Near-Normal Water Levels Allowing More Ship Transits Through Panama Canal 7/1/2024
The Panama Canal is bouncing back after a rough year. Water levels are recovering thanks to recent rainfall, allowing the canal authority to increase traffic and cargo capacity.
Here is a breakdown:
- More ships, more cargo: Starting in August, the canal will accommodate nine giant neo-Panamax ships daily (up from the current eight) and nineteen slightly smaller super-Panamax ships (up from eighteen). This brings the total daily capacity to 35 ships, compared to just 24 in May.
- Drought woes over: This increase follows a rough period caused by a drought in mid-2023. Low water levels in Gatun Lake, which supplies the canal's locks, forced restrictions. At its worst, the canal limited daily traffic to only 18 ships.
- Rainy days bring relief: Thankfully, the drought is over. Rainfall has refilled Gatun Lake to its normal July depth of around 83 feet. This improvement has enticed shipping companies to resume using the canal.
- Deeper pockets for cargo: The canal authority has also relaxed depth restrictions for neo-Panamax ships, allowing them to carry more cargo by permitting a draft of up to 48 feet (previously limited to 45 feet during the drought).
Source: JOC |
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BSC Port Strikes Deal With ILA To Fully Open Leatherman Marine Terminal 6/27/2024
The Port of Charleston's newest terminal, the Hugh K. Leatherman, is finally set to become fully operational after a lengthy disagreement between the port authority (SC Ports) and the dockworkers' union (ILA) was resolved. This conflict revolved around who would staff the new terminal's crane operator positions. The agreement lets current crane operators decide if they want to stay state employees or join the ILA. This gives the ILA a say in staffing the terminal, something they argued they had the right to do all along.
This deal signifies the end of a legal battle and paves the way for the terminal to operate at full capacity. This will be a major boost to the Port of Charleston's cargo handling capabilities. The new terminal itself is a significant addition, increasing the port's capacity by a third. With room for expansion, it has the potential to more than double that increase in the future. The backlog of cargo ships currently waiting to be unloaded at Charleston highlights the need for this additional capacity. Maintenance at another terminal has reduced its functionality, forcing ships to wait or divert to Savannah. While a temporary solution is planned during a maintenance break in July, the port won't be fully operational again until November. The Leatherman terminal's opening will significantly ease these congestion issues.
While the labor problems at Leatherman were not officially part of Contract renewal discussion between the ILA and USMX (the entity that represents Shipping Lines in Contract discussions), having this matter put to rest leaves only some local issues at the Port of Mobile, wages/benefits in general, and automation as the remaining items to be clarified for a new Labor Contract for the US East Coast and Gulf ports.
Source: JOC |
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Baltimore Port Key Channel Reopens Following Bridge Collapse 6/11/2024
After a massive cleanup effort, authorities have reopened the key shipping channel following the March 26th collapse of the Francis Scott Key Bridge. The incident, caused by a cargo ship collision, tragically took six lives and disrupted trade for months. The U.S. Army Corps of Engineers completed the removal of 50,000 tons of debris, ensuring safe passage for two-way traffic at the original channel depth and width. This marks the culmination of a two-month operation involving over 1,500 responders and specialists, utilizing a fleet of boats from various agencies. While the main channel is operational, work continues to remove any remaining steel structures underwater to avoid future dredging complications. The wreckage is being transported to a designated processing facility. Investigations into the bridge collapse are ongoing. The FBI is conducting a criminal probe, while the National Transportation Safety Board is looking into the cargo ship's reported electrical issues before the crash. Rebuilding the bridge is estimated to cost nearly $2 billion and is expected to be completed by fall 2028.
