Featured Headlines:
Alliance Compliance, Defiance, and Reliance
A Dreaded Warning: Vague Cargo Descriptions Are in Trouble!
CBP Hits Pause on the $800 De Minimis Threshold
BIS Cranks Up the Controls on Advanced Technologies
Neo-Panamax Ships, AI Cranes and a Third Terminal…Oh My!
Trucking Spot Market Heats Up, But Don’t Break a Sweat Yet
Mississippi Drought Hits Mission Critical
Eye on the ILA
- With 18 days left until the current master contract expires, a nation turns its lonely eyes on Joe DiMaggio and the (lack of) negotiations between the ILA and ownership with the health of our economy and Christmas itself at stake!
- In a fiery letter to union members, Harold Daggett and his son, Dennis, blasted the USMX’s latest statements as “propaganda” and declared an uncompromising stance against both semi-automation and full automation at terminals.
- While they also missed the Mrs. Robinson reference in our opening bullet, the Daggetts are also taking on healthcare, pensions, and surveillance in workstations, vowing to fight for union members and their families.
- And what about the proposed 78% wage hike? The carriers are expected to reject it outright. Compared to the 32% wage increase agreed on by the ILWU on the West Coast, it’s a bold ask.
- While we are very judgmental and naturally envious people, maybe dockworkers really do need average wages above $400,000 a year… no, really. After all, they “due” have to pay almost 1% in union dues according to Mother Google!
- The Daggetts clearly want to secure a massive deal—potentially Harold Daggett’s final legacy before retirement.
- With October 1st fast approaching, industry insiders are preparing for the worst—a potential strike that hasn’t been seen since 1977.
- Six of America’s largest ten ports would be closed, but don’t worry! They only handle up to 60% of all US international ocean cargo and 13 million containers per year.
- The big question: Will it be long? Many believe Daggett will need to bring home a historic win for the union.
- The Biden administration has stepped in on labor disputes before, like in 2022 with the rail strike. But with an election around the corner, things are getting tricky. Both union votes and political ramifications are influencing whether the White House will get involved.
- Pundits (and punsters) estimate that each day of work stoppage could cause five-seven days of backlog recovery. Yikes!
- Please read below to learn more about the Taft-Hartley Act!
Alliance Compliance, Defiance, and Reliance
- If you thought the industry’s alliance structure was settled, 2025 is going to shake things up even more.
- MSC, the world’s largest container carrier, has announced a standalone east-west service network, breaking away from its 2M partnership with Maersk, which is set to disband in February 2025.
- But don’t worry, MSC isn’t going it (completely) alone—they’ve also signed new vessel-sharing agreements (VSAs) to broaden and bolster their coverage.
- For you secret etymologists among the supply chain community, Monsieurs Merriam and Webster tell us we have been saying “going it alone” since 1825!
- As Hapag-Lloyd exits THE Alliance to have, to hold, and to form the Gemini Cooperation with Maersk, the remaining members—ONE, Yang Ming, and HMM—will rebrand as the Premier Alliance.
- And, ain’t that a relief?! NOBODY likes saying “theTHE” or even “the THEE” and certainly not “the T.H.E.!! Seriously! No, we mean we are seriously serious!
- This new trio will enter a slot-share agreement with MSC for their Asia-Europe services, covering five joint routes, while keeping a few strings independent for flexibility.
- With the world’s largest vessels and Cape of Good Hope routings extending transits, it makes a lot of sense to protect those Asia-Europe load factors. Just ask MSC. Go on, ask ‘em!
- Zim is also in on the action, signing a three-year VSA with MSC for the Asia-North America east coast trade. We love Zim in Baltimore, baby!
- On the transpacific front, the Premier Alliance will offer a solid network of services into both the US Pacific Southwest and Northwest, as well as the East Coast. The transatlantic schedule? Still a work in progress—stay tuned for updates!
Taft-“Heartless”?
- Why is an article about an American labor dispute tucked into Global News? Make no bones about it, if the US Gulf and East Coast shut down, this is a big G global event!
- As we warned at the end of our feature, we’re going to bore you silly with some words about a 77-year-old piece of legislation. Hey, at least it’s younger than our average Senator by a decade or two!
- In 1947, the Taft-Hartley Act was passed after overriding a Presidential veto. President Truman was much less bored than you are as he called this law the “slave-labor bill!” That Truman and his temper!
