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South Korea’s Truckers Rock Supply Chains with Strike Action

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Archives, Global Logistics, Global Trade Daily, Trucking

South Korea’s Truckers Rock Supply Chains with Strike Action

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South Korea’s unionised truckers have gone on strike in a row with the government over minimum pay.

The indefinite strikes, which began local time 12.00 am 24 November, will see at least 20,000 truckers join the picket line, predicted the organiser Cargo Truckers Solidarity (CTS) union.

CTS is affiliated with the Korean Public Service and Transport Workers’ Union (KPTU-TruckSol).

Truckers are calling on the government to extend and increase capabilities of a system which calculates minimum wage based on growing operating costs due to fuel prices soaring.

The system, dubbed ‘Safe Trucking Freight Rates’, applies a minimum freight fare so drivers are not forced to drive dangerously to make deliveries.

The rate currently applies just to container and bulk cement hauliers and is due to expire at the close of the year. Truckers are calling for the scheme to be made permanent and coverage to be expanded to all cargo and freight types, including oil tankers.

The International Transport Workers’ Federation (ITF) affiliate KPTU-TruckSol called a halt to a strike in June after eight days when the government and industry agreed to continue and expand the Safe Rates programme.

Since then, KPTU-TruckSol argues government has caved to pressure from big business and done everything possible to block progress. In response, KPTU-TruckSol has called a new unlimited national strike.

“The government is backtracking on its promise to the determent of workers and public safety,” said Bongju Lee, KPTU-TruckSol President.

“We are prepared to strike until that changes. Legislation to make Safe Rates permanent and expand coverage must pass in the National Assembly. It’s as simple as that.”

At the Port of Busan, police officers and buses were seen lined up along key routes.

Container traffic at ports has dropped to 40 per cent compared to normal levels since the strike began, the transport ministry said on 24 November.

The eight-day strike by truckers in June over the same issue was estimated to have cost the South Korean economy $1.2 billion and sent shockwaves through global supply chains.

Strike action has plagued global supply chains throughout 2022.

In November in the UK, Peel Ports Group (PPG) and Unite the union members reached a deal after a months-long strikes at the Port of Liverpool.

In November the Port of Antwerp was hit by staff walkouts.

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Archives, Global Logistics, Global Trade Daily, Ocean Ports

Port of Houston box Numbers Stay High in Softening Market

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The Port of Houston has enjoyed a 13 per cent year-on-year container growth in October, continuing its positive trend seen throughout 2022.

The port moved a total of 371,994 TEU during the month.

Loaded container TEU reached the highest volume ever, up 21 per cent compared to the same month last year.

Overall, container volume is up 18 per cent year-to-date at Port Houston’s terminals and has surpassed the 3 million mark thus far, with 3,333,924 TEU.

“Although the import demand in the US appears to be softening, we have not seen any slowing in Houston in recent months,” said Roger Guenther, Port Houston Executive Director.

“We are handling record amounts of cargo and remain focused on aggressive infrastructure development to optimise capacity and efficiently handle current and future demand through our port.”

The Port Commission recently voted to introduce a sustained import dwell fee and an optional excessive import dwell fee to cope with record-breaking volumes.

The port had long considered the introduction of a fee as containers keep flowing in at its terminals with no signs of imminent softening in import loads.

“The additional dwell fees are intended to minimise storage of containers on terminal. Boxes need to move through the terminal quickly to maintain a fluid environment and superior level of service for our customers,” Guenther said.

Total tonnage across Port Houston’s facilities was up 18 per cent in October and 25 per cent for the year as compared to last year.

In September, the Port of Houston registered its second-highest month ever for containers following a surge in demand for imported goods.

Total throughput reached 353,525 TEU, a year-on-year increase of 26 per cent.

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Archives, Global Logistics, Global Trade Daily, News, Rail

US Railroad Strike Threatens to Inflict pain on Staggering Economy

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A potential rail strike from US railroad workers in December could have dire impacts on an already unstable economy during the peak season, experts have forecasted.

Earlier this week one of the US’s largest railroad labor unions, The Transport Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD), voted against a tentative five-year collective bargaining agreement with the nation’s Class 1 railroads.

Voting concluded midnight Sunday 20 November for members of the Brotherhood of Locomotive Engineers and Trainmen (BLET) as well as the SMART-TD on the proposed agreements.

SMART-TD train and engine service members have voted to reject the proposed contract, while SMART-TD yardmaster members voted to accept.

BLET members voted to accept a tentative agreement reached on 15 September, however have agreed to join the picket line should strikes go ahead.

A status quo agreement between SMART TD and management is in effect until 8 December.

