Freight Market Updates

Ocean 

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.

Ports

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. 

Trucking

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.

Rail

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.

Air

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.”

International

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.

Ocean 

Containership speeds at all time low. Containerships are moving at all time low speeds, according to Clarksons Research. Analysis from BIMCO suggests that ships could still go even slower after Q1, during which the average sailing speed slowed to 13.8 knots, down 4% year-on-year. BIMCO suggests that this speed could drop by 10% before 2025. According to Alphaliner data, average speeds went down by about one knot over the entire world box fleet in the last two years. “That does not sound like much, but from a 16.5 knot global average, that is about 6% slower meaning, you need X% more tonnage to carry the same cargo volume,” said Jan Tiedemann, an analyst with Alphaliner.

Shipping emissions are dropping ahead of MEPC 80. The 80th gathering of the Marine Environment Protection Committee (MEPC) is set to begin July 3 at the London headquarters of the International Maritime Organization (IMO), where the shipping industry is likely to hear about increased sustainability targets. Ahead of the meeting, new analysis from Clarksons Research says that shipping emissions have been dropping, with the latest estimates suggesting that shipping’s emissions on a tank-to-wake basis will contribute 2.1% and 822m tons of global CO2 output in 2023 – down marginally on 2022’s figures of 2.3% and 845m tons as slower speeds impact. Across the period 2009 to 2019, shipping’s CO2 emissions declined by around 14%, according to Splash247.

Ports

Members of WPCAP pledge commitment to extend climate action. Leaders of 12 major ports in the World Port Climate Action Program (WPCAP) have agreed to “extend their cooperation with a new focus on shore power, new fuels and green shipping corridors,” according to Splash247. The agreement will see continued work toward faster adoption of shore power at ports, which will help reduce emissions of CO2 and pollutants while ships are at berth. It will also focus on facilitating the bunkering and adoption of cleaner fuels, and enabling the deployment of more low- and zero-carbon vessels along green corridor routes in the coming years.

Trucking

FedEx launches emissions tracking platform for shippers. FedEx announced this week that it has launched a tool for shippers to “track emissions tied to their packages’ movement throughout the carrier’s network,” according to SupplyChainDive. Available in the U.S. for all packages sent in the company’s Express, Ground and Freight units, FedEx Sustainability Insights will help businesses to better understand their environmental impacts and shipping patterns via their shipments. The platform utilizes package scan data across the FedEx network to estimate carbon dioxide equivalent emissions for both individual package tracking numbers and accounts on FedEx.com,  where shippers can run an emissions report by scope, service type, transport mode and other metrics.

Rail

CPKC expands Mexico intermodal service with new refrigerated containers. Canadian Pacific Kansas City (CPKC) railroad is adding 1,000 53-foot refrigerated intermodal containers to expand its Mexico cross-border capacity. This will offer more options to shippers using the company’s recently started Mexico Midwest Express (MMX). 

Air

U.S. and EU concerned about cargo concentration in Korean Air – Asiana Airlines merger. The U.S. and the European Union have voiced concerns about Korean Air’s deal to acquire indebted Asiana Airlines reducing competition on certain cargo routes. The U.S. Department of Justice is considering legal action to stop the merger because of concern the “combined airline would dominate routes to the U.S. that they currently compete on for passenger and cargo traffic,” according to reporting by Politico. 

International

Factory activity in China falls amid weakening demand. Factory activity in China decreased faster than expected in May as a result of weakening demand, pressure on policymakers, and lowered Asian financial markets. The National Bureau of Statistics (NBS) said that the official manufacturing purchasing managers’ index (PMI) fell to a five-month low of 48.8, down from 49.2 in April and below the 50-point mark that separates expansion from contraction. Read more from Reuters.

Other

Which shipping pallets are more sustainable – wood or plastic? A study from Peerless Research Group showed that 95% of responding companies use wood pallets and about one-third use plastic. Both materials have benefits, but when nine impact categories, including non-renewable energy use, ozone layer depletion, aquatic and terrestrial ecotoxicity, were taken into account, it was determined that wood pallets had a slight edge on plastic in terms of sustainability, specifically the overall carbon footprint.

Ocean 

Two container lines to pay 2.6 million in fines to FMC. Two container shipping lines will pay a total of $2.65 million in civil penalties to resolve allegations of misconduct brought by the Federal Maritime Commission’s Bureau of Enforcement, Investigations, and Compliance (BEIC).  Ocean Network Express (ONE) and Wan Hai Lines were accused of separate instances of U.S. law violations, with ONE by charging detention fees when appointments were unavailable during allocated free time for equipment return and by not adhering to fair and reasonable practices concerning charges for returning empty containers. The money from the penalties will be directed to the General Fund of the U.S. Treasury, according to gCaptain.

