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Rising Shut-Down Risks to Affect US East Coast and Gulf Coast Ports 

global trade ports

Rising Shut-Down Risks to Affect US East Coast and Gulf Coast Ports 

Maersk is at the center of a pending strike that could significantly disrupt US East and Gulf Coast ports ahead of back-to-school and the holiday season. The International Longshoreman’s Association (ILA) represents union workers at the East and Gulf Coast ports and suspended labor contract talks earlier in the month with the US Maritime Alliance (USMX) over a dispute with Maersk’s presumed implementation of an autonomous gate system in the Port of Mobile, Alabama. 

Read also: US Importers Brace for Freight Rate Surge Amid Strike Threat at East and Gulf Coast Ports

The ILA claims that Maersk’s incorporation of an automated gate violates the coast-wide Master Contract. Once again, the ILA’s long-standing concern that automation could result in the potential elimination of ILA jobs is at the forefront. Meanwhile, Maersk asserts that it remains in full compliance with the contract, and the standoff has paused contract negotiations for the time being. 

A potential strike could affect operations across roughly 36 ports between Maine and Texas. The ILA represents 85,000 port workers in Gulf Coast ports and along the eastern seaboard, and the master contract is set to expire on September 30th. The union’s chief negotiator, Harold J. Daggett, has maintained his stance on union opposition to port automation coupled with exclusive port contracts for union members. 

If history is any indication, unions and ports tend to reach agreements. Yet, the ILA is seeking substantial wage increases in excess of the 32% increase it had secured for West Coast ports last year. In July, for example, the Great Lakes District of the union closed an impressive 40% wage and benefit increase for its new six-year contract. 

In a year where global shipping had not been decimated by man-made hostilities, drought conditions, and spiking container rates, a looming strike would have more shippers spooked. But this year all of the above are front and center, and shippers are accustomed to the chaos. A strike would not occur until October, and while there has been a moderate shift in flows from the east to west coast ports such as Los Angeles and Long Beach, it’s only been in the 2% to 5% range. Container throughput in Los Angeles was down 3% in May (year on year), and volumes at Long Beach had dropped 8.2%.      

global trade port

America’s Ports Surge Ahead: $5 Trillion In Funding Is Earmarked For Groundbreaking Infrastructure Overhaul

America’s coast hosts more than 300 ports, which are vital to the U.S. economy. Annually, the ports contribute more than $5 trillion to the country’s GDP. Although port traffic was disrupted significantly by COVID-19, port traffic is greater now than ever. 

Read also: Port of Lake Charles Surges into Top 10 US Ports for Cargo Handling

Before the pandemic, port officials rushed to dredge deeper channels to accommodate new mega-ships. At the same time, ports were also dealing with aging infrastructure and a critical need for upgraded infrastructure, which would allow for handling higher volumes of cargo. Over the last decade, the size of the mega ships arriving at America’s ports has more than doubled. 

Projects to deepen port channels are underway or have recently been completed because of the need to service Panamax ships—those that are too large to fit through the Panama Canal. The U.S. Army Corps of Engineers did most of the dredging work, but the expanded waterside capacity has created an immediate need for landside infrastructure upgrades. Demand is high for everything from equipment, technology, cranes, transport vehicles, roads, railways, bridges and the construction of warehouse facilities.

Fortunately, funding is available for upgrading the nation’s port infrastructure. The Bipartisan Infrastructure Law provided a long-term $17 billion allocation to support upgrading and expanding port infrastructure. The U.S. Department of Transportation announced last November another $653 million in funding for port projects. Most initiatives will be supported by consolidating federal funding with other revenue sources.

Read also: AMERICA’S TOP 50 POWER PORTS

The traditional type of port operations has evolved, and there is evidence of impressive innovation at many ports. According to officials, artificial intelligence (AI) will play a significant role as ports maximize operational efficiency to speed up the flow of cargo and reduce wait times for vessels. Since two-thirds of the available wind power is located over deep ocean waters, ports are also beginning to play a key role in deploying and maintaining floating offshore wind energy apparatuses. 

Officials at the Port of Long Beach in California will oversee a project to expand the capacity of roads and bridges that are used to move cargo. This will allow rail and truck traffic to accommodate projected increases in cargo throughput and alleviate existing congestion. There are two components of the project. The first involves widening a rail bridge and enhancing its safety by realigning it. The second component calls for upgrades to multiple roadways that must be widened, realigned and improved. Additionally, work will be done on the area’s storm drainage, warehouse facilities and utilities. 

In Washington, the Tacoma Husky Terminal will receive $54.23 million in federal funding to reconfigure the terminal for better truck circulation. The total project cost is estimated at $125.9 million. Currently in the design phase, the project is scheduled for construction in January 2025. The project will be designed to cover three objectives. First, a plan will be developed to reconfigure the container storage yard. That effort will include relocating utilities, light poles, slot drains and fire hydrants. The second objective will require the installation of reefer racks and additional power. A reefer rack is a storage container designed to store perishable cargo at freezing indoor temperatures. New utilities and fire protection systems will be added. The third objective will be to relocate some of the port’s support facilities and construct new ones. 