Beginning 9 December, SMART-TD would be allowed to go on strike or the rail carriers would be permitted to lock out workers — unless national Congress intervenes.

BLET and SMART-TD are the two largest rail unions, accounting for half of the unionized workforce on the nation’s largest freight railroads.

Glenn Koepke, General Manager of Network Collaboration at supply chain data firm FourKites, said that the timing of rail unions returning to the negotiation table could have significant impacts on US supply chains at the tail end of the year.

Agriculture, automotive, chemical, packaging and industrial parts would be most severely impacted.

Many of these products are the lifeblood of the American economy and are often critical components for products that are manufactured for consumers, whether food stuffs or hard goods.

“The timing of rail unions coming back to the table to negotiate has two major implications. The first is peak holiday season and what could significantly impact sales in the final month of the calendar year. Second would be a major blow to the economy, which remains in extreme uncertainty,” Koepke said.

Koepke noted that this is “a very opportunistic time” for the rail strike to occur for those looking for changes to happen.

“This would shake the US economy to its core and magnify the spotlight on the national supply chain. Unlike a port disruption or a terminal strike, there are only seven major, Class 1 railroads in the US that link all of North America — shifting this much volume to another mode of transport isn’t feasible even with unlimited capital.

“Could a rail strike happen? Absolutely. But the federal government has a very close eye on the negotiations.”

The US trucking capacity “could never fully cover the amount of rail cargo moved on a daily basis,” Koepke noted, sending the trucking market into a frenzy and put the upper hand back on the carrier and 3PL side.

“It’s difficult to predict the future, but if I were to take a guess I’d say this will get settled without a major disruption – though continued threats and noise will loom.”

Hutchison
Archives, Global Trade Daily, Technology

Hutchison Ports BEST Installs Solar Panels

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Hutchison Ports BEST terminal has installed 1,832 solar panels on almost half a hectare of its buildings.

This is an auto-supply installation capable of generating 1.18 Gigawatts/hour of electricity, equivalent to the annual electricity consumption of about 200 homes.

The installed power is almost 1 Megawatt/hour (833.56 Kilowatt hours).

Solar Profit will oversee the installation process.

READ: Hutchison Ports, TIL to develop 7 million TEU mega-terminal at Rotterdam

“These efforts contribute to further reducing the terminal’s carbon footprint, with BEST’s emissions being 65 per cent lower than conventional manual terminals,” said Estefanía Soler, Head of Sustainability at BEST.

BEST is one of the most sustainable terminals in the Mediterranean, with an operation model based on semi-automation and the use of mostly electric cranes.

The terminal is working with the Barcelona Port Authority to electrify its quay and allow ships to connect to electricity.

This solar panel initiative is part of BEST’s sustainability strategy and reinforces its commitment to the United Nations Sustainable Development Goal 7 of the 2030 Agenda on “Affordable and Clean Energy”.

BEST was inaugurated 10 years ago and is a benchmark in terms of sustainability within the terminals of the Hutchison Ports group, which operates 52 terminals in 26 countries.

In September, Hutchison Ports inaugurated the Port of Jazan City for Primary and Downstream Industries (JCPDI) in cooperation with Prince Mohammed bin Nasser bin Abdulaziz, the Governor of Jazan Region.

The total existing investments at JCPDI sum to about SAR88 billion ($23 billion), although the city still under construction.

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Archives, Global Logistics, Global Trade Daily, Rail

US Rail Union Votes Down Latest Labor Deal

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One of the US’s largest railroad labour unions have voted against a tentative workforce agreement, opening the door to strike action next month.

Train and engine service members for The Transport Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) voted to reject a five-year collective bargaining agreement with the nation’s Class 1 railroads.

Voting concluded midnight Sunday 20 November for members of the Brotherhood of Locomotive Engineers and Trainmen (BLET) as well as the SMART-TD on the proposed agreements.

SMART-TD train and engine service members have voted to reject the proposed contract, while SMART-TD yardmaster members voted to accept.

BLET members voted to accept a tentative agreement reached on September 15.

BLET and SMART-TD are the two largest rail unions, accounting for half of the unionised workforce on the nation’s largest freight railroads.

The five-year agreement ratified by BLET members and SMART TD yardmaster members addresses rates of pay, health & welfare, and other fringe benefits for approximately 24,000 locomotive engineers and other rail workers represented by the union who are employed by the nation’s Class I railroads.

A record number of eligible BLET members participated in the ratification vote with 53.5 per cent voting in favor and 46.5 per cent voting against.

Turnout among the more than 28,000 eligible SMART-TD members was a record high.

