West Coast port negotiations progress, but shipments continue to reroute
Good morning! Happy Thursday, folks! We hope your day starts off right and remains bright. Let’s get down to the latest news.
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For months, the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) have been in talks about labor contracts, and it seems that they may finally be coming to an agreement. Some are concerned though that the progress may be too little too late, as shippers continue to send their shipments to other ports in the U.S., on the Gulf coast, and in the East.
Check out today’s featured article from G Captain to read about the extended contract negotiations between the West Coast port workers and their employers. once finally finalized, will the new contract result in a permanent loss for West Coast ports as the business continues to be rerouted to the East and the Gulf? ☕️
Featured Article:
Prolonged Labor Talks Raise Specter of Permanent Cargo Loss for West Coast Ports | G Captain
“The contract negotiations between the 22,000 port workers in the International Longshore & Warehouse Union (ILWU) and 70 employers on the US west coast, represented by the Pacific Maritime Association (PMA) are back on track.”
Electric Vehicles & Global Issues 🌎
EV automakers need to consider difficult sourcing decisions globally
EV supply chains are complex, with many components sourced from a range of suppliers around the world. This can make it difficult for automakers to trace the origin of materials and ensure that they are responsibly sourced. Many of the raw materials used in EV batteries, such as lithium and cobalt, are sourced from a limited number of countries and this can lead to supply chain bottlenecks and increase the risk of price volatility. The increasing demand for EVs is putting pressure on the supply of raw materials, which can lead to supply chain disruptions and price increases.
The lack of transparency in supply chains can make it difficult for automakers to ensure that their suppliers are adhering to responsible sourcing practices. This can increase the risk of human rights violations and environmental damage. Sourcing responsibly can be more expensive than sourcing from less reputable suppliers and this can put pressure on automakers' profit margins, especially as the cost of raw materials is already high.
To address these challenges, EV automakers need to take a proactive approach to responsible sourcing. This involves working closely with suppliers to ensure that they adhere to responsible sourcing practices. Automakers can also invest in new technologies that reduce the number of raw materials required in EV batteries and explore alternative materials that are more sustainable and readily available. In addition, automakers can collaborate with industry associations and governments to develop a more transparent and sustainable supply chain for EVs.
Global Issues & Safety 🌎
Supply chain slavery risk increases with poor procurement practices
Modern-day slavery is a serious human rights issue that affects millions of people around the world. Supply chains are complex networks of entities, including suppliers, manufacturers, distributors, and retailers, that are involved in the production and distribution of goods and services. The complexity of supply chains can create significant risks for modern-day slavery, which can be difficult to detect and address. Cost pressures may be straining suppliers, but companies should consider the impact of their decisions on the supply chain.
To address these risks, companies can take a number of steps, such as conducting supply chain audits, implementing robust labor standards and monitoring systems, and working with suppliers and other stakeholders to identify and address risks. Governments can also play an important role in combatting modern-day slavery by enforcing labor laws, promoting transparency in supply chains, and supporting efforts to identify and address modern-day slavery in the supply chain.
Certain regions of the world are more susceptible to modern slavery, and the United States is aiming to assist with geographical risk. The United States list of Goods Produced by Child Labor or Forced Labour and the Global Slavery Index are both useful tools provided to assist buyers to get better associated with their suppliers. When these modern slavery practices are identified, they must be immediately addressed. Instantly terminating a contract with a supplier is often not helpful, and instead leaves victims of these human rights violations vulnerable - instead, governments recommend collaborating with the suppliers to address the issues involved in their labor force.
Let’s Get Global 🌎
💪 US Secretary of Defense signals NATO is looking to step up its logistics practices. NATO (North Atlantic Treaty Organization) is an intergovernmental military alliance comprising 30 member countries from North America and Europe. As a military organization, NATO needs to ensure that it can rapidly and effectively deploy its forces in response to emerging threats, whether they be large-scale conflicts or smaller crises. To do this, NATO needs robust logistics practices, including the ability to move troops, equipment, and supplies quickly and efficiently. By improving its logistics practices, NATO can increase its readiness and ensure that it can rapidly deploy its forces to any location in its member countries and beyond.
