Radiant Road & Rail Opens New Operating Location in Overland Park, Proposed FMC Rule on Refusal of Service Raises Concern, Global Air Cargo Demand has Fallen Compared to 2022.

Ocean

Proposed FMC rule on refusal of service raises concerns. A shift in the U.S. Federal Maritime Commission’s (FMC) approach to rulemaking regarding container line refusal of service could have a significant impact on the regulatory landscape by “making it hard for carriers to turn away loss-making cargo or not honor a booking,” according to the Journal of Commerce. The potential change, outlined in a draft released on June 12, reflects suggestions taken from agricultural exporters and other shippers. It aims to prevent container lines from rejecting shipments solely based on unfavorable economics. However, concerns have been raised, notably by the World Shipping Council, that the proposed criteria for justifiable refusal is overly vague and might encompass a wide range of scenarios.

Latest shipping reform efforts stall in U.S. House. Efforts to introduce new reforms into U.S. shipping law have stalled five months after the bill’s introduction in the House of Representatives. Experts believe this lack of progress might be linked to federal regulators grappling with the consequences of the Ocean Shipping Reform Act of 2022, passed last year. “Implementing further changes to the [U.S.] Shipping Act as the industry adapts to the OSRA-2022 would be confusing, costly, and not well received by those on the front line of the supply chain,” Robert Murray, president of the National Association of Waterfront Employers (NAWE), said.

Ports

Port of Savannah sees volume increase in July. Container volumes at the Port of Savannah experienced a significant increase last month, rising by 17% compared to June. However, the overall throughput remained well below the exceptionally busy July of the previous year. The Georgia Ports Authority reported handling 447,590 TEUs in July, marking a growth of 60,564 TEUs compared to July 2019 before the pandemic, with a compounded annual growth rate of 3.7%, but this figure represented a 16% decline compared to the record-setting July of 2022.

Customs

CPB blocks LVT shipments from Asia. Importers are frustrated by unclear communication from the U.S. Customs and Border Protection (CPB) about the criteria for allowing or blocking shipments of LVT (luxury vinyl tile) from Asia as around $200 million worth of shipments have been quarantined or returned. Major U.S. flooring brands like Home Depot, Lowes, LL Flooring, and Floor & Decor are affected. CPB is focusing on the source of production and PVC sourcing, not targeting specific importers. Brands are reconsidering sourcing strategies due to impacts from the Uyghur Forced Labor Prevention Act, and are exploring domestic options, but limited capacity and higher costs pose challenges.

Trucking

Radiant Road & Rail opens new operating location in Overland Park, Kansas. Radiant Logistics, Inc. announced that its wholly owned subsidiary and U.S. brokerage platform, Radiant Road and Rail, Inc, has opened a new operating location in Overland Park, Kansas. The Overland Park location will augment the company’s robust bi-modal brokerage operation providing truckload and less-than truck load trucking; temperature controlled and dry intermodal; asset and brokered drayage; transloading; and other value-added services. Contact the Radiant Road & Rail, Overland Park Team today at rrrkc@radiantdelivers.com.

Rail

CPKC plans cross-border expansion via new direct interchange connection in Alabama. Canadian Pacific Kansas City (CPKC) plans to increase cross-border operations, benefiting shippers aiming to access Southeastern markets through the eastern U.S. railroads. Executives revealed plans to establish a direct connection with CSX in Alabama via acquiring or operating parts of the Meridian & Bigbee Railroad, which is currently owned by Genesee & Wyoming. This move aims to create a new freight route linking Mexico, Texas, and the U.S. Southeast. The plans will require approval from the Surface Transportation Board. While not directly involved, Norfolk Southern also maintains a partnership with CPKC, offering shippers the option to use the Meridian Speedway for travel between Texas, Mexico, and the Southeast. “I haven’t seen a new interchange pop up [in my years at CSX] … that is going to be as significant as this one,” CSX CFO Sean Pelkey said at Tuesday’s Deutsche Bank’s transportation conference for investors.

Air

Global air cargo demand has fallen compared to 2022. Global air cargo demand has fallen by 3.4% due to the global inflation crisis and decreased manufacturing output, according to SimpleFlying. The International Air Transport Association (IATA) reported in its June 2023 data release on August 7 that this marked the smallest year-over-year contraction in air cargo demand since February 2022. The Purchasing Managers Index (PMI) indicated that manufacturing output and export orders were below the critical 50 threshold, signifying a decline in global manufacturing and exporting. Despite the airline industry’s recovery from the pandemic, air cargo faces a more significant impact than maritime cargo, largely due to pricing factors.

Niger closes its airspace, warning of foreign attack. Niger’s airspace was closed by coup leaders due to perceived threats of military intervention and potential violence from the West Africa regional bloc aiming to reinstate the ousted president. Flights are being rerouted to avoid Niger’s airspace, causing longer travel times and increased costs. Airlines like British Airways, KLM, and IAG-operated carriers have adjusted operations and are closely monitoring the situation. The closure affects multiple sub-Saharan African destinations, with increased flight times and added fuel stops.

International

First ship testing Ukraine’s humanitarian corridor departs Odesa. The first ship testing Ukraine’s new humanitarian corridor in the Black Sea has departed Odesa. Despite Russia’s hostility towards merchant ships, the vessel Joseph Shulte left for Ambarli, Turkey, carrying 2,114 containers of cargo. This corridor, submitted to the UN and International Maritime Organization, comes with risks due to potential Russian intervention or sea mines. Ukraine’s efforts are ongoing despite challenges. Russian officials have not specifically responded to the announcement of the corridor, according to Maritime Executive.

Other

The summer of strikes and supply chain disruptions. SupplyChainDive asks: what’s behind the summer of supply chain labor unrest? Between labor disputes, port disruptions, and more, this prolonged period of labor unrest over the last few months has created uncertainty across the supply chain, motivating shippers to solidify contingency strategies. Read a deep dive here.