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SC Ports resumes most operations, but recovery just beginning

It will take the South Carolina Ports Authority a week or more to restore normal cargo flow through its network following the software malfunction that forced the closure of truck gates at Charleston’s marine terminals and SC Ports’ two inland ports for most of two days, trucking companies that work the market said Tuesday.

SC Ports, in a statement late Tuesday afternoon, said cargo pickups and drop-offs had resumed at all marine terminals and Inland Port Greer. The statement did not mention Inland Port Dillon, but a spokesperson for the port authority said the facility remained closed.

Additionally, SC Ports said it would extend gate hours until 7 pm Tuesday at the Wando Welch and North Charleston marine terminals “to support our motor carriers and cargo owners.”

“We appreciate the support of our maritime community and the patience of partners as we work through the restart of operations,” the port authority said.

SC Ports has said the widespread software problem that surfaced on Sunday did “not appear to be a cybersecurity issue.” A spokesperson for the port said the software vendor confirmed that the root cause of the malfunction was a technical issue, not cyber related.

While operations have mostly resumed, truckers say working through the backlog of containers that weren’t moving for almost two days has only just begun.

“In general, we still anticipate backlogs for a week or two,” a source at one trucking company told the Journal of Commerce.

On an average day, about 6,000 to 8,000 truck transactions are handled at the Wando Welch and North Charleston marine terminals, according to the South Carolina Ports Authority. Wando is the primary container location in Charleston. Other operations inside the terminal returned to normal on Monday, including loading and unloading vessels and moving boxes within the yard.

Trucking companies are concerned about short-term equipment shortages due to the pileup of cargo requiring drays to customers. A second large trucking company with operations in Charleston warned that shippers might receive accessorial fees on invoices due to the congestion.

“Even after the backlogs subside, we anticipate per diem and chassis usage cost impacts and disputes created as a result,” a source at the company told the Journal of Commerce.

Aside from the landside concerns, there will also be downstream effects outside the harbor. As of Tuesday afternoon, there were 13 container ships anchored outside Charleston, meaning the port will need to devote extra resources to clear the backlog of vessels.

Winding through unexpected fees

There are several types of accessorial fees that could become an issue in Charleston in the coming weeks, but a port official said the issues can be easily resolved.

First, there is the question of how ocean carriers and the port authority will treat the free time on containers discharged from vessels on Monday. Port officials will invoice ocean carriers for excessive use of the terminal grounds and ocean carriers will add their fees for not removing the container in a timely fashion in a demurrage invoice. The port told the Journal of Commerce that it will not count Monday or Tuesday toward its demurrage invoices.

Secondly, cargo owners may ask questions about detention penalties – i.e. penalties for not returning the empty container back within a pre-determined window. If a shipper was unable to return its empty container because the terminal was not accepting boxes, would the ocean carrier waive the fee charged on Monday since truck gates were unavailable? In TCW v. Evergreen, the Federal Maritime Commission ruled that a marine terminal must be open to incentivize the flow of containers through accessorial fees. The port did not comment on this issue since it’s a question for the ocean carriers.

The port also told the Journal of Commerce that it will not charge customers for chassis usage on Monday or Tuesday, and it would add an extra day for exporters to deposit their cargo if their window began prior to Monday.

Source:

Ashe, A. (2024b, May 21). SC ports resumes most operations, but recovery just beginning. Journal of Commerce. https://www.joc.com/article/sc-ports-resumes-most-operations-recovery-just-beginning_20240521.html

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Gates remain closed at Charleston, inland ports amid ongoing software issue

No cargo pickups or drop-offs were occurring throughout the South Carolina Ports Authority’s (SC Ports’) network Tuesday morning as SC Ports faced a second day dealing with a software issue that has disrupted its operations.

“SC Ports has made further progress on our gate issue, but it is not entirely resolved,” the port authority said in an advisory posted on its website at 10 am local time Tuesday. “We understand the impact that this issue is having on our partners in the industry.”

SC Ports planned to resume full operations at its marine terminals and inland ports at 5 am Tuesday after it was forced to close all terminal gates to truckers on Monday in Charleston and at inland ports Dillon and Greer because of the software malfunction. But with the issue not entirely resolved, the 5 am restart time was scuttled.

