally, to help assess the potential for trade disruptions of select critical minerals and materials, the Department of the Interior’s U.S. Geological Survey (USGS) will map and develop geospatial databases for select global critical product supply chains, with a current focus on semiconductor components; and will seek designation by the Chief Statistician of the United States of a federal statistical unit providing the nation’s official minerals statistics. Additionally, the National Science and Technology Council’s Critical Minerals Subcommittee plans to launch a new criticalminerals.gov website in January 2024 that will highlight cross-governmental supply chain efforts.
• Defense supply chain mapping and risk management. DOD is increasing supply chain visibility through the creation of a Supply Chain Mapping Tool to analyze supplier data for 110 weapon systems. This capability will be used to develop defense industrial base wargaming scenarios to identify vulnerabilities and develop mitigation strategies.
• Risk mapping for labor rights abuses. The Department of Labor (DOL) updated its Comply Chain guidance for identifying and addressing labor rights violations in global supply chains. In addition, DOL is providing $8 million for two four-year projects to identify supply chain traceability methods and technologies to address child labor or forced labor risks in diverse supply chains, such as the cobalt and cotton sectors. DOL will also undertake new supply chain research on mining and agriculture products across Asia, Africa, and Latin America.

In addition to the announcements above, the Administration continues to deepen engagement with allies and partners to strengthen global supply chains, including:

Deepening international early warning systems to detect and respond to supply chain disruptions in critical sectors with allies and partners, including:

• With the European Union. In May 2023, the United States and the EU established an early warning system for semiconductor supply chain disruptions under the U.S.-EU Trade and Technology Council.
• With Japan and the Republic of Korea. In August, the United States, Japan, and the Republic of Korea committed at Camp David to launch early warning system pilots, starting by identifying priority products and materials such as critical minerals and rechargeable batteries and establishing mechanisms to rapidly share information on disruptions to critical supply chains.
• With Mexico and Canada. Through the United States-Mexico-Canada Agreement (USMCA), the United States, Canada, and Mexico established a trilateral Sub-Committee on Emergency Response to coordinate North American efforts to maintain regional trade flows during emergency situations.
• With Australia, Canada, the European Union, Japan, the United Kingdom, and the World Health Organization. The Global Regulatory Working Group on Drug Shortages, currently chaired by the U.S. Food and Drug Administration, meets quarterly to discuss product shortages participating jurisdictions are encountering and ways such shortages are being addressed. The group’s exchange of information helped address product shortages experienced by each partner during the COVID-19 pandemic and subsequent “tripledemic” including COVID-19, influenza, and respiratory syncytial virus.
• With global partners. Through the President’s Emergency Plan for Adaptation and Resilience (PREPARE), the U.S. government funds activities to improve the weather, water, and climate observing capabilities and data sharing in regions and countries that are needed to produce actionable local, regional, and global climate information and minimize impacts upon infrastructure, water, health, and food security.

Strengthening global supply chains through other innovative multilateral partnerships:

• Indo-Pacific Economic Framework for Prosperity (IPEF) Supply Chain Agreement. The United States and 13 IPEF partners concluded a first-of-its-kind Supply Chain Agreement that gives partners new tools to build diversified, competitive supply chains for critical sectors, including an IPEF Supply Chain Council to coordinate action. The Department of Commerce is kickstarting this effort through pilot projects to enhance the resilience of key supply chains, including those related to semiconductors, critical minerals, and cold chain services. In addition, the Supply Chains Agreement establishes a Crisis Response Network that will allow IPEF partners to better prepare for and respond to supply chain disruptions through emergency communication channels and joint crisis simulations, as well as a Labor Rights Advisory Board to promote worker rights across supply chains.
• Americas Partnership for Economic Prosperity (Americas Partnership). The Americas Partnership is focused on, among other things, strengthening and diversifying supply chains. In its first year of work, the Americas Partnership will focus on the development of regional competitiveness plans in three critical sectors: semiconductors, clean energy, and medical supplies.
• North American Leaders’ Summit (NALS). Through NALS, the United States, Canada, and Mexico are enhancing the resilience of North America’s supply chains for critical minerals, semiconductors, and other essential goods. This trilateral effort includes partnering with regional industry and academia to create quality jobs, promote investment, grow talent, and catalyze innovation.
• Partnership for Global Infrastructure and Investment (PGI). Through PGI, the United States is mobilizing public and private financing to incentivize investments and develop transformative economic corridors to diversify global supply chains and create new opportunities for American workers and businesses. From the development of the Lobito Corridor, connecting the Democratic Republic of the Congo and Zambia with global markets through Angola, to the launch of the landmark India-Middle East-Europe Economic Corridor—through PGI, the United States is creating novel interconnections across regions to facilitate trade and secure clean energy, digital, food security, and other critical supply chains.
• Global Labor Directive. On November 16, President Biden signed the Presidential Memorandum on Advancing Worker Empowerment, Rights, and High Labor Standards Globally. The President directed several departments to address labor rights abuses in global supply chains and identify innovative approaches to promote internationally recognized labor rights throughout the supply chain, including by collaborating with labor organizations, workers, and other labor stakeholders to consider efforts that support worker-led monitoring of labor rights compliance.
• The Mineral Security Partnership (MSP). The Department of State, along with partners including Australia, Canada, Finland, France, Germany, India, Italy, Japan, Norway, the Republic of Korea, Sweden, the United Kingdom, and the European Union (represented by the European Commission), established the MSP to accelerate the development of diverse and sustainable critical energy minerals supply chains. The MSP works with host governments and industry to facilitate targeted financial and diplomatic support for strategic projects along the value chain with an emphasis on those projects which adhere to and promote the highest labor, environmental and sustainability standards.
• International Technology Security and Innovation (ITSI) Fund. Created by the CHIPS and Science Act of 2022, the ITSI Fund promotes the diversification of the global semiconductor supply chain. State will partner with countries to develop the most attractive economic environments for private investment. With ITSI Fund support, the Organization of Economic Cooperation and Development has established the Semiconductor Exchange Network allowing policymakers in the semiconductor industry to examine risks and interdependencies on the current state of the semiconductor ecosystem. Additionally, the ITSI Fund is supporting ecosystem reviews in key partner countries that will inform future collaboration on developing this critical sector.

The post Biden Administration Announces 30-ish – Give or Take 16 – Supply Chain Related Actions appeared first on Universal Cargo.

Your business can’t do without shipping, yes. But who says you have to do the shipping yourself?

Let’s face it; the complexities of import and export demand significant time and resources that could be invested in other parts of your business. For example, not knowing where your cargo is can be really scary. And with good reason – over 2,675 containers are lost at sea each year. 

That’s where a reliable freight forwarder comes in handy. Universal Cargo is THE go-to freight forwarder when it comes to your US import/export operation. They take the burden of shipping goods worldwide off your shoulders and calm your fears. 

Freight forwarders handle shipping processes like warehousing, tracking onshore transport, securing cargo space, arranging cargo, sorting freight charges, and managing documentation, among others. 

But a freight forwarder isn’t all you need to transform your business operations in this digital age  – you need a robust transportation management system (TMS). 

Thankfully, there are new technologies that, if integrated into your transportation management system, will boost it and revolutionize your business operations. These are the technologies we’ll be discussing in this article. Let’s jump right in.  

How a TMS Will Benefit Your Import/Export Operations

A transportation management system is a logistic platform used in supply chain management to plan, optimize, and implement the transportation of goods. TMS helps businesses manage and improve the daily workflow of their transportation operations. Here are reasons to invest in a TMS for a more efficient business. 

Logistics Optimization

A transportation management system (TMS) helps you manage your entire supply chain and logistics process, making it more efficient and cost-effective. It covers every process from the time you receive orders to when you deliver them. This software assists you in route optimization, load consolidation, real-time tracking, and inventory management, among others. 

Document Flow Simplification

Documentation is critical to the import/export business, yet it can be a mess. Handling different documents throughout the whole supply chain process can be tasking and disorderly if done manually. TMS automates and simplifies the whole documentation process in your business. 

It improves the status visibility of all documents, letting you access them easily. With TMS, you generate accurate and consistent documents, saving you time and minimizing errors. A transportation management software also improves internal and external communications, allowing you to carry all stakeholders along and resolve issues sufficiently.

Real-Time Tracking and Visibility

There’s nothing as frustrating as not being able to track your goods. Even if you’re outsourcing your shipping to a freight forwarder, you must be able to know where your goods are at any point in time. TMS puts your mind at rest in this regard. It gives you an up-to-the-minute update of where your shipment is at every stage of the supply chain. 

Real-time tracking of your products improves your efficiency, letting you allocate resources more effectively. It also enables you to detect any delays or issues on time so they can be resolved before they get out of hand. With TMS, your customers can also get real-time updates on their goods, leading to improved customer experience. 

Compliance with Agreements and Regulations

To be successful in any business, including import/export, you must comply with the relevant regulations and agreements. This sounds easy but the process can be complicated. But TMS has got your back. It helps you simplify tasks relating to compliance management. As a result, you will not only be avoiding fines and penalties, you will also be running a reputable and sustainable business. 

On-time Delivery

The best way to lose customers is by delivering their goods late. Fortunately, a transportation management system helps you reduce and even eliminate this occurrence. Route adjustment features in TMS enable you to route your goods more efficiently to avoid delays. In addition, the real-time tracking data you get from a TMS calculates the exact expected time of arrival (ETA) of goods and relays the information to customers. 