The Port of Wilmington in Delaware has secured a federal grant of $50 million to construct a container terminal. The terminal has been planned for several years, but recent funding has created new momentum. The container terminal is one component of a larger overall plan to update and expand the Port of Wilmington. Port officials currently have $120 million to work with, and planning documents outline initiatives representing project costs of up to $750 million. Other project plans include constructing a 2,600-foot-long wharf, dredging 3.3 million cubic yards of river sediments, excavating a berth and access channel and adding bulkheading to 3,200 feet of shoreline. 

Hawaii’s Department of Transportation announced it will invest $33.9 million to improve operational efficiency at the Port of Kawaihae. A funding allocation from the U.S. Department of Transportation Maritime Administration will cover approximately 70% of the project’s total cost. The initiative will include widening Kawaihae Road, adding concrete paving over 10 acres of the port’s cargo yard, implementing 80-foot mast lighting, installing raised transformer pads for additional electrical power pads, and relocating the port office building and maintenance shed. The remainder of the project cost not covered by the PIPD grant will be obtained through revenues received from harbor user fees. Construction is scheduled for 2025.

The Galveston Wharves received an award of $42.3 million from the Texas Department of Transportation for a proposed $50.1 million project at the West Port Cargo Complex. The project entails overhauling a 1,340-foot-long berth across two open slips and adding about 500 feet of berthing area for cargo and lay ships. Construction is expected to begin this year. Noteworthy is the fact that the Texas legislature made history in the last regular session by allocating $640 million for infrastructure projects throughout the state.

In Arkansas, a project with an estimated $18.8 projected cost is being designed for the River Valley Slackwater Harbor. When completed, the new harbor will accommodate up to eight barges at a time and feature a 50-foot-wide concrete deck for mobile cranes. Officials have expressed a desire to finalize a contract for construction services within six months so that work can begin by late 2024. 

Numerous port projects of all types are anticipated in 2024 and 2025. Most will include technology, light rail, renewable energy components, engineering and construction services. 

Author Bio

Mary Scott Nabers is president/CEO of Strategic Partnerships, Inc., a full-service business development firm specializing in procurement consulting, government affairs, research, and public-private partnerships. She founded SPI after co-founding Gemini Global Group and, before that, serving as a statewide office holder in Texas.

 

global trade logistics

Logistics Planning Information For Key U.S. Seaports

For America’s seaports, a strong start to the new year on our side of the world is credited to … a new year on the other side.

Let us explain using the Port of Long Beach as an example. Trade moving through the busy Southern California seaport rose in January (a.k.a. the first month of the new year) as retailers stocked up ahead of Lunar New Year, when east Asian factories typically close for up to two weeks.

Read also: Cargo Volumes Handled by U.S. Seaports on the Rise

Dockworkers and terminal operators at Long Beach moved 674,015 twenty-foot equivalent units (TEUs) in January 2024, up 17.5% from January 2023. Imports increased 23.5% to 325,339 TEUs and exports were down 18.1% to 86,525 TEUs. Empty containers moved through the port increased 28% to 262,151 TEUs.

“Retailers stocked their warehouses in January ahead of the slower import activity we typically see during Lunar New Year celebrations,” explains Port of Long Beach CEO Mario Cordero. “We are ready to grow our volumes and hope to see continued growth through 2024 as we gradually recapture market share.”

“The waterfront workforce and terminal operators are energizing the economy by keeping the goods moving at the Port of Long Beach,” adds Long Beach Harbor Commission President Bobby Olvera, Jr. “We’re staying the course by attracting business, operating sustainably and developing projects that will ensure our long-term growth.”

The strong start to 2024 marks the fifth consecutive monthly year-over-year increase following 13 months of declines in cargo movement at the Port of Long Beach. And it’s indicative of what’s happening at many other U.S. seaports experiencing increased cargo volumes compared to pre-pandemic levels, particularly containerized goods. 

This surge creates opportunities but also brings challenges like congestion, capacity limitations, and rising costs.

KEY TRENDS

  • Increased Trade: Global trade recovery and e-commerce growth are driving higher cargo volumes.
  • Supply Chain Challenges: Labor shortages, port congestion, and container availability issues continue to disrupt smooth operations.
  • Tech and Infrastructure Upgrades: Many ports are investing in automation, data analytics, and infrastructure improvements to enhance efficiency.
  • Environmental Initiatives: Sustainability becomes a growing focus, with Green Port initiatives gaining traction.

SPECIFIC OPERATIONS

  • Container Terminals: Busy, with potential delays and capacity constraints, especially on the West Coast.
  • Breakbulk and Ro/Ro: Seeing steady growth, particularly for vehicles and project cargo.
  • Cruise Industry: Rebounding in many ports, bringing additional economic activity.
  • Inland Transportation: Trucking facing challenges due to driver shortages and rising fuel costs. Rail networks playing a crucial role in efficient distribution.