Ports

April container volumes declined 20% YOY at Port of Long Beach. The Port of Long Beach terminals handled 656,049 teu in April 2023, down 20.1% from April 2022. Imports declined 21.8% to 313,444 teu, while exports increased by 0.6% to 122,663 teu, and empty container movements dropped 26.2% to 219,943 teu, according to Seatrade Maritime. “The unprecedented consumer demand we saw at the height of Covid-19 has diminished and cargo flows are now closer to pre-pandemic levels. We expect slow growth in the second half of 2023, as retailers continue to clear surplus inventory from their warehouses,” said Port of Long Beach Executive Director Mario Cordero.

Major Vancouver port expansion increases throughput. A major expansion project was completed at the Port of Vancouver. Vancouver Fraser Port Authority joined with terminal operator DP World to increase capacity at the critical port, which handles a third of Canada’s trade in goods outside of North America. Designed to increase throughput at the terminal by 60 percent, the expansion project cost US$260 million and was completed in February 2023. The facilities are now in operation and capacity has been increased to 1.5 million TEU a year, 40 percent over the previous capacity of 600,000 TEU annually.  Part of the investment also included reducing the terminal’s environmental impact. 

Trucking

Legislation to increase truck parking advances through U.S. House. On Tuesday, Legislation to invest $755 million toward expanding truck parking in the U.S. advanced in the House after “an opponent won assurances that the money would come from funds already authorized by Congress,” according to FreightWaves. The investments would happen over a period of three years. U.S. Rep. Scott Perry, R-Pa said during debate in the House Transportation and Infrastructure Committee on the Truck Parking Safety Improvement Act that “much has been made of the shortage of truck parking without looking at the underlying issue: namely, the onerous hours-of-service regulations imposed on our nation’s commercial drivers, forcing them off the road into full parking lots.” 

Rail

Norfolk Southern renews safety commitment with rail union presidents. Norfolk Southern has pledged to work together with heads of 12 unions in order to improve safety. They sent a letter signed by NS President and CEO Alan Shaw and the presidents of the 12 unions to all craft and management employees describing the renewed partnership. This partnership comes as NS and other Class I railroads continue to face federal scrutiny over railroad safety. The letter calls for the company to “do better” through more collaboration, a review of best practices, employee input and consultation with experts, according to a news release from NS. 

Air

Air cargo volumes continue to remain low. Current global air cargo volumes are down 8% to 10% from last year’s levels, with rates tumbling more than 40% according to FreightWaves. “Our view is that imports will remain below recent levels until inflation rates and inventory surpluses are reduced,” The National Retail Federation said.

International

Chinese malware targets American maritime assets. Microsoft warns that American maritime assets are being targeted by a Chinese state-sponsored snooping operation, Volt Typhoon. Microsoft said it has uncovered “stealthy and targeted malicious activity” focused on post-compromise credential access and network system discovery aimed at critical infrastructure organizations in the U.S., according to Splash247. Microsoft says that Volt Typhoon has been active since mid-2021 and has targeted critical infrastructure organizations in Guam and elsewhere in the U.S., and is a Chinese state-sponsored actor that typically focuses on espionage and information gathering. Read more here.

Other

Apple production stabilizes after disruptions to supply chain. Following disruptions to its manufacturing base last year, Apple has finally caught up on production– last week, CEO Tim Cook told analysts that “supply for Apple’s iPhone ‘was not an issue’ during Q2.” This comes after Apple warned last November that COVID-19 restrictions in China would “significantly reduce capacity” and slow shipments of its iPhone 14. Apple also made long-term moves to diversify its production geographically and remove itself from China. A Reuters analysis of supply chain data from last fall found Apple’s sourcing from China had decreased by 11 percentage points between 2019 and 2021.

Industry giants join supply chain data exchange program. The Department of Transportation has begun a program that aims to give a real-time picture of U.S. supply chains “through the exchange of company data,” according to SupplyChainDive. Fifty-three companies representing the end-to-end supply chain are now part of the Freight Logistics Optimization Works (FLOW). These FLOW participants, including Costco, Walmart, and Union Pacific, share shipment data on a daily or weekly basis that is then used to create a tool measuring container demand and fluidity. The program is also expected to expand to additional ports, and grow even further. The Biden admin’s fiscal 2024 budget request includes $5.3 million allocated to the new tool.

Ocean 

U.S. import market rising from recent lows. According to Descartes, U.S. ports imported 2,020,197 twenty-foot equivalent units of containerized cargo in April, down 18% yoy, but up 9% from March and 5% from April 2019, pre-COVID. Volumes are showing “continued consistency with pre-pandemic volume seasonality,” said Chris Jones, executive vice president of industry and services at Descartes Systems Group. 

Evergreen hit with shipping complaints. Taiwan’s Evergreen is the latest liner to be hit with a complaint lodged with the Federal Maritime Commission (FMC) and stands accused of failing to stick to its contract. Evergreen has until the end of May to respond to the case filed by CertiFit. The complaint states that Evergreen “initiated a practice of systematically failing to meet its quantity commitments,” under its service contract, and left car-parts supplier CertiFit scrambling onto the highly expensive spot market where they allege that containers were only delivered to the nearest rail yard and not to its own facilities, costing them $750,000. The FMC is currently overwhelmed with record numbers of shipper complaints.

