Labor Negotiations Disrupted CA Ports Early This Week, Union Pacific Temporarily Pauses Rail Shipments to West Coast Ports, U.S. Shippers Warned to Prepare for Strict Security for Large Air Cargo Loads.
Transpacific shipment volumes hit 6 month peak. More containers are on the Pacific heading for the west coast of North America than at any time this year. According to the Japan Maritime Center, outbound transpacific cargo movements hit their peak level in six months in May, marking the first time since October 2022 that monthly outbound volumes on the route have exceeded 1.5m teu. The ships heading for the U.S. and Canada come at a time where west coast ports are suffering sporadic labor walk-outs at terminals.
Labor negotiations disrupted CA ports early this week. The largest terminal at Southern California’s Port of Long Beach closed for the day shift on Monday as dock workers rally for better pay. The temporary closure came after similar disruptions last week in Oakland, California, when some union workers refused to report for assignments. Groups representing major retailers and manufacturers are urging the White House to intervene in the West Coast port labor negotiations, citing worries about shipping disruptions during critical holiday shopping seasons.
Canadian ILWU to vote on strike at West Coast ports. Canada’s International Longshore and Warehouse Union announced that it will conduct a strike authorization vote among its members at the end of this week. The union represents dockworkers at the ports of Vancouver and Prince Rupert, and declared in March before the previous five-year contract expired that they were already at an impasse with the BC Maritime Employers Association. According to Maritime Executive, the ILWU scheduled a two-day vote on June 8 and 9 for the strike authorization but under the current process it would be barred from stating a strike before June 24.
Teamsters begin leader authorization process to potentially strike UPS. UPS Teamsters will begin voting in-person this week to authorize the union’s leaders to call a strike. The strike would be called in the event that the rank and file believe that the company refuses to negotiate a fair agreement before the current five-year contract expires July 31, according to FreightWaves. Voting must be complete by June 16.
Union Pacific temporarily pauses rail shipments to West Coast ports. Union Pacific has temporarily suspended rail shipments to the ports of Los Angeles and Long Beach because of port congestion. By pausing the shipments, shippers can find other ports to send goods rather than have them sit for extended periods of time in containers before reaching their intended destinations, which is critical for food and agriculture shipments. “Union Pacific issued a temporary pause for shipments from our inland terminals into three terminals at the Ports of Los Angeles and Long Beach where we saw some freight starting to accumulate. Our goal with this short-term pause is to ensure the rail line to and from the ports stays fluid,” a Union Pacific spokesperson told CNBC in a statement.
Union Pacific and BNSF launch separate Port of Houston intermodal services. Union Pacific and BNSF each began new intermodal services this month that will ensure that goods going through Port Houston will get to several major U.S. markets faster. Union Pacific’s service allows intermodal containers to be offloaded from ships directly onto railcars and then transported to one of five cities including Denver, Salt Lake City, Oakland, California, Los Angeles, and El Paso, Texas, according to SupplyChainDive. BNSF’s service connects to its intermodal hubs in Denver and the Dallas-Fort Worth area.
U.S. shippers warned to prepare for strict security for large air cargo loads. Freight forwarders in the U.S. are being urged to prepare for stricter cargo security rules by the Airforwarders Association (AfA), or potentially face not being able to fly larger shipments. AfA executive director Brandon Fried said that from October shippers wishing to fly cargo that cannot be screened will need to be enrolled in one of the Transport Security Administration (TSA)’s authorized cargo security programs, according to AirCargo News. “There will only be three options after October 31; join one of the programs, use seafreight instead of airfreight, or don’t ship cargo at all,” Fried told delegates at the CNS Partnership Conference in Miami. “TSA is holding the line on this, there will be no extension. We have started in-person meetings, as well as webinars to explain the options and we need forwarders to work with their shipper customers and support them to work with TSA and join a program.”
Low water levels could affect Panama Canal transit. The Panama Canal is taking steps to preserve water levels to avoid affecting transit. The efforts were announced after the Panamanian National Government declared a climate emergency from a prolonged drought, and water levels are expected to worsen from the El Niño weather pattern.