🎈 The Chinese spy balloon debacle is escalating into supply chain politics. After the U.S. shot down a Chinese-originated spy balloon that was initially caught floating somewhere in the sky above Montana, the politics of the supply chain have been brought into question. The tensions between the United States and China have already been escalating over recent months, and this most recent interaction has some fairly nervous. North American Trade Associations are being asked to begin better diversifying their supply chains after being very reliant on Chinese manufacturing.
🇩🇪 Germany reduces electric vehicle subsidies, resulting in fewer EV sales. Experts are claiming that governments cannot afford to keep electric vehicle subsidies in place forever, and some are wondering if Germany is a sign of what’s to come. The speed and extent of EV growth will depend on a range of factors, including the pace of technological advances, the development of charging infrastructure, and government policies and regulations. Infrastructure issues will need to be addressed in the short team and aging power grids will need to be updated - otherwise, a full transition to all-electric will be nearly impossible.
🤝 DB Schenker and MSC partner to help reduce supply chain emissions. The global freight forwarder and global shipping line have agreed to help reduce the industry’s emissions by using certified sustainable, second-generation biofuels. This partnership is likely to greatly help to decarbonize ocean freight. The blended biofuel used in MSC’s container ships should result in approximately 50,000 metric tons and assist customers to reduce their carbon footprint. According to the International Maritime Organization (IMO), maritime shipping is responsible for about 2.2% of global carbon dioxide (CO2) emissions. This is roughly equivalent to the carbon footprint of Germany, which is one of the world's largest economies.
🇩🇰 Danish maritime data expects container shipping lines to begin a price war. Due to the significant demand decrease after pandemic-driven highs, carriers are very aware that they have the ability to adjust capacity tactically. Carriers seem to have decided not to reduce capacity in response to demand shrinkage, despite that capacity was corrected to meet the decrease in demand previously. Alan Murphy, CEO of Sea-Intelligence, is pointing out that this is a conscious decision by the carriers.
iLevel With You 🏡
More topics for the average American household to consider…
🛍️ After a weak shopping season, Americans bounce back in the new year despite inflation. Overall, while rising inflation and interest rates can put pressure on consumer spending, other factors such as consumer confidence, supply chain disruptions, shifts in spending patterns, and sector-specific factors can contribute to a jump in retail sales. However, it is important to note that the impact of inflation and interest rate hikes on consumer spending can vary depending on the specific economic conditions and circumstances. Not all sectors of the retail industry may be affected in the same way by inflation and interest rate hikes. For example, luxury goods retailers may not be as affected by rising interest rates as retailers selling lower-priced goods.
🔋 Pressure on Tesla paid off: Supercharger network expansion to move forward. The electric vehicle automaker’s electric charging infrastructure will be expanding to include other electric vehicle models by the end of 2024. A minimum of 7,500 superchargers will be available to competitor vehicles and will create the nation’s largest and most reliable charging network. As part of President Joe Biden’s plan to fight climate change, the Tesla decision is a key component for promoting electric vehicle usage among Americans. More charging stations will be set up in public spaces in urban and rural locations over the next few years.
🛻 Ford’s electric pickup F-150 Lightning production has been paused. Long-awaited shipments of the F-150 Lightning have been halted abruptly as a potential problem with the vehicle’s battery pack has been identified. Ford Motor Co. released a statement announcing their investigation into the issue, much to some customers’ dismay. High-voltage batteries can be dangerous if they are not properly designed, installed, or maintained. Faults in the battery can lead to overheating, short-circuiting, or even fires or explosions. This can pose a significant risk to the driver and passengers of the vehicle, as well as anyone in the vicinity of the vehicle.