Ports

Port of Long Beach announces plans for offshore wind facility. The Port of Long Beach has announced plans for a floating offshore wind facility “designed to help California and the nation achieve renewable energy goals,” according to gCaptain. The facility, called Pier Wind, will be the largest of its kind at any U.S. seaport and will support the manufacturing and assembly of huge offshore wind turbines. The project will span up to 400 acres within the Harbor District southwest of the Long Beach International Gateway Bridge and will cost $4.7 billion. Construction is scheduled to begin in January 2027, with the first 100 acres operational in early 2031.

Customs

Backlog causes Texas to scale back truck inspections at border. According to a U.S. Customs and Border Protection (CBP) official, Texas officials have reduced the number of inspections for tractor-trailers arriving from Mexico at two border crossings as a result of thousands of trucks sitting in long wait lines. Increased inspections of trucks that began last Tuesday created wait times of “up to 26 hours for commercial traffic at Veterans International Bridge in Brownsville and the Free Trade International Bridge in the town of Los Indios” according to FreightWaves. The inspections are being carried out by the Texas Department of Public Safety (DPS). 

Trucking

Buttigieg affirms expanded truck parking high on USDOT agenda. U.S. Secretary of Transportation Pete Buttigieg reaffirmed a commitment to continue expanding access to parking for commercial drivers and acknowledged benefits associated with facilitating more access to parking. During an interview with Transport Topics, he said that “ensuring greater parking availability would respond to safety and supply chain concerns. This is a major issue. And one that we view, not only as a matter of convenience, or fluidity, but really as a fundamental safety issue. When I’m talking to drivers, this is one of the biggest, if not the biggest, issues that I hear about.”

Rail

Union Pacific wants review of STB decision on CP-KCS merger. Union Pacific is asking a federal court of appeals to review the approval of the Canadian Pacific and Kansas City Southern merger made by the Surface Transportation Board. UP had “expressed concerns during STB hearings on the merger that the board needed to impose conditions upon CP and KCS that would ensure competition at interchanges,” according to FreightWaves. In the two-page petition to the court, UP said: “Union Pacific seeks relief on the grounds that the agency action is in excess of the Board’s authority; that it is arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law; and that it is not supported by substantial evidence. Union Pacific requests that this Court vacate the order under review and grant such additional relief as may be necessary and appropriate.” CPKC told FreightWaves in a response statement: “We don’t know what UP’s argument is, but in our view, the STB conducted a comprehensive, thorough and thoughtful review of the combination which produced the right final decision clearly recognizing the combination’s many benefits.”

Air

Ryanair places massive Boeing jet order. This week, Ireland’s Ryanair signed a multibillion-dollar deal for as many as 300 Boeing jets. The European carrier said it was placing a firm order for 150 Boeing 737 MAX 10, with options for another 150. 

International

China’s exports see continued growth streak. China’s imports fell 7.9% yoy, but exports grew 8.5% in April, marking a second-straight month of growth, according to CNBC. China’s trade surplus grew to $90.21 billion in April, up from the surplus of $88.2 billion in March. Economists at Goldman Sachs said this week that softer trade data in April is likely to reflect “residual seasonality” after this year’s Lunar New Year.

Other

Amazon offering U.S. customers $10 to pick up purchases. Amazon is offering U.S. customers $10 to pick up a purchase rather than have it shipped to a home address. Amazon is adamant that the promotion is “not a cost-cutting measure” and that it applies to customers who have never used Amazon Pickup or have not used the service in the last year.

Ocean 

Data suggests ocean container import rebound unlikely in 2nd half of 2023. Analysts are projecting that the second half of 2023 will bring a rebound of containerized U.S. import volumes, but some think it’s increasingly likely that U.S. import demand has hit the bottom. Ocean container bookings data from SONAR suggests that U.S. containerized import volumes in 2023 have been trending alongside 2019 levels, which was the last freight recession, according to FreightWaves. See the article for visual graphs and more detailed information.

Ports

California to develop port data sharing system. The five major container ports in California have agreed to work together to launch the “California Port Data Partnership” in a first-of-its-kind initiative headed by the state’s government. According to Maritime Executive, the goal of the initiative is to “jointly advance computerized and cloud-based data interoperability with a common goal of supporting improved freight system resilience, goods movement efficiency, emissions reduction, and economic competitiveness.” It’s the latest in a series of government initiatives launched in response to supply chain disruptions and backlogs from the past few years. 

Trucking

FedEx Freight closing 29 service centers. FedEx Freight announced the planned closures of 29 U.S. service locations by August 13 as part of an ongoing efficiency drive. There are currently 371 stations across the FedEx Ground system, and the affected operations will be consolidated into other locations, according to FreightWaves. 

