AB5 Protests Cause Cargo Volume Drop at Port of Oakland, FMC Requests Public Comment on Emergency Order Issuance, Sichuan Factories Shutdown Amid Scorching Heatwave.

Ocean

Container spot rates are declining fast. According to The Loadstar, container spot rates are falling rapidly on all export routes from China during a historically high demand season. Spot rates are falling across the U.S. east and west coasts as average wait times at Los Angeles and Long Beach terminals fall to three days. In the coming period, ocean carriers will most likely seek to blank as much capacity as possible.

U.S. supply chain faces international obstacles. The U.S. supply chain is facing more trade hurdles as a result of international issues. Shanghai factories have suspended production due to power rationing, and Sichuan, home to some large lithium producers, is also shuttered due to government power rationing. Meanwhile, a pileup of German import containers is expected to extend into the first quarter of 2023, CNBC reports.

Ports

RAISE grants awarded to transport projects. The U.S. Department of Transportation (DOT) announced the award of $2.2bn of grants for 166 projects to modernize transport infrastructure under the Rebuilding American Infrastructure with Sustainability & Equity program. The goal of the project is to “modernize roads, bridges, transit, rail, ports and intermodal transportation and make our transportation systems safer, more accessible, more affordable and more sustainable,” according to a Friday news release. Port projects received nearly $57M in infrastructure grants from the program. A full list of the approved projects can be found here.

AB5 protests cause cargo volume drop at Port of Oakland. Port officials said this week that cargo operations at the Port of Oakland fell sharply in July as a result of trucker protests over the AB5 law. The protests slowed the movement of imports and exports through the Port of Oakland in July, causing the number of containers handled to fall by more than 45,000 in July compared to July 2021, a 28 percent drop. CBS reports that the volume of inbound goods dropped by nearly 27 percent while outbound goods saw a nearly 31 percent drop during the same year-over-year period. Port of Oakland maritime director Bryan Brandes said that “the Port was closed nearly a week last month due to the trucker protests voicing concern over AB5. This congestion reduced our overall July volume.”

Customs

AZ border wall delayed after shipping containers fell over. Arizona Gov. Doug Ducey attempted to use shipping containers to close a 1,000-foot gap in the U.S.-Mexico border wall near Yuma, however the effort suffered a brief setback when two stacked containers somehow toppled over. Claudia Ramos, a correspondent for the digital platform of Univision Noticias in Arizona, posted a photo of the fallen containers on her Twitter feed. She said they fell on the U.S. side of the border, according to Yahoo News. Ramos said contractors in the area told her that “they believed the containers may have been toppled by strong monsoon winds.”

FMC requests public comment on emergency order issuance. The Federal Maritime Commission is seeking public input on whether congestion in the carriage of goods has created an emergency situation that has a significant negative impact on the competitiveness and reliability of the international ocean transportation supply system. The information received in response to this request will aid the Commission’s decision on whether an emergency situation exists and whether an emergency order should be issued to address it. On or before September 14, 2022, you can send an email to secretary@fmc.gov with your comments.

Trucking

Trailer orders drop in July, stretching replacement cycle. July trailer orders declined 28% from June, pushing the replacement equipment calendar further into 2023 as most manufacturers are continuing to pump the brakes on bookings. Most OEMs are unable to accurately price new equipment as fleets are waiting to place orders as a result of volatile commodity prices for materials like steel and aluminum.

Rail

Major freight railroads may reach new deal with workers following presidential report. Representatives for BNSF, Union Pacific, Norfolk Southern, CSX and other railroads said this week that even though the report issued by the Presidential Emergency Board that Joe Biden appointed last month calls for higher raises than the companies had proposed, they “want to reach an agreement to avoid a strike,” according to Transport Topics. The board appointed by President Joe Biden to intervene in stalled railroad contract talks suggested that 115,000 rail workers should get 24% raises and thousands of dollars in bonuses as part of a new agreement to avert a strike. Those recommendations will be used by railroads and unions as the basis for a new round of negotiations over the next month. Federal law would allow for a strike or lockout if the two sides can’t agree on a new deal by mid-September, but Congress is likely to intervene prior to the deadline to keep the supply chain moving.

Air

American Airlines to purchase 20 supersonic planes from Boom. On Tuesday, American Airlines announced that they have agreed to purchase 20 supersonic Overture planes from Boom Supersonic. United Airlines made a commitment last year to buy 15 Overture jets, making the deal with American Airlines the second firm order in the last two years for Boom. “Passengers want flights that are faster, more convenient, more sustainable and that’s what Overture delivers,” Boom CEO Blake Scholl told CNBC. “Flight times can be as little as half as what we have today, and that works great in networks like American where we can fly Miami to London in less than five hours.”

International

Sichuan factories shutdown amid scorching heatwave. All factories in China’s Sichuan province were ordered to shut down for six days to ease a power shortage in the region as a blistering heat wave hit the country. Sichuan is a key manufacturing location for the semiconductor and solar panel industries, and the region’s power rationing will hit factories belonging to some of the world’s biggest electronics companies, including Apple supplier Foxconn and Intel. The province is also a hub for lithium mining, a key component of electric car batteries. Analysts say that the shutdown may push up the costs of the raw material.

Other

Biden Signs Major Climate and Health Care Bills. President Joe Biden signed Democrats’ historic climate change and health-care legislation into law on August 16. The legislation includes the largest federal investment in climate change history – $375 billion over a decade – and would cap prescription drug costs for Medicare recipients at $2,000 out-of-pocket per year. It would also assist an estimated 13 million Americans in affording health insurance by extending subsidies provided during the coronavirus pandemic. The measure is funded by new corporate taxes and increased IRS enforcement of wealthy individuals and entities, with additional funds going to reduce the federal deficit.

Blue Origin landing ship headed to scrapper. The former Stena vessel acquired four years ago by Jeff Bezos’s space company Blue Origin left the Port of Pensacola this week en route to the scrapyards of Brownsville, Texas. The 10,000 dwt ro/ro cargo ship named Stena Freighter was sold to Bezos in August 2018, who had a vision of turning the ship into an autonomous Landing Platform Vessel.