LOOKING AHEAD

  • Continued high cargo volumes expected, requiring further investment in infrastructure and technology.
  • Supply chain disruptions likely to persist, requiring innovative solutions and closer collaboration between stakeholders.
  • Sustainability efforts will continue to be a focus, influencing port operations and cargo handling practices.

What follows is a general overview of specific ports. Keep in mind that individual ports have unique strengths, weaknesses and operational specifics. Always research individual ports based on your specific needs and consult with logistics professionals for detailed planning.

PORT OF BALTIMORE

Contact: World Trade Center Institute, 401 E. Pratt St. #1653, Baltimore, MD 21202. (800) 638-7519 – mpa.maryland.gov

  • Strengths: Strong rail network, proximity to I-95 and I-70, diverse cargo handling, record-breaking Ro/Ro volumes.
  • Considerations: Limited container terminal capacity (presently; a new container terminal is in the works), potential congestion on I-95 during peak hours.
  • Unique planning tip: Explore multimodal options utilizing both rail and trucking for efficient inland distribution, especially for high-volume shipments.

NORTH CAROLINA PORTS

Contact: North Carolina State Ports Authority, 2202 Burnett Blvd., Wilmington, NC 28401. (910) 763-1621 – ncports.com

  • Strengths: Multiple port locations offering regional access, growing container volumes, Foreign Trade Zone (FTZ) availability.
  • Considerations: Drayage costs may be higher due to inland distances, port infrastructure upgrades ongoing.
  • Unique planning tip: Consider utilizing the Port of Wilmington if targeting the Southeast market, or Port of Morehead City for faster access to central North Carolina.

PORT OF LONG BEACH
Contact: Port of Long Beach, 415 W. Ocean Blvd., Long Beach, CA 90802. (562) 283-7000 – polb.com

  • Strengths: Largest container port in North America, advanced technology infrastructure, efficient cargo handling.
  • Considerations: High competition and potential delays, complex customs clearance procedures.
  • Unique planning tip: Utilize online shipment tracking tools and real-time data to anticipate potential delays and adjust logistics accordingly.

PORT OF CHARLESTON
Contact: South Carolina Ports Authority, 196 Concord St., Charleston, SC 29401. (843) 958-8298 – scspa.com

  • Strengths: Efficient container operations, growing cruise industry, strategic location for Southeast distribution.
  • Considerations: Limited availability of empty containers, potential congestion on I-26 during peak season.
  • Unique planning tip: Look into Charleston’s Green Port initiatives for environmentally conscious supply chain solutions.

PORT OF PORTLAND

Contact: Port of Portland, 7200 NE Airport Way, Portland, OR 92718. (800) 547-8411 – portofportland.com

  • Strengths: Focus on forest products and specialty cargo, growing barge traffic, access to Pacific Northwest markets.
  • Considerations: Limited container terminal capacity, smaller port size compared to others.
  • Unique planning tip: Partner with local logistics providers familiar with the port’s specific handling procedures for specialty cargo.

PORT OF NEW YORK/NEW JERSEY
Contact: Port Authority of New York and New Jersey: New York Marine Terminals, 90 Columbia St., Brooklyn, NY 11201; New Jersey Marine Terminals, 260 Kellogg St., Port Newark, NJ 07114. (973) 578-2192 – panynj.gov

  • Strengths: Largest East Coast port complex, extensive trade network, diverse cargo capabilities.
  • Considerations: High costs, complex regulations, potential labor disruptions.
  • Unique planning tip: Utilize experienced customs brokers and freight forwarders to navigate the port’s intricate clearance procedures.

PORT OF GALVESTON
Contact: Port of Galveston, 123 Rosenberg Ave., Galveston, TX 77553. (409) 765-9321 – portofgalveston.com

  • Strengths: Strategic location for Gulf Coast access, growing container volumes, lower costs compared to East Coast ports.
  • Considerations: Weather vulnerability, limited rail network compared to other ports.
  • Unique planning tip: Plan for potential weather disruptions and consider alternative transportation options in case of hurricanes or other severe weather events.

Please remember that these are just general starting points, and the best logistics plan for your specific needs will depend on various factors such as cargo type, origin/destination, budget and desired transit time. Again, conduct further research and consult with logistics professionals for tailored advice.

corn

Corn Belt Ports Expands Presence with New Office to Boost Tri-State Growth

In a move to catalyze economic development in the Tri-State region, Corn Belt Ports inaugurated its latest office at the Johnson-Turner Innovation, Design, and Experimental Activities Center on the Culver-Stockton College campus. The ribbon-cutting ceremony marked the official opening, reinforcing partnerships to drive growth and investment in the Tri-States.

The new office plays a pivotal role in supporting the Tri-State Mid-America Port Commission, one of the regional Corn Belt Ports. Acting in conjunction with the Tri-State Development Summit, this collaboration forms a cornerstone for regional economic development efforts. Corn Belt Ports Executive Coordinating Director Bob Sinkler expressed confidence that working closely with the Tri-State Development Summit, housed at Culver-Stockton, will accelerate growth and investment in the region.

