cargo movement Archives - SiShips

USA Main: +1-904-432-8866| Bogota Colombia +57-1-466-0813

Skip to Content

Biden and Congress Intervene to Prevent Rail Strike

Biden and Congress Intervene to Prevent Rail Strike

Potentially Catastrophic Rail Strike Averted by Bipartisan Cooperation

Some might say Christmas has been saved—others feel like all they’ve got is a lump of coal in their stocking. Rumors of a rail strike have been percolating since this summer, before reaching a fever pitch ahead of a December 9th deadline. At the urging and approval of President Joe Biden, congress acted on Wednesday, November 30th to enshrine previous agreement terms.

Regardless of viewpoint or political affiliation, it is undeniable that a rail strike in the final weeks leading up to the holiday season would have been catastrophic for workers and the economy at large. A rail strike of this magnitude could have cost $2 billion per day. Many pro-labor and progressive factions are disappointed that workers will still not receive paid sick leave. However, already fragile freight lines will march on at a precarious time for the U.S. economy.

What Was the Rail Strike About?railroad strike train congress negotiations 2022 brotherhood of railroad

While there were many parts of the contract where railroads and unions did not see eye to eye, the crux of the negotiations was on the point of paid sick leave. Railroad workers did not receive any guaranteed sick leave due to the grueling on-call set up of the current contracts. This meant that it was difficult to schedule doctor’s appointments or even be present at important family and life events. In an era where railroad profits were at an all time high, unions felt unfairly treated by an industry that squeezed wages and was notorious for chronic understaffing.

This has been an ongoing issue for the Biden Administration, including Labor Secretary Marty Walsh, Agriculture Secretary Tom Vilsack, and Transportation Secretary Pete Buttigieg, who have been acting as a middleman between both sides for months. In September, Biden endorsed a plan that included a 24 percent pay increase by 2024. This version of the contract also gave workers an additional paid day off and let them attend medical appointments without penalty. Several unions actually approves this version of the deal. However, the SMART Transportation Division, the Brotherhood of Railroad Signalmen, the Brotherhood of Maintenance of Way Employes Division and the International Brotherhood of Boilermakers voted the contract down. Due to the structure of the contract all twelve railroad unions needed to approve for it to pass.

biden administration congress prevent rail strike union freight forwardingBiden Administration Felt It Was Imperative to Step In

President Biden surprised some supporters and pundits with his decision. “As a proud pro-labor President, I am reluctant to override the ratification procedures and the views of those who voted against the agreement,” Biden shared in a statement. “But in this case — where the economic impact of a shutdown would hurt millions of other working people and families — I believe Congress must use its powers to adopt this deal.”

Even if both sides agreed to meet at the negotiating table, it would have been impossible to ratify an agreement in time for the December 9th deadline. After the midterm elections, Biden was concerned about an even less labor friendly deal being put forward in January. Ultimately, two bills passed the House of Representatives. The first enforces the deal put forward in September and the second would add an additional seven paid sick leave days. The Senate voted on Thursday, December 1st to uphold the original deal, but struck down the additional paid sick leave.

The Biden Administration reasoned that fallout from the intervention from unions and progressive members of Congress would be limited. This has proven to be correct so far. Unions and labor supporters like Senator Bernie Sanders are directing their anger towards “robber baron railroads”, instead of the president.

Significance of Preventing a Rail Strike

Neither the railroads or the unions are particularly happy with the outcome. Even so, both parties got a little of what they wanted and the economy can continue to chug on. Prices, already high from inflation, would have been certain to jump even higher. Certain products like necessary medical and clean drinking water equipment were even able to get through. 

40% of all freight in the United States travels through the railroad system. It is effectively the heart of the domestic supply chain. The entire economy might have come to a complete halt if the government had not stepped in.