Source: Reuters |
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ILA Halts Talks Over New Contract Until Maersk, AMP Clarify Port IT Projects 6/11/2024
Negotiations for a new labor agreement covering East and Gulf Coast ports have stalled after the union representing dockworkers accused a major shipping company of violating the current contract by implementing automation technology. The International Longshoremen's Association (ILA) said it suspended talks scheduled for this week with the United States Maritime Alliance (USMX) due to the alleged use of an automated gate system at the Port of Mobile, Alabama by APM Terminals, a subsidiary of Maersk. The union claims this system cuts out dockworker jobs and violates their existing agreement. "There's no point in negotiating a new deal if one of the biggest companies is breaking the current one to eliminate our jobs with automation," said the union's lead negotiator. The ILA is demanding the automation issue be resolved before talks resume on a new master contract set to expire in September. Maersk, on the other hand, denies violating the contract and expressed disappointment that details of the negotiation became public. They say they are committed to finding a solution that benefits both sides. The disruption in talks raises the possibility of a strike, as the union has threatened to walk off the job if a new contract isn't reached by the expiration date. The ILA has historically been resistant to automation efforts, and the current contract restricts the development of fully automated terminals. While the exact nature of the technology in question remains unclear, the union alleges APM Terminals did not follow proper procedures for implementing such changes. Maersk has invested in automation startups in the past, suggesting a continued interest in this area. The company maintains they are complying with the contract and committed to a safe work environment for all employees.
Source: JOC |
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Charleston Port Delay Notice 5/31/2024
There have been recent developments at the Port of Charleston that may impact your upcoming shipments. We've been made aware of several challenges currently affecting the port's ability to process vessels efficiently, potentially leading to delays in vessel schedules over the coming weeks. These factors include:
- An ongoing construction project limiting the availability of large-capacity vessel berths.
- A recent hazardous material spill that temporarily shut down another berth.
- A system outage that impacted port operations for over 24 hours (all critical systems have since been restored).
Mallory Alexander is closely monitoring the situation and is committed to providing you with the most up-to-date information. We'll share any specific actions taken by ONE and the Port of Charleston to address these challenges as soon as they become available.
In the meantime, if you have any questions about your specific shipments or require additional information, please don't hesitate to reach out to your dedicated Mallory Alexander representative.
Source: ONE |
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BC Port Foreman Contract Talks Stall as Government Delays Rail Strike Threat 5/14/2024
Canada's West Coast ports, still recovering from last year's longshore worker strike, face another potential disruption as contract negotiations between the British Columbia Maritime Employers Association (BCMEA) and Local 514 of the International Longshore and Warehouse Union (ILWU) have reached an impasse.
The BCMEA filed a complaint with the Canadian Industrial Relations Board, accusing the foremen's union of intentionally dragging out negotiations for a new four-year contract covering 730 workers. This comes just a day after the federal government intervened, asking the labor board to assess the potential impact of a rail strike on public health and safety, effectively delaying it.
The BCMEA claims they made a competitive wage offer, mirroring the 19.2% increase agreed upon with dockworkers last year. However, with the mandatory 21-day cooling-off period after mediated talks concluded without a deal, the union has the option to provide a 72-hour strike notice. While no such notice has been issued yet, negotiations are reportedly still ongoing.
The BCMEA blames the union's "intransigence" for the stalled talks, highlighting the potential risk to Canada's already strained supply chain and global trade reputation. This situation adds another layer of complexity to the transportation sector's labor landscape. With a potential railroad strike planned for May 22nd and ongoing contract negotiations at the Port of Montreal, Canada could face significant disruptions across its key trade routes.
Additional Points:
- The investigation launched by Labor Minister O'Regan last year into the "structural issues" behind West Coast longshore strikes, including the separate bargaining unit for foremen, is expected to be completed in March 2025.
- A potential walkout by foremen could significantly impact container operations at Vancouver and Prince Rupert due to their supervisory roles.
- It remains unclear whether longshore workers would join a foremen's strike, but the situation raises concerns about further disruptions to cargo movement.
