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.