How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

0 Continue Reading →

SiShips Launches New Mobile App

Exciting New Way to Manage Freight Forwarding Available on Google Play Store Now

Freight forwarding is officially at your fingertips. Sheltered International is excited to announce that, as of June 27th 2022, our SiShips mobile app is now available on the Google Play store for Android devices. UPDATE (11.01.22) The SiShips mobile tracking and quote tool app is now available on the Apple App Store for iOS devices! Specifically optimized for the iPad, our clients are now able to quote, book and track shipments on all of their mobile devices. At Sheltered International, we are constantly on the lookout for new ways to blend cutting edge technology with personalized shipping expertise. Our new mobile app is just another way that we are putting control back in the hands of you, the shipper.

Mobile App to Combine Information and Efficiency

Our new app is truly the best of both worlds. Sheltered International will maintain our hands-on approach to freight forwarding and combine our personal experience with real-time data tracking—now just a touch away, thanks to the SiShips app. Our team is fully accessible and responsive, but without the clunky delay of a barrage of emails and endless phone calls.

Whether your cargo is traveling through the air, across the ocean, by rail or by truck, you will be able to survey its location with near instantaneous updates. You can now manually check these updates on the app, or turn on Push Notifications for even more convenience.

Current clients will be able to use their login credentials to get started immediately; new clients looking to get started can get in touch with us to begin using our new services as soon as possible.

siships sheltered international mobile app download google apple ios android shipping tracking

Part of Tradition of Embracing Technology at Sheltered International

Our new mobile app is the next step in the evolution of freight forwarding and Sheltered International remains enthusiastic about our role shepherding the industry towards the modern era. Within the last twelve months, Sheltered International has added around the clock rail tracking and managed transportation to our extensive portfolio of freight forwarding services. All of our services, including rail tracking and managed transportation, will be accessible on the app. 

The mobile app will exist alongside our desktop software with continual updates. All new services that Sheltered International will roll out to clients in the future will also be available on the app.


How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art desktop and mobile software to bring you the highest quality domestic and international shipping solutions. With the world constantly changing, SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software and new mobile app, contact us today.

1 Continue Reading →

Ocean Carrier vs. Drayage Carrier Fees

How Port Congestion and Port Fees Affect You

No one likes port congestion. It causes supply chain delays and missed deadlines, but, worst of all, port congestion can lead to additional ocean carrier and drayage carrier fees.

Ocean carriers refer to the vessel and vessel operators physically transporting goods between international ports. The next step in the supply chain are drayage carriers, which transport goods from ports to their destination. Drayage often refers to trucking and short distances known as “the first mile” on an export or “the last mile” on an import. Unfortunately, both ocean carriers and drayage carriers charge extra fees for delays, wait times, and more.

The federal government is looking to help alleviate the pressure of some of these charges with the passage of the Ocean Shipping Reform Act of 2022 (OSRA 2022). This bipartisan law is designed to help American importers and exporters, especially agricultural exporters, save on costs. The Ocean Shipping Reform Act of 2022 applies to ocean carrier fees, so it is important to understand the distinction between ocean carrier and drayage carrier fees.trucking detention demurrage port congestion

Charges from the Ocean Carrier

There are several key terms to know when discussing charges and fees from an ocean carrier. 

Per diem, also known as detention, is the fee from an ocean carrier for each day past the number of “free” days a container can be away from port. Ocean carriers charge per diem/detention fees as an incentive for customers to return their shipping containers as quickly as possible, so the containers can be used again.

The reverse of detention is demurrage. This refers to the fee assessed by the terminal if your cargo remains at port past the Last Free Day. 

The Last Free Day is the last day of a predetermined period of free storage time in which the goods can be picked up by a drayage carrier before incurring a demurrage fee. Free days depend on your contract and type of drayage carrier (rail, truck, or air), but are typically 2-3 days. 

Charges from the Drayage Carrier

Likewise, here are a few definitions to be aware of when looking over drayage carrier fees.

