Featured Headlines:
Carriers Cut Services, But Freight Rates Keep Sliding
Dodgeball and DOGE: Government Agencies Brace for Layoffs in the First Round
OFAC Launches 'Find My File' Application
Tariff Turmoil: Avocado Market Gets Guacward
Truck Broker Transparency Battle Heats Up
Congress Reboots Push for More Trucker Parking
TPM Mayhem
- Was there fist bumping and fist pumping? Yes, there was fist bumping and fist pumping …and even some dreaded chest bumping. Sigh. It is inevitable at TPM, dear readers.
- Hey, there was also a competitive regatta and a performance by Pittsburgh’s own Wiz Khalifa! Khalifa is known for cannabis culture rap hits, and that struck the right note during this year’s smoky paralysis surrounding tariff threats and trade posturing!
- Yet, for all our playfulness, S&P Global put on a great show for 4,400 shipping executives from 50 countries, and this was the 25th anniversary of the event. Bravo!
- Also, when you count the commercial folks hanging around in coffee shops, hotel lobbies, and a quite infamous Irish bar, the event attracts 200,000 shipping folk! Okay, okay, it is more like 10,000, but it feels like 200K! Having “lurked” at this show, we intend no offense.
- With heavyweights like John Bolton and Soren Toft on the big stage, there was no shortage of strong opinions on protectionism (though very few positive ones from THIS population) and dire warnings on ship taxes, inflation, and carrier profits.
- Yes, you read that correctly! We heard several carriers bemoaning the future state of ocean rates and profitability in the sea of expensive labor and (gasp) a return to Suez viability! Too early, fellas! We all read about 2024 results in the press, guys!
- Somewhat quietly, TPM Academy has assembled a deep and rich “curriculum” of sessions on logistics technology, cold chain, freight procurement, and many other germane subjects. We heard and experienced nothing but positives for the Academy!
- Oh, we ALL got a history lesson on 1930’s Smoot-Hawley Act. If you didn’t go to the show, you don’t get to know! Or, send us a note to [email protected].
- As we all ponder and attempt to play this giant game of Whack-A-Mole, there were too many conversations about “game theory” and whether doing nothing is a strategy at all.
- Frankly, Lars Jenson said it best (as usual):
- “…it would be pure folly to make strategic moves when there’s no idea even what the rules are tomorrow.”
- Shippers might be jamming to Wiz’s When I’m Gone, but one thing is sure… Mr Khalifa’s hit, See You Again will be true for most of the 200,000 official and unofficial attendees!
Vessel Fee Catastrophe
- Mediterranean Shipping Co. (MSC) CEO Soren Toft warns that if the proposed $1-1.5 million per port tax on Chinese-built and -operated ships becomes reality, it could force MSC to withdraw tonnage and rethink U.S. routes.
- “Marginal ports,” like Oakland, may be dropped from rotations due to unsustainable costs. Trans-Atlantic services could also become unviable if carriers can’t pass on expenses.
- As you might expect, thousands took to the streets of Oakland protesting their “marginal” label. It was chaos, dear readers! Well, it could have been…
- On a less light-hearted note, while remaining in Oakland: US exporters and farmers count on Oakland’s specialized agricultural services and proximity to ag production. Ouch!
- MSC estimates the tax would add $800 per 40-foot container on Asia-U.S. East Coast routes and a staggering $1,000 per FEU on trans-Atlantic routes—a near 25% rate hike.
- If ships bypass more ports, the mega hub ports will certainly see congestion bottlenecks. Recently, even with a mere 5% volume increase, LA and NY ports were on their knees begging for mercy, especially for intermodal rail.
- Hey, did the ILA and the ILWU agree to having less work in most ports and a direct need for more productivity in a few? No, no they did not!
- The World Shipping Council calls the proposed measure “draconian;” while retail groups urge stakeholders to fight back before the March deadline for public comments.
Carriers Cut Services, But Freight Rates Keep Sliding
- MSC, Ocean Alliance, and Premier Alliance are pulling back transpacific and Asia-Europe services in an effort to counteract falling freight rates.
- The long-delayed transpacific Mustang service is officially dead, with its vessels reassigned elsewhere. Meanwhile, Asia-North Europe and transpacific launches from Ocean and Premier alliances are being postponed.
- Transpacific spot rates are still dropping, with Shanghai-US West Coast rates dipping below $2,000/40ft for the first time in almost a year.
- Even with MSC shifting 24,000 TEU vessels away from Asia-North Europe and suspending services, total weekly capacity for April departures still hovers at 300,000 TEU—too much supply for the sluggish demand.
- The additional 10% tariffs (now 20%!) on Chinese imports to the U.S. are keeping transpacific volumes muted, delaying rate hike plans and making market recovery even more challenging for carriers.
