Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Logistics industry groups today cheered the passage of an ocean shipping regulation bill through the U.S. House of Representatives and called for the Senate to follow, saying the law would provide critical updates to an international maritime transportation system which has been cramped by pandemic pressures.
The House voted by a firm, 364-60 margin on Wednesday to approve the Ocean Shipping Reform Act (OSRA) of 2021, a bipartisan bill that is co-sponsored by Congressmen John Garamendi (D-CA) and Dusty Johnson (R-SD). The bill now heads to the Senate, where Commerce Committee members are already drafting comparable legislation.
Known in the House as H.R. 4996, the act would strengthen the Federal Maritime Commission (FMC)’s oversight and enforcement authority, empowering it to help ease current supply chain challenges, according to a statement by the chair of the House Committee on Transportation and Infrastructure, Peter DeFazio (D-OR). More specifically, the legislation would allow the FMC to ensure fairness in ocean carrier contracts, require a new process for detention and demurrage charges, deter retaliation and unfair business practices, and examine options for more efficient cargo information sharing, DeFazio said.
Johnson also cheered the vote in the House, calling the bill the first major overhaul of federal regulations for the global shipping industry in over 30 years. “We’ve all been impacted by the backlog in the supply chain and shipping delays,” Johnson said in a release. “China and the foreign flagged ocean carriers aren’t playing fair, and accountability is long overdue. If you want to do business with American ports, you need to play by our basic rules. I am proud of the coalition Congressman Garamendi and I have worked to build over the last year. The Ocean Shipping Reform Act puts American consumers, farmers, retailers, truckers, manufacturers, and small businesses first. Our bill passed the U.S. House with strong bipartisan support and I look forward to seeing it pass the Senate.”
Despite its broad support, the bill was criticized by the World Shipping Council, which is the trade association for the international container shipping line industry. “The House today passed HR 4996 without proper debate or committee process,” the council’s president and CEO, John Butler, said in a release. “The bill is a political statement of frustration with supply chain challenges – frustrations that ocean carriers share. The problem is that the bill is not designed to fix the end-to-end supply chain congestion that the world is experiencing, and it will not and cannot fix that congestion.”
Shippers and retailers cheer tighter regulation of port conditions
However, a host of other supply chain groups applauded the bill. Some of its strongest proponents have been shippers, who have long argued that carriers have taken advantage of pandemic conditions to dodge previous contracts and charge inflated rates.
According to shippers who are represented by the Retail Industry Leaders Association (RILA), the bill would apply “common sense reforms” to address those issues. “The Ocean Shipping Reform Act will bolster the Federal Maritime Commission’s work providing oversight of ocean carriers and carrier alliances—sending the message that fair and open supply chains are essential to the American economy. This is exactly the message retailers need policy makers to press as all interested parties work to untangle the supply chain congestion and remove barriers to the movement of goods,” Jess Dankert, RILA’s vice president for supply chain, said in a release.
“Increased consolidation in the ocean shipping industry and the growth of carrier alliances has impeded competition, tightened capacity, and helped drive prices to record highs. This act will ensure that American businesses have fair access to ocean shipping capacity, and protection from unreasonable fees and retaliatory measures,” Dankert said.
Likewise, one of the earliest proponents of the legislation has been the National Retail Federation (NRF), which this week issued a letter urging House members to vote for its passage and in September had spearheaded a coalition of some 152 supply chain stakeholders to endorse it. “The Shipping Act has remained unchanged for nearly 20 years, as the global supply chain has continued to grow and evolve to meet increased consumer demand. This bipartisan legislation provides much-needed updates and reform to an archaic system that retailers and thousands of other businesses depend on each day to transport goods,” NRF’s senior vice president of government relations, David French, said in a release.
Additional statements of support came from the American Trucking Associations (ATA), which said that the legislation is needed to end abusive practices imposed on American trucking companies at U.S. maritime ports by ocean carriers, most of which are foreign-owned. “Specifically, the trucking industry seeks relief from excessive detention and demurrage charges—unfair fees levied on motor carriers by ocean carriers and marine terminal operators when shipping containers are not moved on schedule, even though delays are typically due to factors entirely outside truckers’ control and often the result of inefficiencies caused by the ocean carriers themselves,” the ATA said in a release.
Another group hailing the bill’s ability to cap excess fees was the American Apparel & Footwear Association, which applauded a future where the FMC would apply minimum service requirements for shippers, respond to breaches of contracts, and address excessive detention and demurrage fees. “Any reports that the shipping crisis is in the rearview mirror have been premature,” Steve Lamar, the association’s president and CEO, said in a release. “Rather, we are seeing deteriorating conditions and swelling impacts across our global supply chains. Once passed, OSRA21 will reduce or eliminate carrier price gouging, epic freight costs, record delays – and other unfair and excessive punitive fees that only fuel inflationary pressures.”
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
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.