A pre-pull is when a container is picked up from the port and stored at a different location, instead of being delivered immediately. Pre-pulls are used when free days at the port will run out. They are less expensive than costly demurrage fees.

Wait time is an hourly charge, also known as a trucking wait fee, for each hour it takes to the full container to be updated or unloaded on the truck. Most trucking companies and drivers will allow a small amount of free wait time before charging for additional time. 

As you can see by now, a seamless workflow between ocean carriers and drayage carriers is key to keeping costs down. That’s where a managed transportation expert like SiShips can make a huge difference on your bottom line.  

international port ocean container shipping news osra ocean shipping reform act 2022

Another common set of fees assessed by drayage carriers have to do with the chassis. Chassis are the specialized trailers that are used by trucks to transport ocean containers on the road. Drayage carriers charge a rental fee for these chassis, and an additional fee known as a chassis split, if the truck driver must go to an extra location to pick up a chassis before arriving to pick up the container from the port.

How the Ocean Shipping Reform Act of 2022 Can Help You

Ocean carrier and drayage charges are linked and have a large effect on each other. However, they are separate fees from separate entities and, while logistically they affect each other, the charges are not related.

President Biden signed OSRA 2022 into law on June 16, 2022. This law created new oversight for the Federal Maritime Commission to address unfair charges and unreasonable denial of American exports. In short, OSRA 2022 was made to combat detention and demurrage charges incurred due to port congestion and shipping uncertainty. Additionally, California Gavin Newsom signed AB 2406 into law on September 30, 2022. AB 2406 will go into effect on January 1, 2023. This law will prevent detention and demurrage fees due to circumstances beyond the control of drayage carriers. Reactions to the California law are mixed. Truckers and cargo owners are pleased with the law, but the terminals are concerned about loopholes in the nuance of the law. 

However, it is clear that federal and state level governments are taking upheaval in the shipping industry seriously and are looking for both short and long term solutions.


How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

2 Continue Reading →

Weakening Markets Lead to Trans-Pacific Rate Drops

Trans-Pacific Rate Drops Expected to Last Through End of Year

After generating record-breaking profits during the pandemic, shipping companies are feeling the squeeze of recent inflation. Container carriers are planning on blanking nearly 700,000 TEU in the month of October. Carriers are looking to entice customers back with lower rates. This appears to be one of the best times in recent memory for those looking to transport products internationally, especially between China and the United States.

These trans-Pacific rate drops are not entirely unexpected. The rates that began rising to unimaginable heights during the pandemic stemmed from mostly situational factors. China’s aggressive zero-Covid policy led to shutdowns of their largest ports in Shanghai. This created backlogs which shifted to the ports of Long Beach and Los Angeles, among others. Protests from truckers over vaccine mandates and union regulations led to more delays. However, as the impact of coronavirus has lessened, the economy has been able to work through those issues. Even last month when it appeared a railroad strike could cripple the supply chain again, President Biden stepped in to keep the wheels moving. 

trans-pacific rate drops jacksonville freight forwarding managed transportation railroads air long beach los angeles savannah

Decrease Imports Lead to Trans-Pacific Rate Drops

The biggest factor in the trans-Pacific rate drops is a decreased number of imports. Inflation has led many Americans to tighten their belts and reduce spending on physical goods. Experts forecast growth as little as 7% in the retail sector, and only 1% when adjusted for inflation. This is the smallest year-over-year growth in the last decade and stands in stark contrast to last year’s growth of nearly 15%. 

Retail is not the only area where imports are shrinking. The U.S. Energy Information Association reported that U.S. crude oil imports were down 500,000 barrels per day from the previous week. Exports, however, continued to rise. Russia’s continued aggression in Ukraine, worsening the energy crisis in Europe, has exacerbated global inflation, as well. 

