FXT quay

Threat of port strikes to Christmas

Sep 1, 2022 |

Dock workers at Felixstowe finished their first strike in over 30 years on Sunday, after members of the Unite union withdrew their labour for eight days in a dispute over pay, with Unite members at the Port of Liverpool announcing it is likely to follow suit within weeks.

The 1,900 workers at the UK’s largest port completed their walk-out over a 7% pay offer on Sunday evening, but were told by the port’s owners not to report for work until Tuesday, which meant they lost the opportunity to work vessels on overtime on bank holiday Monday and is an unfortunate sign of how acrimonious the situation may have become.

The port's owner has gone on record saying the pay offer, which includes a £500 one-off bonus payment, was "very fair”, while Unite have said they will not put the offer to its members, as they want an improved pay offer in line with the rate of inflation of between 7% and 12.3% before doing that.

The union Unite warned it would set further strike dates if the company would not negotiate further, with Unite’s general secretary, Sharon Graham, suggesting industrial action at Felixstowe could continue until Christmas.

The Metro transport team managed to clear all of your containers from Felixstowe ahead of the strike and have coordinated haulage capability to collect inbound containers, as they are discharged from the vessel and cleared through customs, now the strike is over. 

Export containers were redirected to other gateway ports on alternative vessels. Strategic planning has ensured that your products continue to flow through the supply chain, despite the challenges of the port closure.

Dates for any strike action have yet to be determined at the Port of Liverpool, but the workers’ position remains unchanged, with 500 set to walk out over an “inadequate” pay offer and carriers planning to use alternative UK or non-UK gateways as industrial action looms, to try to avoid further disruption.

While we continue to monitor and manage the situation at Felixstowe and other ports affected by industrial action, our focus remains the continuity of operations, to ensure that your supply chain is protected at all times.

To learn how we work around disruption and port congestion, please get in touch with our sea freight director, Andy Smith, who can advise on our preparations ahead of threatened industrial action.

Mojave

US inland port will reduce pressure on Los Angeles and Long Beach

Aug 31, 2022 | , ,

The Mojave Inland Port site is adjacent to the Mojave Air and Space Port, a fully operational airport capable of accommodating large cargo aircraft, with a Union Pacific rail line running through the site and the capacity to handle up to 3,600 trucks a day and three million containers per year once operational.

The project received approval from officials in California to move forward with the transportation and logistics hub, to provide a critical relief valve for the West Coast gateways, that have been continuing to choke with container traffic and have run out of land, to add capacity.

The Mojave Inland Port will be located 90 miles west of the ports in the Mojave Desert, on 400 acres of land, with the project costing an estimated $75 million, that is being privately financed.

The new inland port will save shippers time and money by moving their containers speedily, it is claimed inside three hours, instead of sitting in the port or terminals for days or weeks waiting to be transported.

One of the major causes of port congestion on the west coast is the number of containers waiting to be transported, with more than 33,700 designated for rail sitting on the Port of Los Angeles docks, nearly four times the number that would typically be waiting on a recent survey.

The Port of Los Angeles, America’s largest container port, handled 10.7 million container units in 2021, the busiest calendar year in the port’s 115-year history and Long Beach set a new record in 2021 by moving 9.38 million cargo containers, up 15.7% on 2020 volumes.

With no letup in container traffic since the beginning of the year, the ports reported record container movements in July which continued robustly in August, with both ports very interested in the project and encouraging of the development.

Mario Cordero, executive director of the Port of Long Beach, said he supports the Mojave Inland Port project. “The Mojave Inland Port is the type of innovative solution that will alleviate congestion and allow dockworkers to do their jobs more efficiently, getting goods to businesses and consumers faster.”

On the 9th August officials in Kern County, where the inland port site is located, issued permits for its zoning and site plans, with building permits the next step and a groundbreaking scheduled for next year. The desert port is scheduled to become fully operational in 2024.

The Mojave Inland Port will service containers transporting consumer goods from Asia, which represents 40% of the freight that moves through the ports of Los Angeles and Long Beach.

If this programme is successful we suspect that it will be emulated globally, including in Europe, to move container holding facilities inland. It is one that is worth noting and watching, for slicker supply chains reliant on an ocean freight model.

