Revival of Maritime Operations Amidst Labour Dispute in British Columbia
On July 13, 2023, the B.C. Maritime Employers Association (BCMEA) reported a crucial breakthrough in their negotiations with the International Longshore and Warehouse Union (ILWU) Canada. Both parties arrived at a provisional agreement that covers the next four years, marking a significant step towards ending the ongoing labor disruption. The accord is currently pending approval from both entities.
With this development, maritime operations are set to recommence promptly, potentially enabling a quicker recovery for the economy and businesses affected by the disruption. The deal also signals a renewed commitment to ensuring the stability and resilience of Canada’s chief gateway for international trade. The role of the Federal Mediation and Conciliation Service officers and the Minister of Labour in facilitating this agreement is noteworthy, specifically the relentless efforts of the federal mediator and his team.
Canadian Port Strikes Reverberate Through Rail Trade
According to the Association of American Railroads, the strike of dockworkers in Western Canada, which started on July 1 (and seems close to its end with the July 13 tentative agreement), significantly hampered freight rail cargo from Canada to the U.S. The strike resulted in a drop of over 46% in the weekly trade data, affecting various sectors such as forest products, chemicals, oil, and non-metallic minerals. The U.S., which receives about 20% of its trade through the impacted Canadian ports, has grappled with potential supply chain disruptions as vessels divert their cargo routes.
The fallout of the strike also spurred worries of possible congestion at U.S. ports, as vessels originally bound for Vancouver and Prince Rupert are redirected to American ports. The redirected trade volume raises concerns about additional fees and delays in the supply chain. The strikes have led to a potential delay of 36 to 60 days for every day of the strike, as the Railway Association of Canada predicted.
Source: https://www.cnbc.com/2023/07/12/rail-trade-from-canada-plummets-due-to-west-coast-ports-strike.html
Mexico Surpasses China in U.S. Import Game: A Shift in Global Supply Chains
In the current year’s second quarter, a significant alteration in global supply chains occurred. Mexico surpassed China as the principal exporter to the U.S., signifying a major change in logistics infrastructure and workforce requirements. A decline in U.S. imports from Asia was recorded in Q1, according to the Supply Chain Stability Index released by the Association for Supply Chain Management and KPMG. This decrease was substantial, with ocean freight down by 27% YoY and airfreight plummeting by 50%.
This trend, if sustained, could lessen the demand for port workers and labor involved in intermodal transfers and customs clearance while demanding more staff at land ports and for road transfers. This can result in a heightened need for truckers, aggravating existing shortages. These structural shifts would take years to manifest fully, but supply chain planners would do well to consider them. Though supply chain stability has shown marginal improvement, disruptions remain significant, making just-in-case strategies vital. Notably, many Asian suppliers are also increasingly setting up operations in Mexico. This near-shoring trend emphasizes the importance of holistic supply chain adjustments, including changes in return logistics arrangements.
Source: https://theloadstar.com/shifting-trade-patterns-see-mexico-become-biggest-exporter-to-us/
Uptick in U.S. Container Imports Anticipated, Supply Chain Struggles Persist
In the coming months, a rise in U.S. containerized imports is predicted, as per a prominent retail group’s report. The expectation is for a peak in August, and in November, we might see the first YoY increase since June of the previous year. Nevertheless, potential difficulties linger on the horizon. Western Canadian ports and disputes involving major logistics organizations may still cause disruptions in U.S. supply chains over the summer if the current tentative labor agreement is not confirmed.
These ongoing challenges could have implications for both U.S. and international cargo movements. Strikes at certain ports in Western Canada might not massively impact the U.S. as a whole but could affect specific retailers utilizing these routes. As the winter holiday season and the period of peak shipping demand draws nearer, it becomes more crucial for all involved parties to work towards an agreement and avoid activities that might hinder the smooth operation of supply chains.
Impending Logistics Strike Looms Over Package Delivery Sector
Stalled contract negotiations between a major package delivery service and its workers’ union have led to increased concerns about a potential strike in early August. This could have extensive ramifications for the already competitive package delivery market. A nationwide walkout would involve approximately 340,000 workers, marking the largest strike against a single employer in U.S. history and the first for this service since 1997. The event of a strike could disrupt package deliveries across numerous industries and consumers nationwide.
Source: https://www.npr.org/2023/07/12/1186984345/ups-strike-shipping-package-delivery
Port Everglades Achieves Remarkable Rise in Operational Efficiency
In the past year, Port Everglades has made a significant leap in its global ranking for operational efficiency, thanks to important investments in cargo handling infrastructure and the efforts of its terminal operators and workforce. The port moved from 116th to 89th place worldwide in a single year, based on The World Bank’s index that assesses operational performance in 348 global container ports. With Port Everglades’ improved rank and performance, it has strengthened its position in North America, securing 5th place and becoming Florida’s second most efficient port.
Source: https://www.ajot.com/news/port-everglades-reaches-new-operational-performance-heights
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