Amidst the stoppage, container-ship companies are racing to buying airplanes and seeking aviation parts as customers opt out for more reliable shipping. Shippers that have long shunned airfreight are now racing each other to get into the market.

Maritime executives had hoped the talks would conclude in the early fall. Now, they worry the negotiations could continue through the end of 2022 or into 2023, extending uncertainty that has triggered shifts in trade flows and complicated planning in supply chains.

The concerns over the progress of the port negotiations comes as labor disputes around the U.S. are growing.  The threat of a U.S freight railroad strike still looms, even though the Biden administration intervened to narrowly avert a nationwide shutdown of the freight rail system. The contract, yet to be ratified by Union leaders, would provide rail workers with a 24% wage increase during the five-year period from 2020 through 2024.

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The judge wrote that because RhodeWorks fails to fairly apportion its tolls among bridge users based on a fair approximation of their use of the bridges, was enacted with a discriminatory purpose, and is discriminatory in effect, the statute’s tolling regime is unconstitutional under the dormant Commerce Clause of the United States Constitution.

Rhode Island is the only state in the country with a truck-toll system like the one struck down. The trucking industry fought it since 2018 in large part to prevent any other states from trying their own.

On Wednesday the trucking industry celebrated.”This is a tremendous day for our industry – not just here in Rhode Island, but across the country – had we not prevailed, these tolls would have spread across the country and this ruling sends a strong signal to other states that trucking is not to be targeted as a piggy bank,” Rhode Island Trucking Association President Chris Maxwell said in a news release.

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Global schedule reliability seems to have broken the trend seen since the start of this year, with schedule reliability increasing by 3.6 percentage points in June 2022 to 40.0%. This also marked the first time since the start of the pandemic that schedule reliability improved Y/Y. The average delay for LATE vessel arrivals has been dropping sharply so far this year but remained unchanged M/M at 6.24 days in June. The delay figure is now firmly below the 7-day mark, and an improvement over the respective 2021 figure.

With schedule reliability of 49.5%, Maersk was the most reliable carrier in June 2022, followed by Hamburg SĂĽd with 41.4%. There were 10 carriers with schedule reliability of 30%-40% and only two with schedule reliability of 20%-30%. In June 2022, once again, a lot of the carriers were very close to each other in terms of schedule reliability, with 10 carriers within 7 percentage points of each other. Wan Hai had the lowest schedule reliability in June 2022 of 24.8%. On a Y/Y level, nine of the top-14 carriers recorded an improvement in schedule reliability in June 2022, with Evergreen recording the only double-digit improvement of 16.2 percentage points.

“The cargo won’t flow ’til AB5 goes” was the rallying cry for many of the protesters, who want to see action in Sacramento (the state capital.)

Operators at the Port of Oakland are trying to clear a big container backlog now that terminal gates are open again. Independent truckers stood down from protests that had effectively shut down one of the West Coast’s largest gateways for almost a week. Freight handlers tell the WSJ’s Akiko Matsuda it could be weeks before the backlog of boxes is moved out of facilities that were swamped during the blockade.

The standoff dissipated after the protests against the state employment law known as AB5 were moved to “free speech zones” and authorities warned against blocking the gates. Oakland’s next task will be soothing importers and exporters whose goods were tied up during the blockade, raising new concerns for shippers already wary of potential turmoil during port labor negotiations. Port officials said in a message to the protesting truckers last week that ongoing disruptions could “drive customers away.”

Truckers initially planned a , but extended it to a week or longer.

According to Reuters, on Thursday the governor’s office said: “No one should be caught by surprise by the law’s requirements. The industry should focus on supporting this transition.”

Why Independent Truckers Are Protesting AB5

Owner-operator truck drivers, who make up 90% of the Bay Area port’s operation, are protesting Assembly Bill 5, known as AB5, which is expected to virtually eliminate the use of owner-operators in trucking in the state. The protests follow actions last week at the .

