U.S. East & Gulf Coast Port Union Strike Beginning Oct.1 Likely
Union contract negotiations remained stalled, and the prospects of a strike at U.S. East & Gulf Coast Port beginning October 1 appear likely. Negotiations by the ILA (International Longshoreman’s Assoc.), representing 45,000 members, and the USMX (U.S. Maritime Alliance), representing U.S. East & Gulf Coast Ports, remain suspended. At a Sept. 4th meeting, ILA delegates provided unanimous support for the ILA President’s call for a coastwise strike at Ports from Maine to Texas on Oct. 1 if a new Master Contract is not reached at that time and plans for job action established. Shipper Organizations, including the National Retail Federation, have called on the U.S. President to help facilitate an agreement, including invoking the Taft-Hartley Act, which would order union members back to work while talks resume. Mario Cordero, CEO of the Port of Long Beach (POLB), stated that the SoCal Port is equipped to handle increased diverted cargo if a labor strike at the East & Gulf ports occurs. He said: “We’re prepared for the uptick in shipments and continued growth through the rest of the year with a dedicated waterfront workforce, modern infrastructure, and plenty of capacity across our terminals,” Cordero also stated: “Our terminal operators are also prepared to flex their gate hours as necessary, and our overflow site – our [Short Term Overflow Resource yard] facility at Pier S – is open and has available capacity.” Read more at FreightWaves ILA and Supply Chain Dive POLB.
Canada Railroads Resume Operations After a Brief Lockout & Strike
Canada’s largest railroads, the CN and CPKC Railroads, have resumed operations after a brief lock-out and strike by Rail union members (Teamsters Canada Rail Conference) on August 22 after the Canada Industrial Relations Board (CIRB) on August 24 ordered an end to the lockout/strike and forced binding arbitration. The action occurred after the railroads and union failed to reach a contract agreement, which had been negotiating for nearly a year. Paul Boucher, Teamsters President, stated, “This decision by the CIRB sets a dangerous precedent, “It signals to corporate Canada that large companies need only stop their operations for a few hours, inflicting short-term economic pain, and the federal government will step in to break a union. The rights of Canadian workers have been significantly diminished today”. On August 30, the Teamsters filed four separate federal appeals to the decision. The Canadian railroad lockout/strike affected U.S. rail traffic connected to the Canadian rail network, including U.S. intermodal rail imports via the Canadian West Coast Ports of Vancouver and Prince Rupert. Read More Transport Topics
Ocean Carriers Announce Additional Plans for New Vessel Sharing Alliances
Major Ocean Carriers announced additional plans for new vessel-sharing alliances beginning in 2025 after several current alliances were discontinued. The “Gemini Cooperation Agreement,” comprising the Maersk and Hapag-Lloyd Carriers, will include a network of nearly 300 vessels with a capacity exceeding 3 million TEUs and aim for over 90% schedule reliability, utilizing a hub & spoke model. The “Premier Alliance” will comprise the ONE, HMM, and Yang Ming Carriers. MSC, the largest carrier, is set to become independent. However, it has established slot exchange agreements with the Premier Alliance for Asia-Europe routes and with ZIM for Transpacific services. Due to the current Houthi attacks on shipping in the Red Sea, both MSC and the Gemini Alliance have created network plans offering potential options for Cape of Good Hope routing. Read More at gCaptain.
Phoenix Region Growing as a Logistics and High-Tech Manufacturing Hub
The Phoenix region is increasingly drawing logistics investment to support imports from SoCal Ports, manufacturing in Mexico, and high tech manufacturing, such as semiconductors plants. Chris Camacho, CEO of the Greater Phoenix Economic Council, stated: “We have added 50 million square feet to the industrial market here last year, and a lot of that was new build. In the last five years, we’ve had 45 companies move to the 303 corridors, adding 15,000 jobs. Unlike Southern California, there is no shortage of space in which to build or lease in central Arizona. We’ve had 30-plus semiconductor companies announce here since 2002.” In addition to Taiwan Semiconductor Manufacturing investing more than $65 billion to build 3 chip plants in AZ, other chip makers such as Intel, Onsemi, Microchip, NXP, and Benchmark Electronics have facilities in and around Phoenix. RK Logistics acquired a temperature-controlled warehouse in Phoenix this month to support semiconductor production in AZ. UP Railroad opened a new facility in Phoenix in February to support the demand for intermodal freight. BNSF is planning an intermodal transfer hub on 1,770 acres in Surprise, AZ, along with a logistics park with warehousing and distribution facilities. Read More at Journal of Commerce.
Walmart Opening Automated Distribution Centers to Improve Efficiency and Profitability
Walmart is opening five automated distribution centers (DCs) for fresh food nationwide, including Shafter, CA, which has been built and tested. The new high-tech facilities, roughly 700,000 sq. ft. on average, allow for more density than traditional sites. Each DC has twice the storage capacity and can process more than two times the volume of a traditional site. The facilities utilize automated storage & retrieval systems to assemble dense pallets ready to deliver to stores or to fulfill online grocery orders, and inventory systems operate in near real-time, allowing for better demand prediction and cost savings on safety stock levels. Walmart stated that by early 2026, about two-thirds of its stores will be serviced by automation, roughly 55% of fulfillment center volume will move through automated facilities, and unit cost averages could improve by about 20%. Read More at NBC News.