Businesses that can benefit from a transportation management system include the following:

• Food and beverage businesses
• Ecommerce businesses
• Distributors
• Retailers
• Healthcare and pharmaceutical companies
• Building materials and construction companies
• Agricultural businesses
• Oil and gas companies
• Textile companies 

To revolutionize your business operations, TMS is not a should-have, it’s a must-have. It eases your supply chain operations, letting you optimize your resources. The benefits you get from adopting a transportation management system not only help you run your business smoothly, they place you among the top-tier companies in your field. 

5 Technologies to Boost TMS Growth

TMS is a fantastic innovation but it stops being so if you don’t expand it to meet evolving technological demands. For example, what the computer was 20 years ago is not what it is now. It has been upgraded many times to meet present needs. The same principle applies to TMS. It has to be continually boosted by being integrated with other software to make it more robust. Here are five technologies that can boost TMS growth. 

1. Equipment management software 

Equipment management software improves the allocation and utilization of assets in your business. Say goodbye to days of endless spreadsheets and manage your equipment data in one central location. Whether you’re into manufacturing or supply, every piece of equipment you own must be well-managed. 

Integrating an equipment management system into your TMS ensures you never lose track of your equipment and power tools. Not only are you able to collaborate more effectively, you also gain full control of your equipment and enhance accountability. 

2. Battery management software 

Battery management software (BMS) unlocks performance, improves safety, and enhances the lifespan of batteries in any application. BMS  improves the efficiency of your transportation management system in several ways. First, it helps optimize routes for electric vehicles (EVs), enabling them to complete their journeys without running out of charge. 

Another benefit of integrating a BMS into your TMS is that it can route EVs through charging stations, ensuring that they recharge as and when needed. Also, if you’re using an energy management system to optimize power usage in your facility, BMS works like magic. It helps coordinate your EVs to charge during off-peak hours, saving energy and promoting sustainability. 

3. Enterprise resource planning systems

An enterprise resource planning (ERP) system is a rounded integrated software that assists businesses of all sizes to harmonize and streamline their core processes. An ERP system provides by-the-minute visibility of workflows, boosts operations and improves decision-making.

When you integrate TMS and ERP, you facilitate smooth data sharing between the transportation unit and other units of the company. The centralized database that the ERP provides ensures that only valid and accurate information guides transportation decisions. This information can cover aspects like customer orders, supplier details and inventory status.

4. Supplier relationship management software

Supplier relationship is crucial to a vibrant supply chain and indeed the success of the company. Thus, the need to manage suppliers successfully is what birthed the supplier relationship management (SRM) software. This software improves the procurement process, boosts supplier collaboration and ensures the efficient operation of the company’s supply chain.

If integrated with the TMS, the SRM software helps enhance relationships with suppliers and partners in the transportation unit like freight forwarders. Data collected from SRM enables TMS to manage transportation operations more efficiently. 

Generally, the integration of TMS and SRM leads to better logistic planning, cost-effectiveness, and an enhanced supply chain process. 

5. Warehouse management system

Warehouse management systems (WMSs) are software solutions developed for managing warehouse operations. They ensure the efficient processing of goods from arrival till they leave the warehouse. The software covers functions like inventory management, order management, shipping, and task management. 

When integrated with TMS, WMS helps streamline and optimize the transportation workflow, resulting in reduced errors, short fulfillment times and improved order accuracy. 

Why the Need for Technological Advancements in TMS

Still not sold? Then a deeper dive into the need for an advanced tech-driven TMS will change your mind. Here are five solid reasons you need to jump onboard and boost your TMS with improved technology. 

1. Growing complexities of the supply chain process 

We’re in a digital age where the business landscape has changed drastically. The supply chain industry is not left behind – the process has become more complex, transcending borders and becoming global. And this digital transformation is not stopping anytime soon. That’s why you must embrace the latest technological advancements for your TMS growth.

2. The need to save costs 

It’s a fact that technological solutions help businesses manage their operations better and save costs. TMS-boosting software are no exception. They streamline your workflows, block loopholes, and save you tons of money. 

3. Customer expectations 

You’re in business because of your customers. Remove them from the equation and you’ll be out of business pretty soon. And today’s customers have high demands that can only be met with the latest technologies. So, to ensure you keep your customers and gain new ones, you must integrate modern solutions into your TMS. 

4. Data-driven age 

The whole world is driven by data – from governments to corporations and NGOs. Anyone who’s serious about making any impact in this age has to use data in one form or the other. What better way to leverage up-to-date data than by adopting software designed to help you use data to your advantage? All the solutions mentioned here are data-equipped to enable you to manage your transportation operations more effectively. 

5. Regulatory compliance  

Regulations guide the business landscape and keeping up with them can be stressful. But with these innovative technologies, it becomes easier. For example, the centralized data an ERP software provides gives you immediate access to any data needed for regulatory purposes in the transportation unit. Also, a battery management software helps you comply with sustainability rules.

See? The transportation management software (TMS) is good but it can be better with supporting digital solutions. With these software, not only will you be able to effectively use data, your operations will become smoother and more productive. 

The Difference Between You and Your Competitors

Do you know that in the US, exports of goods increased from $3.2 billion to $168.4 billion in July 2023? Guess who those are raking in such humongous amounts? You’re right – your competitors. And how are they able to do such incredible numbers? You’re right again – by leveraging innovative technologies. 

See why you can’t fold your arms and settle for a TMS that’s not optimized for growth? Here are other benefits you derive from boosting your TMS.

• Reduced costs: benefits like load consolidation and route optimization gained from an improved TMS helps reduce costs. 
• Improved decision-making: with access to up-to-date data that these technologies provide, decision-making becomes easier and better informed.  
• Better customer experience: these software enable you to improve your operations and service delivery, leading to enhanced customer experience. 
• Efficient use of labor: TMS-boosting software promotes the visibility of all your supply chain processes, enabling you to efficiently deploy labor. 
• Compliance with industry regulations: these technologies make it easy to comply with industry regulations, helping you avoid fines and penalties that come with non-compliance.
• Achievement of sustainability goals: your corporate sustainability goals are seamlessly met with advanced TMS technologies like equipment management software and battery management software.

These benefits are too juicy and numerous to pass on. And there’s no better time to integrate TMS growth-boosting technologies than now. Remember, the difference between import/export businesses that are doing great numbers and those performing poorly is the technology they leverage. 

Time to Grow Your Export/Import Business with Advanced TMS Technology

It’s not business as usual. The world is changing fast and tech gurus are constantly churning out digital solutions to ease business processes and promote growth. It’s a great time in history and an opportunity to move your business to the next level with an enhanced transportation management system. 

Your TMS will do much more if integrated with growth-boosting solutions like the equipment management software, battery management software, enterprise resource planning, supplier relationship management software, and warehouse management system. 

Even if you don’t want to take advantage of these digital transformation tools, necessities like the growing complexities of the supply chain process, cost saving, customer expectations, data-driven age, and regulatory compliance are valid reasons to jump in. 

Not to worry, your investments are not a waste. They come with dividends like reduced operational costs, better decision-making, improved customer experience, efficient use of labor, compliance with industry regulations, and achievement of corporate sustainability goals. 

So, the best time to integrate these solutions with your TMS was yesterday. The next best time is now. You have the ball; you have the court. 

This was a guest post by Moyofade Ipadeola.

Author Bio

Moyofade Ipadeola is an SEO writer, UX writer, and editor. Witty, she loves personal development and helping people grow. Mo, as she’s fondly called, is fascinated by all things tech. She can be reached on Linkedin. 

The post Revolutionize Business Operations: How Technology Can Boost TMS Growth appeared first on Universal Cargo.

The ILWU “will continue to operate as usual throughout the restructuring process,” the union said in a statement on Sunday morning. It plans to “continue honoring its employee and payroll obligations in the ordinary course of business.”

The bankruptcy filing was precipitated by a massive damage award and ongoing litigation in a long-running dispute between ILWU Local 8, the union chapter in Portland, Oregon, and terminal operator ICTSI Oregon.

Illegal ILWU Actions that Led to Bankruptcy

I’ve written a great deal over the years about what the ILWU pulled at the Port of Portland. Over two jobs that never even belonged to the union, the ILWU slowed down port operations so much container ships could no longer call on the port.

Those two jobs, plugging and unplugging reefer containers, always belonged to the International Brotherhood of Electrical Workers (IBEW). However, in its bid to control every job up and down the West Coast ports, the mighty ILWU flexed its muscle to punish the terminal operator for daring to leave those two jobs in the hands of the union that had always performed them and warn all the West Coast ports of the possible consequences of not handing over any other jobs that had always been performed by other unions.

The ILWU’s actions, which were found to be unlawful, damaged the port, its terminal owners, IBEW, local truckers, shippers, and itself – which is quite obvious as now it has filed for bankruptcy protection.

If you want a more in depth look at what the ILWU did at the Port of Portland and the fallout from it, here is a handful of posts on it:

Judge Rules ILWU Purposefully Slowed Import/Export @ Port of Portland

ILWU Takes Advantage of No Contract, Slowing Down Port of Portland

ILWU Local 8 Should Pay Damages to Portland Shippers

Jury Hits ILWU with $93M Verdict for What Union Did to Port of Portland

Why Is This International Shipping Story So Sad?

If you don’t have time to go back and read those stories but gave the headlines a quick glance, you probably noticed the $93M verdict a jury hit the ILWU with after finding the union guilty of illegal slowdowns and work stoppages. That $93M verdict is what ultimately led to the union filing for bankruptcy protection.