Some 50.87 per cent of train and engine service members represented by SMART-TD voted to reject the agreement, while 62.48 per cent of SMART-TD-represented yardmasters voted to ratify.

Representatives from SMART-TD will now head back to the bargaining table with the National Carriers Conference Committee (NCCC), which represents railroad management, to negotiate new terms for the affected train and engine service members.

“BLET is a membership-driven union. In September, our National Wage Committee and our General Chairmen who represent freight rail workers unanimously agreed that the time had come for the membership to have a say on their contract,” said BLET President Dennis Pierce.

“Since then, we have worked to ensure that all of our members fully understand the wins and losses in the Presidential Emergency Board recommendations and how those recommendations were improved upon leading to the tentative agreement sent out for their consideration.”

In October the Brotherhood of Maintenance of Way Employees Division (BMWED) membership voted against ratification of the tentative national agreement reached with the Class I freight railroads, sending the two sides back to the bargaining table and resetting the countdown to crippling staff walkouts.

“SMART-TD members with their votes have spoken, it’s now back to the bargaining table for our operating craft members,” said SMART-TD President Jeremy Ferguson.

“This can all be settled through negotiations and without a strike. A settlement would be in the best interests of the workers, the railroads, shippers and the American people.”

A status quo agreement between SMART TD and management is in effect until 8 December.

Beginning on 9 December, SMART-TD would be allowed to go on strike or the rail carriers would be permitted to lock out workers — unless national Congress intervenes.

“The ball is now in the railroads’ court. Let’s see what they do. They can settle this at the bargaining table,” said Ferguson.

“But, the railroad executives who constantly complain about government interference and regularly bad-mouth regulators and Congress now want Congress to do the bargaining for them.”

If there is a strike by SMART-TD or any of the other three rail unions that have rejected proposed contracts with the carriers, BLET and the other eight rail unions that have ratified agreements have pledged to honour the picket lines.

Ferguson said there was a “distinct possibility” that US Congress may pass legislation to resolve the dispute and/or impose an agreement prior to the expiration of the current cooling-off period.

AD
Archives, Global Logistics, Global Trade Daily, Ocean Ports

AD Ports takes over Noatum in $680 Million Purchase

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Abu Dhabi Ports Group (AD Ports) has purchased a 100 per cent stake in Spanish logistics firm Noatum for AED2.5 billion ($680.6 million).

This acquisition significantly broadens AD Ports’ global footprint and positions it among the leading logistics and freight forwarding companies in the world, according to its recent release.

The group aims to create a market-leading international logistics brand, merging its existing logistics business with Noatum to create a significant presence in the region and enhancing services across the company’s global footprint.

Moving forward, AD Ports said Noatum will lead its Logistics Cluster, consolidating the company’s existing logistics offering into its operations.

The group added that some of the revenue and costs synergies of the acquisition include joint purchasing; stronger relationships with shipping lines to attract them to the group’s terminals; expansion of the agency business by leveraging Noatum’s Maritime business; integration of corporate services and functions; transfer of best practices; and best-in-class technology.

“Under the direction of our wise leadership, AD Ports Group continues to extend our global footprint through value-adding acquisitions and partnerships with market leaders,” said Falah Mohammed Al Ahbabi, Chairman of AD Ports Group.

“This ambitious acquisition brings a major global logistics platform into the AD Ports Group family, significantly enhancing our global connectivity and extending the range of maritime, logistics and ports solutions we can offer as we continue to pursue a determined strategy for growth.

“This acquisition makes AD Ports Group one of the most significant global players in the finished vehicle logistics, which we intend to expand in our home and core markets.”

This marks the group’s third major international acquisition in 2022, following the acquisition of a 70 per cent equity stake in Transmar and TCI in September, and the announcement in November of its acquisition of an 80 per cent equity stake in Dubai-based Global Feeder Shipping (GFS).

The acquisition remains subject to regulatory approvals, and the transaction is expected to close in H1 2023.

AD Ports Group recently announced its financial results for the third quarter of 2022, posting a year-on-year (YoY) profit growth of 77 per cent.

Net profit soared to AED334 million ($90.9 million) in Q3 2022 and registered a 58 per cent YoY growth to AED941 million ($256 million) for the first nine months of this year.

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Archives, Global Logistics, Global Trade Daily, Ocean Ports

Suez Canal Authority signs $500 Million deal for East Port Said Container Terminal

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The General Authority of the Suez Canal Economic Zone (SCZONE) and Suez Canal Container Terminal (SCCT) have signed a $500 million concession contract to establish a second container terminal in East Port Said.