🥚 Egg inflation soars to 8.5%, along with other breakfast foods. Citrus fruits, cereal, and baked goods paced alongside eggs - making breakfast a “treat” for most American families. The nation’s worst-ever outbreak of deadly bird flu has been touted as the root cause of the inflated egg prices, wiping out over a million laying hens. one dozen eggs is now, on average, $4.82 - a price greater than a pound of ground beef or a gallon of gasoline. Wholesale prices of eggs have begun to dip slightly, but the retail prices have not yet caught up - usually takes about four weeks.
🚢 Wisconsin approves a $5.3 million port infrastructure grant. Along the Great Lakes to the Mississippi River, Wisconsin’s unique topography is often overlooked in terms of ports. Governor Tony Evers highlighted the grants as the state’s renewed commitment to port cities’ economies. The largest port in Wisconsin is the Port of Milwaukee, which is located on the western shore of Lake Michigan. The port handles a variety of cargo, including steel, salt, cement, and agricultural products. The port also has facilities for handling liquid bulk cargo, such as petroleum and chemicals. Additionally, the Port of Green Bay is located at the mouth of the Fox River and primarily handles bulk cargo, such as coal and limestone.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
⚡️ Why is the US energy output mostly “nonrenewable”? The US has a long history of relying on nonrenewable energy sources like coal, oil, and natural gas to power its economy. This is partly due to the fact that these resources were plentiful and relatively cheap to extract, making them an attractive option for powering economic growth. While the US has made some progress in developing renewable energy infrastructure in recent years, the pace of development has been relatively slow compared to other countries. This is due to a variety of factors, including political and economic barriers to investment in renewable energy, as well as the challenges of integrating intermittent renewable sources like solar and wind into the existing grid.
🚛 Cutting costs after truck rates decline. Truck rates are a significant component of transportation costs, and falling rates can help to reduce the overall cost of transporting goods. This can be particularly important for companies that rely heavily on truck transportation, such as retailers and manufacturers. As truck rates fall, shippers may be in a better position to negotiate lower rates with carriers. This can help to reduce costs even further and increase efficiency in the supply chain. Additionally, declining truck rates can lead to increased competition among carriers, which can drive down rates even further.
🛠️ A tightening economy has manufacturers getting creative about their supply chain this year. In an uncertain economy, supply chain disruptions are more likely to occur. To mitigate the risk of disruptions, manufacturers can diversify their supplier base. This can involve identifying multiple suppliers for critical materials and components so that if one supplier is unable to deliver, the manufacturer can turn to another. Accurate demand forecasting is essential for managing supply chain costs. Manufacturers can improve forecasting by analyzing past trends and using advanced analytics tools to make predictions.
☁️ Cloud technology can assist supply chains to lower costs. Cloud technology enables businesses to scale their supply chain operations up or down quickly and easily, without the need for significant infrastructure investments. This can be particularly valuable for businesses that experience sudden spikes in demand or need to adjust their operations in response to changing market conditions. Cloud technology also allows supply chain managers to access real-time data and analytics from anywhere with an internet connection. This enables them to make informed decisions quickly and adjust their operations as needed.
🤔 Companies are rethinking their future by adjusting their strategies. Customers are demanding faster, more flexible, and more transparent supply chain operations and this requires companies to invest in new technologies and talent to meet these expectations. The increasing globalization of supply chains is making them more complex, with many moving parts that need to be managed. This requires companies to rethink their operations, talent, and technology to ensure they can operate efficiently across borders. The rise of digital technologies, such as artificial intelligence (AI), the Internet of Things (IoT), and blockchain, is transforming the way supply chains operate.
💰 Save your fleet a couple of bucks and start adapting predictive maintenance. Predictive maintenance is a data-driven maintenance strategy that leverages machine learning algorithms and other advanced analytics to predict equipment failures before they occur. By using data from sensors and other sources to identify patterns and trends, predictive maintenance can help semi-truck fleets identify maintenance issues early and prevent costly breakdowns and downtime. By adopting a predictive maintenance strategy, fleets can improve their bottom line and gain a competitive edge in the transportation industry.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 28, 2024, from iLevel Logistics Inc.