Typhoon Talim Disrupts Port Operations in Hong Kong and Mainland China
As Typhoon Talim made landfall on July 17, numerous container terminals in Hong Kong, Guangdong Province, and Hainan Island in China temporarily suspended their operations. The weather authorities in Hong Kong upgraded Typhoon Talim, the first to hit China this year, to a T8, signifying the highest typhoon rating. Operations began to slow down on July 16, completely halting by 10 pm local time. Simultaneously, the China Meteorological Administration issued an orange alert indicating further escalation of the typhoon as it shifted from Hong Kong to the southern coast.
This severe weather event brings potential impacts on global trade as numerous key ports cease operations temporarily. Firms operating in the region, such as Shanghai Pan-Asia and Zhonggu Logistics, have issued advisories warning customers to expect delays due to the typhoon. More so, it was stressed that all significant terminals in South China would halt all box acceptances at the gates, leading to possible port congestion and shipping schedule delays.
Second Tentative Resolution in British Columbia Port Strike Emerges
On July 20, 2023, a second tentative agreement was struck in the ongoing British Columbia port strike, as reported by the local longshore union. Following a work stoppage from July 1 to July 13, which involved more than 7,400 dockworkers and caused significant disruption to port operations, this new proposal has emerged. The agreement will be put to a vote among the union’s contract caucus on July 21, and if it passes this stage, union members will have the opportunity to ratify it.
The prolonged strike and its consequences have seriously impacted the circulation of goods, resulting in billions of dollars in losses. The issues at the heart of this dispute include port automation, external contracting, and the increasing cost of living. A ratification of the new agreement could significantly influence port operations and the wider shipping industry, potentially paving the way for the restoration of normal operations. Despite this, even if the deal is ratified, the economy could experience the aftereffects of the disruption for some time due to the delay in fully resuming regular operations.
Volume Dips at Antwerp-Bruges Port amid Weak Demand
In the first half of 2023, subdued container demand led to a 5.2% drop in throughput at the Antwerp-Bruges Port, amounting to 6.4 million TEUs.
Despite the decline, there were positive signs. The number of refrigerated containers increased by more than 10%, and the overall volume decrease eased in the second quarter. Operational issues were resolved, leading to better performance.
Potential Workforce Strikes and Insolvency Threaten U.S. Freight Industry
In a recent development, freight forwarders in the U.S. have been warned about the impending threat of potential strike action by workers at a major delivery company and the possible insolvency of a major trucking firm. Union negotiations for a contract representing 340,000 workers broke down, with the current agreement expiring on July 31. With the unionized workers authorizing strike action and refusing to work beyond the contract’s expiration, the industry could be on the verge of significant disruption. The potential strike and bankruptcy could have wide-ranging effects, including shortages, price hikes, and shipment delays.
Trade Talks between E.U. and Mercosur: Progress Amid Sticking Points
The European Union (E.U.) and Mercosur, a South American trading bloc currently having Brazil, Argentina, Uruguay, and Paraguay as active members, are working towards a comprehensive trade deal. The E.U.’s leadership has set a deadline for this pact to be finalized by the end of the year. However, the deal’s completion is stalled by disputes over environmental and labor conditions.
This proposed pact has significant implications for businesses in these regions. Certain European countries, with sizable dairy and beef sectors, have voiced concerns about potential lower-cost competition from South American goods. The deal’s conclusion is crucial to the E.U.’s strengthening of its economic ties with Latin America. However, the final agreement must balance various interests and reconcile disagreements over environmental and labor rights protections.
Persisting Drought Conditions Threaten Mississippi and Ohio River Navigation
Water levels in the Mississippi and Ohio rivers are diminishing for a second consecutive year, a result of widespread drought across the Midwest and scarce rainfall in parts of the eastern U.S. A serious issue is emerging in Cairo, Illinois, with water levels receding significantly, and further falls are expected throughout July. This could lead to critical navigation issues as the low water stages increase the risk of shipping vessels running aground.
The implications of these declining water levels could significantly impact shipping across these vital U.S. freight routes, which serve as the main arteries for transporting various commodities. The ability of barges to carry full loads could be compromised, potentially leading to increased transportation costs. Actions such as dredging by the U.S. Army Corps of Engineers might be required to maintain navigation. The persistent drought conditions signal a worrying trend, as low river levels can lead to substantial economic losses.
ILA Targets Expanded Work Jurisdiction through Charleston Protest
The International Longshoremen’s Association (ILA) plans a demonstration at South Carolina’s capitol to further their pursuit for jurisdiction over all tasks at a recently established Charleston marine terminal.
This union-led protest could impact operations at the new terminal and influence future terminal expansions. The unfolding situation could cause disruptions affecting various stakeholders.
U.K. Commits to Major Indo-Pacific Trade Bloc, Enhancing Global Trade Ties”
The United Kingdom has made a decisive stride in reorienting its trade landscape post-Brexit. The nation has recently formalized its commitment to a significant Indo-Pacific trade bloc, labeled as its most substantial trade agreement since its exit from the European Union in 2020. This key agreement was signed in Auckland, New Zealand, marking a new chapter in the U.K.’s pursuit of a broader international trade focus.
The comprehensive bloc, known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), encompasses a diverse group of 11 nations. This key pact removes or significantly diminishes tariffs while pushing for an open and competitive market in services and investments. The U.K.’s new membership could boost its exports, which are anticipated to see an increase of £1.7 billion. The nation is expected to experience a rise in GDP by £1.8 billion, positioning it within the fastest-growing region globally. However, critics argue that the potential benefits will hardly offset the economic losses from leaving the E.U. They contend that the eventual economic increase would only inflate GDP by a minor 0.08% annually.