Automation Advancements

A major issue inhibiting the grand finale of the West Coast dockworkers contract renewal showdown is… Drumroll… Automation.

The Pacific Maritime Association (PMA) believes it should be up to individual terminals and their International Longshore and Warehouse Union (ILWU) locals to negotiate terms surrounding staffing requirements surrounding automation. 

This is a major point of contention between the two parties and it is contributing to the prolongment of the negotiations.

At the end of the day, automation is the way of the future. Is the ILWU just trying to slow down the inevitable?

May, June, July, August, September…

No, we’re not just naming months of the year. 

From when the PMA-ILWU negotiations started back in May, it’s been an endless waiting game to see how long it’ll take them to reach an agreement regarding the 22,000 employees contracts which expired July 1st. Word on the street was that August would be the lucky month chosen to finalize the negotiations. But now a growing number of sources with insider information believe that date may be in August or September without any major disruptions to the docks.

The Biden administration is heavily involved in ensuring that new contracts will be signed without any slowdowns or lockouts putting stakeholders at ease. If both parties keep their word, the ports should continue to operate as usual and the ports supply chain flow should remain uninterrupted by the ongoing negotiations.

Should the US government become more involved in ensuring that the contracts get signed?

Source: JOC 

US Faces Some of the Highest Detention and Demurrage Fees

US importers and exporters are laboring under some of the highest shipping levies in the world. Yup, you’ve read that right. 

According to a new trade report by Container xChange, the world’s leading online platform for container trading and leasing, US shippers face the highest detention and demurrage (D&D) charges by container lines worldwide. This is on top of the high freight rates which they’ve faced over the last 2 years due to COVID and inflation.

Under heavy pressure from shipper lobbyists, President Biden signed the Ocean Shipping Reform Act (OSRA) into law on June 16, 2022. This act arms the Federal Maritime Commission, the U.S. shipping regulator, with the power to act more assertively on D&D charges and shifts the burden of proof for the reasonableness of fees to ocean carriers instead of shippers.  

“Throughout this pandemic, as shipping costs have soared and inflation has become a threat to the U.S. economy, the focus on container line behavior by politicians and regulators has magnified,” said Christian Roeloffs, co-founder of Container xChange. U.S. agricultural shippers have been particularly outspoken about their inability to find affordable empty containers for exports. But importers have been equally outraged by what many believe has been profiting on demurrage and detention charges by container lines. Some have started legal actions against carriers. 

Only time will tell if the OSRA will be effective. But with inflation rising and a recession looming, it won’t be surprising if the Biden administration enforces more regulatory interventions in the near future.

Source: AJOT