The jury found both the Local ILWU 8 and ILWU National to be guilty.

What’s Happening Now

The union has continued to fight the verdict ever since it was reached and even got a victory a few years ago when a judge drastically reduced the damages ILWU was ordered to pay. Miller Time gives the details:

In March 2020, Oregon District Judge Michael Simon dramatically reduced the amount due, ruling that damages should not exceed $19.1 million.

While the sides of the case continue to fight in court, the union told its members, “Unfortunately, the ILWU cannot afford to continue to litigate this case,” according to Miller’s FreightWaves article.

So now the ILWU will use Chapter 11 to reorganize, renegotiate, and resolve the debt.

Unfortunately, labor action causing slowdowns at the ports is not an uncommon thing. Particularly when its time for the ILWU to negotiate a new master contract. This pattern led shippers to divert cargo from West Coast to East and Gulf Coast ports over the last couple years to protect themselves from potential cargo delays in the lead-up to and period of contract negotiations between the ILWU and employers represented by the Pacific Maritime Association (PMA). East Coast ports are still enjoying a market share increase of imports.

Here are a bunch of articles from the last year or so relating to the ILWU and ports:

Another Foreign Company Purchases U.S. Port Terminals & ILWU Ratifies Contract

ILWU Canada Strike Again, Stop, Reissue Strike Notice, Then Cancel – Head Spinning Yet?

New ILWU Tentative Contract Details & Fallout

Highly Paid ILWU Workers Want More, So Shippers Pay the Price

ILWU Disrupts West Coast Ports Friday & Continues Labor Action This Week

Strong Ruling Against ILWU in Seattle T-5 Jurisdictional Dispute Could Be Motivation Behind Labor Action that Closed Ports of LA-LB

ILWU Action Closed Ports of LA & LB Last Week, Slowed Opening This Week

ILWU Labor Action Creates Disruption at the Ports of Los Angeles & Long Beach

ILWU & PMA Finally Resume Contract Negotiations

ILWU Negotiations Help NY/NJ Surpass LA/LB as Busiest U.S. Port

More ILWU Port Disruption & Terminals Cutting Man-Hours as Contentious Contract Negotiations Drag

ILWU Slows Oakland & Seattle Port Operations

The post ILWU Files Bankruptcy Claim appeared first on Universal Cargo.

If this bill goes through, it could seriously impact the amount of vessel sharing agreements allowed in the industry. Vessel sharing agreements between ocean freight carriers are pervasive. The most prominent such deals form the basis for the three major carrier alliances that dominate worldwide ocean shipping.

Because the supply chain with its ocean shipping sector is one of very few areas where Democrats and Republicans seem able to agree, we’re likely on the verge of the FMC’s authority over shipping agreements increasing.

John Gallagher reports in a FreightWaves article:

The Ocean Shipping Competition Enforcement Act … would allow the Federal Maritime Commission to block any agreements among carriers and marine terminal operators found to be unduly anticompetitive without having to first obtain a federal court order.

The FMC currently cannot on its own block an agreement that it determines to be unreasonably anticompetitive. Instead, it must petition the U.S. District Court for the District of Columbia and persuade the court to do so. If the court disagrees with the FMC’s assessment, the agreement automatically becomes effective.

Representative Says Carriers Openly Collude in Alliances

For years, I’ve argued that carrier alliances shrink competition in the ocean freight industry. However, I don’t think I ever used as strong of words as Representative Garamendi did when introducing this bill. On the House floor, He accused carriers of open collusion. In his article, Gallagher quoted the representative:

“The ocean shipping industry was the last transportation sector deregulated by Congress in 1984,” Garamendi said in introducing his bill. “Because of that, today the industry is now dominated by nine foreign-flagged ocean liners that openly collude under three carrier alliances handling some 80% of cargo. After reforming our nation’s ocean shipping laws for the first time in nearly a quarter century, Congress must ensure that the Federal Maritime Commission can do its job and fully enforce the law.

“Americans expect fair, competitive markets with good government, and that is exactly what our bipartisan bill would ensure,” he added.

Under the laws that the carrier alliances came into existence under, carriers are allowed to share vessels but not cooperate when it comes to things like pricing. However, many have worried that the temptation to talk shipping prices would be too great for carriers as they discuss the operations and sharing of their ships. Especially since there have been numerous times carriers have been found guilty and fined over colluding on freight rates.

Adding to suspicion of price collusion is how common it is for carriers to announce things like general rate increases (GRIs) and peak season surcharges (PSSes) practically simultaneously and in similar if not identical amounts and commencement dates.

Even if carriers do manage to resist all collusion temptation on rates, competition still drops with carrier alliances as the carriers are able to work together to reduce capacity (supply) in the industry when demand reduces or they think it is about to decrease.

Will the Bill Ensure Good Government?

The words “good government” stand out to me in Garamendi’s statement about what this bill will ensure. The founding fathers were so convinced that any government could turn tyrannical, they gave us the second amendment. I’m not suggesting the FMC is or would turn tyrannical, but good government is an extremely difficult thing to promise.

We’ve seen in the past, as the government gets more involved in an industry, that industry gets much more expensive for the consumers. And without service getting better. Obvious examples in the U.S. include education and health care. It would not be illogical to worry that the increase of government involvement we’re seeing right now in the international shipping industry could turn out to be detrimental and make importing and exporting more expensive.

For years, I’ve argued that the government should reconsider its allowance of carrier alliances and that it should crack down on unfair detention and demurrage fees shippers face. Now that we’re seeing the government make moves on those issues and more in the supply chain, I’m hoping this doesn’t turn out to be one of those “be careful what you wish for” situations.

The courts do have a valuable place in checking the overreach of government authority. For example, the federal courts just blocked a horrible Californian ban on natural gas appliances. The Golden State already has a severe housing shortage, an enormous homelessness problem, and skyrocketed rents that commonly make it difficult or impossible for even people with incomes over $100,000 a year to be able to afford to live in the same cities where they work. Forcing homeowners and landlords to replace gas appliances, an expensive undertaking, would only exacerbate those problems. Plus, the electric appliances would further tax a power grid that is already unable to meet the state’s needs. And that’s only the beginning of the issues with this particular law.

Removing the courts from the FMC’s process of halting shipping agreements certainly increases the commission’s power and streamlines the process to stop collusive deals. But how well will that power be checked? That’s a question that will likely only be answered for good or naught once the bill and time passes.

The post New Bill Introduced to Give FMC More Power to Halt Carrier Alliances appeared first on Universal Cargo.

Peter Tirschwell reports in the Journal of Commerce (JOC):

Contract negotiations between West Coast dockworkers and marine terminal employers — ongoing for more than five months — have been put on hold pending resolution of a hearing to determine jurisdiction of cold-ironing work at an SSA-run terminal at the Port of Seattle, sources tell JOC.com.

A couple months ago, contract negotiations stalled over this issue of union jurisdiction. The problem only appears to be getting worse.

The big issue most people were expecting to cause contention in the ILWU contract negotiations was automation. However, the union and employers won’t even get to that, nor the large (40%) wage increases the union reportedly initially demanded for dockworkers, until the parties get past this jurisdiction issue. However, this issue is actually related automation in a way.

The ILWU says they gave the PMA language for automation in the 2008 master contract under the understanding the PMA would back the union over others in jurisdictional disputes. If they weren’t already, the ILWU became very aggressive in going after jobs controlled by other unions after the 2008 agreement.

In the lead-up to and during the 2014-15 contract negotiations, the local chapter of the ILWU at the Port of Portland hard-timed the port so much over two jobs always held by the Brotherhood of Electrical Workers that carriers stopped calling on the port with container ships.

Another union, the International Association of Machinists and Aerospace Workers (IAMAW) has jurisdiction on equipment maintenance and repair jobs at a terminal, T5, at the Port of Seattle. The ILWU wants the PMA to back it in the union’s jurisdiction fight to get those jobs. However, the PMA says it can’t do anything there because a court ruling has already been made in IAMAW’s favor.

Now, there’s a hearing on union jurisdiction over these cold-ironing jobs at the Port of Seattle that could turn out the same way the T5 jurisdiction ruling turned out.

It all adds up to the ILWU claiming the PMA hasn’t sufficiently backed the union on jurisdiction to have the right to automate. Not only are we talking about further automation but also what automation has already been done in recent years.

There’s a big disconnect here. The ports need automation to keep up with the amount of cargo that pours through the ports. The ILWU views automation as an existential threat where machines take jobs from people. The PMA has produced evidence that automation, as it increases efficiency and brings attracts more business to terminals, creates more union work and jobs. The union rejects that evidence.

I wouldn’t want to have to arbitrate fights over the issue at the negotiation table.

Despite being 5+ months into contract negotiations already, there seems to be no one who expects agreement to be reached this year. Tirschwell writes in his JOC article:

The inability to get past the jurisdictional issue in Seattle has now led some observers to conclude that the contract negotiations between the International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA) are unlikely to be resolved this year. Talks began May 10 in San Francisco.

“I don’t see it getting resolved in the next couple of weeks,” Gene Seroka, executive director of the Port of Los Angeles, told JOC.com this week. “We’re probably months away.”

Being months away from resolution is very bad news for shippers, as the ILWU as already executed slowdowns during these negotiations. Here are a couple posts we published on the labor action that has happened:

ILWU Slows Oakland & Seattle Port Operations

ILWU Labor Action Occurs as Contract Negotiations Look Bad

One piece of good news, which Tirschwell points out, currently keeping labor contention from boiling over is the amount of work longshoremen are getting:

… the union’s negotiators are not under any pressure from the rank and file to rush into a contract. That’s because West Coast longshore workers have worked more hours year to date this year than during the same period last year.

