Logistics & Supply Chain Update

It has been a busy few months at WSSA, and as we settle back into attending trade shows and live meetings, we will continue to bring you the latest updates on the logistics and supply chain disruptions.

Germany: Ports and steamship lines in Germany are bracing for the potential of strike action during wage negotiations between employers and dockworkers that failed to reach a resolution this past weekend. Last Thursday, workers showed their displeasure with the negotiation process by holding a warning strike. Negotiations are still ongoing, and further strike action is not certain, but is a possibility. Please note that this could cause further delays in cargo processing, and terminal operations could be severely restricted. This would impact not only redelivery of the containers at ports, but also the rail and barge operations.

OSRA 22: Last week President Biden posted a video on twitter talking with major importer and exporter CEOs. In the video, the President indicated that he has urged Congress to pass OSRA22 and that he looks forward to signing the legislation into law in the near future. We will certainly continue to follow this situation closely.

ILWU Negotiations: Regarding ILWU labor negotiations, limited updates are available as to their development. Negotiations began May 12^th and the current contract expires July 1^st. Since so much has changed since 2019 when the last negotiations took place, it is expected that discussions could be more complex this time around. On May 10, the ILWU requested a suspension of talks with the PMA for a 10-day period. The parties returned to the negotiating table on June 1st. While there is a general “media blackout” on the talks, we know the main points for discussion are compensation and port automation, against a backdrop of evolving Covid variants and extreme demand for throughput. The JOC reported on Friday that an earlier gate opening time of 6am is also on the table. Business groups are demanding intervention to insure smooth operations at the ports with multiple requests sent to the White House. We will continue to monitor this progress, and provide updates when available.

Port Dwell Fee: In recurring news, the ports of Long Beach and Los Angeles will once again delay consideration of the “Container Dwell Fee” for another week, this time until June 17. Since the program was announced on Oct. 25, the two ports have seen a combined decline of 38% in aging cargo on the docks. The executive directors of both ports will reassess fee implementation after monitoring data over the next week.

Rail Metering: Norfolk Southern (NS) has started limiting intermodal volumes shipping through the ports of NY/NJ and the Ports of Virginia going to Columbus, Cleveland, Pittsburgh and St. Louis due to a shortage of chassis. Exports from Memphis are also being limited to 75 containers per day, down from a previous cap of 100. Norfolk Southern indicates that metering is necessary to alleviate congestion and is part of a program to keep the network as fluid as possible. Other railroads are also struggling with congestion and using a variety of tactics, some using off-site lots, and others, metering.