- The President and Congress cannot force a resolution or impose a labor contract without new legislation. As some of you may have noticed, we likely could not pass legislation to fund our defense against a hurtling direct-hit meteor, so new legislation is not the answer.
- (We still want to know why we all accept the inability to pass effective, fair, and meaningful laws to improve our great nation, but that sentence will anger ALL of you for some reason!)
- Back to Taft: if a presidentially-appointed board of inquiry deems that a strike action will threaten the safety and health of the nation broadly, the President can press for a court order to impose an 80-day cooling off period.
- Gee folks, 80 days takes us past the election! We’re good at math as you can see!
- Interestingly, since 1971 Taft-Hartley has only been invoked twice. The last time occurred during the GW Bush administration in 2002 after 11 days of a West Coast lockout.
- My oh my, these political stakes are as high as the economic variety. Maybe, just maybe, this article isn’t as boring as we claimed!
A Dreaded Warning: Vague Cargo Descriptions Are in Trouble!
- US Customs and Border Protection (CBP) has kicked off a 30-day grace period to crack down on vague cargo descriptions in Air Cargo Advance Screening (ACAS).
- CBP is particularly keen on eliminating fuzzy cargo descriptions, so it’s time to get specific! If you’ve been using terms like “gift,” “accessories,” or “parts,” you might want to rethink your description strategy.
- ACAS points of contact should be aware of the following during the grace period:
- Stay on top of your inbox! Expect a daily warning email from CBP. Immediate corrective action is required to keep things running smoothly.
- Now is the time to address any problems with the shipper and the bill of lading issuer to avoid those dreaded rejections in the future.
- This 30-day grace period wraps up on October 6, 2024, after which, starting October 7, 2024, rejections will be in full swing.
- For a sample warning email, rejection notification, and rejection message, click here: Sample Warning Email.
- Check out the CBP’s list of unacceptable cargo descriptions here: Unacceptable vs. Acceptable Cargo Descriptions.
- Got questions about vague descriptions? Shoot them over to: [email protected].
CBP Hits Pause on the $800 De Minimis Threshold
- Breaking news for import enthusiasts! CBP is pushing back the launch of the De Minimis threshold in the Automated Commercial Environment (ACE) Automation to January 11, 2025. So, it looks like we’ve got some extra time to prepare!
- The De Minimis threshold, which allows for informal entry of items valued at $800 or less (and imported by one person in a single day), was meant to go live on September 28, 2024.
- Under the Tariff Act of 1930, such shipments are currently duty-free and get the VIP treatment with expedited clearance.
- The volume and value of these low-value US shipments have more than doubled, with China leading the charge by a huge margin.
- CBP is planning to introduce functionality to automatically reject ineligible shipments. However, this feature won’t be rolled out until at least 30 days after the initial warning flag.
- Officials have also stated that they’ll work with the trade community to ensure that this new process doesn’t slow down the flow of legitimate goods.
- For now, take a deep breath and enjoy the extra prep time—January 2025 will be here before you know it!
BIS Cranks Up the Controls on Advanced Technologies
- On September 5, 2024, the Bureau of Industry and Security (BIS) dropped an Interim Final Rule effective September 6, 2024, with a request for comments on implementing export controls on several semiconductor, quantum, and additive manufacturing items for national security and foreign policy reasons.
- The new rule brings a slew of Export Control Classification Numbers (ECCNs) into the Commerce Control List, including ECCNs 2B910, 2D910, 2E903, and many more. These will be added to the AES ECCN reference table, expanding the tech control landscape.
- It also revises existing ECCNs and introduces a fresh license exception, “IEC” (Implemented Export Controls), which will authorize exports and reexports to destinations with similar controls as those imposed by the United States.
- Items under the IEC exception will be marked in the 900 series of the CCL, where the third digit is 9 and the fourth digit ranges from 0 to 7.
- Additionally, the rule adds two new worldwide license requirements to the national security (NS) and regional stability (RS) controls in the Export Administration Regulations (EAR).
- These updates follow extensive consultations with international partners.
- Comments on the rule are due by November 5, 2024. Dive into the full 133-page rule here.
- Hold onto your circuit boards and get ready to navigate a more complex landscape of high-tech export controls, as global standards and U.S. regulations align more closely!
PNW's Pain Peaking?
- If you’ve been shipping through the Pacific Northwest (PNW) lately, it’s been a wild, painful ride with congestion and rail delays, but some relief is in sight.