Culver-Stockton President Lauren Schellenberger highlighted the college’s commitment to the regional impact of the Mississippi River, port development, and flood control. She emphasized the educational benefits of hosting the regional office, exposing college students to essential aspects of economic development, the significance of the Mississippi River, and the role of agriculture in the region.

The ribbon-cutting ceremony witnessed the participation of leaders in economic development, river issues, agriculture, and elected officials. Mid-America Port Commission Chairman Blake Roderick emphasized the increased visibility of the central U.S. ports, extending beyond Illinois, Iowa, and Missouri to become integral to the nation’s core transportation system.

Ralph Martin, Executive Director of the Lewis County Port Authority, recognized the significance of the new office in drawing attention to the region’s ongoing initiatives. Expanding strategic partnerships not only enhances the integration of ports into the regional economic landscape but also aids in attracting state and federal funding. Sinkler noted that Corn Belt Ports has attracted over $2 billion in funding and aims to sustain this investment.

The Canton office is part of Corn Belt Ports’ broader expansion, with recently opened offices in Peoria, Ill., and on the Western Illinois University campus in the Quad Cities. Another office in the LaCrosse, Wis./Wenona, Minn. area is expected to open by the end of February, reflecting Corn Belt Ports’ commitment to responsiveness tailored to each region’s needs.

Recognized as a Top 50 Power Port by Global Trade magazine in 2023, Mid-America Port Commission currently stands as the 39th largest port in the U.S. Sinkler highlighted the importance of visibility, making a compelling case for increased investment in the region.

While celebrating past successes, the top priority for Corn Belt Ports remains the completion of lock and dam projects, including the funding of design work on five locks in the Mid-America Port Commission area authorized by Congress for construction. The long-term investment in infrastructure, particularly in transportation along the Mississippi River, remains critical for the region’s economic prowess, as emphasized by Darrick Steen, Director of Public Policy with the Missouri Corn Growers Association.

The strategic location of the new office overlooking the Mississippi River and Lock and Dam 20 serves as a constant reminder of the ongoing work required for the region’s prosperity, underlining the importance of Corn Belt Ports’ commitment to the continued development of the Tri-State area.

food

Foreign Food Suppliers Had Some “Very Tense” Moments During 2023 Port Disruptions in the U.S. 

Large International Turnout at New York’s Fancy Food Show 2023

Even as they tried to put last year’s U.S. port disruptions as a “bad dream”, foreign food suppliers, making a strong presence at the recent New York Fancy Food Show 2023, hoped that such disruptions would not recur in the future.

“Foreign food suppliers passed through some very tense moments as food shipments to the U.S., one of our biggest markets, lay uncleared for a long time at U.S. ports, particularly on the west coast,” said Servet Turgut, the export director of an Istanbul-based Turkish dry fruit exporting company at the show. 

The show is North America’s largest event for specialty foods and is organized by the Specialty Food Association (SFA).  Sales of specialty foods and beverages across all retail and foodservice channels neared $194 billion in 2022, up 9.3 percent over 2021, and are expected to reach $207 billion in 2023, according to SFA’s annual State of the Specialty Food Industry Report. The specialty market is composed of 63 food and beverage categories which combined account for nearly 22 percent of retail food and beverage sales

The show attracted 2,400 exhibitors from 50 countries and regions, with Italy, France, Spain, Greece, Turkey, Portugal, etc. represented by large exhibitor contingents. Asian countries such as Japan, South Korea, India, Indonesia, Malaysia, etc. were also well represented.  Morocco as this year’s “partner country” presented an array of products ranging from olive oil through dates to packaged tin foods. 

Foreign exhibitors, eager to take advantage of the bullish trend in specialty food sales, were making a strong pitch at the show, even finding innovative ways to beat the inflation and the high freight and storage costs.  One Malaysian company that seemed to generate considerable buyer interest at the show was Selangor-based Doluvo Bhd. Sdn., which used a clever marketing strategy to penetrate the U.S. market; it has been selling its “Pops Malaya” brand of shelf-stable ice lollies, using Amazon to sell its products.  The “Pops Malaya” brand has, meanwhile, become the fastest selling item for Amazon.  Doluvo, a 100% women-owned and managed company, attracted a steady stream of consumers and buyers.

In an interview at the show, Yasmin Karim, the company’s CEO/Founder, said that her company had established contacts with several distributors/brokers having business connections with retailers.  “We work closely with the Malaysian agricultural ministry’s office In Washington.  Our pops are made of a high fruit content, a characteristic appreciated by the consumers,” Karim said, adding her company would also participate in the ANUGA food show in Cologne, Germany, later this year. 

Doluvo ships the pops as liquid which can be stored at room temperature, instead of deep freezing them which would require refrigeration all the way to the retailers. The liquid pops are purchased by consumers who can then freeze them in their refrigerators and consume them as frozen pops.  Selling pops in liquid form is also advantageous because the ships take about two months to transport our containers from Port Klang in Malaysia to the U.S. east or west coast.  The costs for shipping them in frozen form would be prohibitive as a result of the constant refrigeration needed for the long shipment period.