Waleid Gamal El-Dein – Chairman of the General Authority for SCZONE, and Steven Yoogalingam – CEO and Managing Director of SCCT signed the contract on 15 November during on the side line of the UN climate summit (COP27).

Under the contract, SCCT will be responsible for “financing, design, construction, management, and operation” of the new terminal.

This project aligns with SCZONE’s plan to develop its affiliated ports to serve the global trade movement and play a key role in the transportation of green fuel.

The terminal is currently operating with a berth length of 2,400 metres and a handling yard of 1.2 million square metres, with an annual throughput of 4 million TEU.

The project aims to expand the existing SCCT’s Container Terminal at East Said Port to a length of 955 metres and a handling yard of 510,000 square metres, for an additional annual capacity of 2 million TEU.

READ: Suez Canal Authority, Maersk strike $500 million deal for East Port Said berth

“This project comes within the framework of SCZONE’s consistent eagerness with Egypt’s economic strategy, which aims to develop the Egyptian ports to maximise their role in the global maritime trade movement and to exploit the various investments to create job opportunities,” said Waleid Gamal El-Dei.

“This is exactly what the project offers, as it aims to expand the existing container terminal in Port Said East Port with cumulative investments estimated at $500 million, providing 1,000 direct and indirect job opportunities, especially for the residents of Port Said and North Sinai cities.”

Ahead of COP27, representatives from Maersk, SCZONE, and Siemens Energy discussed green hydrogen projects.

The meeting discussed the framework of the companies’ feasibility studies in preparation for pilot phases of the projects.

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Archives, Global Logistics, Global Trade Daily, News

Australian Supply Chain Walloped by Strike Mayhem

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Svitzer Australia, part of A.P. Moller – Maersk, has given notice of a lockout to all harbor towage employees following year-long pay dispute.

The lockout will take place from 12.00 am AEDT on 18 November and will continue indefinitely.

Notice was given to all employees covered under its 2016 National Towage Enterprise Agreement and their union bargaining representatives, the Maritime Union of Australia (MUA), The Australian Institute of Marine and Power Engineers (AIMPE) and the Australian Maritime Officers Union (AMOU).

Svitzer said this step is being taken by under the provisions of the Fair Work Act in response to ongoing industrial action being organized by the unions – which the company argues it is damaging its services and the national supply chain.

“There is significant disruption and ongoing uncertainty about the availability and reliability of our workforce and the ability to deliver services,” reads Svitzer’s latest release.

“This is harming our ability to reliably, safely and efficiently serve our shipping customers and port operations nationally.

“Svitzer has been notified of more than 1100 instances of protected industrial action since October 2020. It has received more than 250 instances of protected industrial action since 20 October 2022 alone, amounting to nearly 2000 hours of work stoppages.

“With each instance of industrial action valuable imports and exports are delayed, disrupted, or goods and produce lost.”

Svitzer added it “had to respond to the protected industrial action as a matter of necessity with one of the few avenues available to employers faced with such action.”

READ: Maersk towage subsidiary commits to 2040 decarbonization target

When the lockout becomes effective, no shipping vessels will be towed in or out of 17 Australian ports otherwise serviced by Svitzer.

This is projected to impact shipping operations at major metropolitan and regional Australian ports nationwide in Queensland, New South Wales, Victoria, South Australia and Western Australia.

Svitzer has been bargaining with the maritime unions for over three years since the agreement expired in 2019.

Svitzer is seeking to remove restrictive work practices from its enterprise agreement which are critical to the future sustainability and competitiveness of its Australian business.

“Our goal all along has been to reach a new enterprise agreement and we have exhaustively negotiated in good faith to try to do this,” said Nikolaj Noes, Managing Director, Svitzer Australia.

“We had hoped it would never come to a lockout – but we are at a point where we see no other option but to respond to the damaging industrial action underway by the unions.”

On 8 November, industrial action within the Port of Liverpool ended as Peel Ports Group (PPG) and Unite the Union agreed on a bargain deal.

PPG reported that Members of Unite at the Port of Liverpool Containers Division fully accepted the deal to increase basic pay by 9 per cent in a vote on 10 November.

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Archives, Global Logistics, Global Trade Daily

Fluctuating Freight Rates Supply Chain’s Biggest Worry Over Next Five Years

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Inflation, fluctuating freight rates and geopolitical tensions are set to dominate concerns for the global supply chain over the next five years, according to a DP World study released today.

From a DP World-commissioned survey with freight forwarders in October, some 63 percent of the respondents said inflation is a main concern, while 56 percent cited geopolitical tensions as another major cause of concern.