Increased Space in Domestic Ports

A side effect of diminished imports is the backlog of ships in the ports of Los Angeles and Long Beach has been almost completely eradicated. “Container ships have basically returned to normal,” said Kip Louttit, Executive Director of the Marine Exchange of Southern California. “The remainder of the nine in the backup are 50 to 150 miles offshore.” The ability to manage the congestion is a combination of strict management of arriving ships and support from other ports. 

trans-pacific rate drop rates ocean pacific freight shipping The increased capacity of west coast ports has helped to lower rates. Container ship dwell times and truck turn times have both decreased. While blank sailings compared to this time last year have increased, “This does not necessarily indicate a major trend change,” Adam Szabo, a shipping analyst for Sea Intelligence, told JOC.com. “It may just very well be that carriers do not announce or indicate many blank sailings so far ahead.” Either way, the current drop in rates provides an interesting opportunity for international business.

Railroad Rates also Down

Once goods have reached the United States, they are finding even cheaper rates for domestic transportation at the moment. Union Pacific Railroad is reducing their rates from Southern California and J.B. Hunt Transport is forgoing their peak season surcharges. This is not a decision transporters take lightly, as surcharges were as high as $5,000 per container this time last year.

The decrease in railroad rates can be attributed to several factors. First, the weakening consumer market is creating less demand. This works in conjunction with the slowing of imports from China and other countries. Second, the lower rates appear to be a step for railroads to become more competitive with trucking rates. 


How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

5 Continue Reading →

Tentative Deal Prevents Railroad Strike

President Biden Steps In at 11th Hour to Forestall Railroad Strike

Late at night on Wednesday, September 14th, President Biden intervened in deadlock negotiations between railroad companies and their workers. Biden, a long time supporter of America’s rail system, has been keeping a close eye on this contract dispute over the summer. The executive branch originally flexed its power back in July, amid fears that a railroad strike could cost the economy $2 billion per day. Now, following a marathon negotiation session, both sides have made a tentative agreement. The railroad brotherhoods will vote on Thursday, September 22nd, to either accept or reject the terms.

Major disruptions were expected, even leading to Amtrak preemptively canceling service on passenger lines, ahead of the deal announcement. The possibility of a railroad strike has been delayed, and possibly avoided.

railroad strike brotherhood locomotive driver engineers

Photo courtesy of Robert Linder via Unsplash.

What Does the Railroad Deal Include?

After 20 hours of negotiations and a phone call from the president, the current contract includes:

  • Voluntary assigned days off and one additional paid day off 
  • Guaranteed time off for medical appointments
  • No disruption to current health care plans
  • Immediate wage increase of 14% and 24% over the next five years
  • Annual lump sum bonuses of $5,000

Unions had originally asked for 15 paid sick days, but this was rejected.

Demand for Voluntary Days Off

Despite headlines leading up to the potential strike focusing on the pay of railroad workers, the real sticking point was sick leave and voluntary days off. Up until now, railroad workers did not have any sick leave or guaranteed time off. In fact, union members are either working or on call 335 days per year. When on call, workers are expected to report within two hours, if needed.

Union representatives had blasted these working conditions as inhumane. The Brotherhood of Locomotive Engineers and Trainmen (BLET) issued a statement that “these policies are destroying the lives of our members.” Following multiple years of record breaking profits for the transportation and shipping industries, union members felt confident in their negotiation position. They shared anecdotally on Twitter that their “savings will last longer than the rest of the economy if we strike.”

washington white house senate gop democrats railroad negotiations presidential emergency board

Photo courtesy of Ana Lanza via Unsplash.

Railroad Strike at Center of Election Season Showdown

The strongest fear among union members is their livelihood becoming a bargaining chip during an election season. While the vote begins this week, tallying the votes could stretch into October. That means a result could be announced perilously close to Election Day in November.

Twelve separate unions will be voting to ratify the contract; if a single one votes against the contract, negotiations will have to start again. On Wednesday, before Biden’s intervention, GOP Senator Richard Burr of North Carolina and Senator Roger Wicker of Mississippi put forth a joint resolution to force the union to accept the terms from the Presidential Emergency Board created by the Biden administration in July. This measure was blocked by Senate Democrats led by Senator Sanders of Vermont. However, Speaker Nancy Pelosi indicated at the time that if negotiations failed, Democrats would present a resolution to prevent a shutdown. Details of the bill were not announced. 


