Trendwatch: Air cargo's summer: traditionally slack, or Red Sea-induced demand?; Biden hikes tariffs on China-made EVs, batteries, semiconductors; Alberta urges Canada PM Trudeau to head off port and rail strikes

ILA and employers confident as master labor contract talks set to begin

The International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) issued the first joint statement on the upcoming contract negotiations expressing confidence that the process is proceeding on plan. This comes as there have already been calls for federal intervention to shepherd the talks for the contract that is set to expire on September 30.

The contract covers at least 45,000 dockworkers along the U.S. East Coast and the Gulf Coast ports. The union claims a total membership of 85,000 members with its reach extending to the Great Lakes ports, inland river ports, and south the Bahamas and Puerto Rico.

Air cargo's summer: traditionally slack, or Red Sea-induced demand?

The gap between air cargo spot rates and ocean rates on the transpacific is shrinking: a phenomenon which, during the pandemic, led to a greater use of airfreight.

In the first week of this month, the average air cargo spot rate on the trade was around nine times higher than shipping by sea, said Xeneta analyst Wenwen Zhang on Friday.

Biden hikes tariffs on China-made EVs, batteries, semiconductors

The Biden administration announced a slate of tariff increases on key goods made in China on Tuesday, taking aim at electric vehicles, batteries, critical minerals, semiconductors, solar cells and more.

United States Trade Representative Katherine Tai said the USTR would keep existing Section 301 tariffs on China and also increase the import tax in strategic sectors. The White House touted the tariff modifications as a tool to better protect U.S. manufacturers against China’s trade practices. The tariffs will cover $18 billion worth of imports in clean energy and technology sectors.

Alberta urges Canada PM Trudeau to head off port and rail strikes

The western oil- and grain-producing province of Alberta on Monday urged Canadian Prime Minister Justin Trudeau to do all he could to head off potentially devastating strikes by railway and port workers.

Staff represented by the Teamsters union voted overwhelmingly this month to strike as early as May 22. Railways are critical to Canada's economy, due to its vast geography and exports of grain, potash and coal.

Further to the west, talks between management and unions at the port of Vancouver have hit an impasse.

"Any work stoppage affecting our railways and ports would be crippling for our national economy and North American supply chains," Alberta Premier Danielle Smith said in a letter to Trudeau that was released by her office.

Blank sailings surge amid widespread port congestion

According to Sea-Intelligence, shipping companies were compelled to blank sailings despite strong demand and freight rates due to widespread port congestion, resulting in a scarcity of available vessel capacity.

The latest round of blank sailings was reportedly driven by a lack of vessel capacity, with the idle container vessel fleet at a very low 0.9 per cent in April.

In issue 664 of the Sea-Intelligence Sunday Spotlight, the company used data from our Trade Capacity Outlook database to compare the actual capacity deployment in March and April 2024 to what the shipping lines had planned in mid-February 2024 for the Asia-Europe and Transpacific trades.

Ocean carrier cocktail leaving a sour taste in shippers’ mouths

The ocean carrier cocktail is back and it packs a punch. Two parts canceled sailings that spice up spot rates, coupled with a stiff pour of general rate increases, leaves shippers with a dull headache and a thinner wallet.

While this iteration of the cocktail is not as strong as previous ones, it is potent enough to sour shippers’ stomachs. With no end in sight to the Red Sea diversions and “meh” consumer demand, ocean carriers are in lockstep with their mission of trying to establish an artificial floor to stave off rate erosion and add some girth to their wallets.

High port volumes expected for 2024’s peak season

The nation’s top seaports should continue to expect elevated import levels this year as strong levels of consumer spending persist, the National Retail Federation and Hackett Associates said in a forecast this week.

The organizations forecasted that loaded import volumes at the top 12 container ports will remain above 2 million TEUs through October 2024, marking the highest sustained volumes in years. The groups credited continued consumer spending on goods as the cause of continued freight demand.

Ships told to reroute in Indian Ocean as Houthi attack range extends

EU Naval Force Operation ATALANTA is advising shipping to sail at least 150 nm further east of existing traffic route to avoid the threat of attack from attack from Unmanned Aerial Vehicles (UAV).

The MSC Orion was targeted by a UAV southeast of Socotra Island while transiting the Indian Ocean Northbound to Salalah in Oman.

FHWA announces $7.1 million for port improvements in Louisiana

The U.S. Department of Transportation’s Federal Highway Administration is announcing $7.1 for port improvements in Louisiana under a new Bipartisan Infrastructure Law (BIL) program created to improve air quality for truck drivers, port workers and families that live in communities surrounding ports. The Port of New Orleans will use the funding towards the purchase of new all-electric heavy and light duty trucks to replace diesel vehicles currently in use, upgrade electrical infrastructure and evaluate new emissions-reducing equipment.

Overall, the new Reduction of Truck Emissions at Port Facilities program provides $148 million in grants to 16 projects in 11 states and Puerto Rico. The funding represents the first round of grants under the new $400 million Reduction of Truck Emissions at Port Facilities Grant Program under BIL invests in port electrification and efficiency improvements. This program aims to reduce emissions from idling trucks at our nation’s ports while modernizing infrastructure and strengthening supply chains.

Video: Last Baltimore Bridge section removed with explosives

Monday afternoon, after several days of delay due to weather, contractors used an explosive "precision" cutting process to remove a large section of the Francis Scott Key Bridge's collapsed truss from the bow of the boxship Dali. The kinetic operation unfolded almost exactly as predicted by USACE in an earlier explanation of the plan: the charges cut the bridge into multiple pieces, and the structure fell away from the ship and into the water.

Revamped services offer faster transit times for Ireland - North America shippers

Specialist con-ro operator Atlantic Container Line (ACL) is redesigning its transatlantic network to offer more North American connections to Irish exporters through a new agreement with UK feeder operator BG Freight Line.

The agreement will see BG Freight Line-sister company Peel Ports’ Liverpool container facilities become a regional hub for Irish shippers, with the feeder carrier set to re-jig its Liverpool-Ireland BGF feeder service between the UK and the island of Ireland to coordinate its sailings in and out of Liverpool with the arrivals and departures of ACL’s deepsea con-ro vessels.

Lufthansa Cargo targets North America with freighter expansion

Lufthansa Cargo will expand its presence in North America with the launch of a new freighter service and an increase in bellyhold frequencies to other destinations.

The Frankfurt-hubbed freighter operator will launch a Boeing 777 freighter service to the Mexican city of Monterrey on June 3, with bookings now available.