We always explore contingency opportunities that deliver product to market in the USA, avoiding congestion and delay. We will monitor the progress of this project and will engage with the executive team at an appropriate time.

If you trade with the United States and would like to explore our capability, please contact Kevin Lake, who leads our North American operations. 

Metro environmental focus not impacted by pandemic

If you use ocean freight you can’t ignore IMO 2023 – what is it?…read on to find out the implications.

Aug 31, 2022 | , , ,

The supply chain challenges that have been driven by the pandemic and continue today with endemic congestion and disruption are significant and need attention, but preparation is needed for significant changes and challenges that are waiting just around the corner.

For close on two years everyone’s attention has been focused on operational, congestion and disruption challenges and when talk turns to the future, it is almost exclusively focused on when transit times will come back down, shipping schedules become accurate and freight rates return to sensible levels, rather than the International Maritime Organization (IMO) 2023 rules aimed at reducing emissions from vessels, which come into force in just 12 weeks.

On 1st January 2023 the IMO will adopt revisions and make additions to its initial strategy to cut greenhouse gas (GHG), by targeting vessel efficiency and carbon intensity to reduce total GHG emissions from shipping by at least 40% from 2008 levels by 2030.

Vessels will need to meet a specific Energy Efficiency Existing Ship Index (EEXI), have an enhanced Ship Energy Efficiency Management Plan (SEEMP) that lays out the vessel’s energy efficiency improvement steps, and determine Carbon Intensity Indicator (CII) rating scheme.

The CEO of a leading carrier explained that to improve the energy ratings of old ships you either use biofuel, or you have to slow the vessels down and calculated that his line would lose between 5 and 15% capacity to comply by lowering speed. This is a major impact on supply chain speed to market that is imminent in being implemented.

The IMO 2020 low-sulphur rules, were well-known for a decade before implementation, yet many only started to devote effort into the issue as we got into 2019 and many shippers only became aware in the second half of 2019 and were very surprised.

The soon to be introduced IMO 2023 rules were agreed upon in 2018, giving five years to prepare and while the new rules will involve carriers having to slow some of their vessels in order to meet the new requirements, the number of vessels affected and how much this will potentially reduce global capacity is presently unknown.

IMO 2023 rules will be more difficult for older vessels than for newer, more fuel-efficient vessels, and could have a more profound impact on smaller regional trades than major deep-sea trades, where most new tonnage operate. 

Shippers that source in alternative regions and smaller locations dependent on feeder services, may find that effective capacity is reduced, services cut and transit times extended.

The IMO 2020 rule change was comparatively simple to explain - “We need to buy more expensive fuel - and while the IMO 2023 rules are more difficult to communicate, their impact on the supply/demand balance in some trades will be very clear.

It helps a little that the entry into the new IMO 2023 is not a “big bang”, as was the case with the low-sulphur rules and will come into effect over time, as vessels get to their next certification, but presently it appears the market is on track for a repeat of the IMO 2020 debacle where many shippers felt it was a surprise sprung on them at the last minute.

Global supply chains are going to be under pressure for a while yet, and we will share the most important IMO 2023 developments so that you are informed and prepared to make critical decisions. 

Please contact Elliot Carlile, or Andy Smith to discuss your supply chain expectations and the potential impact of IMO 2023.

RMT

Felixstowe | Liverpool | Railways: Ocean freight container supply chains face triple strike challenge

Aug 18, 2022 | ,

With rail workers striking tomorrow and Saturday nationally and the Felixstowe Port strike starting on Sunday, for potentially eight days, UK supply chain operations and infrastructure are facing the biggest industrial action challenge in decades.

Two of the UK’s most important container ports will be shut by industrial action during the busiest time of year for global shipping - the annual peak season - when manufacturers gear up after the holiday period, and retailers replenish inventories to start their build up for the critical Christmas trading period.

The Unite Union’s 1,900 members at the Port of Felixstowe will start their eight day walkout on Sunday 21st August. Unite’s chosen industrial action is a ‘discontinuous’ strike, when action takes place on a series of days, with normal working in between, which can either support operations, or cause maximum disruption.

The container shipping lines will be preparing for more congestion around Europe and we await their contingency plans and schedule updates at time of writing, because they are likely to offload UK-bound cargo at hubs such as Antwerp and Rotterdam, which are already busy and dealing with their own industrial disputes and congestion delays. Omitting the UK entirely to avoid the closed ports is also a likely tool to be used to try and keep schedules as intact as possible.