The study found that concerns freight forwarders are currently experiencing include rising and unpredictable freight rates, with 80 percent highlighting this as the biggest worry keeping them awake at night.

Sky-high freight rates driven by peaking demand due to the pandemic have led to unprecedented circumstances for shippers. Most recently, carrier Hapag-Lloyd concluded the first nine months of 2022 posting a group profit of $14.7 billion, owing profits to the freight rates.

Geopolitical disruption such as that of the Russia-Ukraine conflict is impacting all areas of the supply chain. Loss of trade with Russia has driven down the Port of Rotterdam’s container segment output significantly this year.

Around 10 percent of the respondents said they had changed the markets they do business in due to uncertainty.

Additionally, two-thirds (66 percent) of freight forwarders said it is ‘impossible to say’ when economic disruptions will subside.

Nevertheless, 75 percent of the respondents said they expect technology to be a significant factor in easing the current supply chain woes.

READ: Global trade soars hitting record $7.7 trillion in 2022 first quarter

More than half (56 percent) believe digitalization will be the single biggest driver of efficiency, reducing bottlenecks and supporting the industry going forward. Half of the freight forwarders, however, said they are further behind on their company’s digital transformation journey than they had hoped.

The survey was carried out among 41 members of the Digital Freight Alliance (DFA), which was founded in 2020 by DP World as an independent association for freight forwarders providing web-based tools, networking and commercial opportunities for members across more than 190 countries.

The findings from the survey were showcased at the Global Freight Summit, a three-day Dubai conference. The event was inaugurated by Sheikh Ahmed bin Saeed Al Maktoum, President of the Dubai Civil Aviation Authority, Chairman and CEO of Emirates airline and Group and Chair of the World Logistics Passport (WLP) Global Steering Group, and attended by Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, as well as members from the DFA.

“Global supply chains are significantly impacted by the pandemic, geopolitical tensions and the looming threat of the global climate change crisis. In fact, these challenges have demonstrated that many parts of the global supply chain infrastructure are fragile,” said Bin Sulayem.

Earlier this month DP World teamed up with Emirates Development Bank (EDB), signing a Memorandum of Understanding (MoU) to provide small and medium-sized enterprises (SMEs) access to trade financing through DP World’s trade finance platform.

TT
Archives, Global Logistics, Global Trade Daily, Ocean Ports

TT Club: Fire Safety at Sea Calls for Serious Improvement

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TT Club has raised awareness on improving measures to mitigate container ship fires still causing significant cargo losses and ship damage.

The company has estimated a 60-day average occurrence of serious fires – most recently the ZIM Charleston fire in August and the TSS Pearl in the Red Sea in October – and is therefore urging a more comprehensive approach to stop the trend.

“There were significant lessons coming from the sad incident on the MSC Flaminia, which cost the lives of three seafarers, particularly from the subsequent legal proceedings that adjudged the shipper and NVOC responsible for root cause errors,” says TT’s Peregrine Storrs-Fox.

“Despite the biennial updates to the International Maritime Dangerous Goods (IMDG) Code, including multiple arising from this particular incident, the judge’s assessment that the regulations merely set the ‘baseline’ for good practice remains utterly true today.”

Ensuring compliance with the latest mandatorily applicable version of the IMDG Code is essential as a minimum standard for all shipping dangerous goods by sea – although the MSC Flaminia case showed methods still need refinement according to TT Club.

READ: TT Club urges IMO Member States to increase ‘sparse’ container inspections

TT advocates a comprehensive approach to bring an understanding of all the factors contributing to the fires and consequently underlining responsibilities for safety.

The insurance risk firm argued that errors, misunderstandings, mis-declarations and inadequate packing and securing lie at the heart of many incidents, and everyone involved in the process of cargo shipping – starting from sellers and buyers – has a duty to care and comply with safety measures.

Attention to accurate classification and declaration prove to be critical.

READ: Bangladesh depot fire aggravated by hazardous chemicals

Closely related to the issues specific to dangerous goods are those arising from packing cargo according to TT Club.

While the IMO/ILO/UNECE Code of Practice for Packing of Cargo Transport Units (CTU Code) remains non-mandatory international law, it is clearly referenced from the IMDG Code.

Through its participation in the Cargo Integrity Group, TT Club has contributed to work on the ‘CTU Code – a quick guide’ as a route-map for the broad industry to engage more successfully with the CTU Code and to assist wider understanding of good packing practices.

In September, ICHCA International launched the 2022 TT Club Innovation in Safety Award, inviting entrants to submit details of their innovations.

The award, which is open to an individual, team or company involved in cargo logistics, has seen the prestige associated with winning or being highly commended grow year-on-year.