Source: JOC |
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Bad Weather Causing Delays, Congestion At Major Asian Load Ports 4/30/2024
Major shipping lines are reporting delays of up to a week for vessels arriving at key Asian ports. Thick fog in China, particularly around Shanghai and Ningbo, is causing significant disruptions. Other parts of Asia, like Malaysia and Singapore, are experiencing issues with heavy rain and low visibility. These conditions are preventing ships from docking, and as more vessels arrive, congestion is worsening. Yard congestion in Singapore is adding to the delays there. These delays add to existing problems for shippers, who are already facing extended voyages due to rerouting around the خطر (Arabic for "danger") in the Red Sea. Some of the most impacted terminals include the Shanghai East Container Terminal, where delays can reach seven days, according to Maersk. Other Shanghai terminals and ports in eastern and northern China are experiencing delays of up to three days. Similar delays are being reported at Port Klang and Singapore. Shipping lines are confirming disruptions to trans-Pacific and intra-Asia shipping schedules due to the bad weather and port congestion. An example is the Seaspan Bellweather, which is several days behind schedule due to congested berths at all its port calls in Asia.
Source: JOC |
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General Average Declared Over Dali's Key Bridge Collision 4/17/2024
In response to the recent incident of the M/S Dali that collided with the Francis Scott Key Bridge in Baltimore, MD, the vessel owner Grace Ocean has declared General Average (“GA”). General Average is a maritime legal term whereby all parties with a stake in the voyage; including the ship owner, cargo owners, and potentially shippers, will share the financial burden of salvaging the vessel and its cargo. Key points regarding General Average: -Unlike typical insurance claims where the insurer shoulders the cost, general average spreads the financial responsibility across all stakeholders. -Determining how much each party owes hinges on the value of their stake in the voyage. For cargo owners, this is the value of their goods on board. It can get complicated since the exact contents of some containers might be unknown. -Shippers without proper cargo insurance could be facing a significant bill, as general average contributions can be substantial. The estimated salvage cost for the M/S Dali, ranging from $2 billion to $4 billion, highlights the potential financial impact. -Figuring out each party's share can be a lengthy process, taking up to five years in some cases. Insurers meticulously calculate the value of all cargo to ensure fair contribution. General Average law is governed by the York-Antwerp Rules 2016. Click here to view the full legal doctrine governing GA (https://comitemaritime.org/wp-content/uploads/2018/06/2016-York-Antwerp-Rules-with-Rule-XVII-correction.pdf) In an update on the status of this incident, officials reported significant progress in removing the M/V Dali cargo ship as of April 11th. With roughly 38 containers successfully lifted off the vessel, they've cleared a crucial hurdle towards safely relocating the Dali and fully reopening the Fort McHenry Channel. This container removal helps lighten the ship's weight, a necessary step for refloating it. The U.S. Army Corps of Engineers is aiming for a full channel reopening by the end of May, restoring the port's usual capacity. Their plan prioritizes clearing the channel first, which involves removing the bridge section obstructing the ship's bow and clearing debris from both the vessel and the waterway itself. Once the channel is clear, they'll refloat the Dali and move it away from its grounded position. The final step involves dismantling and removing the collapsed bridge, along with any remaining debris scattered throughout the channel.
Source: World Cargo News |
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FMC Building Case For New Container-Data Sharing Rules 4/17/2024
The Federal Maritime Commission (FMC) is seeking more information from shippers and shipping lines about how container shipment data is shared. This information will be used to create a new regulation that could require companies to share more data.
The FMC believes that sharing more data will improve the efficiency of the supply chain. This could lead to fewer delays, lower fees, and more predictable arrival times for cargo.
The new regulation is still being developed, and the FMC is asking for comments from shippers and shipping lines to help them finalize the details. We are pleased to advise that by virtue of having a seat on the National Shipper Advisory Committee, Mallory Alexander is participating in the development of the new Regulations:
Some key points of this new regulation could include:
- It would require companies to share more data about container shipments, such as pickup and return times.
- Participating parties could include BCO’s, Shipping Line’s, Marine Terminals operators, Rail depots, Customs Brokers, Freight Forwarders, and even the Trucking community.
