U.S. East & Gulf Coast Port, and Canada Rail, Union Contract Negotiations
Master Union Contact negotiations for U.S. East & Gulf Coast Ports remained stalled after the International Longshoreman’s Assoc. (ILA) suspended talks with the U.S. Maritime Alliance (USMX) on June 10. ILA President Harold J. Daggett, representing 45,000 members, stated they are “running out of time” to avoid a coastwide strike on October 1, 2023, and “we will not entertain any discussions about extending the current contract, nor are we interested in any help from outside agencies”. A strike would affect container imports to top East & Gulf Coast Ports, including New York/New Jersey, Norfolk, and Houston. Importers are increasingly utilizing U.S. West Coast Ports and the intermodal rail landbridge as an alternative to reduce the risk of disruption from a strike.
Union members of the Teamsters Canada Rail Conference (TCRC) voted to reauthorize a strike, should an agreement not be reached with Canada’s largest railroads, the CN and CPKC Railroads, which serve Canada West Coast Ports, including Vancouver and Prince Rupert. The authorization applies for sixty days, while the Canada Industrial Relations Board (CIRB) rules on whether a strike would affect national safety. A strike cannot legally occur until the CIRB’s decision is rendered, which is planned before August 9, according to the CIRB. A Canada rail strike would affect U.S.-bound container imports, which could be diverted to U.S. West Coast Ports should a strike occur. Read more at Maritime Executive and trains.com.
SoCal Ports Experience Strong First Half of 2024
SoCal Ports reported strong trade volumes for the first half of 2024. The Port of Los Angeles (POLA) handled more than 4.7 million TEUs (twenty-foot equivalent units) through June 2024 – a more than 14% increase over the same period last year. The Port of Long Beach (POLB) handled nearly 4.3 million TEUs – up 15% over 2023. Mario Cordero, POLB CEO, stated: “We are recapturing market share, and consumer spending is driving cargo to our docks as we head into the peak shipping season.” Gene Seroka, Executive Director, POLA, stated he is optimistic for the remainder of 2024. He points out that the POLA is currently operating at 75- 80% of historic capacity providing it room to grow volumes. With uncertainties and disruptions in supply chains including the backlog at some Asian ports, Seroka said some shippers have said they will consider sending additional cargo through the California ports to hedge on world issues. Read More at Maritime Executive.
SoCal Ports Receive CA State Funding for Port Information Systems
The SoCal Ports received California State GO-Biz grants to support the California Port Data Partnership initiative. The Port of Long Beach (POLB) received nearly $8 million to support its “Supply Chain Infomation Highway” project. This project enables stakeholders to make scheduling, planning, and operational decisions prior to cargo arrival, making the delivery of goods more efficient and cost-effective for the more than 200,000 Shippers who use the Port. It also includes integrating all terminal trucking appointment systems into one system.
The Port of Los Angeles (POLA) received nearly $8 million that will support its “Port Optimizer” system technology, which provides stakeholders with up to 40 days of advanced visibility on their cargo, with the ability to anticipate and address potential issues and resolve challenges much quicker, including a new CA Ports Mobile application for increased visibility on container movement, and an improved truck appointment system using artificial intelligence.
According to Tony Zhong, POLA Chief Information Security Officer, cyber-attacks against the POLA in 2023 were over 60 million per month – the most recorded over the ten years of POLA Cyber Resilience Center (CRC) operation. The CRC, managed by IBM and staffed by POLA cybersecurity analysts, includes stakeholder partners, including railroads, law enforcement, shipping lines, terminal operators, and trucking companies. According to Zhong, the top priority of cyber attackers is ransom attacks, which shut a system down until a ransom is paid. Read more at SupplyChainDive and AJOT.
Port of Los Angeles Completes Pier 400 On-Dock Rail Expansion Project
The Port of Los Angeles announced the completion of the Pier 400 On-Dock Rail Expansion project. The $73 million rail project will improve cargo flow, reduce emissions, and improve roadway safety. Located at the APM Terminal, the Pier 400 on-dock-rail project will create additional rail capacity for all Port Terminals and serve as a critical link between the SoCal Port complex and the Alameda Corridor, which carries about 10% of all waterborne containers entering and exiting the U.S. As rail demand increases, the expanded rail yard is projected to eliminate 1,200 truck trips per day by 2040. The project added 31,000 linear feet of track with 5 new railroad storage tracks, a concrete rail bridge, an asphalt access roadway, new crossovers, and turnouts, modifications to the compressed air system, modifications to Reeves Ave., and the relocation of the at-grade crossing from Nimitz Ave. to Reeves Ave. The Port received $21.6 million in grant funding from the CA Trade Corridor Enhancement Program, which funds improving freight corridors in the State, and the remaining $51.6 million was funded by the Port. Read More at POLA.
UPS Coyote Logistics to be Sold to 3PL RXO Logistics
UPS announced the sale of its full truckload brokerage business unit Coyote Logistics to third-party logistics provider (3PL) RXO Logistics for $1.025 billion. Carol B. Tome, UPS CEO, stated, “As UPS positions itself to become the premium small package provider and logistics partner in the world, the decision to sell our Coyote Logistics business allows an even greater focus on our core business.” Coyote, with approx. 2,500 employees, brings 15,000 customers to RXO, along with roughly 97,000 carriers it does business with. RXO, with around 2,150 employees, has approximately 4,000 customers and works with around 115,000 carriers. According to Armstrong & Associates, RXO will have over $7 billion in revenue, making it the third largest domestic transportation management 3PL in the U.S. after C.H. Robinson and J.B. Hunt. UPS stated the sale transaction is expected to close by the end of the year and is subject to regulatory review and approval. Read More at Logistics Management.
Nordstrom Moves Fulfillment Operations to Omnichannel Center in Riverside, CA
Retailer Nordstrom is nearing completion of the relocation of its West Coast fulfillment operations from their Fulfillment Center in San Bernardino, CA, 25 miles from their West Coast Omnichannel Center (WCOC) in Riverside, CA.
The one million sq. ft. WCOC, opened in 2020, is Nordstrom’s newest, most automated, and lowest-cost fulfillment center, serving both store and customer orders, scaled to serve the Nordstrom and Nordstrom Rack banners. The facility includes a state-of-the-art command center and an algorithm that supports dynamic routing for all orders that flow through the network and prioritizing orders, taking into account factors such as processing time, orders in queue, and transit time to calculate estimated arrival. The storage & retrieval system is designed to store five to seven times more products than other sites with the same footprint, allowing more storage of products at the facility, giving customers access to a greater selection within their market, and reducing the number of split shipments customers receive. Read More at SupplyChainDive.