by A1 WorldWide Logistics | Jul 18, 2023 | Freight Forwarding, Shipping Logistics, Supply Chain
A recent drought has led to the Panama Canal facing restrictions. The Panama Canal is an artificial passageway that connects cargo ships to the Atlantic and Pacific oceans. It is a crucial shortcut that cuts shipping journeys by thousands of miles. Since June 5th, limits have been placed on the canal due to recent climate changes causing a drought. While dryer weather tends to happen every five years in Panama, the span has reportedly sped to three years. The levels of dryness have also rose, with 2023 being the driest year on record since 1950. Panama’s national government has declared an environmental emergency due to minimal rainfall in the past months.
What are the Restrictions
Draft limits for carriers passing through the Panama Canal have recently been cut to a maximum of 44.5 feet (13.56m). Canal officials will also reduce the draft limit to 43.5 feet (13.26m) on June 25th. The standard draft maximum in the Panama Canal is 50 feet (15.24m). A boat draft is the vertical distance between the waterline and the deepest boat point. The canal’s restrictions are in place to determine how deep the vessel can float in the water. Boats meet the guidelines by transporting less weight, which is accomplished by shipping fewer containers. Neopanamax vessels, which were permitted entry at the creation of the third set of locks, are the only type affected by the rules.
The last severe drought in the Panama Canal was in 2019-2020. Climatologists forecast that the dry conditions will continue to grow with the El Nino weather pattern arriving soon. El Nino tends to bring drier and warmer climates Across most of Central America. When the phenomenon hit Panama in 2015, the ACP (Panama Canal Authority) reported a revenue loss of $40 million. The ACP has warned that if conditions worsen, they will lower the number of daily crossings. The current number is 35 vessels daily, which may drop to less than 32.
What Does The Panama Canal Facing Restrictions Mean For Supply Chains
The Panama Canal is a crucial global trade route and a significant passageway for supply chains requiring international shipping. It is an ideal shortcut in maritime container transportation and beings in over $2 billion yearly for Panama’s economy. With some of the largest carrier companies transporting through the canal, restrictions may significantly impact supply chains. In the past, the charges led shippers to look for other routes to ship their goods when dryer conditions occurred. Specific carriers have already started applying surcharges for containers entering the U.S. East Coast from Asia.
While the shipping world can be unpredictable, it should not stop you from growing your supply chain. Shippers should, however, be up to date with any changes or new regulations in the industry. The importer/exporter should also take precautions to prevent any mishaps. Having a freight forwarder coordinate the shipping process for you is the best way to ensure secure freight movement. A forwarder guides you through the entire transportation journey from start to finish while educating you along the way. Contact A1 Worldwide Logistics at 305-821-8995 to speak to our export freight forwarders regarding the movement of your cargo internationally or domestically.
by A1 WorldWide Logistics | Jul 3, 2023 | Delivery, Freight, Shipping Logistics
After months of back and forth, UPS vows to reach deal with Teamsters by July 5th. UPS (United Parcel Service) is the largest package shipping company in the U.S. in terms of volume. Recently unsatisfactory contract negotiations between UPS executives and workers have reached a point where a strike was looming. The workers are part of Teamsters, an extensive union of freight drivers and warehouse laborers in the U.S. More than 340,000 UPS employees comprising the Teamsters Union have been negotiating a contract reflecting their work. Last week, 97% of Teamster members voted to protest if UPS did not achieve a compromise.
With the amount of Teamsters workers in UPS, a walkout could be the largest single-company strike in U.S. history. The Teamsters General Secretary-Treasurer noted, “Our members are the backbone of UPS, and they are the reason this corporation hauled in more than $100 billion in revenue just last year.” Along with higher wages, the negotiated contract ended harassment from management and forced overtime. The conversations also brought up the elimination of a two-tier wage system and heat mitigation efforts for drivers. UPS vans that delivers drive do not come equipped with air conditioning, which Teamsters workers are demanding to install.
UPS Vows to Reach Deal by July 5th
One of the reasons why talks between the UPS and Teamsters have not gone so smoothly is due to contract ramifications. A new contract with higher employee pay can lead to UPS finding ways to offset the monetary losses incurred. This could mean looking for larger-sized clients like businesses compared to individuals. A slowing economy and recent inflation are also concerns for UPS if the parties ratify a new contract. With demand predicted to continue slowing throughout the end of 2023, deciding to charge higher rates can have negative effects. UPS’s competitor FedEx, which is currently taking out billions to potentially offer lower rates, may seem more attractive to customers.