AB5 was passed and signed into law in 2019. Provisions in the bill will prevent independent owner-operator truck drivers from contracting with other trucking companies for services, essentially leaving trucking companies no choice but to use only employee drivers. An injunction in place since 2020 has prevented the law from being enforced while a lawsuit on the bill made its way through the judicial system. On June 30, however, the U.S. Supreme Court denied a petition from the California Trucking Association to hear the case, paving the way for full enforcement of the law.

The contract covered workers at ports from California to Washington state that handle nearly 40% of U.S. imports.

“While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached,” said a joint statement from the Pacific Maritime Association and the International Longshore and Warehouse Union.

Both sides said last month that they weren’t planning any work disruptions, but U.S. industries are clearly worried.

Talks between the ILWU and marine terminal employers are due to begin May 12 in San Francisco; the current contract expires July 1.

A work slowdown by the union or a lockout by employers would cripple the US supply chain, which is already contending with vessel backlogs, marine terminal congestion, and inland transportation bottlenecks.

As occurs early in every contract year, importers who are positioned to do so have been sending more of their shipments to the East Coast in the event of work slowdowns or stoppages on the West Coast following the July 1 expiry of the current deal.

Container ports in March were operating at, or near, record levels on the Pacific and Atlantic coasts. s

The Surface Transportation Board (STB) voted unanimously to propose an update of its emergency service rules, which enable the STB to compel railroads to respond when shippers say they aren’t receiving sufficient and timely service.

Among other measures, those rules enable the board to order railroads to share tracks with competitors to get freight loads moving.

The board’s proposal would compress the existing timeline under which a shipper’s petition for relief is considered, speeding up any potential intervention by regulators. And it would create a new category of “acute service emergencies, such as those involving public health or safety issues and imminent and extended potential plant shutdowns,” in which a single board member could rule on a petition within 48 hours.

“This rule is aimed at removing some of the roadblocks that have apparently kept shippers from being able to use the rules,” STB Chairman Martin Oberman said in an interview.

The industry also says that the administration’s stated goal of injecting more competition into the rail industry, including a proposal to compel railroads to share infrastructure with competitors to allow more price competition, will cause more problems and congestion than it would solve.

Oberman has criticized what he views as the rail industry’s focus on short-term profits at the expense of robust infrastructure and labor force to withstand weather and logistics-related disruptions.  

He cited reports of ethanol manufacturers pausing operations while waiting for delivery of the empty unit trains they need to load shipments for market, and of a major fertilizer producer being asked to limit its outgoing shipments due to a lack of train capacity this spring, and major livestock operations reporting delays in delivery of animal feed.

“These shortages contribute to inflation, and you have a huge company who can’t function because the railroads can’t do their job,” Oberman said. “This is a major issue for the economy.”

Railroad industry officials have said the approach from STB and the Biden administration is misguided, and criticized proposals to more aggressively regulate the industry’s operations.  s

The intermodal unit, which XPO has reported as part of its Brokerage and Other Services segment, generated $1.2 billion of revenue in 2021. The divested operations provide rail brokerage and drayage services; 48 locations and approximately 700 employees have transferred to the buyer in the transaction.

The sale to freight and warehousing provider STG Logistics Inc, brings Greenwich, CT based XPO closer to its goal of becoming a stand-alone provider of less-than-truckload services, in which shippers combine multiple loads on the same truck.

STG Logistics is a leading asset-light provider of optimized logistics and transportation services focused on the global supply chain. STG is a key partner for third party logistics providers. s

Transportation Insight said the acquisition is part of its merger-and-acquisition strategy to buy well-positioned transportation and logistics businesses with growth potential. It noted that FreightPros, founded in 2009, has “deep expertise” in the LTL brokerage market.

FreightPros will initially operate within Transportation Insight’s holding company, Transportation Insight Holdings, and over time will be integrated with its Nolan Transportation Group brokerage business unit.

Source: Heavy Duty Trucking