Month in Review – April 2024

Maritime

April 4: Relief as Finnish Port Strikes Are Set to Cease in Bid to Start Talks – The Loadstar

Finland’s supply chains look set for a reprieve after the country’s trade unions issued a temporary pause to the weeks-long labour disruption.

The Central Organization of Finnish Trade Unions (SAK) on Thursday confirmed that the wave of port strikes would cease on Monday morning at 6 am.

Petri Laitinen, MD of the Finnish Freight Forwarding and Logistics Association, said the union decision to suspend the action was intended to open up the possibility of government negotiations.

Finland’s recently elected ‘austerity government’ has taken a hard line on when and when it will not negotiate with unions, making clear that no negotiations would be permitted while strikes were taking place.

April 5: Box Logjam at Port of Vancouver as Import Surge Meets Rail Shortages – The Loadstar

A surge of imports meeting strained rail capacity has pushed up container dwell times at North American west coast ports, especially in Vancouver.

And importers face further disruption with Canadian rail workers set to vote on industrial action in their contract negotiations with the railways.

On April 4, Vancouver Fraser Port Authority’s dashboard for rail flows showed container dwell times of more than seven days at the Centerm container facility, while Vanterm and Deltaport registered dwells of five-to-seven days.

Average dwell times climbed from 4.3 days in December to 5.2 in January, 6.7 in February and 7.3 in March.

The congestion was caused by a double-digit surge in imports. For March, the port posted a 10% rise in boxes over February, 51.7% higher than 12 months earlier. Terminal utilization reached 91% at Deltaport and 96% at Centerm.

April 5: Port of Montreal Labour Negotiations Update

In a statement, the Maritime Employers Association said that mediation meetings have been scheduled by the Federal Mediation and Conciliation Service for April 8 and 9.

The MEA noted that there has been no strike vote and the union has not planned a meeting to set that in motion. For any pressure tactics to be applied, a vote and 72 hours’ notice is necessary.

“While the situation at the Port of Montreal and at the MEA is critical, our priority remains the conclusion of a negotiated collective agreement as soon as possible,” the MEA stated.

April 5: MSC Faces $63-Million Penalty in U.S. Regulatory Dispute – Splash

Mediterranean Shipping Co. (MSC) is looking at a potential $63-million fine in the U.S. for alleged violations of the Shipping Act, encompassing thousands of contested charges directed at various clients.

The U.S. Federal Maritime Commission’s (FMC) Bureau of Enforcement, Investigations and Compliance has accused the world’s largest liner of charging excessive late fees on non-operating reefers and billing companies that were not originally part of the contractual agreement.

In its case brought to the regulator’s administrative law judge, Alex Chintella, the Office of Enforcement alleged MSC knowingly and willfully employed unreasonable and unfair practices that did not promote or “ensure an efficient, competitive and economical transportation system in the ocean commerce of the United States.”

April 7: Houthis Claim Long-Distance Attacks on Three Boxships – The Maritime Executive

On April 7, a spokesman for Yemen’s Houthi rebels claimed that the group had attacked three more container ships, including one that appears to have been no closer than 700 nm away from the group’s territory.

In a statement, spokesman Yahya Saree said that, within the last 72 hours, Houthi forces had carried out attacks on the merchant ships Hope Island, MSC Grace F and MSC Gina.

He described the Hope Island as British, and the MSC vessels as Israeli; none have clear management links to Britain or Israel, based on their Equasis records, but the Houthis have previously targeted MSC ships.

Saree claimed that MSC Grace F and MSC Gina were hundreds of miles from Yemen in the Indian Ocean and the Arabian Sea at the time of the attacks. The group has previously threatened to extend its geographic reach, though whether it has the technical ability to do so is unclear.

April 10: Transpacific Container Contracts ‘Substantially Below’ Initial Asking Rates – Splash

The first batch of transpacific contracts are concluding for the May 2024-April 2025 period, with analysts at Jefferies reporting Asia-U.S. west coast rates are understood to be in the $1,400 to $1,500 per FEU range, up from $1,200 to $1,300 per FEU last year. These agreements compare with current spot rates above $3,000 per FEU.