According to numbers provided by the PMA, the ILWU working hours paid through the first week of October totaled 29.3 million, up 4 percent from the 28.2 million working hours paid during the same period last year. Working hours are up even though US imports from Asia to the West Coast were down 1.7 percent in January through September compared with the first nine months last year, according to PIERS, a JOC.com sister product within S&P Global.

Amidst an uneasy economy, shipping demand is rapidly falling right now. Let’s hope that doesn’t cause labor hours to start falling, turning the situation ugly at West Coast ports.

The post ILWU Contract Negotiations Suspended appeared first on Universal Cargo.

If trains are stopped from moving goods around the country, it would be devastating for a U.S. supply chain already suffering major difficulties for the last couple years and a U.S. economy already in a recession – unless you change the definition of recession as some are trying to do for political reasons.

Many have said we will see a rail strike by the end of September, if not earlier. How likely is that strike to happen?

Is a Rail Strike as Likely as a Truckers Strike?

It can’t be said a rail strike is more likely than a truckers strike because, already, truckers in California executed a strike over Assembly Bill 5 (AB5) that basically shut down the Port of Oakland for a week.

While things could continue to get worse on the truckers front, we’re currently left with many questions there. Will 70,000 truckers be forced off the roads and away from the ports in California when a trucker shortage already exists? Will most independent truckers just be forced to become employees while we face a tricky transition time. Will more legal action stop this law from altering the supply chain’s trucking model? Will truckers strike more? Could they similarly to Oakland disrupt the country’s busiest entry point for goods, the Ports of Los Angeles and Long Beach?

Over 100 International Longshore & Warehouse Union (ILWU) members assisted the truckers in disrupting the Port of Oakland by refusing to work in honor of the picket lines of independent truck owner and operators who don’t want to be forced to become employees or possibly forced off the roads in California altogether. Despite these union members talking about standing with the truckers, the ILWU officially supports AB5 because a major goal of the law is to unionize drivers. While ILWU members at the Port of Oakland’s biggest terminal stood with the independent truckers, ILWU members ignored the pickets at other terminals.

It’s likely ILWU members at the Southern California ports will ignore future strikes and convoys from truckers at the Ports of Los Angeles and Long Beach. That’s what would be wanted by union leadership, which in official statements spun members standing with the truckers in Oakland as refusing to work over safety issues. Indeed, the union has already ignored demonstrations by truckers at the Ports of LA and LB.

Rail workers striking would not need an assist from other industry unions to be effective. However, rail workers are themselves separated into several unions, so those unions would likely have to organize together to execute an effective wide rail strike. Those unions do appear prepared to do so. They do not have the dividing hindrance that truckers do in that AB5 directly impacts independent truckers but doesn’t affect the status of truckers who are already employees of trucking companies. Grievances rail workers have with rail carriers generally impact the workers regardless to which union they belong.

Additionally, rail grievances are nation-wide rather than localized to one state. While we’ll certainly see continued action from Californian truckers on AB5, if we do see work-stoppage from rail workers, it will have a bigger impact.

Is a Rail Strike as Likely as a Dockworkers Strike?

A bigger fear at the Ports of Los Angeles and Long Beach than truckers striking has been over whether the dockworkers will strike or execute slowdowns. Many shippers have diverted their cargo to East and Gulf Coast ports to avoid this risk, even to the point of adding to congestion issues (or causing the congestion according to some experts) at those ports.

Shippers diverting cargo speaks to the likelihood of seeing labor action from the ILWU. There’s an expectation from shippers that every time the master contract between the ILWU and Pacific Maritime Association expires, as it did on July 1st, contract negotiations will get contentious and the ILWU will execute labor slowdowns, threaten to strike, and/or actually strike.

This fear doesn’t exist in the minds of shippers over rail workers because it’s been since 1991 that a wide rail strike has taken place in the U.S. Plus, Congress stepped in and stopped that strike within a day, preventing the severe impact it could have made. However, shippers have suffered a great deal of damage from dockworkers disputing with their employers in recent memory.

There’s the 2014-15 negotiations, when things got so contentious between the ILWU and PMA that there were debilitating labor slowdowns (and eventually mini-lockouts) preventing goods from getting to store shelves for the holiday shopping seasons, agricultural exports rotting on the docks, exporters permanently losing international trade partners, and the U.S. economy losing billions of dollars. The local ILWU at the Port of Portland took advantage of that same break in contract to accelerate its slow-timing of the port (which had already been found in court to be illegal) they’d been doing over a couple electrical jobs that never belonged to the union in the first place. That got so bad ocean freight carriers ceased calling on the Port of Portland with container ships. In 2012, the ILWU clerical workers executed a strike, also causing major congestion. In 2002, amid contentious contract negotiations, the ILWU executed organized slowdowns and the PMA locked them out of the ports, resulting in, you guessed it, major port congestion.

That’s just a handful of ILWU labor action examples from the top of my head, without even mentioning the International Longshoremen’s Association (ILA) on the other side of the country, that happened since there’s been a rail worker strike. While actual, full-blown ILWU strikes are pretty rare, slowdowns have happened much more often. It’s enough to think slowdowns, if not an actual strike, from the ILWU would be much more likely than a strike from rail workers.

It’s easier for dockworkers to strike or execute slowdowns too. Though you have many local factions, all the dockworkers on the West Coast belong to the same overarching union. As mentioned before, rail workers are split into multiple unions, and there are strictly – even complicatingly – set legal processes in place for rail workers’ negotiations.

However, while the ILWU has been negotiating for a new contract for a matter of months, contract negotiations between rail carriers and rail workers have been dragging on for over two years. Rail workers have had enough. While the ILWU views the issue of automation as an existential one, the rail workers, because of how long they’ve waited to secure a new contract, see their issues as more pressing. In fact, a couple of the rail workers’ unions have already approved or moved toward the approval of a strike.

Jeff Schuhrke reported last week in an In These Times article:

Earlier this month, BLET [Teamsters-affiliated Brotherhood of Locomotive Engineers and Trainmen] members voted to authorize a strike with over 99 percent approval. Meanwhile, SMART-TD’s [Sheet Metal, Air, Rail and Transportation Workers-Transportation Division’s] general chairpersons have taken the first step towards authorizing a work stoppage.

Rail workers were even set to strike last month. Given this information, I would say a strike is more likely from the rail workers if not for the following mitigating factor…

Governmental Intervention

A rail worker strike almost happened a couple weeks ago, but the Biden Administration stepped in at the last moment, reported Ian Putzger in an article in the Loadstar:

US president Biden stepped in at the eleventh hour to avert a work stoppage that could paralyse the severely strained rail system.

With the possibility of industrial action as early as today (18 July), he signed an executive order on Friday for a board of arbitrators to seek a solution to the railway contract dispute simmering since January 2020.

During the 60 days given to the board to develop a compromise, no industrial action can happen.

This was no surprise action by the president. It is a prescribed step in the complicated legal process I mentioned above for rail workers’ negotiations. Schuhrke lays out nicely what happens after direct bargaining between the unions and railroads fail, then they enter mediation and that too comes to an impasse, which it did in June:

In accordance with the Railway Labor Act’s cumbersome process, the next step was a mandatory 30-day ​“cooling-off” period, at the end of which either party could have entered into ​“self-help” (meaning a strike or lockout) unless President Joe Biden appointed a Presidential Emergency Board (PEB) to examine the dispute and produce recommendations on a settlement within another 30-days.

…

The PEB’s recommendations are expected by mid-August, after which there will be yet another 30-day cooling-off period during which the parties can either accept or reject those recommendations. If an agreement still has not been reached by then, which would be mid-September, the Railway Labor Act allows for the unions to go on strike. 

If President Biden hadn’t appointed a PEB, he wouldn’t have been doing his job and would have had to add one more disaster to his list that already includes how he’s handling the Southern Border; his botched Afghanistan withdrawal; attacking the oil industry, causing record high gas prices; basically inviting Russia to invade Ukraine… But I digress.

So we now know there won’t be a rail strike until at least mid-September. If the rail unions did go on strike at that point, Congress could step in.

I already mentioned Congress stepping in and stopping the 1991 strike within a day. Schuhrke shared some of how Congress could put a quick end to a strike in September:

…Congress could quickly stop the strike by intervening in any number of ways, including ordering further cooling-off periods, mandating arbitration or implementing the PEB’s recommendations.

There is one more governmental intervention that could reduce the chance of a rail strike, but it’s deserving of its own section…

FRA Proposes Two-Man Minimum Crew Rule

It may not sound like a big issue from the outside, but a huge topic of contention between the rail carriers and the rail workers is the difference of one crew member on a freight train. The railroads want the minimum number of crew members on a freight train to be one instead of two. A strike happening could hinge on this one issue, or <ahem> one crewman.

Check this out from Schuhrke’s article:

“I really, really think that this may actually lead to a legitimate strike,” Lindsey, who is a member of the BLET, told In These Times. ​“The reason why is the railroad has chosen this as their hill to die on: they want one-man crews. They’ve made it clear they are not bowing down.”

The Federal Rail Administration (FRA) may take this issue off the table altogether.

In another article for the Loadstar, Ian Putzger reports:

The US Federal Rail Administration (FRA) is set to reject the push from rail carriers to bring down the minimum crew requirement for freight trains from two people to one.

With a proposal for a rule to that effect, the administration is also shifting the stakes in contract negotiations between the railways and unions.

