Bubble Chart showing the flow of good in the supply chain
Ships in the Panama Canal during the drought

Panama Canal Further Limits Ocean Carrier Transits Due to Ongoing Drought

The Panama Canal Authority (PCA) announced additional cuts in vessel traffic due to an ongoing drought, described to be the worst El Nino recorded in recent history. The PCA had previously reduced the number of transits from the normal of 34-36 per day to 25 per day, and it now will be further reduced to 18 per day by February 2024 (40%-50% of capacity). According to the PCA, it takes approximately 50 million gallons of fresh water to move a vessel through one of the locks. The water comes from freshwater lakes, which also serve as drinking water for the local population, including Panama City.

The transit restrictions have resulted in delays and increased transit time of freight traversing the Canal. As a consequence, Shippers have begun using alternatives for containerized freight destined for U.S. East and Gulf Coast Ports from Asia, including the use of the Suez Canal or intermodal rail landbridge via U.S. or Mexico West Coast Ports. According to the Journal of Commerce, major trans-pacific Ocean Carriers are making more regular and ad hoc calls to Mexico’s Port of Lazaro Cardenas to bypass the Panama Canal limits, including the Ocean Carrier Zim for U.S. inland destinations such as Dallas, Laredo, Kansas City, and Chicago and the Ocean Carrier Hapag Lloyd, which is expected to bring U.S. bound freight through Lazaro Cardenas under an agreement with the CPKC railroad. Read more at CNBC and the Journal of Commerce

Trucks entering the Port of Los Angeles

California Trucking Assoc. Files Lawsuit to Block Advanced Clean Fleets Rule

The California Trucking Association (CTA) announced that it has filed a federal lawsuit to block enforcement of the Advanced Clean Fleets (ACF) rule, approved by the California Air Resources Board (CARB), last April. The ACF rule mandates the transition to Zero Emissions Vehicle (ZEV) trucks in CA by 2042, in a phased-in approach beginning next year. For Class 8 trucks, the regulations apply to government fleets and “high priority” fleets (i.e., companies with gross revenues over $50 million or with fleets of 50 trucks or more) and all Drayage trucks transporting containers to/from Ports and Rail Terminals, which must all be zero emissions by 2035 (with the exception of newer models already in service). 

The CTA lawsuit requests the federal court grant a preliminary and permanent injunction barring CARB from enforcing the rule, based on the contention that it violates current federal law, including the Federal Clean Air Act and the Federal Aviation Administration Authorization Act of 1994. Read more at FreightWaves.

On dock rail at Port of Long Beach

Port of Long Beach Secures $52 Million Federal Grant for On-Dock Rail Project

The Port of Long Beach secured a $52.6 million federal grant, which will support the Pier B On-Dock Rail Support Facility and other projects that will enhance on-dock rail and drayage truck capacity and reliability. The grant is part of the annual U.S. Dept. of Transportation Maritime Administration Port Infrastructure Development Program, which awards funds for the 2021 Bipartisan Infrastructure Law that included nearly $17 billion dedicated to ports and waterways. The Pier B On-Dock Rail Support Facility project, planned to be fully complete by 2032, includes the addition of a track along the Dominguez Channel Railroad Bridge. The federal grant will also upgrade and relocate several roadways in the North Harbor area along Pico Avenue. Read more at Port of Long Beach and Transport Topics.

BNSF train with JB Hunt containers

J.B. Hunt and BNSF Jointly Offering Premium Intermodal Rail Service

Multimodal Carrier J.B. Hunt and BNSF Railway announced a new premium intermodal rail service to be managed jointly by employees of both companies at BNSF Headquarters in Fort Worth, TX. The “Quantum” Intermodal Service aims to provide improved delivery times (i.e., 1 day less than normal intermodal service) and consistent service (i.e., 95% on-time delivery) for customers with service-sensitive freight, which typically utilizes over-the-road service. The price of the service is expected to be between regular intermodal service and over-the-road truckload transportation. Read more at FreightWaves.

ARCHES H2 Hydrogen containers

SoCal Ports Expected to Receive Federal Funding for Hydrogen Fuel Hub

The Ports of Los Angeles and Long Beach are expected to receive federal grant funding towards California’s development of a national hydrogen hub, established by the U.S. Dept. of Energy’s (DOE) H2Hubs program, which will provide $7 billion nationally in federal investment as part of the Bipartisan Infrastructure Law. Funding is to be administered by the CA public-private partnership, the Alliance for Renewable Clean Hydrogen Energy Systems (ARCHES). California will receive up to $1.2 billion depending upon negotiations with the DOE. The clean hydrogen will be produced exclusively from renewable energy and biomass. The funds, which will be equally matched by the Ports and their tenants, will involve deploying hydrogen fuel cell cargo-handling equipment and mobile hydrogen fueling trucks or stations in Port Terminals and subsequently support the statewide deployment of 5,000 hydrogen fuel cell heavy-duty trucks. Read more at Port of Los Angeles and ARCHES.

Nikola Hydrogen Fuel Cell Electric Vehicle on the road

Nikola Debuts Commercial Production Hydrogen Fuel Cell Electric Vehicle

Nikola Corp., Phoenix, Arizona debuted the commercial launch of its Hydrogen Fuel Cell Electric Vehicle (Nikola FCEV) at its manufacturing facility in Coolidge, AZ on Sept. 28th. With a range of 500 miles and refuel time of 20 minutes, the truck is expected to have among the longest ranges of all commercially available zero-tailpipe emission Class 8 trucks – suitable for Port and intermodal rail drayage, metro-regional truckload, and less-than-truckload applications. The Nikola FCEV is produced in a mixed-model production line capable of manufacturing both Nikola’s hydrogen fuel cell and battery-electric vehicle (BEV) trucks, introduced in March of last year, with an annual production capacity of approx. 2,400 trucks across three shifts. Nikola has 223 non-binding orders for the FCEV from 23 customers, including SoCal companies J.B. Hunt, TTSI, and IMC. At a reported price in the range of $450,000, the Nikola FCEV qualifies for several currently available subsidies including the CA HVIP project ($120K-$288K per truck) and ISEF program ($240K-$408K per truck). Read more at PRNewswire, Nikola, and FleetOwner.

Boston Dynamics Stretch Robot

3PL CEVA Logistics Opens State-of-the-Art Transload Facility Near SoCal Ports

Third-party logistics (3PL) Provider CEVA Logistics announced the recent opening of a state-of-the-art Container transload facility within miles of the Ports of Los Angeles and Long Beach. The 135,000 sq. ft. facility with 50 dock doors and parking for 205 trailers, has a unique cross-belt sortation device enabling 10,000 parcels to be sorted every hour, based on preselected variables such as size, color, or preferred carrier. The CEVA facility will also be one of the first logistics companies in the country to deploy Boston Dynamics’ “Stretch” robots which are able to unload hundreds of boxes per hour from floor-loaded containers. According to Boston Dynamics, the autonomous robot can continuously and rapidly unload containers that may be difficult to perform manually based on the height and weight of boxes (up to 50 pounds), in high temperatures. The robot’s vision system enables it to adapt to different stacking configurations does not require any pre-programming and is ready to operate upon arrival. Read more at CEVA Logistics.