by A1 WorldWide Logistics | Aug 3, 2023 | Customs Broker, Shipping Logistics, Supply Chain
Last year, The California government had a report regarding California ports receiving $1.2 billion in federal grants. California Governor Gavin Newsom officially announced the grants on July 6, 2023. Capital will be put aside for multiple projects in Los Angeles, Long Beach, and Oakland ports. The purpose of the grants is for an overall improvement of port systems while creating zero-emission infrastructure to lower pollution. Newsom noted, “These investments will modernize our ports, reduce pollution, eliminate bottlenecks, and create a more dynamic distribution network.” Along with port upgrades, these investments will create over 20,000 jobs in the three ports.
Why are the California Ports Receiving $1.2 Billion in Grants?
During the coronavirus pandemic, the California ports’ cargo volumes grew to record levels. This resulted in congestion, delays, and equipment shortages and revealed several weak links in the ports. The state of California acted by issuing grants to fund development and modernization. While the goal is to build a more effective system for freight movement, various projects will help achieve this. One of the most significant projects is to enlarge the Maritime Support Facility. The Maritime Support facility is in charge of providing chassis and extra storage for all of the terminals in the Los Angeles and Long Beach ports. Bottlenecks in the past years led to overflowing containers and a limited amount of chassis to move the containers.
Along with growing infrastructure, the projects also include improving port roads. In the port of Los Angles, State Route 47 meets Navy Way and Seaside Avenue. These routes tend to get congested, leading to delays for shipments inside and out of the port. The California government will award $41.79 million in grant money to renovate the route to reduce collisions and lower traffic. A two-lane road by the port of Los Angeles is being made to cut traffic. Other grants include hundreds of millions to develop zero-emission cargo handling equipment in the Ports of Oakland and Long Beach. The plans mentioned are some of the 15 projects to improve and develop the ports’ capabilities.
How Will Shippers Benefit?
The Port of Los Angeles is known as the biggest seaport in the U.S., with the other ports following closely. With the amount of cargo moved through the ports yearly, renovations will significantly impact international shipping. In the past few years, the coronavirus pandemic grew the amount of goods bought online. This increased imports from countries like China. A side effect was a shipment surge resulting in port congestion and delays. The port improvement projects are a significant step towards fixing the challenges and keeping up with the demand. Shippers will benefit by decreasing the number of supply chain disruptions for them and their clients.
Port infrastructure upgrades not only benefit regular shippers but first-time shippers as well. However, it may not be enough to ensure the entire freight movement process runs smoothly. It is crucial to talk to a customs broker and freight forwarder to guarantee the moving of your cargo. Contact A1 Worldwide Logistics at 305-821-8995 for customs clearance and assistance in getting your goods to the final destination. Whether you are importing into or out of the U.S., we will guide you through the shipping process.
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 29, 2023 | Importing, Shipping Logistics, Supply Chain
U.S. short-sea shipping is one of the trends in cargo movement that has recently surged. Short-sea shipping is a method of cargo movement involving maritime transportation over short distances instead of between continents. An example is using a west coastline to ship from the Port of Seattle to the Port of Long Beach. This can also mean transporting goods to different countries; however, the method involves small inland waterways and coastlines. While shippers did this practice since ancient times, the last few centuries saw a gain in traction in Europe. Today, the EU (European Union) moves nearly 40% of all freight utilizing short-sea shipping.
Benefits from U.S. Short Sea Shipping
Similar to Europe in the past, the U.S. has recently been growing its dependence on short-sea shipping. The shift to waterborne shipping in the U.S. has not been as quick. This is because most of the U.S. is not economically accessible by water compared to Europe. Despite this, shippers have made steps towards short sea shipping. Many advantages have become evident as shippers and carriers have jumped on the trend. The main benefit is that transportation time decreases drastically. The U.S. has nearly 20,000 navigable channels like canals, rivers, and coastal regions that vessels can pass through. Compared to moving goods by truck, shipping through waterways can bypass highway traffic.
This can mean that potential delays become avoided when reaching the final destination. “Sea motorways” in the U.S. have sped up delivery times and may help lower the crowded capacity in trucking. Another advantage of short-sea shipping is the cost savings that can be possible. Moving goods by sea tends to be less expensive than other conveyance methods. This is especially true for moving large volumes of cargo like containers. Fewer CO2 emissions per ton carried also mean that it is an environmentally friendlier alternative compared to inland transportation. With the shipping industry pushing toward an eco-friendlier environment, inland shipping is beneficial in reducing the ecological footprint.
Trade Between the U.S. and Canada Benefit
Canada is known as the U.S.’s largest trade partner, with trade valued at nearly $794 billion in 2022. A recent study analyzed the potential benefit if both countries increased their short-sea shipping capabilities. The analysis examined the cross-border trade relationships between Canada and the U.S. in the Great Lakes. Short-sea shipping in the Great Lakes region can have significant advantages with the volume of freight that passes through. The main advantage is that the amount of shipments made at a time increases drastically. On average, one marine vessel can carry a cargo capacity of over 900 Trucks.
With increased freight in the Great Lakes, carriers can elevate bottlenecks and decrease air pollution. Short-sea shipping may also solve rising fuel costs and delays. While it is a while until short-sea shipping becomes more common in the U.S., shippers still need to move cargo. If you plan on importing or exporting out of the U.S., contact A1 Worldwide Logistics at 305-821-8995 for assistance. Along with transporting your goods by sea, we provide other conveyance methods like land and air to move your shipment.
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.
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