“While the latest contracts are a bump from last year’s levels, they remain close to break-even levels, highlighting liners’ inability to capture stronger long-term rates given the supply outlook even against a stronger than expected market this year,” stated a shipping markets update from Jefferies on April 9.

Providing further specifics on the deals being concluded, Hua Joo Tan, co-founder of Asia-based container advisory Linerlytica, explained that there are various tiers of contracts being concluded, with large beneficial cargo owner (BCO) rates expected to come in at below the $1,400 to $1,500 range, while smaller BCOs will come in at around that range. The $1,400 to $1,500 range was approximately what liners were making on the spot market in 2019, the year ahead of COVID.

April 14: MSC Containership Seized Near Strait of Hormuz – WorldCargo News

Iranian armed forces have seized a container ship, identified as the Portugal-flagged 15,000-TEU MSC Aries, near the Strait of Hormuz.

The vessel was commandeered by the Islamic Revolutionary Guard Corps (IRGC) on April 13, according to reports from Iranian state media. The move comes as a retaliation against an Israeli attack on Iran’s consulate in Syria, which has resulted in heightened tensions in the region.

The container ship had just completed a call at Khalifa port in the UAE and was heading with cargo onboard for her next call at Nhava Shiva port in India.

April 15: U.S. FMC Building Case for New Container Data-Sharing Rules – FreightWaves

The U.S. Federal Maritime Commission is seeking another round of comments from container line operators and their customers as part of its quest to build the case for potential new mandates on container shipment data sharing.

The FMC wants to supplement an information request issued last year, along with a May 2023 report on the agency’s Maritime Transportation Data Initiative (MTDI). That project, led by Commissioner Carl Bentzel, attempts to measure the extent to which shipment data is used and shared throughout the supply chain.

The information request was to be published on April 16.

“While some key data elements are readily shared between supply chain participants, the lack of timely and accurate access to some data elements can lead to inefficiencies, as was seen during the COVID-19 pandemic,” the new information request states.

April 16: Panama Canal to Add Back Daily Transits as Rainy Season Approaches – The Maritime Executive

After months of increasing restrictions due to falling water levels in its reservoir, the Panama Canal Authority will continue its gradual restoration of daily transits and add a foot to the maximum draft. The decision was made after an analysis of the water levels, efforts to save water and increase storage, and a slight increase in rainfall levels in April ahead of the traditional rainy season.

The increase in transits is especially good news for bulkers, car carriers and gas carriers, as well as smaller containerships, as the increases in transits are slated for the original Panamax locks. After a week-long period of maintenance in May that will restrict transits, the number of daily crossings will be increased primarily for the” Supers” category, Panamax vessels with a beam over 91 feet. Five slots will be restored for a total of 18 daily transits for Supers with a total of 31 daily transits being conducted.

Starting in June, the Panama Canal Authority will also add one additional slot for the largest vessels transiting the canal through the new Neopanamax locks. They will increase from seven to eight the number of vessels and as of mid-June also add one foot back to the maximum authorized draft. It will increase to 45 feet as of June 15, which, while below the pre-draft levels that were as high as 50 feet, will still further reduce the challenges for the largest ships. Some containerships have been transshipping boxes across the isthmus to reduce their draft.

April 18: BCMEA/Local 514 Bargaining Update – 21-Day Cooling-Off Period Begins – BCMEA press release

The BC Maritime Employers Association (BCMEA) and International Longshore and Warehouse Union Ship & Dock Foremen Local 514 (ILWU Local 514) have been engaged in negotiations, assisted by the Federal Mediation and Conciliation Service (FMCS) since January 19, 2024. On March 19, the parties mutually agreed to a 30-day extension of the conciliation period.

