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Week 19 Freight and Customs Updates

May 11th, 2022

The labor talks began between West Coast dockworkers and cargo-handling companies carrying high stakes for an American economy that has been wracked by supply-chain disruptions. The labor talks cover about 22,400 workers at 29 ports, including the big Southern California facilities that make up the country’s busiest gateway for imported goods. Similar negotiations have been long and contentious in previous years, leading to extensive disruptions and delays in the flow of goods

In other news, thanks to lockdowns that don’t seem to be going away, China’s economy continues to stumble—with one index showing another 6% drop in April. Unfortunately, it’s not just China’s economy that’s taking a hit. One estimate puts the global impact of the Shanghai lockdown alone at $28 billion. The country remains committed to its zero-Covid policy. Meanwhile, the Biden administration is currently evaluating how to best move forward on existing tariffs on China enacted during the Trump administration, but he cautioned that no decision has been made.

The big three container shipping alliances are facing increased scrutiny from Washington—again. The FMC announced last week that it would require the alliances to provide more comprehensive information on their practices. This is in a time when members of the Biden administration have labeled the alliances as “cartels” and shippers are, in essence, accusing them of market manipulation.

Not content with the above, shippers are also pushing the FMC to increase their oversight. The National Shipper Advisory Committee, formed a year ago, wants the FMC to expand its authority to include intermodal cargo and port terminal dwell fees on top of the current demurrage fees. In essence, they want the FMC to have a say on anyone that’s included on a bill of lading, which would include rail carriers who are subcontractors to ocean carriers.

Finally, the winds of change could be headed for the air cargo market. During the pandemic, cargo flights fueled massive profits for many in the industry, with shippers giving up on the unreliability of ocean freight. But the war in Ukraine and ongoing lockdowns in China are causing a further slowdown in air cargo—after dropping from a growth rate of 6.9% in 2021 to 2.7% at the start of 2022.

Port Labor Talks Pose New Complication for Supply Chain

Port Labor Talks Pose New Complication for Supply Chain

The bargaining between the International Longshore and Warehouse Union and cargo-handling companies is set to begin Tuesday, two years into a supply-chain crunch that was brought on by the Covid-19 pandemic and that has strained factory production, hobbled retail sales and helped push inflation to a 40-year high.

No lockdown let up in China as damaging economic data rolls in

No lockdown let up in China as damaging economic data rolls in

Shanghai officials have claimed, once again, that they are overcoming the worst of the covid crisis, six weeks after the China’s largest city went into lockdown.

Biden says he's discussing the future of China tariffs imposed by Trump

Biden says he's discussing the future of China tariffs imposed by Trump

Asked by a reporter if he would drop the tariffs on China imposed by former President Donald Trump, Biden said, “We’re discussing that right now. We’re looking at what would have the most positive impact.”

FMC expands capacity, pricing monitoring of alliances

FMC expands capacity, pricing monitoring of alliances

The Federal Maritime Commission (FMC) is strengthening its monitoring of the three major container alliances by requiring members to provide more information on pricing and capacity on trades in which they cooperate. The move comes amid record industry profits and criticism of container lines from President Joe Biden.

US jobs versus foreign robots – west coast port negotiating lines are set

US jobs versus foreign robots – west coast port negotiating lines are set

With negotiations at the US west coast ports to begin this week, 10 May, the Pacific Maritime Association (PMA) is positioning itself as ‘modernists held back by luddites’, while the union has appealed to Americans to back US dockers against ‘foreign plunderers’.

Shippers push FMC to expand oversight on demurrage, terminal dwell fees

Shippers push FMC to expand oversight on demurrage, terminal dwell fees

A shipper advisory group to the Federal Maritime Commission is asking the agency to expand its authority over demurrage fees charged by ports and railroads at ocean terminals.

Air cargo market risks downturn as export orders contract

Air cargo market risks downturn as export orders contract

The two-year bull market for air cargo could be headed for a downturn. Freight volumes moved by passenger and cargo airlines contracted in March and April as manufacturing and supply chains faltered in the face of war and COVID headwinds, according to figures from a major airline trade group and independent analysts.

2022-05-11T11:25:57+00:00May 11th, 2022|Shipping News|
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