How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art software to bring you quality domestic and international shipping solutions. SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

1 Continue Reading →

Dispatch from Gen Con 2022

SiShips Hit the Floor at Largest Tabletop Game Convention

This past August, the Sheltered International team had the pleasure of attending Gen Con 2022 in Indianapolis. The 54th iteration of Gen Con was four days of gaming excitement, with a focus on pen-and-paper games, board games, card games, and more.

It was a particularly exciting time for us, as Gen Con presented a fantastic opportunity to get up close and personal with fans who order games and collectibles from all across the world. Many of our clients manufacture their products in Asia and attendees of Gen Con are a great representation of the final link in the supply chain.

battletech alpha strike mech con convention center inflatable entrance

History of Gen Con

The first Gen Con was held in 1968 in Lake Geneva, Wisconsin. Thus the name Gen Con, an abbreviation of “Lake Geneva Wargames Convention”. Some fans consider the first convention to have been held one year earlier at the home of Gary Gygax, the creator of Dungeons & Dragons. Either way, what originally began as a gathering of less than a hundred people has grown to become the largest tabletop gaming convention in North America, drawing over 70,000 unique attendees before the pandemic in 2019.

The World War I game Dawn Patrol (originally known as Fight in the Skies) is the only game to have been played at every single Gen Con. The air combat board game has developed a cult following over the years and it has become a tradition for attendees to play the game on the Saturday morning of the convention.

While the focus is on role-playing and strategy games, as Gen Con has grown, so has the scope of its vendors. Following the downsizing of video game convention E3 in 2006, Gen Con has invited video game developers to the Indiana Convention Center floor. 

Gen Con went international in 1990 when it was held in Sussex, England. Since then, cons have been held in Paris, Barcelona, Antwerp and even Queensland, Australia.

Vendors of All Sizes at Gen Con

One of the truly remarkable things about Gen Con is its diversity. Not only in the attendees, but in the vendors with packed merchandise booths and tables full of new and classic games. 

d20 dice rolls dungeons dragons catan d4 dice Vendors of all sizes are represented on the convention floor. Popular board game Catan (over 32 million copies sold), Dungeons & Dragons (the best selling game of all time), and Catalyst Game Labs’ new BattleTech: Alpha Strike (who brought an inflatable mech robot to the entrance of Gen Con 2022) are all at home next to small businesses introducing their homespun games for the first time. 

It’s never certain which game will be the next Catan or Dungeons & Dragons, but to reach the largest audience possible, all creators need reliable transportation management services.

Bringing the Global Supply Chain Home

It is an incredibly rewarding experience to view all of the products and merchandise on display at. To see the excitement on fans’ faces as they pore over pins, prints, and other collectibles makes the behind-the-scenes effort to join together the global supply chain all worth it. 

Fortunately, Sheltered International is on the cutting edge of technology that lets us bring the best shipping solutions to all of our clients, large and small. New satellite and deadline tracking features ensure vendors have their goods in time for conventions and the holiday season. Even better, our new mobile app puts the shipper in control at the tap of a finger. 


How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art software to bring you the highest quality domestic and international shipping solutions. With the world constantly changing, SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

1 Continue Reading →

New Updates to Merchandise Processing Fees

Why You May Notice Different Fees on Your Invoice

Just in time for the upcoming holiday season, U.S. Customs and Borders Protection is modifying their fee structure on cargo. The new Merchandise Processing Fees, first announced on August 1st, 2022, will enter into effect on October 1st, 2022. Keep in mind that duty-free imports are not exempt from paying these fees.

