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Railway Strike Averted After Tentative Labor Agreement Reached, Empty Containers Could Saturate Global Ports in 2023, Lower Gas and Car Prices Help Slow Inflation.

By September 15, 2022 No Comments

Rail

Railway strike averted after tentative labor agreement reached. A tentative railway labor agreement has been reached, said President Joe Biden in a statement released Thursday. This action averted a strike that could have been potentially disastrous to the economy and U.S. supply chain. The 12 labor unions of the nation’s Class I railroads—CN, Norfolk Southern, CSX, CP, BNSF, and UP —were expected to strike beginning at midnight on Friday if new contracts had not been completed and approved. Some railroads had already warned their customers of possible service interruptions and stopped taking certain cargoes in advance of the anticipated shutdown, according to NCBFAA. Negotiations between railroads and union representatives had gone on for 20 hours at the Labor Department on Wednesday to come to a deal. The five-year deal is retroactive to 2020 and includes the $5,000 in bonuses and 24% raises that a Presidential Emergency Board recommended this summer. The railroads have also agreed to ease strict attendance policies in order to address unions’ concerns about working conditions. If you have questions or concerns, please reach out to an International Navegate expert at [email protected]

Ocean

Navy seeks public opinion on fate of decommissioned USS Enterprise. The U.S Navy is currently facing a dilemma regarding the decommissioned USS Enterprise, the world’s first nuclear-powered aircraft carrier. Officially decommissioned in 2017, the carrier sits in Virginia and costs millions of dollars annually in maintenance costs but could require more than a billion dollars and up to 15 years to safely dismantle, according to Maritime Executive. The Navy drafted a 586-page report exploring options for what to do with the vessel. In the next phase, the Navy is asking for public input during a 45-day public scoping period. “The Navy is committed to facilitating public and agency participation and input to ensure a complete environmental analysis and to make informed decisions. Public input and involvement are fundamental aspects of the National Environmental Policy Act (NEPA) process,” said the Navy in the report. 

Government watchdog calls on Maritime Administration to increase oversight of government shipments. A lack of oversight by maritime regulators is “allowing federal agencies to evade laws requiring that certain amounts of international cargoes move on U.S.-flag ships,” according to government watchdogs. A new Government Accountability Office (GAO) report will be the focus of a congressional hearing Wednesday. The report, “Actions Needed to Enhance Cargo Preference Oversight,” concluded that the public lacks information on whether agencies such as the U.S. Defense and Agriculture departments are meeting federal cargo preference requirements. Additional efforts by the U.S. Maritime Administration (MARAD) to develop regulations and enforce compliance are needed to rectify the situation. “MARAD’s maritime goals and objectives establish the importance of enforcing cargo preference requirements,” GAO stated. “More specifically, MARAD’s 2020 National Maritime Strategy established the objective of improving the capability of U.S.-flag vessels through a combination of efforts including enforcement of cargo preference requirements.” 

Ports

Empty containers could saturate global ports in 2023. The continuous build-up of empty containers at ports around the world has been contributing to the backlogs and disruption in the supply chains, and according to a new analysis from Denmark-based data analytics firm Sea-Intelligence, a return to normal in shipping could inundate ports with even more empty containers by early next year. “If transportation time is back to normal by early next year, we will see the release of 4.3 million TEU of excess containers into North America, which cannot be expatriated, within the planned network operations,” warns Alan Murphy, CEO of Sea-Intelligence. “This will potentially overwhelm empty container depots in the U.S., an issue which is already beginning to materialize.” 

Typhoon forces the closure of China’s Shanghai and Ningbo ports for second time in ten days. The ports of Shanghai and Ningbo closed for the second time in 10 days following another typhoon, with forwarders expecting a “ripple effect” of shipping delays. Typhoon Hinnamor caused Shanghai, Ningbo and Busan to suspend operations last week, and weaker typhoon Muifa was on a direct path to hit Shanghai on Wednesday, according to the US Joint Typhoon Warning Center. Norman Global Logistics (NGL) told customers Shanghai’s Yangshan container terminals were due to stop gate-in handling by 7pm local time today, while both Waigaoqiao and Yangshan terminals would be fully closed by 8am tomorrow morning, according to the Loadstar.

Customs

100 lbs of contraband cheese seized by CBP. An interesting discovery was made by U.S. Customs and Border Protection officers at a Texas border crossing last week. A woman attempted to enter the U.S. with 100 pounds of undeclared cheese. The woman initially declared 10 wheels of cheese, but found an additional 50 wheels of undeclared cheese hidden “under blankets in the back row of the vehicle,” when they inspected her car. The cheese was seized and destroyed, and the woman received a $1,000 civil penalty. 