“This proposed rule will improve safety for America’s rail passengers – and rail workers – across the country,” said US transport secretary Pete Buttigieg.

When Pete Buttigieg says something, my gut instinct is to suspect the opposite is true. Indeed, a similar rule to this one had previously been proposed but later dumped for a lack of evidence that it actually improved safety. Putzger adds:

This move reverses the stance taken by the FRA under its previous head, during the Trump administration. The authority had proposed a similar rule back in 2016, but abandoned it three years later, saying there was not enough evidence that two-person crews made train operations safer.

It seems the debate has become more about politics than anything else, with a few Democrat-led state legislatures putting similar rules in place seemingly because this federal rule was rejected under the Trump Administration. I’d need to see a great deal more evidence and arguments for and against before taking a side on the law. Generally, before endorsing a federal law, I’d want to see strong evidence the law is needed and it won’t have negative consequences that would equal or outweigh the positive ones. The more the federal government gets involved in an industry, the more the costs of that industry tend to spiral out of control (see education and healthcare).

You can read Putzger’s article to see arguments against the proposed rule. It may ultimately be bad law, but if it is pushed through, it would significantly decrease the chance a rail strike happens because the biggest thing for which the railroads are fighting will be taken off the table.

Conclusion

There are enough factors to make me think a rail strike is not as likely to happen as it seemed even a week or two ago. If a rail strike does indeed happen, I think it would be more symbolic than anything as Congress couldn’t afford not to use its powers to shut the strike down right away.

As locomotive engineer Ron Kaminkow was quoted as saying in Schuhrke’s article:

“Whether or not we actually go on strike, we need to utilize everything at our disposal to impress upon the rail carriers that we are ready, willing, able, mobilized, educated and vehement in our determination. Even if we do not strike, or if we do strike and are ordered back to work in a matter of hours, just knowing that we have that power, that we have the ability to stop the trains from moving — it shows us that we’re the ones that really run the railroad, not them.”

A situation where the unions did strike against the railroads would, however, put the Democrats in a tough situation. Unions tend to be big campaign contributors to the Democratic Party, and they couldn’t afford to be seen as anti-union or, worse, union-busting. However, they also can’t afford to let the economy get stuck on the tracks.

I wouldn’t be surprised to see President Biden’s PEB produce rather union-friendly recommendations and congress implement them if the two sides didn’t agree. I hope the recommendations end up being a suitable compromise to which both sides can agree because the former resolution is an amount of government flexing that displays a level of control of government over the governed that is undesirable to say the least.

The post How Likely Is a Rail Strike? appeared first on Universal Cargo.

Lockdowns Have Already Basically Doubled Port Congestion in China

Yesterday, Universal Cargo’s CEO Devin Burke texted me the picture to the right, showing ships that were waiting outside the Port of Shanghai. You take a look at the picture and tell me if it seems a little congested.

According to Winward, a shipping analytics company, looking at the numbers from just days ago, 20% of the world’s active container ships are stuck waiting outside a congested port. 27.7% of those 1 in 5 of the world’s container ships are stuck outside of congested ports in China.

If you go back to February, before China’s massive lockdowns, only 14.8% of the world’s ships waiting outside of congested ports (and there were significantly fewer overall) were waiting at Chinese ports.

If you’re wondering if that comparison goes back too far, it doesn’t. Yes, the Shanghai lockdown didn’t start until early April, but remember that China locked down Shenzhen in March.

In a PDF document about the effects of China’s lockdowns, Winward shares:

As data pulled from Winward’s Maritime AI platform clearly shows, lockdowns in China are heavily impacting the congestion outside the country’s ports, as the number of container vessels waiting outside of Chinese ports today is 195% what it was in February.

…

… in the April and March snapshots, there were 506 and 470 vessels, respectively, stuck outside of Chinese ports. In February, that number was only 260. In essence, lockdowns in China have nearly doubled the congestion outside the country’s ports.

Living at Work

The same kind of super successful “closed-loop” system China is using to keep ports operating “normally” despite massive lockdowns is now being implemented to restart manufacturing in Shanghai.

“Closed-loop” means that employees have to stay at their place of employment rather than go home at the end of a workday. They may not have a home to go to anyway, as some Shanghai citizens who live in large apartment complexes have been forcibly removed from their homes to turn them into quarantine facilities. Plus, if workers are allowed to leave their workplaces, they may catch and/or spread a virus that has an incredibly low percentile chance of making that worker seriously ill, especially since China’s lockdowns are in no way stopping that virus from spreading.

Yeah, it all makes sense.

According to a Reuters article, the Chinese government has put together a “white list” of 666 firms prioritized for reopening under this “closed-loop” system.

Let’s just pretend that 666 number has no other significance in the world. It’s surely just coincidence. Eric Kulisch did a nice job of avoiding bad numerical associations in his American Shipper article about China trying to ease the lockdown’s supply chain crunch by calling it “more than 660 enterprises” China put on its “white list.”

Kulisch reports that of these enterprises, “many [are] in the automotive, semiconductor, consumer electronics and biopharma sectors” and they include “state-owned automaker SAIC Motor Corp., Volkswagen and Tesla’s electric car factory.”

The firms must follow this “closed-loop” model of keeping workers from leaving factories, living there until… well, who knows when.

Productivity Down – Obviously

If you couldn’t tell with only a cursory look at how congestion is doubling at Chinese ports, a “closed-loop” system inside of a lockdown is not going to be as productive as normal conditions.

Factories are and will have similar problems. Kulisch shares a good example in his article:

A major challenge for factories is getting raw materials and components needed to maintain production while access to the ports is sharply reduced and many supplies are stuck offshore on waiting vessels. 

The Tesla (NASDAQ: TSLA) plant opened with only one of its two shifts, cutting productivity in half, according to a tweet from Ming-Chi Kuo, an analyst at TF International Securities. At that output, Tesla has about 2.5 weeks of inventory and can produce 25,000 to 30,000 units per month, down significantly from pre-crisis levels. Kuo said Tesla’s hourly work rate won’t return to normal until mid-May, at the earliest. 

It doesn’t take much knowledge about supply chains to know that problems at any point in a supply chain effects the supply chain as a whole. In order for factories in China to have a chance at a return to normal by mid-May, this indefinite Shanghai lockdown would need to end extremely soon. For the moment, all we can do is watch disruption pile on top of disruption as China continues its horrible Covid Zero policy.

And, of course, those disruptions are spreading through the gobal supply chain, but that’s a blog for another day.

The post Shanghai Lockdown Causing Outrageous Disruption appeared first on Universal Cargo.

How about power shortages interrupting the supply chain?

There’s a power crunch happening in Europe and Asia, and it’s already impacting supply chains as Chinese factories are getting shut down in turns to conserve power.

Martina Li reported in The Loadstar:

Factories in at least ten Chinese provinces have either cut output or closed temporarily this month, after government-imposed power cuts to curb carbon emissions.

By Friday, at least 10 publicly listed companies told the Shanghai and Shenzhen stock exchanges their factory output had been hit by the power cuts, and their 2021 earnings could be adversely affected.

Greg Miller reports in a Journal of Commerce (JOC) article:

According to Bloomberg, power use is now being curbed by tight supply and emissions restrictions in the Chinese provinces of Jiangsu, Zhejiang and Guangdong.

Bloomberg quoted Nomura analyst Ting Lu as stating, “The power curbs will ripple through and impact global markets. Very soon the global markets will feel the pinch of a shortage of supply from textiles and toys to machine parts.”

Nikkei reported that an affiliate of Foxconn, the world’s biggest iPhone assembler and a key supplier of Apple and Tesla, halted production at its facility in Kunshan in Jiangsu Province on Sunday due to lack of electricity supply. Another Apple supplier, Unimicron Technologies, also halted production in Kunshan on Sunday, said Nikkei, citing regulatory filings.

Stoppages of Chinese factories would further delay deliveries of U.S. imports, which have already been waylaid by extreme congestion at ports in Southern California and, more recently, ports in China.

Fear of Global Warming

A large factor in this wave of power cuts interrupting supply chains is fear. In fact, it may be the number one factor. The fear is palpable with how Miller began his article about the power crisis:

There’s panic-buying of gasoline in the U.K. Natural gas prices in Europe and Asia are skyrocketing. Protests are breaking out across Europe due to spiking electricity bills. India and China are short of coal for utilities. Power is being rationed to factories in multiple Chinese provinces — and winter is coming.

That last line sends spine-shivering images of White Walkers descending from the north. There are certainly reasons to fear expensive power prices and especially power shortages in the winter. Look at what happened during the “Deep Freeze” in Texas with power grids failing and people dying of hypothermia.

Fear set up that tragedy. Fear, which led to power grids being dependent upon far more expensive but far less reliable solar and wind power. That fear has set up this power crisis in Asia, Europe, and throughout the world. It’s the fear pushed by alarmists saying things like, “the world will end in 12 years if we don’t address climate change…”

My point is not to deny climate change. However, I will point out that it’s popular voices like that of Rep. Alexandria Ocasio-Cortez (AOC), who was quoted above, that we listen to over the voices of people like Dr. Leslie Woodcock, emeritus professor at the University of Manchester (UK) School of Chemical Engineering and Analytical Science and former NASA scientist who was quoted in a Breitbart article as saying,

The term ‘climate change’ is meaningless. The Earth’s climate has been changing since time immemorial, that is since the Earth was formed 1,000 million years ago. The theory of ‘man-made climate change’ is an unsubstantiated hypothesis [about] our climate [which says it] has been adversely affected by the burning of fossil fuels in the last 100 years, causing the average temperature on the earth’s surface to increase very slightly but with disastrous environmental consequences.

