Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
On Sept. 29, 2002, the Pacific Maritime Association (PMA), the body representing waterfront management on the U.S.
West Coast, locked out members of the International Longshore and Warehouse Union (ILWU) amid allegations the labor union
was engaging in a deliberate work slowdown to support its demands for a new contract.
The lockout left heavily laden containerships stranded outside of ports from Seattle to San Diego, with no workers
available to unload the cargo. By the time it ended 10 days later—much longer than anyone originally expected—the lockout
had disrupted supply chains from coast to coast and had cost importers and the U.S. economy hundreds of millions, if not billions,
of dollars.
It also caught many shippers and importers with their pants down. At the time of the lockout, more than 80
percent of seagoing imports from Asia entered the United States via West Coast ports. With dock activity paralyzed
and no other port options, ships simply idled in the Pacific Ocean, creating a massive logjam. It took three months
after the strike ended for the backlog to be cleared.
In the wake of the lockout, many importers vowed to never get caught in that situation again and began
a multiyear gateway diversification program. Today, East and Gulf Coast ports handle 30 percent of Asian
imports—mostly through the Panama Canal—while West Coast ports handle about 70 percent, according
to data from Robert Sappio, managing director at consultancy Alvarez & Marsal. (In 2000, about 85 percent of all
Asian seagoing imports entered through the West Coast, with 15 percent coming in through the East, he said.)
A decade later, the agility of the seagoing supply chain could be tested again, this time by a labor-management showdown
looming in the East. Since March, the International Longshoremen's Association (ILA) has been engaged in a war of words with
the United States Maritime Alliance (USMX), which represents waterfront employers, over a new contract to replace the current
pact that expires Sept. 30. The ILA represents 30,000 longshore workers on the East and Gulf Coasts, the Great Lakes, Canada,
and Puerto Rico.
The two sides exchanged general proposals in late March and are scheduled to meet this week in Delray Beach, Fla. In the
interim, there have been no formal negotiations but plenty of rhetoric.
At the center of the storm is ILA General President Harold J. Daggett, a third-generation ILA member and a
45-year association veteran. An imposing and forceful personality right out of central casting, Daggett has
warned for the past few months that a work stoppage is very possible as long as employers refuse to guarantee
longshore worker jobs in return for the group's acquiescence to the increased use of automation at the ports.
While there are other matters of contention, the issue of automation's replacing labor on the docks is and will
continue to be the main sticking point. At an early March industry conference, Daggett threw down the gauntlet to
waterfront management. "We know technology is coming, and we know we can't stop it forever," he said, "but we will
not be deterred from protecting our work and our jurisdiction."
TEMPEST IN A TEAPOT?
In theory, a dockworkers strike seems far-fetched. In a sluggish economy with elevated unemployment levels,
it is unlikely dockworkers would be motivated to walk off of—or want to be locked out of—jobs that
offer generous wages and benefits.
Should the game of chicken continue into the late summer, the Obama administration may seek a national emergency
injunction under the Taft-Hartley Act, a 1947 labor law, to effectively force labor back to work rather than allow
a job action to further damage an already-fragile economy in a presidential election year.
>p>For now, importers are mostly keeping mum. Mark Q. Holifield, who runs the global supply chain for mega-retailer
The Home Depot Inc., declined comment other than to say that "in the normal course of our business, we monitor freight
flows, capacity, and trends daily, and take appropriate actions to optimize our supply chain."
Tim Feemster, senior managing director at industrial property and logistics firm Newmark Grubb Knight Frank, said in
a June 8 e-mail that it is too early for cargo diversion to occur. "The next few weeks will give us an early warning as
to the tenor of the talks," he said. "We will not see the impact at the ports, or [in] the volume for the Western railroads,
for another six to eight weeks."
Yet no shipper or importer is likely to wait long for both sides to reach an agreement, or for the White House to step in to
end an impasse. Importers receiving goods into the East Coast from Asia and Europe have become concerned about possible service
disruptions in the ILA's territory and have begun weighing plans to shift deliveries to West Coast ports to avoid any problems.