U.S. government to remove border vaccine requirements. The U.S. Department of Homeland Security (DHS) announced it will be removing border vaccine requirements. “Beginning May 12, 2023, DHS will no longer require non-U.S. travelers entering the United States via land ports of entry and ferry terminals to be fully vaccinated against COVID-19 and provide related proof of vaccination upon request. DHS intends to rescind these Title 19 travel restrictions in alignment with the end of the Public Health Emergency and the termination of the Presidential Proclamation on air travel.” DHS said in an official statement. Even though this is good news for truckers, the Canadian Trucking Alliance stated that it will continue to “work on several additional border barriers and areas where border policies remain misaligned with a coalition of trucking groups.” 

Rail

STB extends reporting requirements for Class I railroads. This week, the Surface Transportation Board extended the temporary reporting period through Dec. 31 that requires Class I railroads to submit employment data and rail service performance to the board. The STB began monitoring the Class Is’ weekly rail service performance data last year after receiving complaints from shippers about “inconsistent and unreliable service from BNSF Railway Co., CSX, Norfolk Southern Railway and Union Pacific Railroad,” Progressive Railroading reports. The STB required the four carriers to submit updates on employee hiring trends, service recovery plans, and weekly and/or biweekly reports on service performance indicators as part of their monitoring. 

Air

Cargo shift from MEX to AIFA causing airline concerns. A looming freighter ban in Mexico City is causing carriers operating a mix of air cargo and passenger services to ask for support to stave off supply chain collapse. Full-freighter services from Benito Juarez Airport (MEX) had to move to Felipe Angeles (AIFA) within 107 business days from December of 2022. Carriers are becoming increasingly concerned regarding the capabilities of AIFA and the wider logistics network to facilitate this. “We understand AIFA’s warehouse facilities are modern and well-equipped, but staffing is an issue, with some operators prepared to transfer staff by bus each day to ensure adequate coverage….Carriers will have to decide if they want to move the entire operation, passengers as well as cargo, to the new airport. This would impact interlining and, considering that 62% of cargo arrives at MEX on freighter aircraft, the impact will be quite significant,” Tiaca director general Glyn Hughes told The Loadstar.

Japan Airlines increases cargo fleet. Japan Airlines (JAL) announced that it will add three Boeing 767-300ER Freighters to its fleet to begin  supporting its own cargo operations by the end of the fiscal year 2023, the first time in 13 years that JAL will operate its own dedicated cargo aircraft. 

International

Apple and other companies shifting manufacturing away from China. American companies such as Apple are looking to shift away from manufacturing products in China, and are instead looking to places like Taiwan, Vietnam, and India as production bases. Electronics maker Quanta Computer, the top contract manufacturer of Apple’s MacBooks, signed an agreement this month to build its first Vietnamese plant. Moves like this to diversify production away from China have been years in the making for manufacturers that have watched wages there rise. Manufacturers are looking to move away from China as costs rise and trade and technology tensions between Washington and Beijing are happening.

Other

Charts show data on cargo flows and future trends. Cargo flows over the past few years have been a sore spot in the industry. SupplyChainDive asked analysts to compile data showing what exactly happened to cargo over the last few years, and where trends will go in the future. See the information here. 

Ocean 

Bill introduced to give FMC power to crack down on ocean carrier collusion. A bill to give federal maritime regulators more power to crack down on collusive shipping agreements among foreign ocean carriers was introduced Monday. The Ocean Shipping Competition Enforcement Act would allow the Federal Maritime Commission to block any agreements among carriers and marine terminal operators found to be unduly anticompetitive without having to first obtain a federal court order, according to FreightWaves. Currently, the FMC can’t block an agreement that it determines to be unreasonably anticompetitive on its own, but must petition the U.S. District Court for the District of Columbia to do so. If the court disagrees with the FMC’s assessment, the agreement automatically becomes effective. “Congress must ensure that the Federal Maritime Commission can do its job and fully enforce the law,” Rep. John Garamendi, D-Calif said.

Experts say economy is in a freight decline. Ocean freight orders are down 50% year over year, which  in turn is impacting both road and rail transportation. JB Hunt president Shelley Simpson said the industry was in the midst of a “freight recession” during a first-quarter conference call with analysts. A decrease in truck movements in and out of warehouses was tracked by a recent CNBC supply chain survey analyzing inventories and warehouse space, which combined with a 40% decrease in manufacturing orders foretells less freight movement by both truck and rail. According to CNBC, the supply chain data “fits into the broader picture of a contraction in global purchasing indexes, less spending on goods, and excess inventories.”

Ports

Georgia Ports Authority hits Ro/Ro cargo growth milestone. The Georgia Ports Authority (GPA) has recorded eight consecutive months of growth in Roll-on/Roll-off (Ro/Ro) cargo handling. The Port of Brunswick processed 62,100 units of vehicles and heavy equipment in March, with Savannah’s Ocean Terminal contributing an additional 1,700 units, totaling 63,800 units–a 22% YOY increase. GPA Executive Director Griff Lynch accredits the success to new customers and increased trade with long-standing partners. 