Another big Malaysian brand name at the show was Julie’s Mfg. Sdn. Bhd. of Melaka. While Julie’s is a household name in Malaysia and many other countries, its cookies and other products adorn the shelves of, mainly, Asian supermarkets in the U.S.   The company now wants to break into the U.S. mainstream food market. 

“We do sell our products to a mainstream distributor who, however, packages it under his own brand name … however, we want to sell these products in the mainstream market under our own brand of Julie’s,” Martin Ang, the company’s director told Global Trade at the NYFFS.  Ang has regularly participated in the show in the past and has built up a broad business network in the U.S.  Julie’s products are exported to 90 countries around the globe, with exports accounting for some 60% of its total turnover of about US$ 100 million. 

Ang said that Julie’s peanut butter cookies were a fast-selling item in U.S. market; other bestselling items included Le-Mond lemon-flavored biscuits, chocolate/tiramisu biscuits, etc. Ang, who also participates in the Las Vegas food show, finds the New York show attracts more buyers.  Like many other exhibitors at the show, Ang also wished the show would have longer hours, like they have in Europe, from 9:00 am to 6:00 pm, instead of from 10:00 am to 4:00 pm.  “They can also extend it by one day to a four-day event and make it worth our investment coming here,” Ang said. 

Buyers were minutely scrutinizing the olive oil products at the individual booths at the large Turkish pavilion. The business of some Turkish exhibitors had been adversely affected by the supply chain disruptions and cargo congestion at U.S. ports.  However, they were happy that their shipments were now being cleared faster than last year at U.S. ports. 

Davut Er, the chairman of the Aegean Olive and Olive Oil Exporters’ Association, the olive oil exporters’ interest group headquartered in Izmir, Turkey, who also owns an olive-oil company Eroglu, said he was “cautiously optimistic” about the supply chain situation, adding that  Turkey’s exports in 2022 had been “twice as high” as in 2021. He said that Turkish olive oil exports this year were expected to grow twice as much as in 2022; he was expecting the volume to increase to 100,000 tons in 2023, up from nearly 50,000 tons last year.

But Er lamented that container prices were nearly three times higher from Turkey to the U.S.  “We have encountered delays and disruptions (in deliveries),” he said.  The Turkish government had also stopped giving subsidies to Turkish exporters because of the massive earthquake allocations which had resulted in budget cuts. He said that Turkey’s major competitor was Egypt for table olives.  “However, for olive oil, our competitors are Spain, Greece, Italy, etc.”  He said that the show had “satisfied our expectations”. 

Bedri Girit, the chairman of the 7,000-member strong AEGEAN Aqua and Animal Products Exporters’ Association, said that Turkey exported in 2022 seafood products worth $ 1.5 billion, poultry $ 1.5 billion, dairy products valued at $ 0.5 billion and other food products worth $ 1.640 billion, totaling some $ 4.3 billion. 

Girit said that inflation was a global problem and had dampened the demand for upper-end products. 

Asked to compare the Fancy Food Show with other international trade shows, Girit said that the Dubai food show was more attractive for Turkish companies because Turkish food products were widely marketed in the Middle East whereas the New York Fancy Food Show is a channel to tap the U.S. market. 

“Because of the rising health-consciousness of the average American, there is a trend towards consumption of low-sodium items such as nuts, olive oil, salmon fish, etc.  Turkey can ship salmon by air cargo which saves time for the buyers.”

Steven Weisensee, the transportation sales manager of Continental Logistics of Cranberry, New Jersey, who had a booth at the show, said that his freight brokerage company handled between 7,000 and 8,000 TEU containers in 2022. The containers come, mainly, from Europe but also from Asia.  “The crisis caused by past disruptions has eased lately,” he noted, pointing out that ports such as Savannah and Georgia were expanding berths and other infrastructure assets. He said that Savannah port was efficiently organized both for truck and rail transportation.  (End)

Side bar – Bill Lynch, SFA President, Calls Show a “Record Breaker” 

In an exclusive interview, Bill Lynch, the President of the Specialty Food Association, which organizes the New York Fancy Food Show, was pleased with the run of the show which he described as a “record breaker” after the gloom that descended during the pandemic. Lynch, who spoke of double-digit growth in the number of exhibitors at this year’s show compared to the pre-pandemic figures, noted that consumer tastes are changing, with people looking for healthy food items. 

“They are looking for alternative foods which are nutritious … global flavors are in and new products keep coming in from different countries,” he said.

When asked to comment about supply chain disruptions, he said that during the pandemic there were supply problems such as access to glass for packaging, port congestion, inflation, scarcity of labor during the pandemic, etc., all of which contributed to delays and shortages. 

Consumers have more access to products and they are paying attention to processing and scrutinizing the environment footprints. 

Morocco was the “partner country” this year with its pavilion presenting a colorful look and its exhibitors showcasing a large array of food and agricultural items. “The ‘partner country’ presentation has been successful and will be continued,” he added. 

