The Stockout

ILA strike – is 1 week the bogey?

How long will it last? 

The duration of the strike is the question of the hour. With the ILA rejecting the offer of a 50% pay increase over six years, that remains unclear, but the bullets below are a few different perspectives to consider. They generally point to the strike lasting about one week, plus or minus.

  • The Biden administration reportedly said U.S. supply chains are resilient enough to handle a one-week strike. The implication is that it might invoke Taft-Hartley to start a cooling-off...

https://www.freightwaves.com/news/ila-strike-is-1-week-the-bogey

Where ILA strike might go from here

Will the Biden administration renege? 

Last week in this newsletter, I discussed news that surprised me: The Biden administration reportedly had said it won’t invoke the Taft-Hartley Act to prevent or put an end to a strike by the International Longshoremen’s Association (ILA). I’m not sure I believe that, at least not if the strike lasts for an extended period. Containership lines estimate that each day of a strike would lead to five to 10 days of congestion and delays, with a compounding...

https://www.freightwaves.com/news/where-ila-strike-might-go-from-here

Say it ain’t so, Joe

Biden reportedly won’t block ILA strike

Reuters quoted a Biden administration official as saying, “We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now.”

That must be making shippers incrementally more concerned. For all the threatening words from representatives of the International Longshoremen’s Association (ILA) that they will strike on Oct. 1 without a contract, many industry observers have suggested that it ultimately may not matter to supply chains...

https://www.freightwaves.com/news/say-it-aint-so-joe

Labor strife dominates freight news

Wall-to-wall International Longshoremen’s Association coverage

With few signs that a work stoppage can be avoided ahead of the strike deadline without government intervention, it promises to be the biggest issue in transportation until the end of the month – and hopefully not long beyond that.

Intermodal volume outbound from Los Angeles has taken off in the third quarter as the U.S. West Coast ports have gained share. (Chart: SONAR)

Here is a rundown of the articles up on the FreightWaves:

  • I...

https://www.freightwaves.com/news/labor-strife-dominates-freight-news

Is the prospect of tightening capacity this fall overblown?

Capacity coming into the freight market? 

A measure of available capacity, the tender rejection rate has shown the lack of a sustainable uptick following Labor Day. (Chart: SONAR)

For the past two years, the freight industry has been looking forward to capacity coming out of the market, which would improve the supply-demand balance from carriers’ perspective. However, as Todd Maiden reports on FreightWaves, the latest Logistics Managers’ Index (LMI) shows that capacity may actually be increasing....

https://www.freightwaves.com/news/is-the-prospect-of-tightening-capacity-this-fall-overblown

Will we hear updated ILA demands next week?

International Longshoremen’s Association delegates to meet next week

On Sept. 30, the International Longshoremen’s Assocation’s contract expires and it’s approaching quickly. Negotiations between the union and the United States Maritime Alliance have been stalled since June. It’s been a long silence on any update about a potential strike that remains at the top of many shippers’ minds. In fact, it’s one of the most frequent topics that we, the SONAR team, are asked about. The ILA has called for...

https://www.freightwaves.com/news/will-we-hear-updated-ila-demands-next-week

Are food companies guilty of price gouging?

CPG price gouging? 

Vice President Kamala Harris made a political move that might win her votes but seems misplaced. As part of her economic plan, she is calling for a federal ban on “price gouging.” This, of course, is in response to attacks on the current administration over food prices, which remain a sore spot since they are 25%-30% higher than they were in 2019, even as the rate of food inflation has come down to about 1%.

Cocoa price shocks were extreme earlier this year as a result of poor...

https://www.freightwaves.com/news/are-food-companies-guilty-of-price-gouging

Ocean market – adding capacity doesn’t mean overcapacity

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Maritime-focused The Stockout episode

(Image: FWTV)

On Monday’s The Stockout show, I interviewed longtime ocean industry expert John D. McCown. McCown has multiple decades of experience attacking the ocean industry from different angles, including as CEO and co-founder of Trailer Bridge.

One overarching observation is that ocean carriers’ business models have improved in recent years. The carriers’ ability to...

https://www.freightwaves.com/news/ocean-market-adding-capacity-doesnt-mean-overcapacity

Ocean spot rates have likely peaked

Ocean spot rates have peaked, according to Maersk

Ocean spot rates from China to the U.S. West Coast are starting to look like a two-humped camel. (Chart: SONAR)

The reasons for an expected decline in spot rates from here include an easing in port congestion, expected seasonal declines in freight demand as the end of the year approaches and increases in ocean capacity, which is rising 2%-3% per quarter, according to Maersk. That said, ocean spot rates are still expected to remain at historically...

https://www.freightwaves.com/news/ocean-spot-rates-have-likely-peaked

Ocean rates surge to year-to-date highs

Ocean rates show surprising early summer bounce

Spot rates published by Freightos to move 40-foot containers from China to the U.S. West Coast and from China to the U.S. East Coast are shown in white and red, respectively. (Chart: SONAR)

To the surprise of many, ocean spot rates are approaching, or have risen beyond, February peaks, which coincided with the start of the Red Sea attacks. This CNBC article outlined what’s changed in recent weeks to exacerbate the lingering impacts of the Red Sea...

https://www.freightwaves.com/news/ocean-rates-surge-to-year-to-date-highs

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