…

This is not the way science works. If you tell me that you have a theory there is a teapot in orbit between the earth and the moon, it’s not up to me to prove it does not exist, it’s up to you to provide the reproducible scientific evidence for your theory.

Such evidence for the man-made climate change theory has not been forthcoming.

Big Costs Rather Than Big Evidence

That the evidence is not forthcoming, as Dr. Woodcock says, seems true. I’ve often dived into articles and papers about global warming and climate change to see and understand the evidence because I think it’s possible we add to global warming, I’ve been told we do, and there are so many costly policies based on the claim. I’ve read article after article and seen countless news segments where people have stated it’s undeniable that people are causing global warming. Unfortunately, they never share proof and rarely give any evidence, let alone compelling evidence. Please post such proof or evidence in the comments section below.

We’ve so effectively been sold on the fear of global warming, we don’t seem to be counting the costs of how we’re fighting it. From years of massively incentivizing solar and wind power – in the name of fighting global warming – over gas, coal, and nuclear power, we ended up with over 200 people dead, by many reports, during the “Deep Freeze” in a state that would otherwise be unlikely to have power grid problems.

Now we’re seeing the power crisis in Europe and China. Maybe you think the fight against global warming has nothing to do with factories getting shut down in China, a country notorious when it comes to polluting. Think again. The cuts are directly tied to carbon-neutrality goals. Li reports in her Loadstar article:

The cuts followed China’s economic planning agency, the National Development and Reform Commission, released a “dual-control” plan to restrict energy-intensive activities and consumption.

The plan commanded provincial governments to ration electricity consumption to control emissions in line with President Xi Jinping’s target for carbon emissions to peak by 2030, and to achieve carbon-neutrality by 2060.

Live Not By Fear

I think reducing pollution, including CO2 emissions is absolutely worth pursuing. In fact, I think you’d have trouble finding many people against doing so. It’s just important that we don’t do more damage out of fear of climate change, or whatever else politicians and the media push us to fear, than we do good.

There are those who don’t want us to count the costs of our actions. Let me expand a quote I included above. “Millennials, and Gen z, and all these folks that come after us are looking up, and we’re like ‘the world will end in 12 years if we don’t address climate change,'” AOC said, finishing the run-on sentence with, “and your biggest issue is how are we gonna pay for it?'”

Actually, my biggest issue there is either using massive hyperbole or just plain lying about 12 years until Doomsday to cause fear to exploit. However, putting that aside, yes. How are we going to pay for “it” is an important question. Are we going to pay for it by destroying power sectors and crashing economies upon which our children depend? Are we going to pay for it in more deaths from depending on unreliable wind and solar power? Those seem as worthy of fear as climate change. Or are we going to pay for it in prudent measures that may include reasonable sacrifices?

There is always an “it” to fear. When we give in to that fear is usually when we pay more than we even thought to consider.

The post Now What’s Hitting Container Shipping? Power Shortages?! appeared first on Universal Cargo.

Kim Link-Wills reports in an American Shipper article:

It is unclear whether ocean carriers will avoid a newly opened container terminal in South Carolina until a labor dispute is cleared up. But at least for now, it appears most shipping lines are steering clear of the Port of Charleston’s Hugh K. Leatherman Terminal to avoid being caught up in a lawsuit filed by the International Longshoremen’s Association (ILA).

Over the next 15 days, only two container ships are slated to be handled at the Leatherman Terminal. Forty vessels are scheduled to berth at the Port of Charleston’s neighboring Wando Welch Terminal in the same time period.

Should These Union Expectations Be Acceptable?

For what’s getting close to half a century, South Carolina ports have used a hybrid model of employing ILA and state employees. The union hasn’t exactly been happy with this. In fact, Link-Wills reports a clause was put in the 2013 master contract between the ILA and United States Maritime Alliance (USMX) to do a study on “how the hybrid labor model ‘could be altered to permit work currently performed by state employees to be performed by ILA-represented employees in a more productive, efficient and competitive fashion.’”

That study was apparently never done. Just speculation here, but maybe that’s because no one believes giving control of more jobs at ports to longshore unions would make the ports more productive, efficient, or competitive. I know of no evidence that would suggest as much. As a matter of fact, the longshore unions at the East and West Coasts are part of why U.S. ports are less efficient than their counterpart ports in Asia.

Just last week in a blog about how the pandemic is not the root cause of the high freight rates we’re seeing right now, Universal Cargo’s CEO gave seven factors leading to what we’re seeing. One of his reasons for the high freight rates was a searing one for longshore unions: “Very slow adaptation and progress of automation in US ports (compared to China and Asia) coupled with stubborn longshoreman unions keeping ports (especially LA) very slow, cumbersome, and congested.”

We’ve come to expect disruption at the ports whenever a master union contract expires and a new one needs to be negotiated. The unions, ILA on the East and Gulf Coasts and the International Longshore & Warehouse Union (ILWU) on the West Coast, always seem to have their most powerful negotiation tools – port slowdowns and strikes – at the ready to leverage better deals. In recent memory, we’ve seen more of this on the West Coast than the East Coast; however, automation was a sticking point in the last contract negotiations between the ILA and USMX. Automation at the ports is always met with staunch opposition from the ILA and ILWU. That’s probably the single biggest reason U.S. ports have fallen behind other countries’ ports in this area.

Longshore Union Overreach Is Costly

One can understand that from the unions’ point of view, automation is a threat. They don’t want to see machines taking their jobs. Of course, the ILA and ILWU have shown they want control of all jobs at the ports, and have no problem hurting ports, shippers, and carriers in order to try to take jobs away from other people. Even jobs that have never belonged to the ILA or ILWU.

Over only two jobs plugging and unplugging reefer containers, the ILWU hard-timed the Port of Portland so much, making it so inefficient with slowdowns and shutdowns, carriers stopped sending container ships to the port altogether. These two jobs never belonged to the ILWU. They had always been performed by the International Brotherhood of Electrical Workers. Not only did this obviously hurt shippers, the port, and the carriers that called there, but it also hurt the dockworkers who loaded and unloaded containerships at the Port of Portland. The ILWU was willing to sacrifice their own people’s jobs to show their power and make any port think twice about not giving them control over any job. Now we’re seeing something similar from the ILA.

The Leatherman Terminal is a new terminal that could be a serious help during this time of costly port congestion. The ILA is trying to muscle its way to controlling every job there, even though the union is not entitled to every job, as the hybrid model is long established at ports in the state of South Carolina. The union is basically saying, if we can’t have all the jobs, we’ll make it so there are no jobs. By suing carriers who call on the terminal, they’re intimidating them away from calling upon it. Carriers are making billions right now, so they’ll be fine. The ones the ILA are hurting most are the employees losing work over the union’s actions and shippers, who usually suffer the greatest losses during congestion at the ports.

The post ILA Strangling Port of Charleston’s New Terminal appeared first on Universal Cargo.

Today’s post, continuing the Jones Act debate series, will lay out the arguments for whether or not the Jones Act hurts disaster relief.

First, here’s what we’ve covered so far:

President Biden Supports the Jones Act – What Is It and What Does It Do?

The Jones Act Debate Part 1: National Security

The Jones Act Debate Part 2: Protectionism or Hindrance

The Jones Act Debate Part 3: Cost to Hawaii

The Jones Act Debate Part 4: Puerto Rico

As per usual, I’ll state that this series is not meant to take a side but merely present arguments proponents and opponents of the Jones Act make to help you on your way to deciding where you stand in the debate.

The Back and Forth About Jones Act Hindering Disaster Relief

Opponents of the Jones Act say it hinders recovery efforts after natural disasters (and sometimes man-made ones like oil spills). This is going to overlap with the last part of this series, as Puerto Rico’s recovery from Hurricane Maria took center stage in this debate in 2017 and continues to garner passionate social media posts to this day.

In ’17, the debate got heated, as all politically related topics seem to do in recent years, especially when there’s an opportunity to call a political opponent racist during it. However, if you could maneuver your way through accusations of racism, you might find a back and forth something like this:

“The Jones Act limits recovery supplies from getting to Puerto Rico.”

“The supplies are getting there, but they’re stuck at the ports because Puerto Rico’s infrastructure is the real problem.”

To be honest, despite many, many articles and posts about how the Jones Act hurt the recovery of Puerto Rico, I found very little in terms of depth and evidence to support the assertion. Usually, people quickly pivoted to the arguments that shipping to Puerto Rico is more expensive because of the Jones Act, which is a serious debate worth considering that is well-covered in Part 4 of this series.

Opponents of Jones Act Point to Oil & Fuel Shipping Hurting Puerto Rico’s Recovery

After Hurricane Maria, there was a bottleneck of recovery supplies at the ports in Puerto Rico, as Jones Act proponents say, but perhaps the best arguments on the other side are about the Jones Act making it difficult to get American oil and fuel to Puerto Rico increased the cost and time of the recovery.

James W. Coleman, professor at Southern Methodist University’s Dedman School of Law, wrote in an opinion article published by Fox News titled Repeal the Jones Act to speed Puerto Rico recovery:

Puerto Rico is in trouble. Nearly 85 percent of the island’s 3.4 million American citizens remain without electric power, water pumps on half the island aren’t working, and fuel and truck shortages are preventing food and supplies from being delivered to many areas. Authorities say it could take at least three and as many as six months to restore electricity to all residents.