Lynch pointed out that 337 million pounds of food were annually exported to the U.S.  He said that educating buyers and consumers in the U.S. about their food products would help the exporting countries penetrate the U.S. market. 

The SFA has been working closely with a number of countries and has sent missions to countries such as Italy to help the suppliers showcase their products at the Fancy Food Show in New York. 

As demand for display space grows, Lynch revealed that the SFA was looking at expanding or utilizing “to the fullest” any unutilized space.  

 

south ports detention reshoring

Average Demurrage and Detention Charges Witness a 25% Dip Globally in 2023; 7 U.S. Ports Rank Highest

Average Demurrage and Detention charges experience a year-on-year decline of 25% in 2023, with a significant 14% decrease compared to the rates in 2020, as found by Container xChange’s annual Demurrage and Detention Charges benchmark report 2023.

However, there are still 11 ports where Demurrage and Detention fees remain higher as compared to 2020. These ports include Antwerp, Jebel Ali, Ningbo, Port Kelang, Rotterdam, Shenzen, Singapore, Tianjin, Xiamen, Hong Kong, and Guangzhou.

Fig 1: D&D fees over the last 4 years across shipping lines for key ports

In an exclusive webinar held in July’23, a powerful panel of speakers from Drewry, S&P Global, and Container xChange discussed the impact of these charges on shippers worldwide amidst the changing dynamics of demand and supply for containers on a global scale.

“There are multiple factors contributing to the inability of these ports to return to normalcy. The significant increase in energy prices, coupled with higher labour costs, and escalating land expenses and port fees, have all played a part,” stated Chantal McRoberts, Director, DSCA Advisory, Drewry

“Furthermore, the implementation of new regulations, particularly those focused on green energy in EU ports, has added to the financial burden. Additionally, the introduction of rules requiring individualized shipment customs clearance, no longer consolidated under one bill of lading, has proven to be time-consuming, as seen in the case of Rotterdam.”, added McRoberts.

Christian Roeloffs, Co-Founder and CEO added, “Bleak expectations for a significant peak season with a substantial increase in volumes, prices, and the potential for congestion and associated charges are evident in our customers. However, a key factor in determining whether you must pay detention charges is the efficiency of your processes and monitoring. How quickly can you act and notify your agent or trucker if something goes wrong, such as a container being forgotten at the terminal. Timely communication is crucial in avoiding unnecessary charges. This holds true in any market situation.”

“Demurrage and detention should ideally be a free market. The number of free days and the charges should be negotiable between parties and carriers, just like any other free market scenario. However, perhaps what needs regulation is the clarity on when the clock starts. Establishing clear time stamps and determining who bears the burden of proof in cases of congestion, where a container cannot be picked up, would be crucial. Payment should only commence once the terminal is able to release the container. These aspects warrant attention and potential regulation.”, he added.

Shipping Industry Facing New D&D Challenges as U.S Regulators Prepare for Decisions

Demurrage and Detention (D&D) rates in the shipping industry have reached unprecedented levels, especially with the Federal Maritime Commission (FMC) set to make crucial decisions. 

Commenting on the new regulations, Christian said, “The pending U.S foreign trade regulator’s decisions on new shipping line regulations “will significantly impact D&D practices” and could even reshape the landscape, bringing both challenges and opportunities.”

The D&D annual report highlights Drewry’s perspective that the FMC must strike a balance between the conflicting needs of cargo owners and shipping lines. Before the pandemic, shipping lines prioritized revenue generation, considering factors like cargo weight and equipment availability when making occupancy decisions. Regulating these market factors presents challenges for the FMC, especially since a substantial portion of US exports fall into low-income and heavyweight categories.

In April 2023, even before the official FMC decision, major carriers like Maersk, MSC, HMM, and Hapag-Lloyd contemplated waiving D&D surcharges on weekends and holidays when terminals are closed. Additionally, the Port of Houston stopped charging import container storage fees during closed terminal gates but raised daily rates in specific positions by 32% starting May 1.

Operational Challenges Likely to Impact D&D Charges Amid Uncertain Demand Recovery

Commenting on the shipping forecast for the upcoming holiday season, Eric Johnson Senior Editor, Technology JOC, S&P Global Market Intelligence, said, “In a very recent conversation with a Non-Vessel Operating Common Carrier (NVOCC) about their thoughts on a major trans-Pacific shipment, we came to know that they don’t expect the demand to recover until after the Lunar New Year next year. This matches what we’re hearing in general.”

“So, if we assume that’s the case, the focus shifts to operational issues at important ports that we need to consider avoiding delays or additional charges once the container is out of the terminal. It becomes more about specific factors in the field that could cause delays in returning containers on time, rather than relying on a big overall economic improvement to drive demand. With each passing day, it seems less likely that there will be a quick demand recovery.”

U.S. Ports Rank Highest in average Demurrage and Detention (D&D) charges

Out of all the ports worldwide, those in North America stand out as the most expensive when it comes to Demurrage and Detention (D&D) charges. Leading this list of costly ports are New York, Oakland, and Los Angeles, taking the top three spots.