Dodgeball and DOGE: Government Agencies Brace for Layoffs in the First Round
- Government agencies are feeling the sting of layoffs, like getting “retired” in the first round in a dodgeball game. Each agency has dismissed hundreds of employees due to the current Administration’s mandates.
- The US Food and Drug Administration’s (FDA) Commissioner of Food, Jim Jones, has resigned because of the actions.
- The dismissed employees were in “probationary” status, either recently on the job or transferred to a new position in the past one to two years.
- The estimated number of layoffs that will affect some of the import-related government agencies are as follows:
- FDA – 700
- USDA – thousands
- CDC – 10% of staff
- EPA – nearly 400
- Many more government agencies were affected, ranging from NOAA to Park Services to Department of Defense.
- The DOGE-ball game isn’t over yet—more layoffs are anticipated in the future as these agencies continue to feel the pressure.
OFAC Launches 'Find My File' Application
- OFAC has launched its new File Finder application, helping users “track down” important information, much like the Find My Friends app tracks your contacts. This browser-based tool makes it easy to search and navigate through all of OFAC’s website content.
- The File Finder allows users to search all static content on OFAC’s website (PDF documents, Word docs, etc.) by document title, document type, and the contents of each document, helping you “find your friends” (or files) in a sea of information.
- Searchable content includes general licenses, federal register notices, executive orders (and other legal documents), press charts, advisories, specific guidance, and many other records.
- For technical assistance, or if you want to provide feedback on OFAC’s new File Finder application, you can contact the OFAC technical support team at [email protected].
- To track this action further, visit OFAC’s Recent Actions page, just like checking your “Find My Friends” app for the latest updates on your contacts.
Tariff Turmoil: Avocado Market Gets Guacward
- President Trump’s 25% tariff on Mexican imports could send shockwaves through the global perishables trade. If U.S. consumers reject higher prices, air and sea trade lanes may shift dramatically.
- CEO Brian Cornell of Target warned that U.S. shoppers will soon feel the “squeeze” on fresh produce, particularly fruits and vegetables from Mexico. These supply chains are too short to absorb the hit.
- Mexico—which exports 1.3 million tons of avocados annually—is rerouting its shipments to Europe. But there’s a problem—Europe typically imports 800,000 tons between May and September, and Mexico’s supply could overwhelm the market.
- Kenyan avocado exporters, who usually send 70,000–100,000 tons to Europe, now face a pricing nightmare. With Mexico’s cheaper shipping rates and continuous supply, avocado prices could drop to $0.55–$0.82 per kg—well below the break-even mark of $1.64–$2.18 per kg.
- If Mexican avocados flood Europe, some African producers might get left with a whole lot of guac and nowhere to go…and the U.S. might have a guacamole shortage come Cinco de Mayo!
- Never miss another tariff announcement again! Visit our Trump’s Trade Tariff page for the latest and greatest update in today’s ever-changing market!
Truck Broker Transparency Battle Heats Up
- The Federal Motor Carrier Safety Administration (FMCSA) has reopened the comment period on its broker transparency rulemaking, extending the deadline to March 20 after receiving over 4,800 submissions since November.
- At the heart of the dispute is whether owner-operators and small carriers should have access to shipper-paid rates and broker margins—a transparency push that’s been simmering since 2020.
- FMCSA suggests requiring brokers to maintain electronic records of freight transactions, providing access within 48 hours of a carrier’s request, and including all charges, payments, and claims in transaction records.
- The Small Business in Transportation Coalition (SBTC) wants FMCSA to ban contract clauses that let brokers waive a carrier’s right to review records. FMCSA says this request may be reconsidered after the next round of comments.
- Comments can be submitted online or by mail under docket number FMCSA-2023-0257 until March 20.
Congress Reboots Push for More Trucker Parking
- Lawmakers have reintroduced the Truck Parking Safety Improvement Act, aiming to expand safe parking options for truck drivers nationwide.
- Sponsored by Reps. Mike Bost (R-Ill.) and Angie Craig (D-Minn.), the bill would provide state funding to maintain and expand truck parking facilities—a long-standing industry priority.
- With only one parking spot for every 11 truck drivers, many are forced to park in unsafe locations or drive past their legal hours in search of rest areas, which was particularly taxing during Covid-19.
- Past versions of the bill have proposed $755 million in competitive grants, but previous attempts stalled in Congress. A Senate companion bill is expected to follow.
- The bill has been sent to a committee for review, but no hearing is scheduled yet. Advocates hope this push finally clears the legislative roadblocks.
- In other news, in case anybody missed it, the Federal government is not only in the mood for slashing costs, but it is currently hostile to 98% of new spending. Anybody willing to wager about a funding win for our beleaguered truckers? Only the crickets will bet!