The recovery of Puerto Rico could progress much more rapidly if the Jones Act was wiped off the books….

… Puerto Rico must import liquefied natural gas for its power plants, but there are no ships complying with the Jones Act large enough to transport that much gas from the U.S. Gulf Coast. Instead, Puerto Rico imports liquefied natural gas from Trinidad & Tobago. Low-cost gas from the mainland United States is sent to Asia, Europe, and South America instead, transported on the ships of other nations.

A year later, Mark J. Perry – American Enterprise Institute scholar and a professor of economics at the University of Michigan, Flint – wrote in an opinion article for the Hill that the Jones Act’s effect on shipping oil slowed recovery time while making it more expensive in Puerto Rico.

The Jones Act has raised the cost of transporting oil and gas to all U.S. domestic ports, but especially ports in the noncontiguous regions of Hawaii and Puerto Rico, which was devastated by a natural disaster in the form of Hurricane Maria a year ago this month. Inflated shipping costs due to the Jones Act were a secondary and avoidable man-made disaster for Puerto Rico that added to the costs of recovery and significantly slowed the recovery time.

Yes, those are generalities Perry speaks with, but they represent a very popular opinion. Finding analysis and specifics on how much recovery was slowed or how much more it cost because of the Jones Act is something I wasn’t able to find, despite going through many, many articles making the same assertions. If you have good evidence or sources for this, please share them in the comments section below.

It is certainly possible the Jones Act could hinder recovery efforts when shipping is needed. For that reason, and possibly for other political reasons too, the Jones Act has been waived under emergency circumstances a number of times. That’s something both sides of the debate can point to. One side can say if the Jones Act didn’t hurt recovery, it would never need to be waived. The other side could say when there is a disaster that the Jones Act might slow the response to, it can always be waived for that circumstance.

Is Jones Act Wrong Place to Look for Disaster Relief Problems?

Aaron Klein, Senior Fellow of Economic Studies for the Brookings Institution, argues in a Brookings article:

The feverish debate about whether to waive the Jones Act to expedite Puerto Rico’s disaster recovery was akin to considering what to do about a paper cut for a cancer patient. Its waiver was—and remains—irrelevant to the core humanitarian problems at hand and any needed reaction. The key problems, including insufficient and delayed federal resources, and a lack of means to distribute supplies on the island, have nothing to do with the Jones Act.

Klein thinks that while the opinion that the Jones Act hurt disaster relief in Puerto Rico is wildly popular, it is also wrong. He backs up this opinion with a comparison of needs between situations of waiving the Jones Act. While Klein does not dismiss the idea that Puerto Rico is treated differently as a commonwealth than states are, he points to reasons the decision of waiving the Jones Act in 2017 compared to earlier waivings of the legislation do not play into that:

After the speculation about the Jones Act’s supposed barrier to aid delivery spread virally online, the Department of Homeland Security was pressed by Rep. Nydia Valezquez (D-NY) to waive the Jones Act. Comparisons were made to prior waivers for hurricanes that landed in the continental states, fueling arguments that Puerto Rico was receiving second-class treatment. This fed into a broader narrative concerning whether Puerto Rico is more broadly treated equitably given its commonwealth status.

While that broad debate has great merit, focusing on the Jones Act component is wrong. It fails to appreciate the distinction between waivers based on oil and fuel shipping and cargo shipping. Those types of ships are not interchangeable and hurricanes to the Gulf Coast involved fuel and oil tanker shortages. As Keith Hennessy, director of the National Economic Council under President George W. Bush, stated regarding the waivers granted during Katrina and other times: “The direct benefits of a waiver were, in this case, small and diffuse. Waivers allowed 50K barrels per day here, and 100K barrels there, to arrive several days earlier than they would have otherwise. The waiver resulted in handfuls of short-term arrangements that moved fuel more expeditiously.” Puerto Rico, did not need oil tankers, nor were the problems about getting fuel to the port.

For Klein, the Jones Act debate as it pertains to disaster relief for Puerto Rico after Hurricane Maria was about the media and politicians being opportunistic with the disaster. If not repealing the Jones Act, where should people look for the good of Puerto Rico’s recovery? Klein concludes his article with this:

More broadly, those concerned with Puerto Rican disaster assistance in the short term, and how to restore the economy of Puerto Rico in the long term, should focus on the real economic problems. As my Brookings colleague Jason Miller correctly argues, this requires a long-term, sustained commitment of economic resources and assistance to the Commonwealth.  It may also require rethinking the sustainability of the island as a commonwealth, or whether it should join the United States as the 51^st state. Puerto Rico should not be used to press a long-standing economic debate regarding where to draw the line in which parts of our nation’s economy and military security are opened up to foreign competition. Critics of the President [President Trump at the time of his writing] and those who wish to show support for a stronger disaster recovery ought to think twice before retweeting or Facebooking an enticing headline purporting to link obscure laws to topical disasters. They may be inadvertently supporting policies they actually oppose.

Concluding the Jones Act Debate

We can’t end a debate that has been raging on for a century, but we can end the blog series covering it. While there are more arguments we could cover in this series, I believe we’ve hit the most talked about ones. We’ll do one last post on this series that quickly lists the arguments so you have them in one place for easy reference, then we’ll bid the topic adeaui – at least until it pops up in the news in a very significant way.

The post The Jones Act Debate Part 5: Disaster Relief appeared first on Universal Cargo.

A federal jury has ruled the ILWU to pay $93.6 million for the illegal slowdowns and work stoppages at the Port of Portland that resulted in containerships no longer calling on the port.

Chris Dupin reported in an American Shipper article:

A federal jury has awarded $93.6 million to ICTSI Oregon, the former operator of the Port of Portland’s Terminal 6, after members of the International Longshore and Warehouse Union (ILWU) engaged in illegal work practices such as work slowdowns and stoppages.

The work slowdowns and stoppages by the ILWU Local 8 at the Port of Portland were atrocious. Not only did they cause containerships to stop calling on the port, they eventually led to ICTSI having to shut down its Port of Portland terminal.

ICTSI being awarded $93.6 million in a federal jury decision makes sense; however, ICTSI was not the only one to suffer damages from the ILWU’s actions.

Portland Shippers Suffered Losses Due to ILWU

In my aforementioned blog post, I actually wrote that the ILWU Local 8 — the part of the union that disrupted the supply chain through the Port of Portland — should pay damages to Portland shippers.

Slowdowns and delays always have costs for shippers. Sometimes, those costs are very high. The ILWU caused slowdowns, delays, and congestion for years at the Port of Portland.

According to Dupin’s American Shipper article, that the ILWU and its Local 8 engaged in unlawful job actions between May 21st, 2012 and August 13th, 2013 was accepted as proven fact from previous court decisions during the proceedings that awarded ICTSI damages from ILWU. But labor slowdowns to deliberately hurt the port terminal did not in any way stop in 2013.

Not only did the Portland branch of the ILWU’s tactics continue, but Local 8 really took advantage of a period in 2014 when there was no contract between the ILWU and PMA. I couldn’t even tell you how many updates we posted in blogs and social media about congestion and slowdowns at Portland as the ILWU there did things like slowing crane operations to just 7.5 moves per hour. The standard at that time, according to the Journal of Commerce (JOC), was 30 moves per hour, and the Port of Charleston had crane productivity at 40 moves per hour.

Of course, such slowdowns didn’t happen only during the ILWU-PMA contract negotiation period because these slowdowns had nothing to do with those negotiations (I’ll get to what they were about in the next section). By summer of 2015, containerships had basically stopped calling on the port because of how costly the poor productivity was there.

In fact, a ship calling on the Port of Portland actually became a newsworthy event at that point. In August of 2015, I wrote a blog for Universal Cargo about how sad it was that the first containership to call on the port in 3 months was making headlines — headlines merely for calling on the port.

When carriers like Hanjin (yes, the major carrier that went bankrupt later was the containership line that called on the Port of Portland most frequently) stopped calling on the Port of Portland, Conrad Wilson wrote an article, published on OPB.org, that went into the chaotic state shippers near the Port of Portland were in:

David Braman, the general manager of Mitchell Brothers Truck Line, said Hanjin’s departure has left many businesses that ship using containers in a state of “chaos.”

“We’re getting inundated with phone call after phone call from people looking for rates,” he said. “Nobody really knowing how they’re going to [get] their freight moved from point to point.”

While some businesses and farmers may turn to East Coast or Gulf ports, most of the goods that were moving through the Port of Portland are now heading to the ports of Seattle and Tacoma, Braman said.

Right now, businesses here have two options: Move containers by rail or truck.

But those trips to Puget Sound shipping terminals can be four times as costly as a trip to the Port of Portland.
Northwest Container, the rail option, has been so busy recently it’s had to close early most days and even turn containers away.

Braman said everything that can’t get on the train has to move by truck. And there’s a shortage there, too.

“There’s not enough equipment to service the area any more,” he said. “Something’s going to get left behind. And we’re all in that same predicament. There’s nobody here that’s up to this speed yet.”[2]

The increased costs of importing and exporting remains for shippers in the Portland area as they must pay for truck or rail services to and from farther away ports.

What Caused Labor Tension at the Port of Portland?

The source of tension for all the conflict that caused the downfall of container shipping through the Port of Portland is actually stupid and petty.

The ILWU hard-timed the Port of Portland, causing container shipping to cease at the port, forcing shippers to change their supply chain, eliminating ICTSI’s terminal’s profitability, costing the union jobs at the port, and now resulting in a $93 million penalty to the union — all this and more — over two jobs.

