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.
Just before midnight Dec. 4, ship management and striking clerical workers reached a tentative contract ending an eight-day battle that had shut the Port of Los Angeles, the nation's busiest seaport, and dramatically reduced operations at the adjacent Port of Long Beach, the second-busiest. The six-year contract should be ratified sometime today.
Longshoremen—whose decision to honor the clerical workers' picket
lines had shuttered 10 of the port complex's 14 terminals—returned to work this morning, and the supply chain began what is expected to be a multi-week process to clear the backlog of goods.
Stephen E. Schatz Sr., a spokesman for the National Retail Federation (NRF), said in an e-mail that it could take 16 to 24 days to empty the pipeline. That is based on a calculation that it takes two to three days to push freight out the door for each day it sits idle due to a work stoppage.
The time frame for recovery may be lengthened depending on the availability of equipment at the complex, Schatz said. Equipment availability had become a serious issue by the time the strike was settled.
Fortunately for U.S. retailers and consumers, the walkout occurred during a relatively slow time at the ports. Most holiday merchandise has already entered U.S. commerce, and retailers were still several days away from the
last replenishment push before Christmas. Still, with inventory levels at record lows, there was concern that a strike lasting into next week would have caused problems for retailers that faced unplanned surges in demand.
Had the strike continued without an agreement or without government intervention, importers would have been forced to rely on expensive air freight to rush holiday goods to market. However, the rush to secure air freight
would have tightened capacity so quickly and dramatically that many importers would have been shut out anyway.
The strike's resolution could provide a short-term boost for truckers as shippers and importers may opt for the quickest possible ground transportation mode to rush idled freight to market. For their part, the nation's two
main western railroads, BNSF Railway and Union Pacific Corp. (UP), say they are prepared to go with the flow.
"We are ready to resume normal operations," said Aaron Hunt, a UP spokesperson.
"Our rail operations and facilities remain fluid and are well positioned to move containers as the situation is
resolved," Krista K. York-Woolley, a BNSF spokeswoman, said yesterday.
DISPUTE OVER OUTSOURCING
Neither side would comment on details of yesterday's agreement. However, the International Longshore and
Warehouse Union (ILWU), which represents the clerical unit, said in a statement last night that the unit
wins "new protections that will help prevent jobs from being outsourced to Texas, Taiwan, and beyond." It
was unclear at press time when the unit's rank-and-file would vote to ratify the agreement.
The unit, which has been working without a contract since June 2010, struck Nov. 27 in protest over alleged
plans by the Harbor Employers Association (HEA) to outsource clerical jobs to lower-cost locations in the United
States and overseas. The management group has denied the union claim, saying no clerical jobs have been
outsourced and none are expected to be.
The unit at the ports is considered the highest-paid clerical workers in the nation. Management said its
most recent contract offer, which the unit had rejected, would have paid each member as much as $190,000 a
year in wages, pensions, and the monetary value of health benefits.
The needle on settling the dispute began to move on Monday when Los Angeles Mayor Antonio Villaraigosa became
directly involved in the talks after cutting short an overseas trip to return to the city. Late yesterday, the Federal
Mediation & Conciliation Service (FMCS), an independent government agency tasked with keeping labor-management peace,
said it was asked by both sides to arbitrate the dispute.
FMCS Director George H. Cohen and Deputy Director Scot L. Beckenbaugh arrived in Los Angeles late yesterday, but
it is unclear what influence they had in bringing about an agreement.
ATTENTION TURNS EAST
With the strike settled, FMCS can return its attention to the East and Gulf Coasts, where it is
mediating a long-simmering dispute between the International Longshoremen's Association (ILA)
and the U.S. Maritime Association (USMX). Both sides are working under a mutually agreed upon 90-day contract
extension. The agreement was reached when it became clear that they wouldn't come to terms before the scheduled
Sept. 30 contract expiration date and that a work stoppage during the peak shipping season was becoming a strong
possibility.
Management says the ILA has failed to consider any changes to archaic work rules at the 13 ports. USMX is also
still concerned about excessive worker pay and benefits that result in millions of dollars being paid for time not worked.
For their part, the ILA has accused management of forcing the union to give up an eight-hour work guarantee that has been
standard practice for years and wanting to radically change contract language governing the payment of worker overtime.
When the extension was announced Sept. 20, Cohen said the two sides had made progress on "several important subjects" that
he declined to specify. There has been no public comment from the FMCS since then. The current extension expires Dec. 29.
Even as he hailed the settlement on the West Coast, Matthew Shay, president and CEO of the NRF, said the group won't rest
until tensions are quelled in the East and along the Gulf.
"Retailers, manufacturers, and the rest of the business community cannot afford another shutdown," Shay said in a statement.
"Our economy cannot withstand another port disruption."
The number of container ships waiting outside U.S. East and Gulf Coast ports has swelled from just three vessels on Sunday to 54 on Thursday as a dockworker strike has swiftly halted bustling container traffic at some of the nation’s business facilities, according to analysis by Everstream Analytics.
As of Thursday morning, the two ports with the biggest traffic jams are Savannah (15 ships) and New York (14), followed by single-digit numbers at Mobile, Charleston, Houston, Philadelphia, Norfolk, Baltimore, and Miami, Everstream said.
The impact of that clogged flow of goods will depend on how long the strike lasts, analysts with Moody’s said. The firm’s Moody’s Analytics division estimates the strike will cause a daily hit to the U.S. economy of at least $500 million in the coming days. But that impact will jump to $2 billion per day if the strike persists for several weeks.
The immediate cost of the strike can be seen in rising surcharges and rerouting delays, which can be absorbed by most enterprise-scale companies but hit small and medium-sized businesses particularly hard, a report from Container xChange says.
“The timing of this strike is especially challenging as we are in our traditional peak season. While many pulled forward shipments earlier this year to mitigate risks, stockpiled inventories will only cushion businesses for so long. If the strike continues for an extended period, we could see significant strain on container availability and shipping schedules,” Christian Roeloffs, cofounder and CEO of Container xChange, said in a release.
“For small and medium-sized container traders, this could result in skyrocketing logistics costs and delays, making it harder to secure containers. The longer the disruption lasts, the more difficult it will be for these businesses to keep pace with market demands,” Roeloffs 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.
National nonprofit Wreaths Across America (WAA) kicked off its 2024 season this week with a call for volunteers. The group, which honors U.S. military veterans through a range of civic outreach programs, is seeking trucking companies and professional drivers to help deliver wreaths to cemeteries across the country for its annual wreath-laying ceremony, December 14.
“Wreaths Across America relies on the transportation industry to move the mission. The Honor Fleet, composed of dedicated carriers, professional drivers, and other transportation partners, guarantees the delivery of millions of sponsored veterans’ wreaths to their destination each year,” Courtney George, WAA’s director of trucking and industry relations, said in a statement Tuesday. “Transportation partners benefit from driver retention and recruitment, employee engagement, positive brand exposure, and the opportunity to give back to their community’s veterans and military families.”
WAA delivers wreaths to more than 4,500 locations nationwide, and as of this week had added more than 20 loads to be delivered this season. The wreaths are donated by sponsors from across the country, delivered by truckers, and laid at the graves of veterans by WAA volunteers.
Wreaths Across America
Transportation companies interested in joining the Honor Fleet can visit the WAA website to find an open lane or contact the WAA transportation team at trucking@wreathsacrossamerica.org for more information.