On Friday, June 30th, Teamsters announced that UPS planned on reaching a contract agreement by July 5th. The announcement was made before the current 5-year national contract expires on July 31st. With the potential of a strike from Teamsters happening if no resolution is reached, this comes as positive news. A strike not only affects UPS, customers, and the economy feel the impact because of the size of UPS. Teamsters, however, noted that they will have a walkout on August 1st if UPS doesn’t reach an agreement by then.
What Can This Mean for Your Goods?
With over 17 million domestic packages delivered daily, a strike could drastically impact UPS’s customers. As mentioned, a new contract with higher labor costs leads to greater money loss for UPS. To compensate, UPS may begin charging higher rates and surcharges to their customers. A main concern is that UPS may lose customers if shipping becomes more expensive due to the current cost-sensitive market. Customers who ship globally could switch to alternatives like freight forwarders to ship their cargo. If you plan on exporting from the U.S. to anywhere internationally, contact A1 Worldwide Logistics at 305-821-8995 for assistance.
by A1 WorldWide Logistics | Jun 21, 2023 | Supply Chain, Transportation, West Coast Protests
Disruptions in numerous West Coast ports across the U.S. may soon subside as the ILWU and PMA reach a deal. ILWU workers and the PMA (Pacific Maritime Association) have negotiated a new contract for the past 13 months. After over a year of unsuccessful talks, the ILWU voiced their displeasure by protesting and walking off seaports. Terminals in the ports of Long Beach, Los Angeles, Seattle, Oakland, Hueneme, and Tacoma were all impacted by limited employees. As containers piled on terminals, outbound and inbound dwell times spiked. In five major West Coast ports, average dwell times increased to 13%. The Port of Tacoma’s dwell time reached nearly 87%.
Disagreements in contract talks resulted in terminal shutdowns and the complete closure of specific ports. The Port of Seattle closed completely on June 10th due to insufficient ILWU dockworkers showing up to work. Along with conflicts resulting from inadequate wages, health and safety concerns were also in the conversations. Reportedly 43 ILWU workers died during the coronavirus pandemic, with over 13 dying from covid. As shippers started to pay attention to the disruptions, they began shipping cargo to East and Gulf Coast ports. Even when the negotiations started, West Coast Ports experienced close to a 15% market loss due to the transition.
ILWU and PMA reach Deal
The deal was announced as a “tentative agreement,” meaning the parties have not officially ratified it. However, the agreement is on a new six-year contract which is currently subject to changes. The president of the PMA, James McKenna, notes that the contract “recognizes the heroic efforts and personal sacrifices of the ILWU workforce in keeping our ports operating during the pandemic and supply chain crisis.” The ILWU president said that the ILWU will now return to entirely focusing on West Coast port operations. The cooperation between the PMA and ILWA is vital with the peak season approaching soon.
The Peak Season
The peak season in shipping is the busiest time for international cargo movement when the demand is the highest. From mid-August to near Thanksgiving, many industries experience a high amount of orders, meaning a greater volume of shipments moved. The number of vessels importing containers into West Coast ports has already risen, similar to pre-covid levels. Los Angeles and Long Beach ports had 58 ships en route on Monday compared to 46 a month prior. A deal reached between the ILWU and PMA becomes gradually important as more cargo starts to be brought in. A shutdown of some of the biggest ports in the U.S. can impact a higher amount of supply chains.
As West Coast ports return to normal operations, businesses that ship internationally benefit from fewer disruptions. This is especially true with the peak and holiday seasons approaching rapidly. A way to ensure your shipment is successful is by hiring a logistics company to handle the process. Logistics companies coordinate your goods’ movement and take over other parts of your supply chain. Having extra services can be beneficial in getting and retaining customers as well as growing your business. Contact A1 Worldwide Logistics at 305-821-8995 to learn about our solutions for helping you navigate the global shipping industry.
by A1 WorldWide Logistics | Jun 13, 2023 | Freight Forwarding, Import and Export Experts, Shipping Logistics, Supply Chain
On Friday, June 2nd, terminals throughout various West Coast ports were shut down due to labor shortages. Workers in the ILWU (International Longshore and Warehouse Union) left their jobs due to failed contract negotiations. Over the past year, the ILWU and PMA (Pacific Maritime Association) have been in talks regarding contractual agreements like wages. Despite the progress made in the negotiations, a resolution has yet to be made. More than 20,000 workers from the ILWU have been working in numerous West Coast ports since July 2022. Terminals in Los Angeles, Long Beach Oakland, Seattle, Tacoma, and Hueneme ports have all reported disruptions from the walkouts.
