Trendwatch: USTR set to formally approve China tariffs increase soon; Rail workers’ union files legal challenge of Canada’s back-to-work order; Airfreight capacity conundrum as peak season approaches

US port talks kick off in bid to avoid economy-disrupting strike

The union representing East and Gulf coast dockworkers kicks off a two-day meeting Wednesday in New Jersey to discuss wage demands with port employers under the threat of a strike that would disrupt maritime trade gateways from Houston to Boston.

Negotiations on a labor contract covering six of the 10 busiest US ports have stalled since June, when the International Longshoremen’s Association called off high-level wage talks with the United States Maritime Alliance, a group known as USMX that represents ocean carriers and terminal operators. 

About 45,000 workers and three dozen ports in total could be affected in the event of a strike. And with less than a month before the Sept. 30 deadline, US retailers are renewing their plea to the White House to help break the impasse.

USTR set to formally approve China tariffs increase soon

The office of the US Trade Representative is set to formally approve tariff increases on billions of dollars in Chinese goods in the coming days, paving the way for them to go into effect two weeks later, according to a spokesperson. 

The office is set to make a final determination on the proposed increases that President Joe Biden announced in May on products including electric vehicles, semiconductors and batteries to solar cells and critical minerals. The USTR move — considered a formality — had been repeatedly put off, delaying the date the tariffs go into effect.

Rail workers’ union files legal challenge of Canada’s back-to-work order

The union representing more than 9,000 workers at Canada’s two largest railways filed a legal challenge of the decisions that suspended their right to strike and sent them back to work.

Canadian National Railway Co. and Canadian Pacific Kansas City Ltd. locked out employees on Aug. 22 after contract talks with the Teamsters Canada Rail Conference failed. Less than 17 hours later, Labor Minister Steven MacKinnon stepped in, asking an independent labor tribunal to order arbitration to settle the dispute and telling the railways to resume operations.

Canadian Pacific’s unionized employees then went on strike and Canadian National’s workers announced they would begin a strike Aug. 26. But the tribunal, the Canada Industrial Relations Board, sided with the minister on Aug. 24, forcing CP’s workers back and preventing a CN strike before it could begin.

Airfreight capacity conundrum as peak season approaches

Since October 2023, more than 75 cargo ships have been attacked by Houthi rebels in the Red Sea. 12% of all global trade traditionally took this route, via the Suez Canal, but as a result of the pirate incursions, shippers have been forced to seek alternative routes to market for their goods.

For some, taking an alternative route via the Cape of Good Hope seemed appropriate. But with an increased travel distance of 9% requiring more vessels, and increased cost of fuel, time and resources, shippers have seen costs continue to rise exponentially.

At the same time, capacity on deep sea shipping has reduced by between 15% and 20%, not helped by the congestion in Baltimore caused by the harbour bridge collapse.

Cathay Pacific set to resume full A350 operations by Saturday

Cathay Pacific has discovered 15 engines on its A350 fleet have components which need replacing – and it has already replaced three.

The remaining aircraft will be out of service until the repairs have been made, the carrier said today.

Yesterday, following a take-off from Hong Kong to Zurich, engine component failure forced the aircraft to return to its hub, triggering Cathay to inspect all its A350s.

MSC Marie becomes largest Neopanamax to cross Panama Canal

The 17,640 TEU container ship MSC Marie made history by becoming the largest-capacity Neopanamax vessel to transit the Panama Canal.

With a length of 366 meters and a width of 51 meters, MSC Marie set the new record on 30 August, surpassing the 17,312 TEU Ever Max, which made its inaugural passage through the Panama Canal in August 2023.

Middle East trade surges, leading box lines to launch new services

With Far East-Middle East container volumes seeing double-digit growth year-on-year, several liner operators have added more services to this lane.

Japan's joint venture Ocean Network Express (ONE) and Taiwanese intra-Asia carrier TS Lines are launching the South China-Middle East Express (SMX) service on 8 November, connecting the southern Chinese ports of Shekou, Da Chan Bay, and Nansha with Jebel Ali and Hamad. TS Lines is assigning a 2,900 TEU ship to SMX, while ONE said it will nominate a vessel at a later date.

China lines up shipbuilding mega-merger

Two units of China’s largest shipbuilding conglomerate, China State Shipbuilding Corporation (CSSC), have moved to merge through a share swap deal expected to end competition and create a new global shipbuilding behemoth.

CSSC’s Shanghai-listed flagship arm, China CSSC Holdings, plans to absorb and merge with smaller peer China Shipbuilding Industry Corporation (CSIC) by issuing A-shares to CSIC stockholders.

The move, which would establish the world’s largest shipbuilding listed company, is also the largest asset consolidation since the formation of CSSC, following the merger of China State Shipbuilding Corporation and China Shipbuilding Industry Corporation in 2019. 

Canada joins the US in implementing stricter requirements for European air cargo shipments

anada has joined the US in the sudden implementation of stricter security requirements for Europe- and CIS-based air cargo shippers importing goods into the country.

Following the announcement of the new requirements, Air Canada Cargo warned shippers that they face an embargo unless they can meet the new requirements.

The airline said that Transport Canada had issued an immediate mandate that all cargo arriving from a list of 55 largely European countries (see list below) must not be accepted from shippers without an established business relationship with either Air Canada Cargo, their freight forwarder, their known agent, or that are a known consignor.

Shipments tendered to Air Canada on behalf of a freight forwarder or known agent must also adjust their master air waybill or e-air waybill to include new messaging provided by the carrier.