“SC Ports is working diligently to resume all operations as quickly as possible following a vendor software issue that impacted a server,” it said. “Work is progressing, and many systems have been restored.”

The port authority said Monday the issue did “not appear to be a cybersecurity issue.”

Few details are known about the extent of the software issue and whether it impacts only the truck gates or all operations inside the terminals such as ship-to-shore cranes, yard hostler vehicles and container stacks.

A spokesperson for SC Ports, in response to questions from the Journal of Commerce on Monday, said: “For security reasons, we are not going to detail our systems.”

A source with knowledge of the problem, however, called the software issue “temporary,” and added that “other operations are ongoing.”

“We were able to continue working vessels over the weekend and today and will continue to do so as able,” the source said.

Rail ramps affected

The closure affects the 6,000 to 8,000 truck transactions per day that the port authority handles, including the 500 to 650 containers outgated on trucks that are taken to terminals run by CSX Transportation and Norfolk Southern Railway (NS). If the situation is not cleared up shortly, CSX and NS will have to develop a plan to prevent its terminals from being overrun with exports.

The closures of Inland Port Dillon and Inland Port Greer might have a cascade effect on Memphis business if SC Ports doesn’t reopen on Tuesday morning. On an average day, about 100 ocean containers travel between Charleston and Memphis in either direction.

SC Ports was also beginning to see a backlog of vessels, with eight container ships docked outside Charleston as of Monday afternoon.

Source:

Ashe, A. (2024, May 21). Gates remain closed at Charleston, inland ports amid ongoing software issue. Journal of Commerce. https://www.joc.com/article/gates-remain-closed-charleston-inland-ports-amid-ongoing-software-issue_20240521.html

 

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Vancouver works through rail dwell woes while warily eyeing labor talks

A possible strike later this month by conductors and engineers at Canada’s two major freight railroads could cripple operations at the Port of Vancouver while scuttling the railroads’ recent attempts to thin the inventory of long-dwelling rail containers at the port, the country’s largest.

The threat of rail strikes in Canada amid contract negotiations isn’t atypical and agreements are often struck in the final hours, thanks to federal prodding. But container lines, railroad executives and forwarders have been warning since early 2024 that this negotiation cycle carried a higher risk.

One former railroad executive who spoke to the Journal of Commerce put the likelihood of a rail strike at 50-50, adding that the industry won’t know for sure until the final hours before a May 22 deadline.

“Paying by the hour versus paying by the miles would be a game changer in Canadian rail operations,” the source, who did not want to be identified, said, referring to union resistance to the wage proposal put forth by the Class I railroads. “The union is not on board at this point, and this has become a strike issue.”

Notably, during a May 1 press conference announcing the authorization of a strike, the rail unions ducked questions on whether they would strike simultaneously at Canadian Pacific Railway and Canadian Pacific Kansas City (CPKC). If an agreement can’t be reached before the May 22 deadline, the unions could choose to target one of the railroads and focus its pressure via work stoppages.

Such a disruption would reverse the modest port performance improvement at Vancouver, where rail container dwell times are still five days or longer, on average, across the port’s four container terminals, according to the Vancouver Fraser Port Authority. Vanterm was the one exception, with rail dwell times on average under three days.

Excessive rail container dwells, which contribute to congestion at Vancouver’s marine terminals, have risen steadily this year, from 5.2 days in January to 6.7 days in February and 7.3 days in March, according to the port’s website.

The port has yet to release its April rail container dwell times, but railroads say dwell times have improved over the past month. On April 24, Canadian National Railway (CN) said during a first-quarter earnings call it had added eight more weekly trains serving Vancouver and Prince Rupert to handle what they expect will be sustained import growth at both British Columbia ports.

Carriers, forwarders and shippers are already making contingency plans to prepare for a possible strike, but they say their options are limited. Maersk Line on Thursday said in a customer advisory it is diverting some cargo to the Port of Prince Rupert and is “inducing Tacoma, WA, on four upcoming sailings on our TP1 service to care for US import/export rail cargo should a strike take place.”