As part of the Fixing America’s Surface Transportation (FAST) Act of 2015, the Secretary of the Treasury was given the power to adjust Consolidated Omnibus Budget Reconciliation Act (COBRA) fees in accordance with inflation. This decision is made by comparing the average Consumer Price Index from the previous year. If there is an increase of more than one percent, the COBRA fees must be changed, accordingly. These fee increases represent a small percentage of the whole, however, it is important to factor them in while budgeting and preparing calculations for shipments.

ocean cargo shipping freight forwarding u.s. customs inspection fees rates inflation

Notable Fee Changes

The full list of COBRA related fees is available at the Federal Register. For ease of use, we’ve highlighted a few of the fees you are most likely to encounter.

Important to note is the Merchandise Processing Fee rate will not change; it remains at 0.3464% of the cargo value. However, both the minimum and maximum have increased slightly. From the U.S. Customs and Border Protection notice, “The minimum will change from $27.75 to $29.66; and the maximum will change from $538.40 to $575.35.”

  • The Surcharge for Manual Entry/Release (class code 500) will change to $3.56
  • The Dutiable Mail fee (class code 496) will change to $6.52
  • The Commercial Vessel or Commercial Aircraft Passenger Arrival customs fee will change to $6.52 per passenger. Also, the Commercial Vessel Passenger Arrival (from exempt areas) customs fee will change to $2.29 per passenger.
  • The Commercial Truck Arrival fee will change to $6.50. The total single crossing fee will be $14.05, as the Commercial Truck Arrival Fee does not include inspection service fees (which are currently $7.55).

 

international freight forwarding fee structure increase shipping news

Are Any Imports Exempt from Merchandise Processing Fees?

While we mentioned that just because an import is duty-free that does not mean it is exempt from Merchandise Processing Fees (MPF), there are certain Free Trade Agreements that will waive the MPF. For example, the current Free Trade Agreement with Israel provides an exemption. Sheltered International will be able to help you work through and understand whether MPF will apply to your shipment.


How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art software to bring you the highest quality domestic and international shipping solutions. With the world constantly changing, SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about Merchandise Processing Fees and possible exemptions, or to view a demo of our software, contact us today.

0 Continue Reading →

Chinese Shipping Rates Decrease

Multiple Factors Lead to Lower than Expected Shipping Costs

The anticipated rush of cargo following the recent reopening of Shanghai has failed to materialize. The Chinese city had been subjected to a months-long lockdown, the likes of which the west had not seen since the initial days of the Covid-19 pandemic. With business leaders like Elon Musk championing the economic and industrial might of Shanghai, a flurry of activity was expected to return the city to its full capacity. However, current economic hurdles have subdued demand. A positive side effect is a shipping rates decrease.

Shipping rates from China have decreased dramatically in the last few weeks. The dual threat of inflation and high gas prices leaves retailers expecting lower consumer demand and cutting back orders. Industry insiders are not expecting a pick up in demand until Q4 2022. The summer of 2022 is one of the best opportunities in the last several years for those looking to ship freight to and from China.

shipping port container containerships freight forwarding

High Gas Prices Lead to Conservative Spending

The historically high gas prices being faced by the United States and the rest of the world are the result of many different aspects, despite the desire of political commentators on both sides of the aisle to point a finger at singular issues.

While the United States received less than 10% of oil imports from Russia, the percentage was significantly higher in Europe. The economic blockade of Russia for their invasion of Ukraine is leading to an energy squeeze filtering from Europe to the entire world. As of the writing of this article, Saudi Arabia has been capping their oil production (although, a new report optimistically suggests OPEC+ might hike supply soon).

While there is the capability of digging new domestic and international oil wells, gas executives are hesitant to invest in long term projects with the expected rise of electric cars in the next decade and the recent memory of negative trading prices during the height of the pandemic. However, even experts are not prepared for the sky high trajectory of average gas prices. On June 14th, the New York Times reported the expected average price for the month of June 2022 was $4.59; less than a week later the average price was $4.98.