As the extended conciliation period concluded on Thursday, negotiations have now entered a 21-day cooling-off period, with mediated talks continuing with the support of FMCS. During the cooling-off period, the parties may acquire the legal right to strike or lockout, but may not exercise their right to strike or lockout until:

• 21 days have passed since the end of the conciliation process;
• a strike or lockout vote has been taken; and
• a 72-hour strike notice has been issued.

April 22: Port of Montreal: Longshoremen Reject MEA’s Settlement Proposal – CityNews

The 1,200 longshoremen at the Port of Montreal rejected, by a margin of 99.5 percent, management’s latest offer to renew their collective agreement.

The Maritime Employers Association (MEA), which represents the employer side, had stated that this settlement proposal represented the furthest they could go in the current context.

Of the 1,206 members of this local of the FQ-affiliated Canadian Union of Public Employees (CUPE), 1,078 were present, and rejected the employer’s offer by 99.54 percent.

April 22: Labour Minister Appoints Industrial Inquiry Commission on Longshoring Disputes at Canada’s West Coast Ports – Employment and Social Development Canada press release

Minister of Labour Seamus O’Regan Jr. on April 22 announced the appointment of an Industrial Inquiry Commission on the underlying issues in longshoring labour disputes at Canada’s West Coast ports. The Commission will be chaired by Vincent Ready and will include Amanda Rogers as a Member of the Commission. The Commission will soon begin meeting with stakeholders and reviewing consultation submissions from relevant parties. The Commission will present its findings and recommendations in a report to the Minister in Spring 2025.

April 24: Box Ship Diversions due to Red Sea Crisis Having Dramatic Impact on Emissions – The Loadstar

Re-routing of vessels on Asia-European routes has added 5,800 nautical miles to the journey of each container, pushing up CO2 emissions.

According to Xeneta’s CO2 per-tonne-km measure, the carbon emissions index (CEI), the Far East-Mediterranean trade, which in Q3 23 was one of the best performers in terms of emissions, became the worst in the first quarter of this year, with a CEI score of 140.8 – an increase of over 60%.

The CEI index for Far East-Northern Europe trades also increased in the first quarter, to 111, a 20% jump year on year. However, Xeneta analyst Emily Stausbøll noted that the increased distance on this trade was partially mitigated by an improved vessel filling factor, up 6.1%.

April 24: Houthis Target Maersk and MSC Vessels as They Vow to Renew Attacks – The Maritime Executive

Security services received reports of an explosion near an unidentified vessel on April 24 in the Red Sea. It is the first acknowledged report in days and came just hours after the Houthis issued a renewed threat on their official channels.

Details were vague on the incident, with the UK Maritime Trade Organization issuing only brief details. They received a report from a vessel of an explosion in the water approximately 72 nautical miles southeast of the port of Djibouti. The statement said only that there had been an explosion “at a distance,” and that the crew and vessel were reported safe.

A Houthi spokesperson claimed responsibility, reporting they had targeted two vessels, the Maersk Yorktown (28,900 DWT) a U.S.-flagged containership operated by Maersk Line Ltd., which operates under contract to the U.S. military, and the MSC Veracruz (68,000 DWT). The MSC vessel is registered in Portugal. The Houthis are again attributing the MSC vessel as an “Israeli ship.”

April 29: FAK Rate Hikes Holding, with Strong Demand into Peak Season Predicted – The Loadstar

With excess container liner capacity continuing to be soaked up by the widespread vessel diversions around the Cape of Good Hope, combined with surprisingly strong demand, the recent turnaround in the fortunes of shipping lines is now expected to last into the peak season.

According to new analysis from shipping consultancy MSI, anecdotal evidence shows a round of FAK rate hikes announced earlier this month appear to have had some success.

“The initial signs are that these increases are sticking,” it said.

“Apart from the impact of the Cape of Good Hope diversions, a strong rebound in cargo demand across the world is supporting liners’ endeavours to keep freight rates at their current levels,” it added, noting that the main east-west trades, as well as variety of smaller north-south trades, had shown “robust” growth.