Major terminal expansion project in British Columbia receives approval. Canada is set to take on a significant container terminal expansion project in Delta, British Columbia after receiving approval from the Canadian government. The CAD $2 billion Roberts Bank Terminal 2 Project will be important “for the country’s long-term trade growth and capacity needs,” according to the Vancouver Fraser Port Authority, which is leading the project. The expansion will involve constructing new land and a three-berth marine container terminal near existing terminals at Roberts Bank, and will increase the west coast container capacity by roughly one-third, adding 2.4 million TEUs of capacity, according to gCaptain. The project is expected to create 18,000 construction jobs, 17,300 ongoing jobs, an estimated $3 billion in annual GDP upon completion, and $631 million in tax revenue for Canadian services. 

Trucking

NHTSA seeks to mandate side impact guards on heavy truck trailers. The National Highway Traffic Safety Administration is revisiting a proposal to mandate the installation of side underride guards on heavy truck trailers. The proposal is in response to a “provision in the 2021 bipartisan infrastructure law requiring the secretary of transportation to conduct additional research to better understand side guards’ overall effectiveness and ‘assess the feasibility, benefits, costs and other impacts of installing side underride guards on trailers and semitrailers.’” NHTSA’s new Advisory Committee on Underride Protection will make recommendations to the secretary on safety regulations related to underride crashes, and is seeking comments through June 20.

Rail

Three major railroads team up to compete with CPKC. Three major railroads are agreeing to work together to compete with Canadian Pacific-Kansas City Southern. On Monday, Canadian National, Union Pacific and Grupo Mexico railroads announced that they will work together to “quickly move intermodal cars filled with shipping containers from Mexico north across the United States to the key hub of Chicago and further north into Canada.” This service will be in direct competition with CPKC’s single-line network that is currently the only railroad directly connecting all three North American countries. The three railroads said they “believe their service will be superior to CPKC because Grupo Mexico has a bigger rail network in Mexico and Union Pacific has a more direct route north to Chicago,” according to AP News.

Air

Top airports by cargo and passenger amounts in 2022. Airports Council International (ACI) has revealed which airports were the busiest by passenger volume and by air freight in 2022. Hong Kong International Airport took the top spot as the world’s busiest air cargo hub, but its 4,199,196 metric tons of freight are just barely ahead of Memphis International Airport’s 4,042,679 metric tons. As far as passenger traffic, Hartsfield-Jackson Atlanta International Airport swept the floor with the competition, with nearly 20 million more passengers than the next highest airport, Dallas/Fort Worth International.

International

Singapore to accept proposals for creation of drone port this year. Singapore is looking to create a drone port for the delivery of ship supplies and is planning to launch a call for proposals (CFP) later this year. The move was announced at Singapore Maritime Week, according to Splash247. “The CFP will act as a pathfinder for public agencies and private companies to develop a concept of operations for drones that is suited to Singapore’s operating environment as a busy hub port,” said senior minister of state for finance and transport Chee Hong Tat. 

Other

Ground parcel delivery costs on the rise. Delivery costs for ground parcels hit a record high in Q1 according to the TD Cowen/AFS Freight Index. Annual rate hikes and fuel surcharges contributed to rising costs, but average discount increases of 1.6% helped soften the blow, according to SupplyChainDive.

Ocean 

Shipping companies comply with speed initiative to protect CA whale populations. According to NOAA’s Blue Whales and Blue Skies program, shipping companies increased compliance with an initiative to protect whales off the coast of California last year. Participating vessel operators are asked to reduce transit speed to 10 knots or less near the state’s busiest seaports from mid-May to mid-December, during seasonal peak whale activity and air pollution times. Slower traveling speed “reduces the risk of a fatal whale strike by an estimated 44 percent, and it cuts stack emissions in areas with longstanding air quality challenges,” according to Maritime Executive. Approximately 75% of participating ships complied.

Ports

Port Houston on track to hit 1 million TEUs earlier than expected. Port Houston’s loaded export volumes have reached 349,964 TEU year-to-date, the highest monthly volume for loaded exports in its history.  Volumes are at a 26% increase in the first quarter of this year compared to last and a 10% increase YOY. According to the port, container volumes through Port Houston are on track to hit 1 million TEU earlier in the year than ever before.

West Coast ports lose 1 million TEUs per year to East Coast shift. A new report from Descartes Systems Group says that over one million twenty-foot equivalent import containers per year have shifted away from U.S. West Coast ports. Volumes are being driven east, with Gulf Coast ports receiving the biggest volume gains. An increase in Asian-based imports coupled with a simultaneous decrease in Northern European imports have contributed to this shift, according to gCaptain.

Customs

Feds seize goods tied to forced labor. Federal authorities have seized $961 million worth of goods over suspected ties to forced labor since late June, according to CNBC. Goods are remaining in custody at ports while companies are receiving detention notices and stand to lose millions of dollars. Electronics, apparel, footwear, textiles and agricultural products top the list of detained items in terms of dollar value.

Trucking

Navistar recalls 45,000 trucks due to under hood fires. Navistar is recalling 45,000 trucks from the 2016-2020 model years because of three under hood fires related to the heating, ventilation and air conditioning system. The company determined that low voltage and amperage to the power distribution module (PDM) was the likely cause of the fires. Navistar reported no injuries related to the recall. 

