This week:

• Coalition urges President Biden to help with stalled ILA-USMX contract negotiations
• Ocean carriers struggle to meet demand despite increased capacity
• SC Ports, ILA agree to reopen Hugh Leatherman Terminal after long labor dispute
• Exporters criticize FMC container drop-off data as the agency works on data initiative
• Analysts speak about US truckload recovery at SMC3 Connections conference

US Business and Trade Group Coalition Asks White House to Help Restart ILA-USMX Contract Talks

More than 160 businesses and trade groups — ranging from high-level organizations such as the US Chamber of Commerce and the National Retail Federation to niche groups like the Halloween & Costume Association — recently urged the Biden administration to intervene in stalled contract talks between the International Longshoremen’s Association (ILA) and port employers on the US East and Gulf coasts.

The businesses and organizations sent a letter to the White House on Tuesday, June 30, urging President Joe Biden to assist in restarting negotiations ahead of the September 30 expiration of the master contract between the ILA and maritime employers. The letter expressed grave concern about potential disruptions to port operations, supply chains, and the US economy if a new agreement isn’t reached.

Talks between the ILA and the United States Maritime Alliance (USMX) stalled on June 10. The union alleged that USMX members APM Terminals and Maersk are using an “auto gate” system that bypasses union labor, a violation of the current agreement. Maersk denies the allegation and claims they fully comply with the contract.

In 2022, Congress and President Biden imposed a contract agreement between railway unions and employers. This action was taken under the Railway Labor Act, which grants the federal government special authority in transportation labor disputes due to the potentially disastrous impact strikes can have on the US economy.

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Despite Increased Capacity, Ocean Carriers Still Struggle to Meet Demand

Ocean carriers have received nearly 1.6 million TEUs of new capacity so far this year. However, it hasn’t been enough to balance the pull of supply and demand on major trade routes like the trans-Pacific and Asia-Europe.

An ongoing surge in demand for ships on Asia’s export routes continues to outpace the significant increase in vessel capacity added by carriers in 2024. In real-world terms, the imbalance is straining efforts to manage unusually high shipping volumes. Additionally, the Suez Canal blockage and congestion at major ports worldwide has exacerbated trade issues this year, leading to longer voyages around southern Africa.

Major trade organizations acknowledge the ongoing problems. A DHL Global Forwarding market update issues to customers in June said, “Despite a record increase in nominal capacity from new deliveries, effective demand currently exceeds it,”

SC Ports, ILA Reach Agreement to Reopen Hugh Leatherman Terminal

The South Carolina Ports Authority (SC Ports) and the ILA Local 1422 agreed to reopen the Hugh Leatherman Terminal in North Charleston on Friday, June 26. The terminal, which opened in 2021, sat idle for over a year due to a staffing dispute between the ILA and SC Ports.

The dispute started when SC Ports wanted to employ non-union state workers to operate cranes on port docks. The ILA demanded that only unionized dockworkers operate the cranes. The disagreement escalated to the US Supreme Court, which declined to hear the case, effectively upholding a lower court’s ruling in favor of the ILA.

After the Supreme Court passed on the case, both parties entered into negotiations, which led to the new agreement. State employees will have the option to either remain in their current roles or join the ILA. SC Ports will continue to be responsible for training and certifying crane operators. Both organizations expressed satisfaction with the deal and committed to a smooth reopening of the terminal.

US Shippers Express Frustration With FMC’s Shifting Container Drop-Off Dates

US exporters are frustrated with the Federal Maritime Commission’s (FMC) lack of reliable information about container drop-off dates and vessel schedules. That’s the takeaway from the FMC’s recent information request of US shippers and others involved in the maritime supply chain, as the FMC seeks solutions through its Maritime Transportation Data Initiative (MTDI).

The MTDI aims to create standardized container tracking and cargo data across US ports. However, those surveyed in the information request say the inconsistent data they receive from the FMC leads to shipping delays and increased costs. They further argue that the numerous variables involved in ocean shipping require a more comprehensive approach that is outside the scope of the MTDI.

FMC Commissioner Carl Bentzel launched the MTDI in November 2021. The information request, which surveyed exporters, liner operators, and ports, followed a May 2023 update on the project’s status. The FMC hoped the information request would help determine which shipment data is used throughout the supply chain.

The agency acknowledged the challenges in standardizing maritime supply chain data, stating in the information request that MTDI participants face issues such as “determining who should provide the information, information changing frequently, and changes not being conveyed to shipping entities.”

Analysts Speak About US Truckload Recovery at SMC3 Conference

Analysts and economists speaking at the 2024 SMC3 Connections conference in Colorado Springs expect the recovery of US truckload demand to be prolonged, extending into 2025 and possibly 2026. According to the speakers, surplus capacity in the market is absorbing the increased freight volumes, hindering carriers’ ability to raise rates.

Avery Vise, Vice President of Trucking at transportation data company FTR, predicted steady growth in total truck loadings at 2.1% this year and a bit more for next year.

Vise and other conference presenters said the future pricing for both US truckload and less-than-truckload (LTL) will continue to depend on capacity. Analysts noted that excess truckload capacity will continue to make it challenging for carriers to increase rates.