Here are some of the top news stories impacting global supply chains this month.
Tensions are escalating between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), increasing the risk of a strike at U.S. East and Gulf Coast ports. The ILA is demanding a 78% wage increase and no automation, while USMX is offering a 32% wage increase and has agreed to the existing contract language on automation. The White House is urging the two sides to negotiate a settlement, but the ILA has rejected their intervention. According to the head of ocean freight for the Americas, chances are very good that a “historic strike” is looming. This has shippers bracing for disruptions.
Our take: It appears any resolution to the dispute that prevents a work stoppage, if it happens, will come close to the deadline. Shippers should continue to monitor the situation closely and consider West Coast options as the key October 1 date approaches. Contact Transmodal with any questions or for alternative routings.
Read more here.
The U.S. Federal Maritime Commission (FMC) has new monitoring rules in place. Major container shipping alliances (2M, Ocean Alliance, and The Alliance) are now required to provide detailed pricing and capacity data. The nine carriers in these alliances control over 80% of global capacity. The move follows concerns over profiteering during the supply chain crisis, as freight rates surged by more than 10 times for spot cargo, raising accusations of anti-competitive behavior. President Biden has also announced “a crackdown” on foreign-owned shipping lines that are forcing inflating rates.
Our take: The FMC, like most importers, has noticed persistently high rates after the post-Covid return to ‘normal.’ Let’s hope a closer watch on the steamship lines will result in low rates and better access to capacity for companies.
Read more here.
U.S. manufacturers are lobbying for reductions or delays in newly announced tariffs on Chinese imports. The Biden-Harris administration is expected to implement increases of 100% on Chinese electric vehicles, 50% on semiconductors and solar cells, and 25% on lithium-ion batteries and other strategic goods. Ports, politicians, and electric vehicle manufacturers are arguing that the tariffs will raise costs and disrupt supply chains. There is, of course, pushback from Chinese officials.
Our take: The results of the upcoming U.S. election will also influence the direction and severity of any new tariffs imposed. Regardless, companies should watch closely what happens as their costs to import products and materials may be impacted.
Read more here.