Re-routing cargo to other gateways is probably the most viable option, but the challenge for shippers will be to get space on alternative services, said David Bennett, chief commercial officer at the forwarder Farrow. “The PNW (Pacific Northwest) is overbooked,” Bennett said.

Details please refer to JOC news.

Source:

Mongelluzzo, B. (2024, May 8). Vancouver works through rail dwell woes while warily eyeing labor talks. Journal of Commerce. https://www.joc.com/article/vancouver-works-through-rail-dwell-woes-while-warily-eyeing-labor-talks_20240508.html

 

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Ocean carriers target growing China-Mexico trade with new express services

Ocean carriers are targeting the burgeoning China-Mexico trade with the launch of new services next month that coincide with soaring container volumes and growing investment in Mexico by Chinese companies.

Cosco Shipping and OOCL, its Hong Kong-headquartered affiliate, will launch an express service between Asia and Mexico in early May with a 15-day transit from Qingdao to Ensenada, Baja California, and 20 days from Qingdao to Manzanillo.

While the trans-Pacific Latin Pacific 5 (TLP5) service starts in Busan, it will predominantly serve eastern and northern China with calls at Ningbo, Shanghai, Qingdao and Dalian and the west coast Mexican ports of Ensenada and Manzanillo. There will be westbound calls at Yokohama and Busan.

“TLP5 is a brand-new service jointly operated by OOCL and COSCO Shipping Lines that aims to cater to the increasing demand in Asia–Mexico trade and provide a competitive option to shippers,” Michael Xu, OOCL’s director of trades, told the Journal of Commerce.

The two carriers will deploy seven vessels with a nominal size of 6,000 TEU on the loop, which starts May 6 from Ningbo, Xu added. OOCL said its existing TLP1, TLP2 and TLP3 loops are unaffected by the new service.

Mediterranean Shipping Co. (MSC), meanwhile, will launch a similar China-Mexico shuttle starting from Qingdao on May 15 that will call at Ningbo, Shanghai, Busan, Manzanillo and Lazaro Cardenas. The service, which is in addition to MSC’s existing Andes, Aztec, Inca and Santana loops, will be inaugurated by the 6,500-TEU MSC Apollo.

Volume, capacity boost

The launch of the new services comes amid surging volumes between China and Mexico and an investment boom by Chinese companies in Mexico as part of wider nearshoring efforts in Central and South America. Chinese investment is helping to fuel a boom in Mexico-US trade that led Mexico to overtake China last year as the biggest exporter to the US.

Details please refer to JOC news.

Source:

Wallis, K. (2024, April 30). Ocean carriers target growing China-mexico trade with new express services. Journal of Commerce. https://joc.com/article/ocean-carriers-target-growing-china-mexico-trade-new-express-services_20240430.html

 

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Baltimore readying for return of Asia volumes as recovery takes shape: port CEO

The Port of Baltimore is preparing to handle the return of cargo at the end of May as container lines begin accepting loads on Asian services for delivery to terminals that have been blocked since the March 26 collapse of the Francis Scott Key Bridge following the crash of the container ship Dali.

Longshore labor is keeping rail gantry cranes and other motorized equipment humming and state aid is being distributed to port workers who are not working due to the sudden disappearance of container, roll-on/roll-off and bulk volumes, Jonathan Daniels, CEO of the Maryland Port Authority, said in a Tuesday interview.

Container lines, which normally operate six weekly services connecting to Baltimore, have told the port authority they have begun accepting bookings for shipments to the port, Daniels said. Maersk’s recently relaunched TP20 service from Asia, for example, will be one of the first services to return to Baltimore, he said.

Maersk’s decision to keep Baltimore as a US port of call, in addition to Newark and Houston, on the Panama Canal express service “shows a commitment that while there is a temporary blip, (carriers) do realize that this is, in fact, temporary and it’s not a long-term indication that the port has some type of structural issue,” Daniels said.

