Radiant's Freight Market Update

This week: New regulations target container late fees, labor dispute could threaten East & Gulf Coast ports, and STB expresses concern over potential NS leadership change.

Ocean

New regulations target container late fees. The Federal Maritime Commission has imposed stricter billing rules on ocean carriers and terminal operators to combat abusive container late fees. The focus is on demurrage fees for full containers not picked up promptly and detention fees for late return of empty containers. Starting May 26, carriers and terminals must issue invoices within 30 calendar days of charges. Read more from Freight Waves here.

Ocean Alliance extends operational agreement until 2032. CMA CGM, COSCO, OOCL, and Evergreen announced a five-year extension of their Ocean Alliance. The operational agreement, originally set to expire in 2027, will now continue until 2032. This agreement enables the carriers to collaborate on vessel sharing, chartering, and space exchange across seven major East and West trades, linking Asia to various destinations including Northern Europe, the Mediterranean, the Middle East, and North America’s East and West Coasts.

Ports

Labor dispute could threaten East & Gulf Coast ports. Concerns are mounting over the future of East and Gulf Coast ports as the labor contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) nears expiration. Talks on wage increases collapsed, prompting ILA to warn of a possible coastwide strike in October 2024. Contract negotiations began in February 2023 and have shown little progress.

Canada invests in Port Windsor multimodal operations. Canada is investing up to $26.3 million to enhance multimodal operations at Port Windsor in Ontario, focusing on a key grain terminal managed by Archer Daniels Midland Co. The investment aims to transform the region into a crucial multimodal transportation hub, fostering industry growth, investment, and job creation in what is the largest federal investment in Port Windsor to date. The project is expected to significantly boost export capacity for agricultural products from southwestern Ontario farmers, expanding access to global markets in the United States, Europe, and Latin America.

Trucking

FedEx warns of cost increase with trucker rest break waivers. FedEx Corp. anticipates higher linehaul and delivery route expenses, if waivers on truck driver meal and rest breaks in California and Washington are approved by the Biden administration. FedEx asserts that compliance with state rules would lead to operational disruptions and decreased safety, urging the Federal Motor Carrier Safety Administration not to waive preemption over state laws. Read more from Freight Waves here.

Rail

STB expresses concern over potential NS leadership change. Surface Transportation Board (STB) Chairman Martin Oberman voiced his worry about activist investors potentially replacing Norfolk Southern Corp.'s leadership with a short-term profit-focused strategy of cost-cutting and job reductions. This shift, if realized through Ancora Holdings Group LLC's takeover attempt, could significantly harm the rail industry, according to Oberman. Rail executives share these concerns, fearing that short-term profit-driven approaches will hinder rail volume and long-term prospects for employees, customers, and shareholders.

Air

Aerospace coalition aims to secure aviation supply chain. Leading aerospace companies, including Boeing and Airbus, have formed a coalition to prevent unauthorized parts from infiltrating the global aviation supply chain, as announced by GE Aerospace on Feb. 22. The Aviation Supply Chain Integrity Coalition, comprising representatives from major industry players such as Delta Air Lines, American Airlines, Safran, StandardAero, and United Airlines, aims to prevent incidents like the one involving AOG Technics, who allegedly sold thousands of unapproved engine parts with forged paperwork. Law enforcement has already made arrests in connection to the AOG Technics investigation. The coalition, operational since this month, has launched a 90-day review to enhance supply chain operations.

AFA urges Biden to enhance US airport cargo infrastructure. The US Airforwarders Association (AfA) has appealed to President Joe Biden for funding to improve cargo facilities at U.S. airports. AfA Executive Director Brandon Fried expressed disappointment that recent grants for airport improvements did not prioritize cargo areas, crucial for easing truck congestion. Fried highlighted the pandemic-induced truck waits of up to nine hours in congested cargo zones at major US airports, underscoring the need for infrastructure investment to enhance efficiency and competitiveness in the air cargo industry.

International

Port of Rotterdam adopts Green Award verification. The Port of Rotterdam has become the first EU port to utilize the Green Award Foundation's Ship Waste module program to verify ships meeting new environmental performance criteria, according to World Cargo News. Recent EU regulations require member state ports to grant waste fee discounts to ships demonstrating reduced waste volumes and sustainable practices. “Over one-third of ships now eligible for Rotterdam’s waste fee discount under these EU sustainability criteria actively chose to undertake Green Award’s rigorous certification process in advance of regulations taking force this year,” said Green Award Foundation Executive Director Jan Fransen.

FMC adds Chinese shipping company to controlled carrier list. The Federal Maritime Commission has designated Hede (HONGKONG) International Shipping Limited, linked to the government of the People’s Republic of China, as a controlled carrier. This inclusion subjects the company to heightened regulatory scrutiny by the FMC. Read more from gCaptain here.

Technology

Staples automates fulfillment centers with robots. Staples has deployed piece-picking robots from RightHand Robotics across its North American fulfillment centers to automate operations. The autonomous robotic arm utilizes AI and machine learning to handle items of various shapes, sizes, weights, and packaging.

Other

Massive wildfires disrupt travel across Texas, Oklahoma. Wildfires in the Texas Panhandle are forcing evacuations and disrupting travel for truckers and motorists. Highways were temporarily closed earlier this week, including Highway 136 between Borger and Amarillo, with Interstate 40 near Amarillo remaining open but advised against due to excessive smoke.

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The Radiant Network's supply chain and logistics updates provide valuable insights on freight trends, customs regulations, global news, economics, tech, and more. The Radiant Network includes the brands Radiant World Trade Services, Radiant Global Logistics, Radiant Canada, Radiant Road & Rail, Adcom, Airgroup, SBA, and Distribution By Air.

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Radiant World Trade Services is a part of Radiant Logistics, Inc. (NYSE American: RLGT), a publicly traded third-party logistics company that provides technology-enabled global transportation and value-added logistics solutions to a diverse account base. They offer comprehensive services including freight forwarding, truck and rail brokerage, warehouse and distribution, customs brokerage, order fulfillment, inventory management, and technology services. Radiant has an extensive network of offices throughout North America and other key markets worldwide.