Freight Forward: Unions Push Back

Welcome to Freight Forward, where each Monday, I’ll recap what happened in supply chains the previous week through JOC.com articles and additional sources and also what to expect for the week ahead.

I’m Cathy Roberson, a supply chain writer and researcher. For this weekly series, I serve as a research analyst for the Journal of Commerce (JOC), for whom I identify trends, provide thoughts and input into stories and assist with parcel last-mile queries.

*Please note that there will be no Freight Forward next week...

Unions Push Back

Labor worries continue as the International Longshore and Warehouse Union (ILWU) Canada rejected a four-year contract agreed by negotiators on July 24 and LTL provider, Yellow Corp notified the Teamsters of plans to shut down and file for bankruptcy.

Meanwhile, UPS Teamsters union members will review and vote on the tentative contract agreed between UPS and the Teamsters on July 25.

Longshore workers and maritime employers along the US East and Gulf coasts reached local agreements in just two of the 14 ports under the master labor contract, according to the chief negotiator for the International Longshoremen’s Association (ILA) writes Michael Angell. The ILA directed its locals to wrap up bargaining by the end of February 2023.?Dennis Daggett, ILA’s executive vice president, said in a speech last week the union wanted to settle local issues first because “local management doesn’t bargain in good faith, hides behind the no-strike clause, and says the master contract is enough, we’re not giving any more.”

Ocean

• The Port of Oakland is partnering with visibility vendor QuayChain for its new data portal the port is building for shippers, forwarders and drayage providers writes Eric Johnson. The partnership will allow the port to use data from QuayChain’s Edge Devices (QEDs), hardware set up around port facilities that helps create a private cell signal-based network to plug visibility gaps on container status.
• The Port of Savannah added 1.5 million TEUs of annual capacity with the reopening of the rebuilt Berth 1 at the Garden City Terminal writes Teri Errico Griffis. The expansion gives Garden City the capacity to handle 7.5 million TEUs annually, a 25% increase. The berth will now be able to work two vessels with capacities of 10,000-14,000 TEUs simultaneously or one 20,000-TEU vessel.??

Air

A contributing factor to both supply and demand of air cargo out of Asia is the lingering effect of contracted chartered freighter capacity locked in by forwarders during the frantic scramble for space during late 2021 and 2022, according to DSV writes Greg Knowler. DSV CEO Jens Bj?rn Andersen told analysts during the forwarder’s first-half earnings call that the industry had long-term commitments on chartered capacity that had left “planes hanging around different airports with no cargo.”?

? “Of course, any cargo that you can get into these planes is better than flying half-empty, and this is what we see,” Andersen said. “We think this will ease off as some of the lease agreements run out and then we will get into a normalized market, so it’s a temporary thing.”

Inland

• Yellow is trying to sell its third-party logistics unit, Yellow Logistics writes Bill Cassidy. The company, “is currently engaged with multiple interested parties” about the sale of Yellow Logistics, a non-union subsidiary launched in 2018 as HNRY Logistics, and discussions “are active and ongoing,” Yellow said in a statement.
• Some of the largest US less-than-truckload carriers are adding capacity despite lower freight volumes, existing excess capacity and economic uncertainty. They are opening new facilities or adding new doors to existing terminals, increasing density and capacity in LTL lanes critical to their customers writes Bill Cassidy.
• Warehouses and distribution centers in Southern California finally have a surplus of capacity for the first time since the pandemic-driven import rush began three years ago writes Bill Mongelluzzo. The vacancy rate for those facilities in the Inland Empire was 3.4% in the second quarter, according to Cushman & Wakefield’s latest national industrial real estate report. This was up from Inland’s rate of 1.9% in this year’s first quarter and 1% in Q4 2022.

Earnings

A few JOC stories on some of the latest Q2 earnings announcements:

• ODFL focusing on capacity, cost management in LTL downcycle?by Bill Cassidy
• Strategic focus on higher-margin business pays off for forwarders by Greg Knowler
• CMA CGM reports $1.3 billion Q2 profit despite flat volume by Greg Knowler

That’s it for this week. Please be sure to hit the subscribe button to receive the latest updates.

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What did I miss? Have a question? Let me know in the comments. I’ll be checking back throughout the week to answer questions, address comments and share additional insights.

In the meantime, here’s wishing everyone a good freight week ahead!

-Cathy?