Fig 2: Accumulative D&D fees across shipping lines for North American ports: 2023

Even though these ports take the top 7 spots in our ranking table, the overall average charge has at least decreased by 25% in 2023 and stands at a value of $2008 per container per day (coming down from $2692 in 2022). The late fees at the twin ports of Los Angeles and Long Beach surpassed by another western port, Oakland.

Fig 3: D&D fees over the last 4 years across shipping lines for North American ports

 

 

 

 

port houston porto rule container conflict

New Federal Rule Threatens to Shut Down Four of Florida’s Seaports

Newly proposed rules by the National Oceanic Atmospheric Association (NOAA) pose a clear and present danger to Florida’s economy, its public safety and the security of our nation, the Florida Ports Council (FPC) said today. These federal rules would impose the most restrictive regulations on navigable waters from Pensacola to Tampa Bay, resulting in a near shut down of essential food, fuel, medical supplies and cargo imports and exports at four of Florida’s most active Gulf of Mexico seaports.

NOAAs proposal calls for eliminating all nighttime vessel traffic, and significantly reducing daytime vessel speeds, impacting Port Tampa BaySeaPort ManateePort Panama City and Port of Pensacola. The rule, NOAA says, is designed to protect a newly discovered whale, with a population size of between 50-100 whales, that is known to traverse the entire Gulf of Mexico region, and is not just limited to Florida waters.

Implicit in the federal government’s call for eliminating nighttime vessel traffic and reducing daytime vessel speeds only in Florida between Pensacola and Tampa Bay, is an uninformed assertion that Florida’s seaports have limited operations and shutting them down would not harm the supply chain in Florida or the broader United States.

Below is an outline of the economic, public safety and national security impacts of the proposed rule.

FACTS:

ECONOMIC IMPACT:

Florida’s 16 Seaports:

  • Florida seaports saw record-high cargo in 2022.
  • 112.5 million tons of cargo moved,
  • 4,310,054 TEUs (Twenty-foot Equivalent Units) moved,
  • Accounted for 13.3 percent of Florida’s GDP,
  • Supported 900,000 jobs, and
  • Contributed $117.6 billion to Florida’s economy.

Port Tampa Bay (1 of 4 Fuel Ports):

  • One of the nation’s fastest growing seaports.
  • Handled more than 33 million tons of cargo with an economic value of $17 billion in FY 2022.
  • All cargo will be impacted by the proposed NOAA rule.
  • More than 6,400 ships called on the port in FY 2022. That’s 17+ ships each day. All vessels traveled at night in the Gulf of Mexico for part of their transit.
  • More than 7,677,245 net tons of domestic petroleum products came into the port in FY 2022, all with a nighttime aspect to their transits in the Gulf of Mexico.
  • Read Port Tampa Bay’s Seaport Spotlight

SeaPort Manatee (1 of 4 Fuel Ports):

  • $5.1 billion economic value annually.
  • 33.4 percent of its ship traffic, reflecting a $1.7 billion value, will be impacted by this proposed rule.
  • 325 cargo vessels that call on this port, representing 33.4 percent of all ship traffic, traverse to and from this port at night.
  • 96 fuel ships, representing 10 percent of all fuel vessels that call on this port, traverse to and from this port at night.
  • Read SeaPort Manatee’s Seaport Spotlight.

Port Panama City:

  • 2.03 million tons of cargo was handled at this regional seaport in FY 2022, with the majority of cargo traversing at night in the Gulf of Mexico for part of its travels.
  • $618.8 million in personal income and local consumption
  • Supporting 10,790 total jobs in Northwest Florida and the Southeastern U.S.
  • $1.6 billion in total economic value
  • Read Port Panama City’s Seaport Spotlight.

Port of Pensacola:

  • 425,277 tons of cargo handled in FY 2022, a 55 percent increase year-over-year
  • $300 million in cargo now transits through this port – a 419 percent increase.

PUBLIC SAFETY: Seaports Fuel Florida:

  • Florida is not an oil refining state; therefore fuel/petrol is imported from two neighboring Gulf of Mexico port states – Louisiana and Texas.
  • Of particular impact to the public safety of all Floridians, two of Florida’s four petrol seaports that import fuel – Port Tampa Bay and SeaPort Manatee – are located within NOAA’s proposed rule restriction zone.
  • All four of Florida’s fuel ports play vital roles in keeping everything from airplanes to cars and commercial trucks used for delivering goods and supplies to grocery stores across Florida fueled.
  • More importantly, in times of natural disaster, a nighttime ban on vessel traffic, combined with daytime vessel speed limitations will exacerbate Florida’s ability to recover from storms.