Rail

Dashboard for easy tracking of average railroad speed, dwell, and cars. Supply Chain Dive created a dashboard to track the average speed, dwell time, and cars online of Class I railroads currently operating in the U.S., that is meant to “simplify the process for a few of the key measures in that dataset.” The numbers are reported weekly to the STB, but are compiled here in an easy-to-read dataset.

Air

Air cargo industry aims to go digital. Air cargo carriers are modernizing and going paperless. Many carriers are asking customers to use electronic air waybills, which experts say are “key to improving processes, increasing shipment visibility and eliminating errors,” according to Supply Chain Dive. IAG Cargo implemented a charging fee earlier this year for using paper AWBs in an effort to digitize operations and procedures. Even though electronic AWBs (eAWB) have been available for more than 10 years, the air cargo industry has lagged in shipping document digitization, Chief Transformation Officer David Rose told Supply Chain Dive.

International

EU Parliament finalizes emissions trading system rules. A package of climate measures has received a final stamp of approval from the European Parliament for the “Fit for 55” emissions scheme, which aims to cut the bloc’s overall greenhouse gas footprint by 55% by 2030. The measures come after extended negotiations between the EU Parliament, Commission and Council, but will still require a final signoff by the national representatives on the Council. The package will allocate 20 million ETS allowances (worth about $2 billion at current value) to support the decarbonization of shipping, according to Maritime Executive. 

Other

SpaceX Starship sees historic launch, explodes mid-air. In a historic test Thursday morning, SpaceX launched its Starship rocket for the first time. The rocket did not reach space after exploding mid-flight. Starship is designed and intended to carry passengers and cargo out of earth’s orbit, but no crew were on board for the test. Leadership at SpaceX stresses that the launch was “experimental” and that getting it off the ground was a success nonetheless. See the video here:

Ocean 

MSC faces possible civil penalty over congestion surcharges. In a filing earlier this month, the Office of Enforcement is recommending that the The Federal Maritime Commission review the tariffs of Mediterranean Shipping Company (MSC) for a “possible civil penalty related to its insistence on continuing to maintain an ‘ambiguous surcharge’ in its tariff for congestion,” according to Maritime Executive. The investigation comes as the FMC is cracking down on unreasonable charges and business practices of major carriers.

Ports

Longshoremen back at work after LA and Long Beach port strikes. Workers returned last weekend following two days of intermittent strikes at the ports of Los Angeles and Long Beach in California. Shippers are uneasy about the prospects for industrial action, as the unions have not agreed new pay terms since an old contract ran out on July 1 last year, according to Splash247. 

Customs

Four U.S.-Canada border crossings subject to changes and analysis. Federal officials have temporarily extended operating hours at four U.S.- Canada border crossings– three in North Dakota and one in Idaho. For 120 days beginning April 1, U.S. Customs and Border Protection expanded hours of operation from 9 a.m. to 7 p.m. at North Dakota’s Maida, Northgate and Sherwood ports of entry and from 7 a.m. to 7 p.m. at Idaho’s Porthill POE. CBP intends to conduct an analysis on traffic flow at the end of 120 days because traffic volumes at all four northern POEs remain 39% below pre-pandemic levels. CBP also plans to identify potential alternate POEs and determine fiscally responsible hours of operation at POEs, as well as “review community impacts and consider similar expanded hours at these alternate locations,” according to Transport Topics.

Trucking

Proposed emission standards would raise heavy truck equipment costs. The Environmental Protection Agency’s new proposed greenhouse gas standards for heavy trucks–aimed at drastically reducing carbon emissions–would boost equipment costs for manufacturers, fleets and owner-operators by an estimated $9 billion, however compliance costs would be reduced to 5.7 billion after factoring in battery tax credits included in the Inflation Reduction Act. The standards would begin in model year (MY) 2028 and extend to MY 2032 according to a 717-page preamble to the proposed rule released this week, and “would govern a range of truck sizes from delivery trucks and dump trucks to freight-hauling day-cab and sleeper-cab trucks.” 

Rail

Legislation proposed to limit train length and crew sizes. A bill in the Nevada legislature limiting train lengths and a provision requiring train crew sizes of at least two people is now law in Ohio. Assembly Bill No. 456 seeks to prohibit trains more than 7,500 feet long on main lines, which would consist of railroad tracks that see 5 million gross tons or more transported annually, as well as on lines that branch off from the main line, according to FreightWaves. Violating the proposed rule would result in fines of up to $25,000 for the third violation. The bill would directly affect Class I railroads Union Pacific and BNSF who currently operate in Nevada.