They are also looking at the possibility of advancing inventories of potentially strong-selling holiday items so they are
guaranteed to be resting in U.S. commerce no matter what happens at the bargaining table.
DIVERSIONARY TACTICS
Experts say the time to begin planning is now, especially while West Coast ports are underutilized and there is ample
containership capacity on the water with only about 3 percent of the global fleet sitting idle.
Sappio of Alvarez & Marsal, who spent nearly 30 years at ship giant APL, said companies looking to shift deliveries to West
Coast ports should secure vessel slots no later than the end of July. "If contract discussions go badly in August, you're going
to be late to the game," he said. "If it's much after July, it's going to be a chore to find a ship."
Sappio said he believes a strike or lockout is unlikely and that any inventory shift that occurs as a result will be
short-lived. He added, however, that port congestion, especially at Los Angeles and Long Beach, is a "certainty" should
a work stoppage occur.
Sappio surmised that some carriers may pre-file a "congestion surcharge" to offset unforeseen operating expenses
arising from any supply chain disruptions in the East. This would come on top of "peak season" surcharges on Asian
import traffic ranging from $480 to $675 per container. Those surcharges are expected to hit over the next few weeks.
Timothy R. Simpson, a spokesman for Copenhagen-based A.P. Moeller Maersk, the world's largest liner company, was unaware of
any congestion surcharges under discussion.
Henry L. (Rick) Wen, Jr., vice president, business development/public affairs for the U.S. arm of liner giant Orient Overseas
Container Line Inc., said that in the event of a work stoppage, ships already laden with imports could declare "force majeure," a
legal maneuver shielding them from damages should an event outside of their control prevent them from fulfilling their contractual
obligations.
Wen said ship lines would consider diverting vessels to Canadian ports and offloading freight there, or simply lying at
anchor until the strike is settled. Regardless of the scenario, delays and bottlenecks would ensue because Canadian ports would
be overwhelmed by all the diverted cargo. As a result, importers and exporters would be subject to additional charges under force
majeure terms, he said.
While a work stoppage would mostly affect the flow of U.S. imports from Europe, cargo flows on both coasts would be
stymied if the ILWU struck in sympathy with their East and Gulf Coast brethren. In a saber-rattling statement in early May,
ILWU International President Robert McEllrath voiced full support for ILA workers. "The fact is that we have their back in
the fight to protect work and jurisdiction; their fight is our fight," he said.
RAMPING UP
For their part, service providers are starting to listen to their customers, and they are starting to stir.
APL Logistics, the third-party logistics unit of shipping giant APL, is gearing up its deconsolidation capabilities
along the West Coast to accommodate any surge in imports, according to Tony Zasimovich, the company's vice president
of international services.
Zasimovich added that APL Logistics will prepare to deploy more team-driver truck capacity to get goods inland
and will ensure space is available for its "Ocean Guaranteed" service, which, as its name implies, guarantees deliveries
from Asia to all continental U.S. points served by its trucking partner Con-way Freight, the less-than-truckload arm of
Con-way Inc. The service is available for less-than-containerload and full-containerload traffic, albeit at a higher price
than an all-water service.
Zasimovich said vessel users have a window until early August to put contingency plans in place.
Western railroads are gearing up as well. "We continue to talk to customers to understand what their needs might be," said
John P. Lanigan, executive vice president and chief marketing officer for BNSF Railway, one of the two Western rails. "We
are in good shape for locomotives, freight cars, and crews. We can respond to a surge in traffic with people, assets, and
increased cars per train."
Lanigan added, however, that he would just as soon not see the rail's contingency plans be executed. "We certainly hope
there is no disruption as it would negatively impact overall U.S. supply chain operations," he said.
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.
Electric vehicle (EV) sales have seen slow and steady growth, as the vehicles continue to gain converts among consumers and delivery fleet operators alike. But a consistent frustration for drivers has been pulling up to a charging station only to find that the charger has been intentionally broken or disabled.
To address that threat, the EV charging solution provider ChargePoint has launched two products to combat charger vandalism.