April 28: Baltimore Welcomes its First Container Ship Since Bridge Collapse – The Maritime Executive

On April 27, the Port of Baltimore received its first container ship since the tragic collapse of the Francis Scott Key Bridge one month ago. The arrival is an important milestone for Baltimore businesses and longshoremen, who have been heavily impacted by the closure of the inner harbour.

April 30: Houthi Attack on MSC Ship in Indian Ocean Indicates Further Range – The Maritime Executive

The attack on the MSC Orion on April 26 is raising troubling questions, as the vessel was in the Indian Ocean, up to 400 nautical miles from the mainland of Yemen.

The ship, which is registered in Portugal and owned by Eyal Ofer’s Zodiac Maritime and chartered to MSC, reported an explosion and found some debris believed to be from an “uncrewed aerial system.” The ship sustained some minor damage.

The Houthis in mid-March had threatened to expand the zone of attack to include portions of the Indian Ocean. They said they would disrupt ships attempting to divert away from the Red Sea and traveling around Africa. So far, while there have been several other Indian Ocean attacks, this is the first confirmed at these distances.

Air

April 3: Shipping Disruption and E-Commerce Demand Driving Up Airfreight Rates – The Loadstar

The start of the airline summer season this month is likely to hit airfreight rates, due to an increasing amount of belly capacity on passenger routes. But right now, despite the major tradelanes not seeing significant changes, there remain pockets of high volumes.

Ex-India is still busy, say forwarders.

“Space is still congested across all India origin airports, as well transshipment points,” said Ligi Logistics.

“There is a severe backlog and congestion in Chennai, Mumbai, Delhi and Bengaluru, where off-loading is being badly delayed and time for off-loading of trucks is a minimum 36 to 44 hours.”

April 10: Forwarder Anger as Scanner Malfunctions Hit Bangladesh Air Exports Again – The Loadstar

Air cargo flows through Bangladesh’s Dhaka Airport are again facing severe challenges, due to the malfunction of explosive-detection scanners (EDSs).

Only one of the airport’s EDS machines is working, as air cargo demand and rates out of the country have significantly increased this year.

“It is utterly impossible to meet the requirements of freight forwarders with only one operational EDS,” Kabir Ahmed, president, Bangladesh Freight Forwarders Association (BAFFA), wrote to the civil aviation authority on April 9.

Outbound cargo is being stockpiled inside cargo villages, according to forwarders.

April 15: Bottlenecks and Price Hikes as Airlines Now Avoid Iran Airspace – The Loadstar

Asia-to-Europe airfreight could face extreme bottlenecks and price hikes due to the rising tension in the Middle East, and sea-air transshipments from Dubai will also be affected.

On April 13, Iran launched around 300 missiles and drones at Israel, most of which were shot down by Israel’s U.S.-backed missile defence system and its allies.

Safety concerns led many major carriers to cancel or reroute flights. Lufthansa Cargo told The Loadstar it would “fly around Iranian airspace” until April 19, at least.

But with Russian airspace also closed since 2022, due to its invasion of Ukraine, carriers rely on Iranian airspace as a vital crossing for the in-demand Asia to Europe trade, creating concern that the airspace closure would bottleneck Asia-Europe airfreight routes further.

April 30: EU Launches Greenwashing Action Against Airlines over Emissions Offsetting Claims – ESG Today

The European Commission announced on April 30 that it has launched action, alongside the EU consumer authorities, against 20 airlines over misleading greenwashing practices, with a particular focus on claims made by the airlines that the CO2 emissions from flying could be offset by paying additional fees to support climate projects or the use of sustainable aviation fuel (SAF).

In a letter sent by the Commission and the Network of Consumer Protection Cooperation (CPC) Authorities, the airlines are invited to outline proposals to bring their practices in line with EU consumer law, and warned that they may face enforcement actions by the CPC authorities if they fail to take steps to solve the concerns, including sanctions.