- One of the goals is to improve the accuracy and timeliness of estimated arrival times at container ports.
- Another goal is to reduce the volume of erroneously billed demurrage or detention charges associated with poor container availability information
- The regulation would apply to all intermodal cargo shipments in the U.S.
We shall provide routine progress reports regarding the new Regulation as it moves through the development process.
Source: Freight Waves |
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Panama Canal's Future Is Dark And Stormy, Much To Shippers Relief 4/17/2024
The Panama Canal Authority (ACP) is cautiously optimistic about the future after a difficult six months. Drought caused by El Niño led to historically low water levels in Gatun Lake, the canal's main source of water. This bottlenecked traffic, with some categories like container ships dropping to 60% of normal levels. However, recent rainfall has provided some relief and the ACP expects to gradually increase the number of ships passing through in the coming weeks. They are aiming for a full return to normal capacity by 2025, although weather remains a key concern.
The situation was further complicated by the fact that Gatun Lake also supplies drinking water for millions of Panamanians. This dual function of the lake became a major issue leading up to the country's presidential election. Candidates faced pressure to address both water needs and the canal's economic importance.
The ACP proposed a solution: a new reservoir and tunnel project to increase water supply. However, this plan has been criticized by farmers who fear land loss due to flooding.
There's a glimmer of hope on the horizon though. Forecasts predict an end to El Niño and a potential shift to La Niña, which could bring more rain. This would be a major boost for the canal's recovery and global trade. The Panama Canal is crucial for the flow of goods, especially for US ports like Savannah which rely heavily on traffic from Asia. Delays caused by the canal's issues have significantly impacted wait times at these ports. A full recovery of the canal would be a welcome relief for international trade.
Source: Freight Waves |
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Baltimore Preps For Limited Port Reopening By End Of April 4/8/2024
The Baltimore port is aiming to be partially operational within a month, with full capacity expected by the end of May. This is a quicker than expected recovery after a ship accident blocked the main channel. Other East Coast ports have absorbed Baltimore's cargo without major issues, but some shipping companies are adding fees for these reroutes.
The US Army Corps of Engineers plans to clear the debris by May, allowing full access to the port again. A temporary, shallower channel will open by the end of April for limited cargo movement. This will allow some container barges and roll-on/roll-off ships to operate again.
While other ports have capacity for Baltimore's cargo, some shippers are being charged extra fees for the rerouting. The Federal Maritime Commission is reminding carriers to keep these fees reasonable.
Mallory has identified all containers that have been either directly affected by the DALI collision or where their arrival port or schedule will most likely be affected. Our customer service teams will continue reaching out to our clients to alert them of any changes in Port of Loading / Port of Discharge and aid in developing a contingency plan for container pickup and delivery.
We will be monitoring this situation closely as more information and updates from local authorities and our Ocean Carrier partners is made available.
Source:JOC |
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FMC Fears Glut Of Container Fee Disputes After Baltimore Bridge Collapse 4/5/2024
The closure of the Port of Baltimore due to the Francis Scott Key Bridge collapse is causing headaches for shippers and regulators. Shipping giant MSC is rerouting containers originally bound for Baltimore to other East Coast ports, but this move could lead to disagreements over fees. The issue is that MSC is ending its delivery contracts at the new ports, instead of trucking the containers inland as originally planned. This could result in extra charges for shippers who were expecting their cargo to be delivered further inland. The Federal Maritime Commission (FMC) is anticipating a surge of disputes related to container storage and late fees (demurrage and detention) due to these disruptions. The FMC recently implemented new regulations on these fees, which might help settle some arguments. However, a bigger solution could be on the horizon. The FMC is developing a program called the Maritime Transportation Data Initiative (MTDI) that would provide real-time tracking information for containers and improve communication throughout the supply chain. This could prevent similar problems in the future by giving shippers a clearer picture of their cargo's location and estimated arrival time. While some ocean carriers are hesitant about mandatory data sharing, the FMC is pushing forward with the MTDI in hopes of creating a more transparent and efficient shipping system.