Air

Ocean carriers look to expand air cargo operations. During the pandemic, ocean market congestion led many shippers to opt for air freight. Shipping giants including MSC, CMA CGM and A.P. Moller-Maersk either started or expanded air cargo operations in order to take advantage of the opportunities in the market. Despite current air cargo slowdowns, the major carriers are still launching new flight routes and expanding operations. According to a release, Maersk is planning to launch twice weekly flights connecting Chicago (RFD) and Hangzhou (HGH), and South Carolina (GSP) and Shenyang (SHE) using Amerijet-operated 767-300 freighters.

International

Port strikes continue to affect global supply chains. The number of port strikes and protests around the world quadrupled over the past year to 38 incidents, according to Crisis24, a maritime security consultancy. Worker shortages have prompted shipping lines to divert or delay cargoes globally. You can find a useful risk map detailing real-time port strikes worldwide from P&I club NorthStandard here. 

Other

Senators probing major retailers on use of child labor in supply chains. Following recent media investigations into exploited migrant children, senators are now asking some major U.S. companies about the use of child labor in their supply chains. Sen. Alex Padilla, chair of a subcommittee on immigration, and John Hickenlooper, chair of a subcommittee on workplace safety, are asking the companies how they vet their contractors and train their own employees to prevent child labor violations, SupplyChainDive reports. The senators sent letters to 27 companies on April 5, including the CEOs of Walmart, Target, PepsiCo, Frito Lay, J. Crew, Whole Foods, General Mills, Ben & Jerry’s, Ford and General Motors, and others who were named in a New York Times report on migrant child laborers working for major companies or their contractors.

Amazon begins charging for some returns. Amazon has begun charging customers for some returns made to The UPS Store locations. Customers may be charged when selecting The UPS Store for a return if a free option — Amazon Fresh, Whole Foods and Kohl’s locations — is within the same distance or closer to their delivery address, according to SupplyChainDive. 

Ocean 

Data shows increase in container ship schedule reliability. The container shipping industry is seeing an increase in schedule reliability. New data from Sea-Intelligence shows that schedule reliability is approaching pre-pandemic levels, and is currently at the highest level since August 2020. Sea-Intelligence CEO Alan Murphy says that “schedule reliability was a staggering 26 percentage points higher,” year-over-year. According to the data, the industry bottomed last year, falling to a level where just one-in-three ships were on schedule. 

MSC updates policy on customer billing. MSC announced last week that it is updating its policy on customer billing. The decision came just a few days after the Federal Maritime Commission announced its investigations into detention and demurrage compliance. The company said in an email notice to customers: “MSC will not assess demurrage, detention or per diem charges for any day in which a terminal is closed due to holidays, weekends, or other port closure events.” The carrier also noted that “working days” where per diem charges would apply include holidays and weekends in which marine terminal operators are open for business, according to SupplyChainDive.

Ports

Port of Morrow faces $2m fine over wastewater spill. Oregon’s Port of Morrow faces a new violation over contamination in eastern Oregon, linked to a spill of port wastewater “in an area reeling from years of water contamination from the port and other sources,” Maritime Executive reports. The Department of Environmental Quality failed to act on the violations for years, but is now negotiating a settlement with the port over previous violations. The DEQ appears to have waited weeks to act again until two people complained about the latest spill.

Trucking

Cummins to invest $1B in engine plants and hydrogen equipment. Cummins Inc. plans to spend $1 billion to “modernize engine plants in three states and invest in hydrogen production equipment in Minnesota,” the company said this week. Cummins CEO Jennifer Rumsey said that federal investment through the infrastructure bill and the Inflation Reduction Act influenced Cummins’ decision to invest in its U.S. plants. Read more about Cummins plans at FreightWaves.

Tesla recalls semi trucks over parking brake valve module issue. Tesla issued a voluntary recall of 35 of its all-electric Class 8 Semi trucks due to a parking brake issue. A National Highway Traffic Safety Administration (NHTSA) safety recall report says that electronically controlled parking brakes on semi trucks “may intermittently fail to transition when the parking brake is engaged or disengaged, which could then result in the parking brakes not being set or released.” Tesla will send letters to semi owners on May 23 notifying them of the recall, according to FreightWaves. 

Rail

Canadian rail operators seeing more investment demand ahead of earnings season. According to Bank of America, Canadian National Railway and Canadian Pacific are receiving more investor interest ahead of earnings season for rail operators across North America, showing that investors are viewing US rail operators as more risky than their Canadian peers at present.

Air

UPS to open cargo sorting facility at TPA. UPS plans to open a 40,000-square-foot sorting facility at Tampa International Airport (TPA). The $79.5 million cargo building is expected to be complete by the end of 2023 and will be able to sort up to 7,500 packages per hour, according to an airport release. UPS will lease the facility from the airport’s Aviation Authority, and it will support its Next Day Air deliveries for Tampa Bay and Florida’s west coast. 

International

China’s first cargo airport begins international flights. The first cargo-focused airport in China launched its inaugural international route with a flight bound for Belgium loaded with 100 tonnes of freight. According to China’s state press agency Xinhua, the flight departed Ezhou Huahu Airport in Hubei Province on April 1, and the route is scheduled to provide two round-trip cargo flights each week between China and Europe.