Trucking

Lower gas and car prices help slow inflation. U.S. inflation slowed for the second month in August as a result of lower gas prices and cheaper used cars, however many other items continued to rise in price. Consumer prices were 8.3% higher in August compared with a year earlier, the government said Sept. 13. That was down from an 8.5% jump in July and a four-decade high of 9.1% in June. On a monthly basis, prices rose 0.1%, after a flat reading in July, according to Transport Topics.

Bill introduced to pay truckers for overtime hours. A bill was introduced in the Senate this week to “ensure that truckers are compensated fairly for the hours that they are on the clock.” The Guaranteeing Overtime for Truckers Act was introduced September 12 by Senators Edward J. Markey (D-Mass.) and Alex Padilla (D-Calif.). According to CDL Life, the bill would “repeal the motor carrier provision of the Fair Labor Standards Act of 1938 (FLSA), which excludes many truckers from overtime protections enjoyed by other workers.”

Air

UAE approves temporary license for first electric cargo plane. The first all-electric, zero-emissions cargo plane in the United Arab Emirates (UAE) just received approval for a temporary license. In a tweet, Mohammed bin Rashid Al Maktoum, vice-president and prime minister of the UAE and ruler of Dubai, said: “In the Council of Ministers, we approved the temporary license for the first cargo plane in the region that operates entirely on clean electric energy and without any emissions, an important step that may contribute to changing the future of the shipping sector and its environmental impacts.” The air cargo industry is busy investing in electric aircraft for logistics on a smaller scale, especially for last-mile delivery initiatives. 

Due to environmental concerns, Israel prohibits Boeing 747 freighters from serving the country. 747 freighters will no longer be allowed to fly to Israel beginning next spring. On March 31, 2023, a ban on four-engine aircraft will come into effect in the country, after which 747’s will only be admitted under exceptional circumstances. The ban was announced by the Israel Airport Authority, which cited sustainability and environmental concerns. The ban will have no impact on passenger operations.

International

Australian energy companies looking to build infrastructure for domestic LNG supply. Australia is one of the world’s leading exporters of liquefied natural gas, and Australian energy companies are racing to build infrastructure for domestic supply amid rising demand and inflated prices. LNG terminal projects have been undertaken in Australia before, but many were scrapped or delayed because of the hefty cost to liquefy gas for export to distant destinations. Conditions have changed rapidly, partly due to a push away from carbon-intensive fuels, and partly due to gas shortages in population centers in southeastern Australia.

Port of Felixstowe dock workers overwhelmingly reject new contract offer, plan for another strike as soon as Sept. 27. Dock workers at the port of Felixstowe rejected a pay deal imposed by management, paving the way for a new round of industrial action and disruption to vital trade flows. Bloomberg reports that 82% of votes cast in a ballot of Unite union members opposed a 7% raise and £500 bonus to be implemented by the UK arm of CK Hutchison Holdings Ltd. Last month, Felixstowe was hit by eight days of walkouts involving almost 2,000 staff members. Unite is pressing for a raise of at least 10% amid soaring inflation. UK unions must give 14 days notice of action, so that the next strikes at Felixstowe could start from Sept. 27. The strikes could overlap with the second half of a two-week walkout by more than 500 Unite members at the Port of Liverpool.

Other

Minnesota nurses go on strike. 15,000 nurses in Minnesota went on strike this past Monday. The nurses said they are fighting for better staffing and better care for their patients. Mary Turner, a Covid ICU nurse and president of the Minnesota Nurses Association, said “we are not on strike for our wages. We’re fighting for the ability to have some say over our profession and the work life balance.” The strike is against 13 hospitals in the Minneapolis-St. Paul region and Duluth. Turner said the union members voted to limit the strike to three days at this time. She said she “hopes management will now be willing to negotiate on the staffing and work rules issues that led to the walk-out,” according to CNN.

Trevor Milton, Nikola founder, on trial for securities fraud. Nikola Corp founder Trevor Milton is currently on trial for securities fraud after becoming a billionaire by lying to investors about the most important aspects of his low-emission vehicle company, a prosecutor told jurors as Milton’s fraud trial began on Tuesday. Prosecutors alleged that Milton sought to deceive investors about the electric- and hydrogen-powered truck maker’s technology, beginning in November 2019. Milton left the company after a report by short seller Hindenburg Research called the company a “fraud” in September 2020. Milton currently pleads not guilty to two counts of securities fraud and two counts of wire fraud.