The Commission’s action follows the launch of a complaint last year by the European Consumer Organisation (BEUC) targeting misleading climate-related claims by several European airlines, and calling on European authorities to require airlines to stop making claims aimed at giving consumers the impression that flying is sustainable.

Rail

April 1: Teamsters Canada Calls for Strike Authorization Vote by CN and CPKC Train Crews – Trains

The union representing Canadian National and Canadian Pacific Kansas City engineers and conductors in Canada has authorized a strike vote, as labour and management remain far apart on new contracts.

Leaders of the Teamsters Canada Rail Conference told their members on March 28 that a strike vote will be held from April 8 to May 1. If the rank and file vote to authorize a strike, the earliest a walkout or lockout could occur is May 22.

After being unable to reach agreements during negotiations that began last fall, labour and management since March 1 have been negotiating with the help of federal conciliators. Also still negotiating: CPKC rail traffic controllers, who are represented by TCRC in Canada.

April 8: CPKC–TCRC Collective Bargaining Update

Following Canadian Pacific Kansas City’s (CPKC) filing of a notice of dispute and request for assistance in ongoing collective bargaining negotiations, the Federal Minister of Labour appointed conciliators on March 1 to help CPKC and the Teamsters Canada Rail Conference (TCRC) reach new negotiated agreements.

CPKC met during the week of April 1 with TCRC leadership representing both the TCRC – Train & Engine (T&E) division and the TCRC – Rail Canada Traffic Controllers (RCTC) division, along with federal conciliators. The parties remain far apart.

Bargaining will continue the week of April 22.

Trucking

April 1: Trucking LLCs Must File New Report Under U.S. Law – Transport Topics

Small trucking company owners may find themselves among the millions of limited liability company proprietors across the U.S. [and beyond] facing hefty fines and prison time if they fail to report information now required by an obscure new U.S. Treasury Department law that took effect January 1 to thwart money laundering, tax fraud and financial crimes.

The new paperwork, called beneficial ownership information reports, for LLCs is now required by the Financial Crimes Enforcement Network, a bureau under the Treasury Department focused on safeguarding America’s financial system from illegal activities and collecting, analyzing and providing regulators with financial information to the agency.

[Some non-U.S. companies may be required to file the report as foreign reporting companies.]

April 2: Nova Scotia Offers Rebates for Zero-Emission Vehicles – Today’s Trucking

Nova Scotia will offer rebates of up to $50,000 per medium- and heavy-duty zero-emission vehicle, depending on its class.

Eligible vehicles include vans and trucks used for commercial or industrial purposes that weigh more than 3,856 kilograms (8,500 pounds), according to a news release.

“Transportation is Nova Scotia’s second-largest source of greenhouse gas emissions,” said Tory Rushton, minister of natural resources and renewables. “Moving to zero-emission vehicles reduces emissions and supports our goal of reaching net zero by 2050.”

April 4: Alberta’s New Class 1 Training: More In-Cab Training Hours, Red Seal Certification – Today’s Trucking

As of next year, new Class 1 drivers in Alberta will require 103.5 hours of mandatory training as a part of broader goal to make truck driving a Red Seal certified job three years from now. This will make Alberta the first province to officially recognize truck driving as a skilled trade.

The existing mandatory entry level training program (MELT) requires 113 hours of training, which includes 57 hours of in-cab training.

“While the new learning program will reduce barriers to Class 1 licensing, it will also require more hours of in-vehicle training than the current MELT system, and opportunities for ongoing competency training will continue throughout a driver’s career, increasing safety,” said Jesse Furber, press secretary of Alberta’s Transportation and Economic Corridors Ministry.

April 6: Fuel Costs Show Why Trucking Market Is So Challenging for Providers – FreightWaves

Retail diesel fuel costs are up 33% versus April 2019, while the National Truckload Index that measures all-in spot rates shows an increase of only 16% over the same time. The implication is that carriers are in a far worse position on the spot market than they were in 2019 as they are unable to fully pass along operating costs.