With Southampton and London Gateway working at capacity, if the Felixstowe or Northern European ports situation deteriorates, it is very possible that some carriers may drop UK-bound cargo further downstream – for example in Tangier or alternative Mediterranean ports - and use feeder services to get cargo closer to destination.

To coordinate our response to the Felixstowe escalating situation and linked industrial actions we have created an eight-strong ‘Strike Action team’ who, working with the port, carriers and our contracted long-term haulage and rail partners, have been delivering and moving containers to off-dock holding areas ahead of Sunday. This is something that we, Metro, anticipated when the original potential strike action was announced and have been preparing for ‘behind the scenes’.

As we learn what omissions and discharge points the shipping lines are planning, we are reviewing modal/service options and will work with our contracted partners to plan the haulage offerings we have available in the UK and on the continent. Another contingency that the shipping line partners using Felixstowe have is to delay vessels which will have a further impact on schedule reliability and result in delayed arrival into the UK.

The Strike Action team will discuss options with affected customers individually and swiftly. As any options that are possible in those ports, will likely be subject to availability, due to the congestion that will quickly build during the strike action, or as part of the following impact.

Unofficially, we understand that some carriers that call at Felixstowe have changed port rotations, so that vessels that were initially due to arrive during the strike period will now arrive after.  Alternatively, as highlighted earlier, carriers may plan to remove Felixstowe bound containers at earlier port calls, to be collected by the following week’s vessel which is due to call Felixstowe after the strike period.

Felixstowe has advised the suspension of the option to book vehicle booking slots (VBS) more than 24 hours in advance, which is available to us and other large users of the port normally. Instead they will release any available VBS slots each day, subject to the level of workforce present, which means there will be limited collections and deliveries from the port next week. Therefore, disruption, rent and demurrage, and elevated costs are likely to feature prominently. Neither the shipping lines nor the Port of Felixstowe have offered any immediate advice on the extension of free time during the strike action. It is likely that additional costs will be inevitable at the current time, as no party within the dispute, or carriers will accept any liability.

Shortages of drivers and the continuing pandemic-linked supply chain disruption caused significant snarl-ups at Felixstowe ahead of last year's Christmas period, with some container ships diverted to other ports, or omitting the UK altogether. This week’s industrial action could have a more profound impact than Christmas, or the Suez blockage last year, as it is specifically UK focused. However it will have an impact on other ports, as Felixstowe vessels call or are redirected to discharge and load both in the UK and Europe, as a consequence further disrupting the supply chain and logistics for container movements. From experience and market intelligence a seven day delay will take more than seven days to rectify and there will be consequences to the port's closure that will reverberate for weeks after the event, and that is without further industrial strike action being confirmed.

Dockworkers at the Port of Liverpool have also voted to strike over wage negotiations and while no dates have yet been announced, it will not be before the 3rd week in September.

The inland movement of containers will be further disrupted today and Saturday as the RMT and TSSA rail unions withdraw labour, including drivers and critical operations staff, which means many freight services will not be running. The reality of this situation is that the rail network for container movements will be interrupted for the next three days and road transport will be the only reliable way to move containers to and from all of the UK ports, as this is a national strike.

The Strike Action team have been consulting closely with rail service operators and do expect some freight services to keep running. The current planning shared with them suggests that 30% of services will run today, 70% on Friday and 50% on Saturday 20th August.

The timing of these disputes could not be worse for the economy, where the cost of living is soaring, with inflation already at a 40 year high and recession warnings ever more pessimistic, as inflation escalates and consumer demand is dampened.

We will continue to monitor and manage the situation as it unfolds but the disruption now looks unavoidable. We continue to hope that there will be an eleventh hour resolution(s) and will keep you updated on a daily basis.

Please contact your Metro team member to discuss any specific movements and we will also continue to communicate with you proactively on developments, options and alternatives available during this event, and any future action and reoccurrence.

Please call Grant Liddell or Andy Smith for further specific information on how we are able to deliver continuity of operation. We are well positioned, with considered teamwork, to ensure that your supply chains and logistics platform are protected during this emerging situation.

Category: Sea

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