- The first stage of construction for Los Angeles’ Maritime Support Facility (MSF) begins.
- Labor talks at the Port of Montreal lead shippers to ask for government intervention.
- The US Department of Transportation’s data-sharing and cargo visibility program builds momentum.
- Federal Maritime Commission asked by congressmen to create a national advisory committee for regulators, port authorities, and terminal operators.
- The possibility of East Coast port strikes has shippers weighing up rerouting costs.
Port of Los Angeles to Build 80-acre Container Storage and Chassis Maintenance Site
On December 7, the Port of Los Angeles started the environmental review process for what will become an 80-acre near-dock site that will support the port’s six container terminals. When complete, the port’s terminals will be able to use the Terminal Island Maritime Support Facility (MSF) for additional container storage and chassis maintenance and repair in a bid to improve fluidity after the severe port congestion and supply chain bottlenecks seen in 2021 and 2022.
The Port of Los Angeles plans on leasing the site to a private operator and will hold a virtual public meeting on January 9 to receive comments on the project.
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Canadian Shippers Urge for Government Intervention in Montreal Port Labor Talks
Contract negotiations between longshore workers at the Port of Montreal and their employers have hit a standstill, and some shippers are anxious to avoid potential strikes and port delays. The Port of Montreal’s container volume for the first 11 months of 2023 totaled 12% lower than for the same period in 2022, and further drops could hurt local supply chain businesses.
The workers’ union Local 375 of the Canadian Union of Public Employees (CUPE) representing the port’s longshore workers, along with multiple shippers, have been pushing the Canadian government to be more involved in avoiding further disruptions. Earlier in the year, workers at the Port of Vancouver went on strike for 13 days before an agreement was reached in contract talks, affecting the flow of C$10.7 billion in commerce and causing significant cargo backlogs.
Even though the deadline has passed and the period of federal oversight has ended, Montreal Port employers still have not submitted their wage offers. Longshore workers must adhere to a cooling-off period and will be legally allowed to strike as soon as January 4 should nothing change.
US DOT FLOW Cargo Visibility Program Is Building Momentum
The Freight Logistics Optimization Works (FLOW) program launched in March 2022 as a Department of Transportation-backed approach to improve cargo flow. FLOW works by sharing data such as port equipment and labor availability, cargo volumes in transit, and more with shippers and supply chain investors.
Last year, there were just 18 members at the time of the program’s launch. Now, that number has grown to 55, including some of the largest retail brands like Home Depot, Target, and Walmart. The end of November also saw the release of the FLOW API (Application Programming Interface), which allows members to upload their own supply chain data into the data-sharing program. Since releasing the API, an additional 20 members have begun the onboarding process, signifying the important role that data-sharing programs will soon play throughout the country’s supply chains.
FMC Receives Push from Congressmen to Establish a National Regulator Advisory Committee
Two US congressmen recently asked the Federal Maritime Commission (FMC) to create a national committee that can advise regulators on port-related matters at the national level. The FMC has been working with the National Shipping Advisory Committee (NSAC) since 2021, a similar committee allowing shippers to dialogue with and make recommendations to the FMC.
A similar committee for regulators, port authorities, and terminal operators could level the playing field by giving regulators and operators a greater voice regarding maritime policy and dispute resolution.
Shippers Consider Rerouting Cargo to Avoid Potential East Coast Port Strikes
The International Longshoremen’s Association (ILA) may go on strike along the East and Gulf Coasts if negotiations with carriers do not reach an agreement by September 30, 2024, when the current collective bargaining agreement ends. While the last East and Gulf Coast workers’ strikes occurred in 1977, the West Coast port disruptions from lengthy contract negotiations over 2022 and this year mean shippers are already making contingency plans.
In particular, shippers on the Asia-North America trade lane are asking carriers and NVOs for additional backup plans as they negotiate contracts for the next cycle. Industry leaders are generally in mixed minds regarding what will likely happen. One school of thought is that carriers might weather a strike, which would also increase cargo charges, to maintain a strong negotiating position.
However, The more popular prediction is that carriers will do what they must to keep freight moving, even if it means funding higher wages and bonuses for port employees. While still unclear, this may be a more likely scenario because the end of the current collective bargaining agreement sits in the middle of the 2024 presidential election campaign, which could threaten carrier antitrust immunity should legislators step in.