Fuel is just one of many trucking operating cost inputs that have inflated dramatically over the past five years, but it is one of the largest measurable costs that are relatively homogenous across the national carrier base. It is also a glaring example of how desperate the truckload spot market has become.

April 9: Urgent Action Needed for Commercial Truck Driver Training: Report – Insurance Bureau of Canada

New commercial truck drivers who have not received adequate training are putting the safety of Canada’s roads and highways in jeopardy, according to a new report from professional services firm MNP, commissioned by Insurance Bureau of Canada (IBC).

MNP found drivers with less training and experience are more likely to be involved in collisions and make costly claims than drivers with more training and experience. Insurance claims related to commercial trucking accidents have been increasing rapidly in recent years.

“This third-party report echoes many of the recommendations that our industry has put forward and we encourage governments across the country to use this report as a call to action to update and improve training and enforcement standards,” said Celyeste Power, President and CEO, IBC.

To identify best practices in truck driver training, MNP conducted a review of driver training programs in various Canadian and international jurisdictions. It then offered recommendations on how to improve training requirements.

April 16: False Hours-of-Service Log Reports Rise in U.S. Despite ELDs – FreightWaves

The full implementation of the U.S. federal ELD rule dates back to December 2019, but that hasn’t stopped hours-of-service violations from racking up, said P. Sean Garney, co-director of Scopelitis Transportation Consulting.

The working theory always was that the tight, immutable data on HOS generated by an ELD would reduce the frequency of violations. The record spelled out by Garney shows mixed results.

Garney said the road to HOS violations generally runs through two pathways: questionable use of the personal conveyance provisions of the HOS rule and the “yard rule” that allows drivers to be behind the wheel but considered off duty while moving a truck within a defined company-owned area.

April 18: Philadelphia Judge Rejects $25 Million Jury Verdict in Truck Crash – Transport Topics

In an unusual ruling, a state judge of the Philadelphia Court of Common Pleas last month erased a “clearly inappropriate” $25 million jury verdict for punitive damages in a 2019 truck-involved accident lawsuit.

However, Judge Gwendolyn Bright’s decision still left the defendant, Lancaster, Pa.-based Ecore International, a family-owned recreational flooring firm with only four trucks, facing a $1 million jury award in compensatory damages.

Before the judge reduced the jury verdict, it seemed that the litigation – Clemmons v. Ecore International – would stand as another nuclear jury verdict, like some past decisions that tilted the scales of justice against motor carriers.

April 18: U.S. FMCSA Looks to Streamline Tracking of Motor Carriers, Freight Brokers – FreightWaves

U.S. regulators are moving ahead with plans for a new registration system that will help the government keep better track of motor carriers and freight brokers.

The Federal Motor Carrier Safety Administration will be asking the White House Office of Management and Budget to review and approve a request to collect new information that will inform the FMCSA Registration System (FRS). FRS will replace the current Unified Registration System (URS), according to a Federal Register notice.

FMCSA and the states use operating-authority registration information to track motor carriers, freight forwarders and brokers, as well as the companies that insure them.

“Registering motor carriers is essential to being able to identify carriers so that their safety performance can be tracked and evaluated,” FMCSA stated in the notice.

April 24: U.S. FMCSA to Establish Registration Fraud Team – FreightWaves

After years of complaints from truckers, brokers and insurance companies, U.S. federal regulators are setting up a team specifically to deal with rampant fraud in the trucking industry.

The Federal Motor Carrier Safety Administration’s Registration Fraud Team will work in the agency’s registration office to focus solely on assisting those who have been victims of registration fraud at the agency as well as identifying measures to help prevent it.

“We’ve heard from every corner of the industry about how bad fraud is right now,” said Ken Riddle, director of FMCSA’s Office of Registration, “and the one thing we’ve heard loud and clear is, ‘How can FMCSA help?’ We took that very seriously, so we’re looking at every way that we can help mitigate it.”