Radiant's Freight Market Update

This Week: Panama Canal Limits Transit and Implements Reservations, Unifor and St. Lawrence Seaway Reach Tentative Deal, UAW Reaches Deal With GM to End Auto Worker Strike.

Ocean

Cargo ship loses containers in Northern Canada, causing environmental concern. The Nunavut government and Canada are urgently addressing a potential environmental and boating hazard in their northernmost territory, just south of the Arctic Circle. On October 27, a cargo vessel had an accident, losing part of its cargo in Frobisher Bay near Iqaluit port. The Canadian Coast Guard, along with NEAS, is working to locate the floating cargo, consisting of 20 shipping containers and various freight from the NEAS’s Sivumut, an 8,000 dwt cargo ship built in 2010 and registered in Canada. Weather conditions in the area may pose a challenge with temperatures around -3°C. The government hasn’t disclosed the contents of the containers but warns that they are drifting toward neighboring Apex.

Ports

Unifor and St. Lawrence Seaway reach tentative deal, ending strike. The labor union representing St. Lawrence Seaway workers in eastern Canada announced that it reached a tentative labor agreement on Sunday, bringing an end to a week-long strike that had disrupted a critical North American trade route connected to the Atlantic Ocean. Unifor, which represents approximately 360 workers, reached an agreement with the St. Lawrence Seaway Management Corp (Seaway) covering various worker groups involved in engineering and maintenance in the provinces of Ontario and Quebec. The strike began on October 22 following failed contract negotiations with Seaway, but talks resumed last Friday due to concerns about the economic impact of the seaway’s closure. The St. Lawrence Seaway connects the Great Lakes to the Atlantic Ocean and is overseen by the Canadian not-for-profit Seaway Corp, in conjunction with the U.S. Great Lakes St. Lawrence Seaway Development Corporation.

September cargo volumes dropped 22% at Port of New York and New Jersey. In September, cargo volumes at the Port of New York and New Jersey decreased by 22% year-over-year to 660,553 TEUs, as they return to normal levels following the record highs of the previous year. “For the year so far, as well as for the month of September, the seaport was the nation’s third-busiest container port, which reflects a resetting of cargo volumes following record setting years in 2021 and 2022.” the port said in a press release. The port’s previous cargo surges were driven by various factors, including cargo diversions from the West Coast and increased demand in East Coast population centers following the pandemic. Despite a 6% rise in volumes in September 2023 compared to September 2019, there are signs of a slowdown, with cargo activity dropping 0.3% compared to August 2023 figures when volumes reached 662,740 total TEUs.

September cargo volumes up 16% at Port of Jacksonville. In September, Jacksonville Port Authority rose 16% year-over-year to 114,747 total TEUs as a result of additional services added to the port, according to Supply Chain Dive. “The primary drivers of the growth are the addition of two new European container services (MSC and Ellerman City Liners), as well as the additional capacity created by the upsizing of vessels on the EC5 Asian service,” a spokesperson for the port said. “In addition to these growth areas, our other trade lanes have also remained consistent.”

Trucking

UAW reaches deal with GM, ending automaker strike. On Monday, General Motors and the United Auto Workers reached a tentative agreement, ending the union’s six-week series of coordinated strikes that secured record pay raises for employees at the Detroit Three automakers. The agreement comes on the heels of deals recently made by the union with Ford Motor and Stellantis, the parent company of Chrysler, marking significant successes for auto workers who had faced stagnant wages and substantial concessions since the 2008 financial crisis.

Rail

Norfolk Southern asks STB for closer look at proposed CPKC-CSX Southeast corridor. Norfolk Southern (NS) is urging the Surface Transportation Board (STB) to compel Canadian Pacific Kansas City (CPKC) and CSX to provide more comprehensive information about how their Mexico-U.S. Southeast corridor project will impact passenger and freight rail traffic. NS insists that STB should not proceed with CPKC’s and CSX’s applications until they combine their submissions and provide additional data. CPKC and CSX have proposed acquiring portions of the Meridian & Bigbee Railroad to enhance rail freight flows between Mexico, Texas, and the Southeastern U.S. However, NS’s legal representatives have pointed out that their applications overlook the potential impact on rail traffic, including access to NS and the Meridian Speedway via the Meridian & Bigbee Railroad, according to FreightWaves.

Air

Air cargo demand sees minimal increase in October. Recent data shows a marginal increase in air cargo demand in October. According to the latest statistics from data provider Xeneta, air cargo demand in October rose by a mere 2% compared to September. General air cargo spot market rates also saw a 2% increase over the two-month period, reaching $2.28 per kg. In comparison to the same time last year, October witnessed a 2% demand increase, although rates were down by 30%. However, this decline is the smallest recorded throughout the year. Rates continue to surpass pre-Covid 2019 levels, thanks to premium and special cargo, whereas general cargo rates have nearly returned to their pre-pandemic levels, according to Air Cargo News.

International

Panama Canal limits transit and implements reservations. Shipping lines are facing increased delays and disruptions at the Panama Canal, owing to the “driest October in 73 years”, as well as anti-mining protests in the region, according to The Loadstar. The Panama Canal Authority (PCA) announced new operational measures, following “41% less rainfall than usual”. It said: “The canal and the country face the challenge of the upcoming dry season with a minimum water reserve that must guarantee supply for more than 50% of the population and, at the same time, maintain the operations of the interoceanic waterway.” The PCA has introduced reservation slots from now until February, limiting transits to 49 between November 3-30, 22 in December, 20 in January and 18 for February. It advised: “The Panama Canal urges its customers to make reservations in order to transit as programmed. In addition, information is provided in advance, as well as in real time, so that shipping companies can plan and make the best decisions.”

Other

UPS aims to reduce emissions through increased delivery density. According to UPS Executive Vice President and Chief Digital and Technology Officer Bala Subramanian, the company is aiming to enhance its delivery efficiency to reduce its environmental impact by actively working to raise its deliveries-per-stop ratio from 1.28 to 1.4 by leveraging technologies such as machine learning, as disclosed during the 2023 UPS Impact Summit held on October 17. “The goal is, if we do it, it actually has a significant benefit, not only for the company, but also for sustainability,” Subramanian said. Read more from Supply Chain Dive here.