☕ In this special edition of Cargoccino, we’re sharing updates on the looming East Coast ports strike that’s set to disrupt supply chains across the nation, on October 1st, 2024; From the impacts on cargo moves to actionable strategies for shippers. Grab your coffee, and let’s get into it! ☕
⛔ No THCs, No Deal: ILA Negotiations at Impasse
The absence of terminal handling charges (THCs) in the US market is a significant issue in the ongoing negotiations between carriers and the International Longshoremen's Association (ILA). These charges, which are prevalent in other regions, would enable carriers to transfer higher labor costs directly to shippers. However, due to past practices, US carriers have been unable to apply THCs, resulting in tensions during contract negotiations.
Source: JOC
U.S. Economy Faces $5B Daily Toll
Industries such as automotive, retail, and food imports are facing major disruptions, with over 50% of apparel and footwear shipments reliant on East Coast ports. The strike could cost the U.S. economy $5 billion per day, with each day of closure leading to a six-day backlog. Businesses are redirecting shipments to West Coast ports, but capacity is strained, with container wait times rising to 4-8 days. Shippers must fast-track imports and explore alternative routes to avoid soaring freight costs and significant delays in deliveries.
Source: The NY Times
Cargo Stranded at Sea, No Clear Alternatives for Shippers
Container ships may be stuck idling offshore because there are no other ports available. Some shippers can't redirect their vessels to the West Coast because ports in Mexico and Canada are already at full capacity. Major carriers like ONE and Maersk expect their vessels to anchor indefinitely, while shipping lines and cargo owners are trying to find solutions. Adding to the chaos, potential rail strikes in Canada could further disrupt supply chains in North America. Shippers are facing a costly and uncertain wait.
Source: SeaTrade Maritime
SoCal Ports Stay Smooth Amid Record Imports. Some Rail Delays?
The ports of Los Angeles and Long Beach are handling record import volumes smoothly. In August, imports reached an all-time high of 849,806 TEUs. Key improvements, such as near-dock surge yards and fully staffed warehouses, have kept up to now container dwell times under three days. However, there are issues with rail operations, as dwell times have increased to 8.2 days, the highest since 2022, which is causing a significant bottleneck.
Shippers should prioritize truck-based transport and prepare for potential delays in rail operations to ensure smooth supply chain flow amid increasing volumes.
Source: JOC
🚙 Automotive Shippers: Air and Transloading Recommended
Automotive shippers are being advised to consider using air charters and transloading to prevent major disruptions in case of a potential port strike on the East Coast. This strike could potentially shut down 36 key ports that handle over 300,000 TEUs of auto parts annually. With limited options on the West Coast and critical routes, such as Germany to Charleston, being at risk, CH Robinson is cautioning about increasing delays.
Ports with ILA operations span across North America’s east coast, including in Boston, New York, Philadelphia, Baltimore, Hampton Roads, Wilmington, Charleston, Savannah, Jacksonville, Miami, Tampa, Mobile, New Orleans and Houston. The port authorities of New Jersey, Houston and New Orleans also fall within the ILA.
Shippers need to take swift action to redirect freight and ensure that supply lines continue to operate smoothly, if possible.
Source: Automotive Logistics
FMC Warns Carriers: Compliance with Fee Regulations Critical Amid Potential Port Strikes
The Federal Maritime Commission (FMC) reminds ocean carriers and marine terminal operators (MTOs) to adhere strictly to all statutory and regulatory requirements, including those related to tariffs, service contracts, and fees like demurrage and detention. These charges must be reasonable, clearly defined, and serve as legitimate incentives to encourage cargo movement. The FMC will closely scrutinize any fees assessed during terminal closures due to potential port strikes on the East Coast and Gulf of Mexico, and will investigate any reports of unlawful conduct. Violators will face prosecution, and shippers can report violations or disputes directly to the FMC for resolution
Source: the FMC
💸 Avoid Costly Demurrage Fees: Essential Strategies for Shippers
With the strike being imminent, shippers risk facing excessive demurrage and detention fees due to cargo retrieval challenges. To avoid unfair fees, shippers should document disruptions, communicate proactively with carriers, and leverage FMC rules to dispute charges. Proactively seeking waivers or compensation can help mitigate financial impacts during terminal closures.
Full article on strategies to avoid demurrage fees 👈
Strike-Proof Your Supply Chain 🛡️
Shippers and Logistics Providers need proactive strategies to minimize disruptions. Key actions include closely monitoring cargo movements, utilizing pre-pulls and yard storage to keep supply chains flowing, and leveraging transloading to avoid port congestion. Shippers should also prepare for potential D&D fees, increased shipping costs, and insurance claims due to delays. As West Coast rail delays grow, exploring flexible logistics options and staying informed will be crucial to mitigating risks and keeping cargo on track.
BlueCargo tips on how to prepare: HERE
A Demo is worth more than a long speech
The BlueCargo team has your back more than ever during these disruptions. We can help you monitor changes, avoid demurrage and detention charges, and mitigate them. Outside disruptions, 20% of invoices have errors because of billing discrepancies and rates mismatches. Imagine the consequences of a Port strike on billing.
And with BlueCargo, you can eliminate the manual process of auditing and reconciling the information from the different logistics providers you work with across any containerized freight invoice.
Since a demo is worth a thousand words, the best thing to do is to meet with the JOC Inand 2024 BlueCargo Team.
Set your demo time at JOC Inland today.
☕ What is brewing at BlueCargo ☕
You asked for tools to help with your Cost Controlling / Spend Visibility, and we've delivered!
We have a new tool that's particularly useful during these unprecedented times.
What's in it for you?
🛟 3-7% potential savings on freight spend!
🛟 Find and mitigate up to 65% of discrepancies on accessorial fees that are outside your control, and that shouldn't be your responsibility
🛟 Improve and control cash flow
And, as Steve Jobs said, "You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new." With this in mind, our product team is working on new solutions for other containerized fees that will significantly reduce your company's freight expenses.
Stay tuned for these exciting developments!
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