Source: Freightwaves |
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FMC Unit Seeks $63 Million Fine Against MSC For Alleged Shipping Law Violations 4/5/2024
The US shipping regulator is proposing a hefty fine for a major ocean carrier, MSC. The Federal Maritime Commission (FMC) wants MSC to pay $63 million for allegedly violating US shipping laws in a number of ways. The main complaint is that MSC overcharged customers for fees related to refrigerated containers. Specifically, the FMC says MSC charged higher rates for refrigerated containers even when they were being used as regular dry containers. This allegedly happened thousands of times in 2021, even after MSC said it had fixed the problem. The FMC also says MSC failed to properly update its rates and incorrectly billed some logistics companies. MSC disagrees with the allegations and says it will fight the fine. The company claims it addressed the container fee issue and refunded some customers. They also argue that some of the accusations are outside the legal timeframe for penalties. The FMC disagrees, saying MSC's continued efforts to collect the fees mean the violations are ongoing. The final decision on the fine will be made by a judge who will consider both sides' arguments.
Source: JOC |
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Baltimore Bridge Collapse Sends Vehicles Tumbling Into Water
3/26/2024
In the early hours of Tuesday, a 948-foot container ship collided with the Francis Scott Key Bridge in Baltimore, causing a section to collapse into the Patapsco River. Rescue efforts are ongoing, with two survivors pulled from the water and several individuals still missing. Maryland Governor Wes Moore stated it was likely an accident, with no indication of terrorism. The bridge collapse occurred during repairs, and initial investigations suggest no structural issues with the bridge. The closure of the Port of Baltimore, a vital car shipping hub, could disrupt supply chains and increase costs. The incident, a rare event, prompts concerns about bridge safety and port operations. The vessel involved, named Dali, is managed by Synergy Marine Corp, with no reported injuries among its crew. Baltimore Mayor Brandon Scott described the scene as resembling an action movie. The National Transportation Safety Board is investigating, and a state of emergency has been declared to expedite federal aid. The impact on other vessels and port operations remains unclear. The Francis Scott Key Bridge, built in 1977, spans 1.6 miles and is a key transportation route in the region.
In response, Mallory has identified all containers that have been either directly affected by the DALI collision or where their arrival port or schedule will most likely be affected. Our customer service teams will be reaching out to our clients to alert them of any changes in Port of Loading / Port of Discharge and aid in developing a contingency plan for container pickup and delivery.
We will be monitoring this situation closely as more information and updates from local authorities and our Ocean Carrier partners is made available.
Source: Reuters |
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25% More Containers out of LA/LB Ports Possible: ITS Logistics 2/29/2024
Consumers are buying less, but that doesn't mean there won't be challenges for shipping companies. Right now, shippers are choosing longer routes to avoid storage costs, but this strategy might not work in the long run.
There are two main reasons for this:
- Contract season is coming up. Paying extra for slower routes might not make sense financially, especially during peak season.
- There is a potential labor strike on the East Coast. Shippers are hesitant to commit to year-long contracts with this uncertainty.
These concerns will likely be discussed during contract negotiations between shippers and ocean carriers. Shippers will be looking for justification for the higher costs associated with East Coast routes. Logistics companies are preparing for increased activity on the West Coast. They are anticipating a rise in demand for storage space and transportation services due to concerns about the East Coast labor situation and shipping disruptions in the Red Sea. In a year with lower overall cargo volume, logistics companies need to focus on providing excellent service and reliable technology. Clients are looking for certainty and dependability, not empty promises of disruption. Next week, during contract season, logistics companies will be trying to secure the best deals and remain flexible in a challenging environment. Their ability to provide certainty in an uncertain time will be crucial for their success.
