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Two Container Lines to Pay 2.6 Million in Fines to FMC, Norfolk Southern Renews Safety Commitment with Rail Union Presidents, Industry Giants Join Supply Chain Data Exchange Program.

May 25, 2023

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Two container lines to pay 2.6 million in fines to FMC. Two container shipping lines will pay a total of $2.65 million in civil penalties to resolve allegations of misconduct brought by the Federal Maritime Commission’s Bureau of Enforcement, Investigations, and Compliance (BEIC). Ocean Network Express (ONE) and Wan Hai Lines were accused of separate instances of U.S. law violations, with ONE by charging detention fees when appointments were unavailable during allocated free time for equipment return and by not adhering to fair and reasonable practices concerning charges for returning empty containers. The money from the penalties will be directed to the General Fund of the U.S. Treasury, according to gCaptain.


April container volumes declined 20% YOY at Port of Long Beach. The Port of Long Beach terminals handled 656,049 teu in April 2023, down 20.1% from April 2022. Imports declined 21.8% to 313,444 teu, while exports increased by 0.6% to 122,663 teu, and empty container movements dropped 26.2% to 219,943 teu, according to Seatrade Maritime. “The unprecedented consumer demand we saw at the height of Covid-19 has diminished and cargo flows are now closer to pre-pandemic levels. We expect slow growth in the second half of 2023, as retailers continue to clear surplus inventory from their warehouses,” said Port of Long Beach Executive Director Mario Cordero.

Major Vancouver port expansion increases throughput. A major expansion project was completed at the Port of Vancouver. Vancouver Fraser Port Authority joined with terminal operator DP World to increase capacity at the critical port, which handles a third of Canada’s trade in goods outside of North America. Designed to increase throughput at the terminal by 60 percent, the expansion project cost US$260 million and was completed in February 2023. The facilities are now in operation and capacity has been increased to 1.5 million TEU a year, 40 percent over the previous capacity of 600,000 TEU annually. Part of the investment also included reducing the terminal’s environmental impact.


Legislation to increase truck parking advances through U.S. House. On Tuesday, Legislation to invest $755 million toward expanding truck parking in the U.S. advanced in the House after “an opponent won assurances that the money would come from funds already authorized by Congress,” according to FreightWaves. The investments would happen over a period of three years. U.S. Rep. Scott Perry, R-Pa said during debate in the House Transportation and Infrastructure Committee on the Truck Parking Safety Improvement Act that “much has been made of the shortage of truck parking without looking at the underlying issue: namely, the onerous hours-of-service regulations imposed on our nation’s commercial drivers, forcing them off the road into full parking lots.”


Norfolk Southern renews safety commitment with rail union presidents. Norfolk Southern has pledged to work together with heads of 12 unions in order to improve safety. They sent a letter signed by NS President and CEO Alan Shaw and the presidents of the 12 unions to all craft and management employees describing the renewed partnership. This partnership comes as NS and other Class I railroads continue to face federal scrutiny over railroad safety. The letter calls for the company to “do better” through more collaboration, a review of best practices, employee input and consultation with experts, according to a news release from NS.


Air cargo volumes continue to remain low. Current global air cargo volumes are down 8% to 10% from last year’s levels, with rates tumbling more than 40% according to FreightWaves. “Our view is that imports will remain below recent levels until inflation rates and inventory surpluses are reduced,” The National Retail Federation said.


Chinese malware targets American maritime assets. Microsoft warns that American maritime assets are being targeted by a Chinese state-sponsored snooping operation, Volt Typhoon. Microsoft said it has uncovered “stealthy and targeted malicious activity” focused on post-compromise credential access and network system discovery aimed at critical infrastructure organizations in the U.S., according to Splash247. Microsoft says that Volt Typhoon has been active since mid-2021 and has targeted critical infrastructure organizations in Guam and elsewhere in the U.S., and is a Chinese state-sponsored actor that typically focuses on espionage and information gathering. Read more here.


Apple production stabilizes after disruptions to supply chain. Following disruptions to its manufacturing base last year, Apple has finally caught up on production– last week, CEO Tim Cook told analysts that “supply for Apple’s iPhone ‘was not an issue’ during Q2.” This comes after Apple warned last November that COVID-19 restrictions in China would “significantly reduce capacity” and slow shipments of its iPhone 14. Apple also made long-term moves to diversify its production geographically and remove itself from China. A Reuters analysis of supply chain data from last fall found Apple’s sourcing from China had decreased by 11 percentage points between 2019 and 2021.

Industry giants join supply chain data exchange program. The Department of Transportation has begun a program that aims to give a real-time picture of U.S. supply chains “through the exchange of company data,” according to SupplyChainDive. Fifty-three companies representing the end-to-end supply chain are now part of the Freight Logistics Optimization Works (FLOW). These FLOW participants, including Costco, Walmart, and Union Pacific, share shipment data on a daily or weekly basis that is then used to create a tool measuring container demand and fluidity. The program is also expected to expand to additional ports, and grow even further. The Biden admin’s fiscal 2024 budget request includes $5.3 million allocated to the new tool.