The nation's largest retailers today urged President Obama to become directly involved in the stalled contract talks between ship management and striking clerical workers at the Ports of Los Angeles and Long Beach. The stalled negotiations have triggered a work stoppage that has shut a large segment of the nation's two largest ports.
In a letter to the president, Matthew Shay, president and CEO of the National Retail Federation (NRF), said, "A prolonged strike at the nation's largest ports would have a devastating impact on the U.S. economy." Shay urged President Obama to "use all means necessary" to get both sides back to bargaining.
The strike by an 800-member clerical local of the International Longshore and Warehouse Union (ILWU) is now in its third day. The walkout initially hit the APM Terminal, the largest at the Port of Los Angeles. In support of the clerical workers, dockworkers at the terminal honored the picket line, shutting down operations there.
The clerical strike, and the action by dockworkers in sympathy with the strikers, widened yesterday to include seven of the eight other facilities at Los Angeles and three of the six terminals at adjacent Long Beach. The two ports combined handle approximately 40 percent of seagoing Asian imports entering the United States.
Shay said that because of the current fragile state of the U.S. economy, an extended strike could be worse than the October 2002 management lockout at West Coast ports, which shut down the waterfront from Seattle to San Diego for 10 days and cost the U.S. economy an estimated $1 billion a day.
Unlike in 2002, when some amount of pre-holiday peak season cargo was stranded on the water, most of this season's holiday traffic has entered U.S. commerce by now. Still, any surge in demand close to Christmas Day—especially with many reports showing an uptick in consumer spending—may force retailers to opt for more expensive airfreight to get goods into the U.S.
That scenario, in turn, is expected to dramatically tighten airfreight capacity, meaning that some retailers may not have access to any form of transportation should they need it.
It is believed retailers have less than one week to make contingency plans should it become apparent that the strike will not be settled quickly. "If [a strike] lasts into next week, it will get very serious," said Charles W. Clowdis Jr., head of supply chain advisory services, for consultancy IHS Global Insight.
Members of the ILWU's Local 63 Office Clerical Unit (OCU) do clerical work for shipping agencies and terminals and are employed by 14 terminal companies and 14 steamship lines. The unit has been working without a contract since the last contract expired in June 2010. Talks aimed at reaching a new agreement broke off last month.
DISPUTE OVER OUTSOURCING
The unit struck in protest over the Los Angeles/Long Beach Harbor Employers Association's (HEA) alleged attempt to outsource clerical jobs. The unit claimed that management has eliminated 51 permanent clerical jobs in the past five years and that an additional 76 jobs are poised to be sent overseas.
The HEA, however, dismissed the unit's claim, saying the individuals were those who had retired with full benefits, quit, or died during the past three years. "Not one of the 51 job positions they identify has been given to a nonunion employee or subcontracted away," HEA said in a statement. "There simply has not been a business need for replacing these workers."
According to the association, management has guaranteed that no unit member will be laid off during the life of the contract. The group said employers have no incentive to outsource work since they are "obligated to pay...employees whether there is work to do or not."
The management group maintains that the unit wants to restore the practice of "featherbedding," defined in labor-management lingo as hiring more workers than are needed to perform a given job, or to adopt complex and unnecessary procedures just to employ additional workers. As part of its strategy, the clerical unit insists on having control over staff levels, management said.
The unit's members are already the country's highest paid clerical workers, according to management. HEA said the latest proposal would bring workers' wages up to near $90,000 a year and annual pensions up to nearly $75,000.
The U.S. manufacturing sector has become an engine of new job creation over the past four years, thanks to a combination of federal incentives and mega-trends like nearshoring and the clean energy boom, according to the industrial real estate firm Savills.
While those manufacturing announcements have softened slightly from their 2022 high point, they remain historically elevated. And the sector’s growth outlook remains strong, regardless of the results of the November U.S. presidential election, the company said in its September “Savills Manufacturing Report.”
From 2021 to 2024, over 995,000 new U.S. manufacturing jobs were announced, with two thirds in advanced sectors like electric vehicles (EVs) and batteries, semiconductors, clean energy, and biomanufacturing. After peaking at 350,000 news jobs in 2022, the growth pace has slowed, with 2024 expected to see just over half that number.
But the ingredients are in place to sustain the hot temperature of American manufacturing expansion in 2025 and beyond, the company said. According to Savills, that’s because the U.S. manufacturing revival is fueled by $910 billion in federal incentives—including the Inflation Reduction Act, CHIPS and Science Act, and Infrastructure Investment and Jobs Act—much of which has not yet been spent. Domestic production is also expected to be boosted by new tariffs, including a planned rise in semiconductor tariffs to 50% in 2025 and an increase in tariffs on Chinese EVs from 25% to 100%.
Certain geographical regions will see greater manufacturing growth than others, since just eight states account for 47% of new manufacturing jobs and over 6.3 billion square feet of industrial space, with 197 million more square feet under development. They are: Arizona, Georgia, Michigan, Ohio, North Carolina, South Carolina, Texas, and Tennessee.
Across the border, Mexico’s manufacturing sector has also seen “revolutionary” growth driven by nearshoring strategies targeting U.S. markets and offering lower-cost labor, with a workforce that is now even cheaper than in China. Over the past four years, that country has launched 27 new plants, each creating over 500 jobs. Unlike the U.S. focus on tech manufacturing, Mexico focuses on traditional sectors such as automative parts, appliances, and consumer goods.
Looking at the future, the U.S. manufacturing sector’s growth outlook remains strong, regardless of the results of November’s presidential election, Savills said. That’s because both candidates favor protectionist trade policies, and since significant change to federal incentives would require a single party to control both the legislative and executive branches. Rather than relying on changes in political leadership, future growth of U.S. manufacturing now hinges on finding affordable, reliable power amid increasing competition between manufacturing sites and data centers, Savills said.
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.