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Containership Schedule Reliability Continues to Climb, Florida Ports Reopen Following Hurricane Idalia, Cargo Theft Surges Due to Fraud.

Aug 31, 2023

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Evergreen challenges FMC on D&D fees. Evergreen is leveraging a small claims case regarding detention and demurrage fees to contest the policies and administration of the Federal Maritime Commission (FMC). The U.S. Court of Appeals for the District of Columbia is set to hear arguments that could significantly impact the contentious issue of D&D fees. The FMC, having expressed its stance on D&D fees, issued an Interpretative Rule aimed at guiding the industry and addressing complaints. These fees gained traction during the recent surge in container volumes, and became a driving issue for the 2022 Shipping Act reform. Evergreen’s challenge originates from a 2020 dispute between a trucking company (TCW) and Evergreen, triggered by delayed return of a container carrying a Yamaha motorcycle from Japan to Georgia.

Containership schedule reliability continues to climb. Continuing its streak for the sixth consecutive month, container shipping schedule reliability has exceeded 60 percent, approaching levels not seen since 2020. Following a period of low reliability where only one out of three ships were adhering to schedules, the sector has rebounded, though the average monthly schedule reliability plateaued at just below 64 percent since February 2023. Schedule reliability remained unchanged month-over-month in July 2023 at 64.2 percent, maintaining the slightly lower level than the peak reached in May 2023,” said Sea-Intelligence CEO Alan Murphy. “On a year-over-year level, however, schedule reliability in July 2023 is still 23.8 percentage points higher.” MSC is currently leading the sector in reliability, surpassing 70%.


Florida ports reopen following Hurricane Idalia. Following Hurricane Idalia, Florida ports impacted by Hurricane Idalia are now open and operational again. Prior to the Category 3 Hurricane that landed on Wednesday, the Coast Guard declared port condition Yankee for the Gulf Coast region, meaning that gale-force winds of 34 to 47 knots were possible. The Port of Jacksonville said “the US Coast Guard has lifted Hurricane Port Condition ZULU for the Port of Jacksonville. JAXPORT is now fully open and operational.” The storm is now traveling through the Carolinas and has been downgraded to a tropical storm.


U.S. CBP suspends BNSF and Union Pacific from anti-terrorism partnership. The U.S. Customs and Border Protection agency has suspended BNSF Railway and Union Pacific from its Customs Trade Partnership Against Terrorism program. The railroads’ certification was suspended for 90 days effective Aug. 22, BNSF and UP said in customer advisories. Read UP’s statement here, and BNSF’s statement here.


FedEx to hike Ground and Express shipping rates in 2024. FedEx is set to implement an average 5.9% general rate increase for both its Express and Ground shipping services on January 1, 2024. For FedEx Express’ U.S. domestic, U.S. export, and U.S. import services, as well as FedEx Ground and FedEx Home Delivery, rates will see an average 5.9% increase. FedEx noted that Ground Economy shipping rates will also experience a rise. Meanwhile, FedEx Freight shipping rates are anticipated to rise by an average of 5.9% to 6.9%, dependent on the customer’s transportation rate scale, for shipments within the U.S. and between the contiguous U.S. and Canada. FedEx plans to provide comprehensive information about all rate changes, surcharges, and fees on its website starting September 7.


Union Pacific files complaint over CPKC trackage rights dispute. Union Pacific has filed a complaint in the U.S. District Court for the Western District of Missouri, requesting a declaration that it is not obligated to manage Canadian Pacific Kansas City (CPKC) grain trains using trackage rights between Beaumont, Texas, and the ports of Houston and Galveston. The complaint is based on a 1988 term sheet that allowed Kansas City Southern (KCS) to move grain to the mentioned ports. Following the Canadian Pacific and KCS merger, which eliminated the Kansas City interchange, UP contends that its obligation to handle CPKC grain trains beyond Beaumont no longer applies. CPKC has approached the Surface Transportation Board to address this issue, asserting that the term sheet was tied to a past regulatory approval and was designed to preserve shippers’ choices.


Cargo airline in Mexico accused of labor violations under USMCA. A U.S. committee enforcing labor provisions of the US-Mexico-Canada free trade deal has urged Mexico to investigate allegations that Mas, a cargo airline, hindered pilots’ right to organize. The U.S. Interagency Labor Committee, part of the Department of Labor, received a complaint from Mexico’s aviation pilots’ union (ASPA) alleging that Mas engaged in intimidation, interference, and reprisals against pilots seeking union affiliation. The committee found evidence of violations of workers’ rights and could impose sanctions, but will consult with Mexico before any action due to the trade agreement’s labor enforcement mechanisms, according to FreightWaves. The USMCA has robust worker protections and an independent panel for labor violation investigations.


Mexico truck driver strike delayed following carrier deal. The potential nationwide strike and protests by cargo truck drivers in Mexico have been delayed due to federal authorities’ receptiveness to the drivers’ requests, as per the Mexican Alliance of Carrier Organizations (AMOTAC). Initially planned for Tuesday and Wednesday, AMOTAC’s demonstrations intended to raise awareness about challenges faced by truck drivers, including cargo theft, increased operating expenses, intricate vehicle registration, high toll fees, and authorities’ extortion, according to FreightWaves. “We decided to postpone our protest for three months, because we saw the good will of the federal government to attend to our needs,” Rafael Ortiz, AMOTAC’s president, said in a news release. “We will use this time with the intention of evaluating the National Guard’s work on the roads of our country.”


Cargo theft surges due to fraud. Verisk’s CargoNet has warned of a surge in cargo theft through fraud in the U.S. and Canada. In Q2 2023, incidents involving shipment misdirection and fake pickups rose by nearly 700% compared to the same period last year. Concurrently, traditional cargo thefts increased by 57% to 582 cases. These incidents resulted in over $44 million worth of shipments being stolen. The average value per theft also rose by around $100,000 to $260,703, as thieves targeted high-value shipments. Read more from Insurance Business here.