Two jobs!

These weren’t even jobs taken away from the ILWU. These were jobs that never belonged to the ILWU. There were two jobs monitoring, plugging, and unplugging reefer shipping containers at the Port of Portland that the International Brotherhood of Electrical Workers had been doing for the previous 30 years. The ILWU decided those jobs should belong to it.

Because these two jobs that historically never belonged to the ILWU were not awarded to the union, the ILWU knowingly destroyed business at the port.

Hanjin announced it would stop calling on the Port of Portland, ending almost 20 years of serving the port, because of how bad the productivity became. Knowing Hanjin pulling out from the port would be disastrous, the Port of Portland offered the carrier incentives to stay. That would only buy the port a little bit of time if it couldn’t get cooperation from ILWU.

Despite the fact that the pullout would “end a $250,000 weekly payroll for longshore workers who load and unload the vessels at Terminal 6,” said to the JOC at the time, the union persisted with slowdowns until Hanjin, and the other carriers like Hapag-Lloyd, gave up on the port.

The ILWU knew it would cost union jobs to drive carriers away from the Port of Portland, but it was willing to do so in order to — one could only surmise — show its power for future leverage on its employers. It is unlikely the ILWU foresaw a $93 million penalty for its actions.

The price may be more than the union can bear as Dupin’s American Shipper article ends with:

According to the Oregonian, attorneys for the ILWU asked the judge to delay entering the judgment against the union until Nov. 12, saying it would impose a heavy burden on the union, possibly bankrupting it.

The post Jury Hits ILWU with $93M Verdict for What Union Did to Port of Portland appeared first on Universal Cargo.

scrubber malfunction from @Sam_Eckett tweeted video

Ocean carriers’ biggest answer to meeting the International Maritime Organization’s (IMO) upcoming 0.5% sulfur cap on fuel (IMO 2020) might not be the answer after all. Or better stated, it might be a dangerous answer.

The IMO 2020 solution we’re talking about here are systems acting as onboard treatment plants to remove harmful gasses from ship engines and exhausts called “scrubbers.”

Maritime insurance provider Gard released an article where its author, Loss Prevention Executive Siddharth Mahajan, highlighted claims of dangerous fires, corrosion, and thermal shock Gard has seen with scrubbers.

Scrubber Related Fires

The fires have been happening with the installation and retrofitting of scrubbers to ships.

Gard has seen a few fire incidents where sparks from welding, metal cutting, and other hot work activities fell into the inner chamber of the scrubber through uncovered openings, and in one case the fire also spread to the engine room through glass reinforced epoxy (GRE) piping. Heat generated from the steel cutting for the supporting brackets, also contributed to the build up of heat inside the scrubber.

Obviously, such fires are dangerous to the people working at the ship yards and are costly. However, such fires are no peculiar to scrubbers, according to Mahajan. Fire is a danger anywhere on a ship where welding, cutting, or grinding work is happening.

Hopefully, more careful procedures like covering and double checking openings on scrubbers will be adapted to help avoid such fires in the future.

Scrubber Related Corrosion

Corrosion appears to be a bigger problem with scrubbers that, according to the Gard article, will be installed on nearly 3,000 ships by 2020.

Within a year, corrosion could present serious danger to the crew and cargo on containerships with scrubbers.

Check out what Mahajan wrote about corrosion cases involving scrubbers:

Scrubber waste is corrosive, and we have seen a few incidents where within 10-15 months of the open loop scrubber being installed, corrosion of overboard distance piece or in its immediate vicinity has resulted in water ingress into areas such as the engine room, ballast tanks and cargo holds. Absence of or poor application of protective coatings on the inside of the pipe and at the welds, along with poor application of paint on hull plating near the washwater discharge were identified as the causes of accelerated corrosion. In all these cases, temporary repairs to plug the leak were carried out by divers followed by permanent repairs at a yard.

Workmanship plays a big role in these corrosion cases, but obviously so does the very nature of scrubbers themselves in creating corrosive waste.

With a rush to get scrubbers on ships ahead of IMO 2020 that goes into effect in just a couple months, it’s scary to think we could see a bunch of water leaks in ships about a year from now.

Check out this scary video that was tweeted about a month and a half ago of water pouring down onto the main engine of a ship. The extremely dangerous situation is attributed to a corrosion related scrubber malfunction.

Scrubbers & Thermal Shock

This last scrubber related damage to a ship brings up a few issues.

Here’s the case as Mahajan describes it:

A vessel was regularly trading in Northern Europe and had installed an open loop scrubber. It had to changeover to low sulphur fuel when visiting a port that had regulations in place banning discharge of washwater from open loop scrubbers. It was still required to run the scrubber in dry mode, i.e. with washwater supply pumps turned off, to allow for the passage of hot exhaust gasses with a temperature of nearly 400° C. After departure from port, washwater pumps would be started and cold sea water sprayed through the nozzles inside the scrubber. During inspection of the scrubber by crew, damage was noticed to the nozzles, demister housing and the drains.

A survey was carried out and indicated a variety of concurrent causes, such as thermal shock, poor workmanship by the yard, for example, only spot welding done on demister supporting plates; and poor design. The scrubber had been in service for nearly two years.

Let me start at the end. The scrubber was in use for two years before it was discovered it had both design flaws and shoddy workmanship done on it.

The ocean freight industry is being flooded by scrubbers — no pun intended. With so many being rushed out onto ships to meet the need of complying with IMO 2020, the possibilities for design flaws and workers at ship yards cutting corners with tactics like spot welding are immense.

Many potentially dangerous problems could be building up in and around scrubbers that ships’ owners, captains, and crews have no idea about. Ultimately, these issues could be putting not only ships and cargo but also seamen’s lives at risk.

Conclusion

Critics of scrubbers have said the systems replace polluting the air with polluting the water. Those defending scrubbers have said the amount of pollution the systems would put in the water is negligible.

While the water pollution created by scrubbers may be much less than air pollution, if scrubbers cause ship malfunctions or floodings from corrosion or other problems caused by design flaws or shoddy workmanship, that could lead to bigger pollution events like oil spills from sunken ships.

That Gard is spotting these problems now and giving strategies to reduce the risk of more cases like the ones Mahajan highlights in the Gard article is good. But at the same time, the article is eye-opening. There seems to be a great deal of risk with all the scrubbers hitting the seas.

Still, the industry has put too many eggs in the scrubbers basket for thousands of them hitting the waters to be anything but inevitable now.

All ships using more expensive, cleaner fuels that make scrubbers unnecessary is not feasible as IMO 2020 hits on January 1st. Other options like electric and sail powered ships certainly are not ready to take over the world’s cargo vessel fleet. Going back to wind power is an idea with little traction. But electric ships are stirring much excitement. With that excitement, their potential, and electric ships being tested on the waters, their day will probably come; however, that’s not likely to happen for at least a couple more decades — at least not in a dominant way.

In the meantime, we seem stuck with scrubbers and all their potential dangers. Hopefully, scrubbers will only a short-term fix for the problem of compliance with IMO 2020. If better solutions aren’t moved toward quickly, there could be some serious problems in a year or two.

Related Articles

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As expected, China retaliated against the U.S. for the tariffs hike President Trump ordered on $200 billion worth of Chinese goods. China announced its plan for tariff increases on $60 billion worth of U.S. goods on Monday (May 13th, 2019), just three days after the U.S. implemented its latest tariffs increase.

The tariffs hike the U.S. implemented on imports from China was from 10% to 25%. Similarly, China is raising tariffs on U.S. exports that were previously tariffed at 10%. The difference is tariffs on some of those goods are increasing to 20% while the tariffs on others are being increased to 25%.

It’s possible U.S. shippers who export tariff targeted goods to China may not actually see these tariff increases hit their goods, but it would probably require the countries coming to agreement on a trade deal before the end of the month.

Ana Swanson and Keith Bradsher reported in a New York Times article:

Both China and the United States have left a window for negotiators to try to reach a deal before the latest round of higher tariffs goes into effect. China said it would delay the higher rates until June 1, while Mr. Trump’s new 25 percent rate affects only products sent to the United States as of May 10, leaving a two- to four-week gap from the time most goods leave China by boat to when they arrive at an American port.

That doesn’t give much time for China and the U.S. to come together on this trade deal; however, it does give a tiny glimmer of hope that the trade war escalation could be halted. At the very least, it adds credence to President Trump’s words Monday that were reported by NBC News:

“We’ll let you know in three or four weeks if [the trade talks are] successful,” President Trump said. In three weeks we’ll see if there’s a deal or if China and the U.S. fight it out with these tariffs and the likely rounds to follow, like the tariffs increase the U.S. is planning next on $300 billion worth of Chinese goods.

If China’s tariffs on U.S. goods go into effect on June 1st, there are 2,493 products that will see the hike to 25% tariffs. Amanda Shendruk & Heather Timmons, in a Quartz article, did the work of Google translating the list of all those products China’s Ministry of Finance announced they were targeting with the tariffs hike to 25%. While Google translate leaves room for error, the Quartz list is organized by category and includes HTS codes for each product. The list is included below.

Food

Beverages

Mineral Products

Chemical Products

Plastics, Rubber, etc.

Raw Hides and Skins

Wood and Articles of Wood

Paper and Paper Products

Textiles

Apparel

Footwear

Other Textiles

Stone, Plaster, Cement, etc.

Precious, Semi-Precious Stones, etc.

Base Metals, and Articles of Base Metals

Machinery and Mechanical Appliances