- Container dwell times at Seattle and Tacoma terminals have skyrocketed, doubling in recent weeks. Normally a 3–4 day wait, it’s now 5–6 days.
- Retailers are skittish about possible labor strikes in Canada and the East Coast, so they shifted more freight through the PNW. Add to that the reinvention of some old trans-Pacific services, and voilà, instant bottleneck.
- BNSF and Union Pacific are scrambling to keep things moving with extra locomotives, rail containers, and some optimism (because that’s all you need, right?).
- Import volumes may have peaked, so things should cool off by the end of the month.
- Let’s all cross our fingers that the holiday import wave, a port strike back East, angry hard-to-spell militants, or vessels pushed sideways in all global canals by violent weather don’t send things into another tailspin! We’re sure we are all perfectly safe!
Neo-Panamax Ships, AI Cranes and a Third Terminal…Oh My!
- The Port of Houston is getting ready for some major upgrades as it prepares for the next wave of shipping capabilities, capacity, cranes, and other c words.
- Port Houston’s Executive Director, Charlie Jenkins, is already thinking ahead. While current terminal capacity is expected to last through the next decade, a third terminal is in the works.
- Oh, Barbour’s Cut and Bayport, you’ll be getting a baby brother or sister pretty soon!
- By 2025, Houston will start handling neo-Panamax vessels, thanks to the completion of Project 11, which will widen the Houston Ship Channel to allow two-way traffic
- This will accommodate an additional 1,400 vessels annually. Larger ships, like 15,000 TEU monsters, are expected to start calling at Houston by the end of this year.
- Bayport terminal just received three new ship-to-shore cranes, bringing its total to 18. Another eight cranes are on order and set to arrive by 2026 to support larger ships.
- To keep up with growing container volumes (up 10% this year!), the port is testing a truck appointment system called Express Pass. It really sucks. Just kidding!
- This system allows truckers to schedule pickups up to three days in advance, with the goal of reducing truck turn times and boosting efficiency. Right now, 30% of dray moves use Express Pass, but Jenkins hopes to increase that to 80% by year’s end.
- In a bid to optimize operations, Houston is rolling out AI-powered systems for managing its container cranes.
- With truck turn times already under an hour for double moves and just over 30 minutes for single-container moves, the port is working hard to keep things running smoothly.
Trucking Spot Market Heats Up, But Don’t Break a Sweat Yet
- As the pre-holiday shipping season ramps up, the US truckload spot market is starting to sizzle.
- Key inland distribution spots like Allentown, Charlotte, and Atlanta are seeing tighter capacity. In Allentown, the load-to-truck ratio hit a hot 9.9 this week—up from 6.5 last month.
- If you’re living and shipping here in Allentown, rates have also jumped from $1.79/mile in August to $1.87/mile this week. Compare that to last year’s $2.12/mile, and it’s clear the pressure isn’t as intense as it could be.
- Overall, the spot truckload market is down 17% year over year, and truckstop.com data shows load volumes dropped by 7.6% compared to last year.
- While contract carriers seem to be picking up the slack, a weaker manufacturing sector is the culprit here.
- Smaller trucking firms are dropping out as costs rise, but don’t worry—many can “jump in and out” of the market as needed. These debt-free haulers cut their operating costs and are waiting for their moment to return. That’s why pricing has stayed so flat(bed) this year.
Mississippi Drought Hits Mission Critical
- A drought is shrinking the mighty Mississippi River, and it’s sending shockwaves through U.S. shipping. From grain to gasoline, the nation’s critical cargo artery is under pressure.
- Low water levels have hit hard in the Midwest, particularly affecting soy and grain producers. Barge companies are limiting how much they can load to prevent vessels from running aground, which is driving up costs.
- Barge rates from Minneapolis-St. Paul to St. Louis jumped 19% last week, while St. Louis-originating rates spiked 17%.
- It’s not just about the crops—low water levels are even affecting drinking water. When the Mississippi gets this low, it loses the strength to push back saltwater from the Gulf, threatening water supplies in Louisiana.
- The Army Corps of Engineers has had to step in to build an underwater barrier for the third year in a row to stop saltwater intrusion.
- With dry conditions gripping much of the Ohio River basin, there’s little rain forecasted to turn things around. Hydrologists are predicting that the situation could worsen, threatening more delays and higher costs for shippers.
- While we’d love to barge into your minds with some dry humor here while counting a few Mississippis, this issue is affecting the heartland too much for us to be that heartless!