The demand for gas in America has only increased, following workers return to offices and the arrival of the summer driving season. Many Americans are opting for experiential vacations instead of physical goods having been cooped up inside. Consumers looking to tighten their belts have suspended home renovations and canceled subscription services. 

united states port shipping containers cargo rates gas prices energy

Bear Market Helps Shipping Rates Decrease

The other major factor driving down demand is the arrival of a bear market. Defined as a decline of 20% or more across the entire stock market, nearly every sector is suffering (with the exception of energy stocks). The drop is acutely felt by brands like Wal-Mart and Target in the retail sector. With pressure from shareholders to find cost cutting measures and consumer demand down, these retail giants are not placing the same level of orders from Chinese factories.

Ships looking to make up the gap are enticing other clients with lower rates through Q2 and Q3 2022. Any proactive companies will be able to take advantage of this unique situation after a fraught two years of lockdowns, port backlogs, and supply chain disruptions.  

How SiShips Gives You The Advantage

Sheltered International combines expertise with state of the art software to bring you the highest quality domestic and international shipping solutions. With the world constantly changing, SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

0 Continue Reading →

Shanghai Reopens; Work to Lessen Backlog Begins

Resuming Full Production Not as Easy as Flipping Switch

Shanghai is lifting their extreme lockdown and not a moment too soon. While originally intended to be a two-phase lockdown lasting one week, the near total lockdown of Shanghai stretched to two months before being lifted on June 1st. Chinese citizens are relieved after a frightening and confusing time.

shanghai port china freight forwarding global supply chain biden putin ukraine lockdown China has enforced the most stringent restrictions worldwide since March 2020. The goal of reaching community zero-COVID has frustrated Shanghai, especially. Citizens who had been separated from family and basic needs were trapped by muddled messaging from the government. Amid positive trends in cases, “some Shanghai districts tightened restrictions on movement, and even in neighborhoods that met criteria for people to be allowed to leave their homes officials were ordering them to stay put,” as recently as Friday, April 22nd according to Reuters.

Signs of life returning to normal are evident across China, with even Hong Kong Disneyland reopening after an extended closure. However, the work to bring the world’s second largest economy back to full power is just beginning.

Truckers Hit Hard by Covid Restrictions

While the port of Shanghai officially remained open during the lockdown, it was far from operating at regular volume. The daily cargo volume hovered around 100,000 containers per day, down roughly 30% from the norm of 140,000 containers. Even the containers that made it through the port have piled up as truckers inside China face roadblocks and quarantines.

Some truck drivers were forced to remain for multiple days in the cab of their trucks due to the tight restrictions around Shanghai. After hearing horror stories from fellow truck drivers, some refused to travel. The lack of available truck drivers increased the amount of containers at the port and nearly doubled the cost of domestic transportation involving Shanghai.

Prognosticators say it could take weeks, or even months, for international shipping to return to normal.

shanghai china lockdown coronavirus zero covid government coronavirus cases breakout pandemic endemic shipping supply chainReopening Logistics Present Difficult Hurdle

The Chinese government is doing all they can to ease the stress of the present situation. This includes providing 80,000 Shanghai businesses based in government-owned buildings with six months free rent. Despite this and other incentives, it will take time for the city to ramp up to full capacity. Goods and materials being delivered to Shanghai were nearly stopped completely during the strict lockdown.

“Shanghai is coming back with a vengeance,” predicted Tesla CEO Elon Musk during an earnings call on April 20th. The Tesla plant in Shanghai, known as Gigafactory, restarted production after a 3 week long disruption the day before. Gigafactory workers are taking multiple Covid tests each day while living and working entirely within the factory premises. Tesla was one of the first factories to resume full production during the shutdown.

Tesla remains susceptible, like every other automotive company, to the semiconductor shortage that has plagued the globe for the last two years. Most factories in Shanghai, while no longer lacking workers, do not have enough materials to operate. They are waiting for the trucking apparatus to fully restart and remove the backlog from ports. 

