This week:
- Canadian government’s mediation service steps in to help resolve port lockouts
- US retailers ramp up imports ahead of potential second ILA strike and proposed Trump tariffs
- CSX debuts double-stack rail service at Port of Baltimore, service to expand by end of 2025
- Large carrier truckload capacity, rates stabilize as industry observers note early signs of recovery
BC, Montreal Ports Turn to Canadian Government Amid Labor Gridlock
The British Columbia Maritime Employers Association (BCMEA) was expected to hold talks this past Saturday with the International Longshore and Warehouse Union Local 514 to reopen critical terminals in Vancouver and Prince Rupert. However, a lockout initiated by BCMEA against longshore foremen represented by Local 514, following a strike vote by the union, has disrupted the Canadian supply chain.
Representatives of the Canadian government’s Federal Mediation and Conciliation Service (FMCS) were also expected to attend the meeting. Both parties to the dispute sought the FMCS’s assistance amid the intense labor gridlock that has hindered the Canadian supply chain.
The BCMEA has offered a 19.2% wage increase over four years, but Local 514 rejected it and sent the maritime employers a notice of strike. In response, the BCMEA locked out Local 514 foremen from the ports. The foremen have been without a formal contract since March 2023.
Meanwhile, the Maritime Employers Association (MEA) has issued a final wage offer to the Canadian Union of Public Employees Local 375. Talks between the MEA and Local 375 have stalled, and a formal rejection could lead to a near-total shutdown of container operations at the Port of Montreal.
A statement issued by the MEA last Friday said the Montreal port was “practically closed,” as it was limiting activity to essential services unrelated to longshoring. The MEA offered Local 375 workers a raise of 20% over more than six years while calling on the Canadian federal government to intervene in negotiations.
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US Imports Skyrocket Ahead of Potential ILA Strike and Proposed Tariffs
Between now and the end of the year, US retailers plan to import 350,000 more TEUs than they expected just one month ago. According to the latest monthly Global Port Tracker (GPT) report, the rush to import merchandise into the country is a response to two significant developments.
First, there is no master agreement between US East and Gulf Coast dockworkers, and the tentative contract extension expires on January 15, 2025. Retailers fear another strike by the International Longshoremen’s Association (ILA), like last month’s brief stoppage that disrupted the global supply chain.
The other factor is last week’s re-election of former US President Donald Trump to a second term, which will also begin in January. President-elect Trump campaigned on an economic platform of massive tariffs, which would far exceed those from his first term. Both developments have led retailers to frontload as much merchandise as possible before the new year.
CSX Boosts Port of Baltimore Capacity With Double-Stack Rail Service
CSX locomotives began hauling double-stacked container trains at the Port of Baltimore on October 28, a long-awaited development that boosts the port’s cargo capacity and efficiency with service to the north.
The debut of the double-stack rail service is a significant milestone in Baltimore’s rail service projects. Next is the completion of the Howard Street Tunnel expansion by the end of 2025, which will unlock the full potential of double-stacking by providing a more direct route to the Midwest. The tunnel expansion is expected to increase the port’s annual capacity by 160,000 TEUs.
The Howard Street Tunnel project has faced numerous delays, but opening the northern route enables the port to demonstrate the long-term viability of double-stacking.
Truckload Capacity and Rates Stabilize as Market Shows Signs of Recovery
The long-running decline in large carrier truckload capacity appears to be slowing down, and rates are stabilizing as industry stakeholders observe early signs of recovery. The Journal of Commerce’s Truckload Capacity Index (TCI) saw a minimal drop of 0.3% in Q3 2004, suggesting large carriers have found the capacity sweet spot after two years of decline.
These factors mark a nascent recovery in the US truckload market despite ongoing weakness in demand. Other key indicators, like dry van spot rates and contract rates, are also stabilizing or even rising slightly.
Although supply chain analysts feel the positivity in the truckload market, they caution that freight demand remains relatively weak, and it will be crucial to monitor other factors going into 2025. Among the unknowns for next year are the price of fuel, ongoing driver shortages, and uncertainty about economic trends as the US government shifts leadership in January.
US Ports Receive EPA Funding for Clean Energy Upgrades
US ports are prepared for major upgrades to container handling equipment following the federal government’s announcement of $2.8 billion in Environmental Protection Agency (EPA) grants. The funds will be used to replace diesel-powered yard equipment with electric equivalents. The upgrade projects will allow ports near residential areas to increase cargo volumes while reducing carbon emissions.
On October 29, the EPA announced that its Clean Ports Program, funded by the Biden administration’s Inflation Reduction Act, will fund 21 projects across multiple US ports.
The Port of New York and New Jersey will receive a substantial portion of the funding, totaling $344 million. The ports of Los Angeles and Virginia are also set to receive significant funding for their clean energy initiatives.