The first is a cut-resistant charging cable that's designed to deter theft. The cable, which incorporates what the manufacturer calls "novel cut-resistant materials," is substantially more difficult for would-be vandals to cut but is still flexible enough for drivers to maneuver comfortably, the California firm said. ChargePoint intends to make its cut-resistant cables available for all of its commercial and fleet charging stations, and, starting in the middle of the year, will license the cable design to other charging station manufacturers as part of an industrywide effort to combat cable theft and vandalism.
The second product, ChargePoint Protect, is an alarm system that detects charging cable tampering in real time and literally sounds the alarm using the charger's existing speakers, screens, and lighting system. It also sends SMS or email messages to ChargePoint customers notifying them that the system's alarm has been triggered.
ChargePoint says it expects these two new solutions, when combined, will benefit charging station owners by reducing station repair costs associated with vandalism and EV drivers by ensuring they can trust charging stations to work when and where they need them.
New Jersey is home to the most congested freight bottleneck in the country for the seventh straight year, according to research from the American Transportation Research Institute (ATRI), released today.
ATRI’s annual list of the Top 100 Truck Bottlenecks aims to highlight the nation’s most congested highways and help local, state, and federal governments target funding to areas most in need of relief. The data show ways to reduce chokepoints, lower emissions, and drive economic growth, according to the researchers.
The 2025 Top Truck Bottleneck List measures the level of truck-involved congestion at more than 325 locations on the national highway system. The analysis is based on an extensive database of freight truck GPS data and uses several customized software applications and analysis methods, along with terabytes of data from trucking operations, to produce a congestion impact ranking for each location. The bottleneck locations detailed in the latest ATRI list represent the top 100 congested locations, although ATRI continuously monitors more than 325 freight-critical locations, the group said.
For the seventh straight year, the intersection of I-95 and State Route 4 near the George Washington Bridge in Fort Lee, New Jersey, is the top freight bottleneck in the country. The remaining top 10 bottlenecks include: Chicago, I-294 at I-290/I-88; Houston, I-45 at I-69/US 59; Atlanta, I-285 at I-85 (North); Nashville: I-24/I-40 at I-440 (East); Atlanta: I-75 at I-285 (North); Los Angeles, SR 60 at SR 57; Cincinnati, I-71 at I-75; Houston, I-10 at I-45; and Atlanta, I-20 at I-285 (West).
ATRI’s analysis, which utilized data from 2024, found that traffic conditions continue to deteriorate from recent years, partly due to work zones resulting from increased infrastructure investment. Average rush hour truck speeds were 34.2 miles per hour (MPH), down 3% from the previous year. Among the top 10 locations, average rush hour truck speeds were 29.7 MPH.
In addition to squandering time and money, these delays also waste fuel—with trucks burning an estimated 6.4 billion gallons of diesel fuel and producing more than 65 million metric tons of additional carbon emissions while stuck in traffic jams, according to ATRI.
On a positive note, ATRI said its analysis helps quantify the value of infrastructure investment, pointing to improvements at Chicago’s Jane Byrne Interchange as an example. Once the number one truck bottleneck in the country for three years in a row, the recently constructed interchange saw rush hour truck speeds improve by nearly 25% after construction was completed, according to the report.
“Delays inflicted on truckers by congestion are the equivalent of 436,000 drivers sitting idle for an entire year,” ATRI President and COO Rebecca Brewster said in a statement announcing the findings. “These metrics are getting worse, but the good news is that states do not need to accept the status quo. Illinois was once home to the top bottleneck in the country, but following a sustained effort to expand capacity, the Jane Byrne Interchange in Chicago no longer ranks in the top 10. This data gives policymakers a road map to reduce chokepoints, lower emissions, and drive economic growth.”
"Shrink" is the retail industry term for the loss of inventory before it can be sold, whether through theft, damage, fraud, or simple book-keeping errors. In the ongoing effort to reduce those losses, Switzerland-based retail tech company Sensormatic Solutions has expanded the scope of its Shrink Analyzer application to shine a light into previously unmonitored parts of brick-and-mortar stores where goods tend to go missing.