Other

FedEx to combine businesses into one organization. FedEx Corp. plans to combine most of its companies into one business, effective June 1, 2024. The restructuring will bring FedEx’s air, ground parcel and FedEx Services businesses under one entity called One FedEx, but the company’s LTL operation, FedEx Freight, will continue to operate as a stand-alone business within the new corporation, according to FreightWaves. FedEx expects E-commerce to account for 90% of all new business through 2026.

Job openings fall below 10 million. In February, job openings fell below 10 million for the first time since May 2021. The Labor Department reported this week in its monthly Job Openings and Labor Turnover Survey that available positions totaled 9.93 million, a drop of 632,000 from January’s downwardly revised number.

Ocean 

Shippers oppose new act that would prevent lines from entering VSAs. Shipping lines and shippers are opposing the US Ocean Shipping Antitrust Enforcement Act (OSAEA) which they say will hit efficiency and increase costs, according to The Loadstar. OSAEA will prevent US lines from entering into vessel-sharing agreements (VSAs) and also seeks to repeal anti-trust exemptions for carriers. The Loadstar reports that the bill’s progress through Congress is only just beginning and there is a long way to go before it potentially passes.

World Bank predicts slowdown in trade growth. Trade growth is projected to slow over the next decade as a result of reductions in global economic growth, according to the World Bank. Trade growth through 2030 is expected to slow by 0.4 percentage points per year (relative to the previous decade), according to Maritime Executive. Rising interest rates, the ongoing invasion of Ukraine, and the COVID 19 pandemic have all contributed to slowing global economic growth.

Ports

Georgia Ports Authority invests in hybrid cranes to reduce costs and emissions. The Georgia Ports Authority (GPA) announced an investment of $170 million to acquire 55 state-of-the-art hybrid rubber-tired gantry cranes (RTGs) for the Port of Savannah’s Ocean Terminal. gCaptain reports that the investment will transform the terminal into a “cutting-edge all-container facility, enhancing its capacity to manage increased ship and cargo traffic while significantly reducing its environmental impact.” The hybrid cranes will operate primarily on electric battery power, utilizing diesel generators only to recharge their batteries, and will reduce fuel consumption by 47% – leading to over $1.6 million in fuel cost savings per year and 500,000 gallons of diesel annually across the Ocean Terminal fleet. 

Trucking

FMCSA denies TIA rate transparency rulemaking petition. A rulemaking petition by the Transportation Intermediaries Association (TIA) that aimed to remove a requirement that freight brokers disclose to carriers transaction records between brokers and shippers was denied by the Federal Motor Carrier Safety Administration last week. The denial was issued just one day after the FMCSA agreed to “initiate a formal rulemaking by two groups representing small-business truckers – the Owner-Operator Independent Drivers Association and the Small Business in Transportation Coalition (SBTC) – requesting that brokers be prohibited from denying carriers the ability to access such records,” according to FreightWaves. “After careful consideration, FMCSA has determined that TIA’s petition does not contain adequate justification to initiate rulemaking,” the agency said.

Rail

Railroads under scrutiny following derailments. Following a string of derailments and other issues, the railroad industry has found itself under political and regulatory scrutiny. This article from Bloomberg offers key readings and rundowns on rail industry happenings, as well as other freight sectors. Something to ease your mind about the derailments: studies show that in the U.S., derailments normally occur about 1,000 times per year, which is half the rate compared to 20 years ago. 

Air

Delta Cargo unveils cooling facility at JFK International Airport. This week, Delta Cargo unveiled its largest cooling facility at John F. Kennedy International Airport in New York. The facility will support cargo that requires temperature-sensitive handling and will serve as the main cold chain facility for pharmaceutical and healthcare products at the airport, as well as enable cargo shipping of perishable produce and fresh goods.

Transpacific airfreight rates rose in March. Transpacific airfreight rates increased in March, with the latest statistics from the Baltic Exchange Airfreight Index (BAI) showing that prices from Hong Kong to North America in March increased by 9% compared with February to $5.38 per kg. According to Aircargo News, Prices from China to the U.S. were also up by 7.8%.

International

Port of Antwerp launches world’s first hydrogen dual fuel straddle carrier. The Port of Antwerp-Bruges in Belgium is touting the world’s first hydrogen dual-fuel straddle carrier. The machine uses an engine developed by Compagnie Maritime Belge (CMB)’s clean technology division CMB.TECH and runs on a mix of hydrogen and diesel fuel. The dual-fuel technology will replace 70% of diesel consumption with hydrogen, with the eventual goal of 100% hydrogen injection, according to Splash247.

Other

Gulf oil auction receives offer of $264 million. An auction for drilling rights in the Gulf of Mexico drew interest from oil industry giants who offered a combined $264 million for the rights. The auction, mandated by last year’s climate bill compromise, was the first in the Gulf in more than a year. A government analysis suggests that developing the leases for sale in public waters in the Gulf of Mexico could produce more than 1 billion barrels of oil and more than 4 trillion cubic feet of natural gas over 50 years.