NATIONAL SECURITY

  • All branches of our nation’s military use the Eastern Gulf Test and Training Range (GTTR) for national security training.
  • The GTTR is a multi-service training area that supports simultaneous maritime, air and land training exercises. It is an integral part of the Department of Defense’s Training Resource Strategy.
  • However, NOAAs proposed Vessel Slowdown Zone will restrict live fire munitions to a certain zone.
  • The Defense Support Initiatives Committee has submitted comment to NOAA stating that, “…it is essential that no restriction be placed on Department of Defense or Homeland Security activities.”

The Florida Ports Council has requested to NOAA that they rescind their proposed rule, and take action to work closely with affected ports, maritime industry stakeholders and other to accurately determine the effect any proposal would have on ports and the communities they serve. A copy of the FPCs letter to NOAA can be found here.

PROTECTING FLORIDA’S ENVIRONMENT

The Florida Ports Council and its 16 member ports have a long history of protecting Florida’s environment to preserve the state’s natural environment. Collectively, Florida’s seaports are using innovative technology to champion the use of cleaner, alternative fuels, reducing engine emissions from port equipment, recycling oil used in cranes, capturing more stormwater than ever and ensuring this stormwater is cleaner before it discharged back into the environment.

Additionally, Florida’s ports have played a key role in raising awareness of wildlife and marine life, and supporting efforts like bird sanctuaries, clam restoration, annual Right Whale festivals, and more.

Among the organizations that FPC and its member ports are actively engaged with are:

  • Florida Recycling Partnership,
  • Ocean Alliance Group (chaired by FPC member and Port Tampa Bay Port Director Paul Anderson),
  • Green Marine,
  • Tampa Bay Estuary Program,
  • Maritime Sustainability Team,
  • Manbirtee Key Bird Sanctuary
  • Coral Reef Research and Restoration
  • American and Florida Shore and Beach Preservation Association
  • Leadership in Energy and Environmental Design (LEED) Green Building Rating
costa

Call for US Trade Restrictions Against Costa Rica for International Fishing Violations

A call for U.S. Port Access and Import Restrictions to Protect Endangered Sharks and Billfish

An international coalition of 18 Marine Conservation Organizations (MCOs) has presented evidence to the Office of International Affairs, Trade, and Commerce (IATC) of the National Marine Fisheries Service (NMFS) that Costa Rica is in violation of at least two fisheries conventions as well as U.S. Public Law, and its actions threaten populations of endangered sharks and commercial billfish.

The coalition is calling on NMFS to present a negative finding against Costa Rica in its next Biannual Report in 2023 to the US Congress and maintain its status as a nation that repeatedly practices Illegal, Unreported, and Unregulated (IUU) fishing. NMFS had already identified Costa Rica as an IUU nation in its 2021 Congressional Report which also highlighted unsustainable fishing problems that the country has since failed to rectify.

IUU fishing remains one of the greatest threats to marine ecosystems, according to the Food and Agricultural Organization of the United Nations. Until these illegal practices are halted, Costa’ Rica’s fishery threatens marine biodiversity and regional fisheries within the Pacific Central American Coastal Large Marine Ecosystem (PACA). The issuing of a negative finding for Costa Rica by NMFS could deny Costa Rican fishing vessels access to U.S. ports and potential import restrictions on fish or fish products under the U.S. Moratorium Protection Act.

Specifically, the petition lists several violations under the International Commission for the Conservation of Atlantic Tunas treaty (ICCAT), including the illegal take of endangered hammerhead sharks, silky sharks, and thresher sharks, as well as illegal take of swordfish without a quota and overfishing of white marlin. Furthermore, it calls out Costa Rica’s failure to institute an onboard observer program after 12 years of promising one, without which it is impossible to properly document and manage its fisheries. Costa Rica is similarly in violation of its treaty obligations under the Inter-American Tropical Tuna Commission treaty (IATTC).

A negative listing should be a wakeup call for the Costa Rican government to take corrective actions and lead the process for other countries to take similar measures to comply with their international maritime agreements”, said a hopeful Joe Ryan, of Beyond the Se@. “This is what the world expects from Costa Rica,” affirmed Ryan.

The coalition further calls on the U.S. to encourage a list of actions Costa Rica can take to improve its fishery management practices and prevent a future negative listing including:

  • Immediate implementation of an observer program and requiring the recording and monitoring of bycatch.

  • Prohibition of directed and incidental fishing and commercialization of endangered sharks under Costa Rica’s Wildlife Conservation Law. Incidental catch of endangered sharks should be capped at a level that protects the species, with consequences for any exceedances.

  • Catch limits must be established for sharks that are not listed as endangered to establish a sustainable fishery. Once these limits are surpassed, fisheries must be suspended.

  • Immediate and permanent ban on the use of steel leaders.

  • Implement a six-month Pacific longline seasonal closure (from May to October) during the time when mahi-mahi catch is at its lowest and shark catch is at its highest. Costa Rica´s endangered shark catches are increasing, and what is described as a mahi-mahi fishery actually targets endangered sharks.

  • Promotion of green-stick yellow fin tuna fishing, or trolling, by Costa Rican fleets, and help Costa Rican longliners transition to this form of fishing when the longline fishery is closed during the months of May to October to protect sharks.