The newly enhanced, cloud-based application can now integrate radio-frequency identification (RFID) and electronic product code (EPC) data from overlooked parts of the building, like employee entrances, receiving doors, "buy online, pick up in store" (BOPIS) doors, or other high-risk areas selected by a store. It then integrates that data into Sensormatic's analytics engine to provide insights into when, where, and how shrink occurs to help users strengthen their loss-prevention strategies, the company says.
Those expanded capabilities allow the platform to provide enhanced "shrink insight" at locations beyond the store's main exit, Sensormatic says. For example, strategically placed RFID scanners at employee exits can reduce internal theft while providing item-level evidence for theft investigation efforts. Likewise, monitoring online-order pickup doors can help retailers both improve in-store e-commerce fulfillment accuracy and identify employee theft events, according to Sensormatic.
A few days before Christmas as I was busy preparing for the holiday, I received a text message from my bank asking if I had attempted to purchase a $244 Amtrak ticket in Orange County, California. Considering that I had the card in my possession and that I lived thousands of miles away from the attempted purchase location, I promptly replied "No." Almost immediately, a second message informed me that my card was locked and to contact my bank.
I'd like to say this was an isolated incident, but in 2024, I had to replace the same card four times. Luckily, it just took a quick trip to my local bank to replace the compromised card, but it was still an unwanted hassle.
Fraud is a never-ending issue facing not just consumers but businesses as well—no one is immune, it seems. In its latest industry report, "Occupational Fraud 2024: A Report to the Nations," the Association of Certified Fraud Examiners (ACFE) estimated that businesses lose 5% of their revenues to fraud each year. This report focused specifically on three basic types of occupational fraud: asset misappropriation, corruption, and financial misstatement. But what about other types of fraud?
The media often report on big organized theft rings stealing goods from trailers, trains, or containerships, or on bands of thieves breaking into warehouses or retail stores—but there are so many other ways in which fraudsters wreak havoc.
For instance, another area where fraud is rampant is consumer returns in the retail industry. Software company Appriss Retail, in collaboration with business management consultancy Deloitte, recently published its "2024 Consumer Returns in the Retail Industry" report. It states that "total returns for the retail industry amounted to $685 billion in merchandise in 2024." That might seem like a drop in the bucket compared to the $5 trillion in sales U.S. retailers racked up last year, but as the report's authors note in the executive summary, "the amount of fraud and abuse remains a significant issue that should be addressed. Fraudsters and abusers are often becoming adept at circumventing retailers' controls across all channels."
So what can businesses do? According to the ACFE study, internal controls (i.e., surprise audits, management reviews, hotlines or other reporting mechanisms, fraud training, and formal fraud risk assessments) are the best defense against occupational fraud.
When it comes to consumer returns fraud, Appriss Retail's report concludes that while retailers continue to adapt and refine their fraud prevention strategies, it's a delicate balancing act. The trick is for "retailers to implement solutions that have [a] minimal impact on the consumer experience," the report noted. "Brand loyalty can be fragile and competition continues to grow, so holding onto consumers is often a key to long-term success."
Then there's security and asset protection. Last October, I attended a session at the Council of Supply Chain Management Professionals' EDGE 2024 conference that focused on security and safety. In that session, Lee Ambrose, vice president of business development for Remote Security Solutions (RSS), discussed advanced strategies and technologies for violence prevention. But he also touched on asset/transit protection and specific solutions that can help companies discourage theft.
As an example, Ambrose cited his company's transit surveillance unit (TSU)—a portable monitoring device that can be installed on trailers to protect in-transit freight. According to the company's website, the TSU uses AI (artificial intelligence) detection, security cameras, and two-way communication to deter criminal activity, providing real-time detection and notification when unauthorized persons attempt to enter the trailer. It claims the device has a deterrence rate of 98%.
In the end, sometimes there is only so much a company can do to mitigate fraud/theft. But we are fortunate to have resources we can turn to if we need help. It's an uphill battle, but one that we will keep on fighting.