Source: FreightWaves |
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FMC Rules For Truckers In Chassis Dispute With Ocean Carriers 2/15/2024
The US Federal Maritime Commission (FMC) has ruled against ocean carriers mandating specific chassis for cargo owners and truckers in merchant haulage business. This ruling stems from a decision favoring the American Trucking Associations (ATA) made by a hearing examiner in 2023, which the Ocean Carriers Equipment Management Association (OCEMA) appealed. The issue revolves around the distinction between carrier haulage, where the ocean carrier handles door-to-door transportation, and merchant haulage, where the cargo owner manages inland transport. The FMC found ocean carriers in violation of the US Shipping Act of 1984 by mandating specific intermodal equipment providers (IEPs) under merchant haulage, leading to increased chassis rental rates. The ruling aims to promote competition and ensure a smoother cargo flow. Although limited to specific locations initially, the ruling may have broader implications for inland transportation. The decision clarifies the FMC's jurisdiction beyond ports, potentially extending its authority to issues like detention and demurrage in rail terminals.
Source: JOC |
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FMC asked to slow fast tracking of Red Sea-linked freight surcharges 2/9/2024
The Federal Maritime Commission (FMC) recently granted emergency waivers to container lines, allowing them to impose surcharges without the usual 30-day notice. These surcharges, linked to increased operational costs due to ships avoiding the Suez Canal amid Red Sea attacks by Houthi militants, vary widely, from $150 to $2,700 per container. Shippers worry that these waivers let carriers recoup more than actual costs, potentially burdening retailers with millions in extra expenses. While FMC Chairman Daniel Maffei acknowledges carriers' need to cover higher costs, he emphasizes the importance of justifiable surcharges with clear purposes and end dates. Industry voices argue that the swift approval of these waivers lacks proper review, leading to unfair surcharges that could disrupt trade flows and burden smaller shippers. Additionally, concerns are raised about potential port congestion if disruptions persist. While some appreciate carriers' efforts to maintain cargo flow, transparency and fairness in surcharges remain key concerns for the industry.
Source: JOC |
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Port Of New Orleans Gets $226M For International Container Terminal 1/24/2024
The federal government has provided a significant boost to efforts aimed at constructing an international container terminal at the Port of New Orleans, capable of accommodating ultralarge container vessels. The port has been granted an additional $226.2 million to support the $1.8 billion Louisiana International Terminal (LIT) project. The objective is to establish the port as the primary international container gateway in the Gulf of Mexico. Brandy Christian, the port's resident and CEO, expressed gratitude for the landmark grant, highlighting its global recognition and its status as the largest federal investment in a new container terminal by the U.S. Department of Transportation. Scheduled for completion around 2028, the Louisiana International Terminal is designed to handle 2 million twenty-foot equivalent units annually and accommodate ultralarge container vessels transiting the Panama Canal. The project is a collaboration between the Port of New Orleans, Ports America based in New Jersey, and Terminal Investment Ltd., the investment arm of Switzerland-based Mediterranean Shipping Co. The partnership has already committed $800 million to the LIT project.
In addition to the recent federal grant, the Port of New Orleans received $73.77 million to advance the initial construction phase. Louisiana lawmakers have contributed nearly $30 million to cover early development costs for the container terminal. It is anticipated that the LIT Project will create 18,000 jobs in Louisiana and generate over $1 billion in total new state and local tax revenue by 2050, according to state officials.
U.S. Rep. Troy Carter Sr. highlighted that this investment would leverage the Port of New Orleans' extensive connectivity to interstate systems, railroads, waterways, and hubs. The Louisiana International Terminal is one of two major container facility projects underway along the lower Mississippi.
In a separate development, the Plaquemines Port Harbor and Terminal District recently announced a $500 million preliminary deal with APM Terminals to construct their container facility approximately 20 miles south of the Port of New Orleans. The initial construction phase will involve a 200-acre development, including a container terminal with on-dock railing and a berth that is capable of handling ships carrying 14,000 TEUs. Charles D. Tillotson, executive director of the Plaquemines Port, emphasized that this project would solidify Plaquemines as 'The Louisiana Gateway Port' due to its overwhelming geographic and strategic advantages.
Source: FreightWaves |
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