Container growth momentum, driven by distribution center expansion from customers Floor and Decor and Con-Air, remains — even if it can’t be tapped at the moment, said Daniels, who took over at the port authority less than two months before the 9,962-TEU Dali collided with the Key Bridge. Floor and Decor is doubling its distribution center at the Tradepoint Atlantic terminal to 2.8 million square feet, while Con-Air will open a 2.5 million-square foot facility later this month in Hagerstown, Pennsylvania.

Details please refer to the JOC news.

Source:

Szakonyi, M. (2024, May 1). Baltimore readying for return of Asia volumes as recovery takes shape: Port CEO. Journal of Commerce. https://www.joc.com/article/baltimore-readying-return-asia-volumes-recovery-takes-shape-port-ceo_20240501.html

 

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Teamsters Canada vote overwhelmingly to authorize rail strike as soon as May 22

Unions representing conductors and engineers with Canada’s two major freight railroads said Wednesday they have authorized a strike as soon as May 22, after 98% of the Teamsters Canada Rail Conference (TCRC) voted to walk off the job unless a new labor contract is hammered out.

Federal conciliators have tried since March 1 to negotiate a deal between Canadian Pacific-Kansas City(CPKC), Canadian National Railway (CN) and TCRC, without success. Talks broke down on a new collective bargaining agreement soon after talks began last fall.

During a press conference Wednesday, the Teamsters declined to answer whether the individual unions under the TCRC umbrella would strike at the railroads simultaneously.

A conciliation period ended May 1. Without a deal, the two sides begin a mandatory 21-day “cooling off” period before the TCRC can strike or the railroads lock out the workers. Voting took place from April 6 to May 1. The vote tally announced Wednesday was required for the TCRC to issue a 72-hour strike notice that could come as soon as May 19.

TCRC represents 6,000 conductors, engineers and yard workers with CN and 3,200 with CPKC. The union also represents about 80 rail traffic controllers with CPKC. In the US, rail traffic controllers are often referred to as dispatchers.

Canadian rail stoppages not uncommon

The core issues in dispute include salaries, work-life balance and rest periods.

Both CN and CPKC want to abolish the per-mile pay for conductors and engineers and replace it with an hourly wage. The railroads have said the new pay scale is “modernized” and will raise wages for employees, while the TCRC says more than half its workforce will earn less until the proposed changes in pay take effect.

CPKC said it has put two proposals on the table, one of which it says would increase pay and improve work-life balance with “scheduled, predictable days off” through a simplified system, and the other that would “maintain the status quo for work rules” for rest.

“I can tell you that the progressive hourly deal, in my assessment, addresses what our employees want and need,” CPKC CEO Keith Creel said on an Apr. 24 earnings call. “They want a better quality of life. They want higher wages, which certainly is understandable. And in turn, our ability to be able to provide that is found in the terms and conditions of that hourly agreement.”

Another issue of contention is the “Transport Canada Duty and Rest Period Rules” enacted last year.

The TCRC complains that the railroads want to use rules to replace all previous workplace provisions in prior collective bargaining agreements. The union argues the rules were meant to complement terms in prior agreements, not replace them, and to do so would jeopardize safety.

Patrick Whitehead, CN’s chief network operating officer, said during a first-quarter earnings call that any claim the railroad is not committed to safety is wrong.

“We successfully implemented the duty and rest period rules that were mandated in Canada in May of 2023 and have been in full compliance with these rules,” Whitehead said on the April 23 call. “What we are doing is working to simplify the complexity of the stacking effect we experienced beginning in 2023 of the additional paid sick and personal leave days under the Canada Labor code, the duty and rest period rules and the unavailable time provided by the legacy collective marketing agreement.”

Work stoppages are not uncommon in Canada. The TCRC walked off the job with Canadian Pacific in 2012, 2015, 2018 and 2022 and embarked on an eight-day strike with CN in 2019.

In theory, CPKC and CN could run limited operations during a strike because there are managers who have been trained or have worked as conductors, engineers, rail traffic controllers, trainmasters and yardmasters earlier in their careers.

Source:

Ashe, A. (2024, May 1). Teamsters Canada vote overwhelmingly to authorize rail strike as soon as May 22. Journal of Commerce. https://www.joc.com/article/teamsters-canada-vote-overwhelmingly-authorize-rail-strike-soon-may-22_20240501.html