The Latest Developments
The disruptions continued in the Port of Seattle with the shutdown of the entire seaport on June 10th. On June 9th, the second and third shifts experienced massive slowdowns as ILWU officials led operations to a pause. The Port Authority responded by sending the workers home; insufficient workers led to closure the next day. This port is one of the biggest movers of grain and produce in the U.S. Shipments from U.S. exporters are currently idle at the docks, with the ILWU declining to dispatch terminal workers. The ILWU made a contradictory statement: that the Port of Seattle and other ports are operating.
Union workers noted that they are not getting an adequate pay increase for the work they are putting in. Especially compared to the revenue the U.S. shipping industry made during the coronavirus pandemic. The ILWU said in a statement that they are negotiating for a contract that is “fair and equitable”. Business groups recently sent a letter to the Biden administration to appoint a mediator to address the current protests. Nearly 12% of the U.S.’s GDP (Gross Domestic Product) comes from West Coast ports. With the Port of Seattle being one of the biggest harbors in the U.S., International Shipping may soon feel the impact.
The Impact on Global Supply Chains
The Port of Seattle is a top U.S. agricultural exporter and, with the Port of Tacoma, makes up the NWSA. NWSA (Northwest Seaport Alliance) is North America’s 4th largest container gateway and 2nd largest refrigerated container gateway. With its extensive size, many supply chains are affected by a port shutdown. Add the disruptions of the other West Coast ports to the mix, and many cargo movers may soon be impacted. The supply chain congestions and bottlenecks felt during the coronavirus pandemic may return. Shippers have also moved their shipments to the East Coast and Gulf Ports to mitigate the slowdown.
As the pressures on the Port of Seattle and other West Coast ports persist, billions of cargo remain stagnant. With the peak and holiday season quickly approaching, the industry may feel the current disruptions sooner. Despite this, the movement of shipments is necessary for the success of an incredible number of supply chains. However, a shipper must be current with any occurrence in the freight movement industry. Contact A1 Worldwide Logistics at 305-821-8995 to help meet your supply chain goals. Whether it’s importing, exporting, warehousing, etc., we help you navigate the complex world of shipping.
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by A1 WorldWide Logistics | May 17, 2023 | 3PL, Order Fulfillment, Warehousing
3PL or third-party logistics are outsourced solutions a company offers to its customers. This kind of operation has grown over the last decades due to the need for business to expand their reach. While 3PLs provide extensive services, some main ones include warehousing, shipping, and e-commerce fulfillment. 3PLs break down further into four categories. The four types of 3PL companies include standard, service developers, customer adapters, and customer developers. This article will introduce the 3PL and explain the differences and advantages between each.
Standard 3PLs
Standard 3PLs are known as the most common type of third-party logistics provider. This service is used by businesses requiring basic logistics needs like warehousing and storage. Small e-commerce companies also use this type of service for packing and picking at a low cost. Since the number of solutions offered is limited compared to the following three 3PLs, they tend to be less expensive. This is ideal for customers on a budget. As businesses expand, they usually switch to other 3PL types to achieve their goals.
3PL Service Developers
3PL service developers encompass all of the solutions that a standard 3PL has but add some more to it. Some of these services include IT Infrastructure and management. IT (Information Technology) infrastructure uses hardware and software to operate a business. An example is using a web server or app created by a 3PL company for customer order fulfillment. The IT framework also allows shipment tracking, cross-docking, extra security, and specific packaging.
3PL Customer Adapters
One of the most advanced 3PL service providers is known as customer adapters. Rather than having their own logistics operations, they take over and run their customer’s processes entirely. Adaptors control the end-to-end fulfillment supply chain of the hiring business by managing parts such as shipping and warehousing. This is ideal for scaling business since owners have little involvement, meaning they can focus on other aspects of their company. Customer adapters can be expensive compared to the other 3PLs due to the functionality provided to a client.
3PL Customer Developers
Similarly to customer adaptors, customer developers take control of a company’s logistics aspects. They differ since customer developers provide their systems while inheriting their client’s operations. Along with overseeing the procedures, they improve the performance of a business by giving constantly updated data. Large companies tend to be the primary users of this 3PL, which is usually the costliest option. A few of this 3PL type exist due to the size and complexity of maintenance.
The 3PL industry has expanded over the last decades due to the number of solutions offered. This article listed a few of the services; however, the list broadens to options like customs clearance. 3PLs are the easiest way for companies to grow their operations and increase the provided to their customers. As e-commerce has become popular, so has the need for 3PLs for order fulfillment. Contact A1 Worldwide Logistics at 305-821-8995 or info@a1wwl.com to learn more about our numerous 3PL solutions. We can help you achieve your objectives no matter the size of your business.
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