The dominoes of the global supply chain have been knocked down, but with the help of easing restrictions in China they are slowly being set back up.


How SiShips Gives You The Advantage

Sheltered International combines expertise with state of the art software to bring you the highest quality domestic and international shipping solutions. With the world constantly changing, SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

0 Continue Reading →

Labor Negotiations Underway with Dockworkers Union

Labor and Management Meet in San Francisco

The International Longshore and Warehouse Union (ILWU) entered contract talks this week with the Pacific Maritime Association (PMA). These labor negotiations come ahead of the July 1 expiration of the current contract and amid backlogs and delays in west coast ports like Los Angeles and Long Beach. Jim McKenna, PMA President and CEO, remains hopeful about the negotiations. “At this point in time,” says McKenna, “you have to be cautiously optimistic that we’re not gonna get into a strike scenario, but it’s early in the game.” Both sides have acknowledged the likelihood of talks continuing past the July 1 deadline, but that outcome does not necessarily mean a strike from the ILWU will take place. 

The biggest focus of negotiations is the right to automate ports. The ILWU stands in firm opposition to automation, something PMA has warmed up to following the pandemic. PMA feels that automation is the only viable solution to prevent future backlogs. The ILWU claims any automation of west coast ports will be the end of thousands of jobs for union workers. 

automation port terminal shipping united states domestic international imports exports

Photo courtesy of Chuttersnap via Unsplash

Labor Negotiations Testing an Already Fragile Supply Chain

The backdrop for these negotiations is, of course, the precarious state of the global supply chain. Shanghai, home to the largest port in the world, has been in a strict Covid-19 lockdown for over a month. Russia’s invasion of Ukraine has destabilized Eastern Europe and is leading to an increase in energy prices worldwide. Meanwhile, the ports of Los Angeles and Long Beach are still working through the backlog faced by Covid restrictions and transportation strikes in the United States.

The dockworkers have been a key part of the record profits for shipping companies during the pandemic. The 22,000 members of ILWU could be looking to flex some of their leverage. Past strikes have been crippling for the domestic supply chain, with 44% of global imports entering the United States from the 29 ports on the west coast.

Port Densification as a Sticking Point in Labor Negotiations

The core of management’s argument is automation is unavoidable. Major ports, like Los Angeles, are in urban centers without room to expand. Automation enables ports to grow up, instead of out. As the global population grows alongside disposable income, imports continue to rise and ports need a place to store containers before they are sent out on trucks and trains. Additionally, studies show the output of automated facilities is 44% higher than that of non-automated facilities.

The ILWU counters these claims by saying the rise in productivity at automated facilities has come at the cost of work in other locations. Based on the east coast, the International Longshoremen’s Association (ILA) support their west coast counterparts. The ILA has successfully limited terminal’s right to automate in their contracts. The U.S. Secretary of Labor, Marty Walsh, is monitoring the negotiations carefully and has stated he is willing to intervene if the supply chain is threatened by any potential outcomes. However, Walsh added he is not personally concerned there will be issues come July.

port shipping freight container ship boat international freight forwarding terminal west coast longshoremen dockworkers union negotiations

Photo courtesy of William William via Unsplash

Common Negotiating Ground on Growth

Both sides remain committed to the negotiating table and believe they will find a solution that works for both parties. The ports are at, and have been at, 100% capacity during the recent past. Terminals need to grow to accept more goods, which means more profit for management and more hours for labor unions. There are versions of a new contract where both sides benefit, it simply is a matter of finding that compromise.


How SiShips Gives You the Advantage

Sheltered International combines expertise with state of the art software to bring you the highest quality domestic and international shipping solutions. With the world constantly changing, SiShips puts the shipper in control, offering efficient and cost effective ways to ship your product.

To learn more about managed transportation with SiShips, or to view a demo of our software, contact us today.

0 Continue Reading →