Bubble Chart showing the flow of good in the supply chain
UPS delivery van with driver<br />

UPS and Teamsters Agree on a Tentative Union Contract

UPS and the Teamsters Union announced a tentative agreement had been reached on a new five-year union contract, averting a potential strike, which could have occurred after Aug 1st, based on a previous union member vote last June. The tentative agreement, affecting 340,000 UPS workers nationwide, must be ratified by member vote, which is scheduled to conclude by August 22nd.  The Teamsters Union President O’Brian stated: “The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it. UPS has put $30 billion in new money on the table as a direct result of these negotiations.” UPS CEO Carol Tome stated: “Together, we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees, and to UPS and our customers. This agreement continues to reward UPS’s full and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers, and keep our business strong.” Industry analysts indicated the increased wages of the union contract will result in higher shipping costs for shippers over the next several years.  Read more (Fleet Owner)

YRC truck on the highway

LTL Carrier Giant Yellow Corp. Ceases Operations and Files for Bankruptcy

Yellow Corp. (YRC Freight), the nation’s 3rd largest Less-than-Truckload (LTL) Carrier, with 2022 Revenues of $5.24 billion, ceased operations and filed for Chapter 11 bankruptcy protection on August 6, 2023. The 99-year-old company, following years of acquisition of competitors, significant debt, and contentious labor union relations, completed its final delivery orders, closed its facilities, and laid off its 30,000 employees, 22,000 of which were Teamsters Union employees, on July 30th. Following Yellow’s acquisition of Roadway and USF, Yellow failed to fully integrate their networks and reduce costs (the “One Yellow” program), which, according to a lawsuit filed on June 27th against the Teamsters Union, was due in part to resistance by the Teamsters to allow necessary changes. Following Yellow’s failure to meet payments for the worker’s health care and pension fund in July, the Union threatened a strike, causing the majority of Yellow’s customers, including Walmart and Home Depot, to divert their business to other Carriers such as XPO, exacerbating its financial distress and inability to service loans. The company plans to liquidate its assets to pay off its debts, which include 169 owned-service centers (with 10,000 dock doors) and 140 leased facilities (with 9,200 doors), 12,700 tractors, 42,000 trailers, and its successful Yellow Logistics Inc. subsidiary, with 6 warehouses. With an estimated 9% share of the LTL market, Yellow’s closure is expected to cause LTL market rates to increase in the short term. The liquidation auction is scheduled for Oct 26th. Read More (Fleet Owner)

Cargo ship in the Panama Canal with low water levels from the drought

Panama Canal Drought Restriction Measures Cause Increased Congestion

Panama Canal drought restrictions are causing increased congestion for containerships traversing the canal. According to a report by CNBC on August 10th, there were 154 commercial vessels waiting to cross the Canal, with an average wait time of 21 days. Drought conditions caused the Panama Canal Authority (PCA) to impose temporary restrictions in June, including limitations on the weight and draft of vessels transiting the canal (from 50 feet to 44 feet), causing Ocean Carriers to limit cargo weight and impose surcharges (e.g., $500 per Container by Hapag-Lloyd). As of August 8th, the PCA has imposed additional restrictions on the number of vessels allowed to transit from 34 – 36 vessels per day to 32 per day (10 using the Neopanamax locks and 22 utilizing the old locks). Pre-booking of slots was reduced from 23 to 14 daily (10 Neopanamax and 4 Panamax) and some of the rest were allowed on a first-come-first-served basis (62% currently waiting). The water utilized for the locks comes from freshwater lakes, which also serve as drinking water for the local population, including Panama City. Due to the increased cost and transit time of using the Panama Canal, Shippers are considering alternative routes, especially for Northeast Asia containerized imports to East and Gulf Coast Ports, including the use of the SoCal Ports and intermodal rail landbridge to U.S. eastbound locations. Read More (CNBC)

Heavy truck charging stations at Port of Long Beach

Port of Long Beach Opens Heavy Duty Electric Truck Charging Station

The Port of Long Beach has opened a Heavy Duty Electric Truck Charging Station, capable of charging 26 trucks at once. Adjacent to the Port’s Pier-A Terminal, the 5 MW public terminal features 13 dual-cord 360kW chargers, capable of charging 26 trucks at 180 kilowatts. Installed by WattEV, a Truck-as-a-Service start-up, the charging station is planned to include a higher-power Megawatt Charging System capable of charging pass-through trucks in 20 minutes at up to 1.2 megawatts. WattEV is also building truck charging stations at warehouse districts in nearby Gardena, inland near San Bernardino, and north in Bakersfield, CA, which are expected to open by the end of this year. Read more at DC Velocity and WattEV

DHL Express Air Cargo Plane

DHL Express Gains Airport Approval for Air Hub in SoCal Inland Empire

According to a report by FreightWaves, DHL Express, a leading international express delivery provider, gained approval from the Ontario International Airport Authority, in the SoCal Inland Empire, to establish a West Coast Air Cargo Hub at the airport. Known as the “South Airport Cargo Center”, the first phase of the project on 62 acres is estimated to begin operations in 2025, with a smaller expansion ready by 2029. The project applicant was unnamed, but assumed to be DHL Express, based on previous records. At full buildout, the facility would have 857,762 sq ft of warehouse and office space. The project still needs to undergo federal environmental review by the FAA. DHL would join FedEx Express and UPS with air hubs at the airport. DHL currently utilizes LAX for its main West Coast hub, which lacks room for expansion. Read More (FreightWaves)