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West Coast longshore contract talks suspended until June 1
Coastwide contract talks between the ILWU and West Coast waterfront employers represented by the PMA have been suspended until June 1st. Individual committee meetings between the two sides on matters such as worker safety are continuing.
Last Friday, the ILWU reportedly requested a temporary break in the talks that began on May 10th. The union asked to suspend the negotiations from May 20th to June 1st.
It is unclear why the ILWU asked for the break. One source said little progress has been made since the talks began and that the ILWU appears to be in no rush to secure a new contract prior to the July 1st expiration of the current deal.
Port automation debate intensifying amid WC labor talks
The debate over automation at U.S. ports is heating up again. Whether West Coast dockworkers will attempt to reverse course on allowing some automation during the contract talks with employers is still unclear. However, recent developments suggest that the highly contentious issue is coloring the negotiations.
Before the sudden suspension in talks, employers planted a flag on the issue by releasing a PMA-commissioned study that claimed automation at the ports of LA and LB has contributed to an increase in dockworker jobs since 2015.
According to the study, the use of automated cargo-handling equipment has allowed the Long Beach Container Terminal and TraPac terminal in LA to handle more containers on their existing footprint by densifying cargo-handling operations and increasing terminal efficiency.
The ILWU has firmly rejected those findings, claiming that automation at LBCT and TraPac has resulted in the loss of hundreds of cargo-handling jobs.
U.S. retailers struggle to ‘right-size’ inventories
Retailers beset by current and potential supply chain disruptions are pulling more inventory into the U.S. earlier than usual. They are racing to close gaps that led to stockouts last year and in some cases building an inventory glut. That implies retail inventories will continue to rise, despite inflation, fueling greater transportation demand into this summer.
The U.S retail inventory-to-sales ratio remains historically low, but consumers are returning to traditional purchasing patterns. Consumers are shifting more of their dollars to goods that support social activities.
There is still a lot of inventory inbound and in motion across the supply chain, and more is expected once China fully lifts Covid lockdowns. The threat of additional supply chain disruption on the West Coast is goading shippers to move product sooner rather than later.
MSC & Hapag Lloyd to skip some U.S. & Canada calls in June
Ocean carriers are skipping some calls to Canada and the U.S. East Coast and shifting arrival dates in June as North American port congestion and delays force liners to rework schedules. MSC said that its Eagle service from Asia will not call Canada’s Prince Rupert and Vancouver ports during the second and fourth week of June.
Along with those blank sailings, MSC will have blank sailings on three Asia services to the U.S. East Coast for one week each during June. Those services include the America/TP17, Empire/TP12, and Elephant/TP11. They said the changes were due to “the ongoing challenging market situation generating congestion and schedule delays across the supply chain.”
The decision to omit Canada calls comes as the marine terminals at Prince Rupert and Vancouver are now full. Both ports are hitting their capacity limits as shippers look for alternative import gateways should ILWU contract talks hit a snag.
Shanghai April container volumes drop, but other China ports surge
Container volumes at eight of China’s top ports surged 25% to 16.8 million TEU in April from 13.4 million TEU in March. Only Shanghai saw a month-on-month decline in April, the first full month of a city-wide lockdown. For the year-to-date, Shanghai posted a 1.9% rise in volumes to 15.4 million TEU between January to April compared with a year earlier.
Month-on-month volumes at Shanghai fell 19% in April to 3.1 million TEU from 3.8 million TEU in March. Other ports such as Shenzhen and Ningbo saw substantial double-digit month-on-month percentage increases.
The Shanghai lockdown continued in May, although carriers, including Maersk and CMA CGM, said logistics and supply chains are gradually improving. Maersk said about 25% of warehouses have resumed operations.
About O’Neill Logistics
O’Neill Logistics is a leading 3PL with operations in Rancho Cucamonga, CA; Savannah, GA; and Newark/Monroe, NJ. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.
O’Neill Logistics has over 2 million square feet of state-of-the-art facilities. Additionally, we offer dray services to support the warehouses and provide distribution to retailers and wholesalers. Our reliable 3PL platform combines sophisticated technology with robust, flexible processing designs and speed-to-market gateway models.
Lastly, we aim to simplify your supply chain. We deliver exceptional service and can optimize your operational performance. Therefore, we aim to build, protect and foster strong business partnerships.
