Rebound in H2, Ratified Deal, Hurricane Idalia.
Your weekly All-Ways round-up of Supply Chain news.
Mixed Outlook
While some factors could potentially support the container shipping market in the second half of the year, ocean carriers are maintaining a cautious outlook.
In the first half of the year, container shipping returned to normalcy after two years of disruption. New issues arose because of this… like too much vessel capacity and too much stock for the current demand.
Cosco Shipping had the lowest financial figures since 2020 with its revenue dropping 57% to $12.7 billion.
The company said that container volume fell too:
➡️ Biggest drop on the trans-Pacific which fell 69% to $2.8 billion and liftings fell 14.5% to 2.1 million TEUs.
➡️ Asia to Europe and Mediterranean fell 66% to $2.5 billion but liftings eased 6.7% to 2.2 million TEUs.
➡️Biggest revenue earning on the Intra-Asia at $3.2 billion total revenue, down 51% from H1 2022. Liftings fell 7% to 3.8 million TEUs.
China Containerized Freight Index and Xeneta are both showing signs of a potential rebound in the second half.
Finally Finalized
For the longest while, we’ve been waiting for the finalization of the longshore labor contract.
Just a few days short of Labor Day, the rank-and-file of the ILWU have voted to ratify the new six-year coastwide contract with the Pacific Maritime Association (PMA). The new contract will expire on July 1, 2028.
“The negotiations for this contract were protracted and challenging,” said ILWU International President Willie Adams. “I am grateful...to those that supported giving the ILWU and PMA the space that we needed to get to this result.”
The new contract, which will expire on July 1, 2028, will have a 32% salary increase over six years that will be paid retroactively to July 1, 2022. A $70 million bonus will be spread throughout the 20,000 workers as a one-time thank you for their work throughout the pandemic.
PMA President James McKenna said that discretionary cargo that was diverted to the East and Gulf coasts should return as a result of the ratification.
Reopening Ports
The suspension of vessel and landside operations due to the passage of Hurricane Idalia has been lifted. Major ports along the southeast US Coast have reopened with minimal operational impact because of the short duration of the closures.
After a post-storm assessment by the US Coast Guard, Jacksonville fully reopened.
“Jaxport is now open to landside cargo operations,” the port stated. “Because Jaxport terminal operators establish their own operating hours at their gated facilities, drivers should check with their terminal operator for their specific hours of operation.”
Moving along the upper west coast of Florida on Wednesday morning, Idalia reached Savannah and Charleston by the evening as a tropical storm before moving into the Atlantic.
Savannah and Charleston reopened by the next morning and inland Port Dillon delayed its opening until 1 PM.