Policymakers are reevaluating the US railroad system
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Twice in 2022, the railroads were on the eve of an industry-wide strike. Congress stepped in during the second occurrence, blocking the rail unions from acting upon what they had warned would happen for months… but the close call still has policymakers reeling.
Congress passed the Staggers Rail Act in 1980 as a way to deregulate the rail industry in the United States. Prior to this act, the rail industry was heavily regulated by the federal government, with rates and routes controlled by the Interstate Commerce Commission (ICC). The goal of the Staggers Rail Act was to allow railroads to have more flexibility in setting rates and adapting to changes in the market, in the hopes that this would lead to increased efficiency and profitability. Some are now stating that the opposite has come to fruition…
Check out today’s featured article from MHL News to read about what America’s policymakers are planning in the wake of a near-economic disaster involving a nationwide railroad strike of our freight railroads. How can this system possibly be fixed? ☕️
Featured Article:
Is There an Answer to the Railroad Mess? | MHL News
“The threatened rail strike appears to have awakened policymakers.”
Ports & Claims 🚢
Demurrage charges waived by US Federal Maritime Commission SCO
The December 29th decision to waive over $150,000 in demurrage fees imposed by Taiwan carrier Evergreen for Wisconsin-based forwarder TCW Inc. has set a precedent. The ruling, laid out by a US Federal Maritime Commission small claims officer (SCO), was based on a rule that requires these types of charges to only be issued in an effort to prevent carriers from profiteering. This decision now lays out a specific groundwork for the maritime industry - including carriers, chassis owners, and terminal operators, that are privy to charging demurrage and detention fees on holidays when containers and chassis are unable to be picked up or dropped off.
In layman‘s terms: demurrage refers to the charges that are incurred when cargo remains in a container or at a terminal for an extended period of time beyond the allotted free time. Demurrage charges are typically assessed when cargo is not loaded or unloaded within the specified time frame agreed upon by the carrier and the shipper. Demurrage charges are supposed to be intended to compensate the carrier for the use of their equipment and facilities, as well as any additional costs incurred as a result of the extended use. These charges can be significant and can vary depending on the specific circumstances of the shipment.
Taxes & Driver Issues 🚛
Connecticut’s trucking industry has questions: how is the new tax law supposed to work?
Beginning in 2023, Connecticut truckers are liable to a new tax law in the northeastern state. The tax applies to Class 8 and Class 13 large commercial trucks and imposes a fee on a per-mile basis - due by February 28th. This fee can range from 2.5 cents per mile for vehicles weighing 26,000 to 28,000 pounds to 17.5 cents per mile for trucks weighing more than 80,000 pounds. While the tax has been projected to accumulate approximately $90 million per year for transportation improvements in Connecticut, many truckers are scratching their heads.
John Blair, president of the Motor Transport Association of Connecticut, has cited this growing concern for truckers in the state who are asking questions of how compliance with this new tax law will work and who is exempt from it. Blair also suggested that legal action is potentially on the table. Tiffany Thiele, communications director for the state Department of Revenue Services, in turn, has stated the state’s DORS is in regular communication with carriers who have questions regarding the tax. Connecticut has a reputation for having high taxes due to the state's relatively high property taxes, sales taxes, and income taxes.
Let’s Get Global 🌎
🌎 Climate change is reconstructing how the manufacturing industry. Extreme weather events such as heatwaves, floods, and hurricanes can disrupt production and supply chains. Changes in temperature and precipitation patterns can affect the availability of raw materials and energy sources, which can also impact production. As concerns about the environmental impact of manufacturing processes continue to grow, there is increasing pressure on manufacturers to reduce their greenhouse gas emissions and adopt more sustainable practices. This can require significant investments in new technologies and processes, which can be costly for manufacturers.
🚢 Port of LA’s Gene Seroka points to China’s reopening as a stimulus for cargo flow. China's economy is important for the Port of Los Angeles for a number of reasons. One of the main reasons is that China is a major trading partner for the United States, and the Port of Los Angeles is a major gateway for imports and exports between the two countries. A significant portion of the cargo that moves through the port is destined for or originates from China. China's economy is also important because it is a major source of cargo and a key market for many of the businesses that operate in the region. Many of the goods that are shipped through the port are produced in China and are bound for markets in the United States and other countries. Overall, the economic relationship between China and the United States, and the Port of Los Angeles in particular, is a complex and important one that has significant implications for both economies.
🔋 The complicated mission to restore U.S. mining for battery materials is underway. The U.S. has significant domestic reserves of many of the minerals used in battery production, including lithium, cobalt, and nickel. However, China is the world's leading producer of these minerals, and the U.S. has historically imported a large portion of its mineral needs from other countries. This is because China has a number of advantages as a supplier, including lower labor costs, a more established infrastructure for mining and processing minerals, and in some cases, more favorable regulations. However, the U.S. is looking to change that.
iLevel With You 🏡
More topics for the average American household to consider…
🫣 Inflation rears its ugly head, again. The U.S. Federal Reserve’s latest interest rate hikes have good intentions… but the immediate effect feels like the opposite. NRF Chief Economist Jack Kleinhenz has reminded the public in a press release that there is almost always a delay in the sought-out results of these hikes and that it may take up to eighteen months to effect inflation. When the Fed raises interest rates, it becomes more expensive for individuals and businesses to borrow money. As a result, they may be less likely to take out loans and make big purchases, which can help to reduce demand and slow down the rate of price increases.
🏆 To become an award-winning workplace, it takes more than a “positive environment”. There is no one-size-fits-all answer to what it takes to become an award-winning workplace, as the specific factors that contribute to a positive work environment can vary depending on the industry, the size of the organization, and the needs and expectations of the workforce. However, there are some common themes that tend to be present in organizations that are consistently recognized as being great places to work. Values-based leadership, staying focused on the company’s mission, involved leaders, rewards, and fostering career growth all play significant roles.
⛽️ Not so fast - diesel is on the rise, again. After seven weeks of price declines of the fuel providing some ease to the crippled truck drivers who rely upon it, the diesel prices rose another 4.6 cents this week. While 4.6 cents may seem nominal, some are worried that this may be the beginning of another spike. The latest U.S. Energy Information Administration (EIA) data available shows the average national price of diesel sitting at $4.583 per gallon.
GET SMART 🧠
Ramp up that brain power for these advanced topics…
🤖 Warehouses adopting automation are making leaps and bounds. Warehouse automation can help improve efficiency, reduce errors, and lower labor costs in the supply chain. Automation can also help to improve tracking and inventory management, as well as increase the speed at which orders are fulfilled. In addition, automation can help to reduce the risk of injury to warehouse workers by automating tasks that are hazardous or physically demanding.
📈 Logistics Managers’ Index (LMI) report trended upward in December. The Logistics Managers' Index (LMI) is a report that measures the performance of the logistics industry in the United States and is produced by the Council of Supply Chain Management Professionals (CSCMP). The basis of the report is on a survey of logistics professionals that measures various aspects of logistics performance - including transportation, inventory, and warehousing. It is designed to provide a snapshot of the state of the logistics industry and to help logistics professionals identify trends and make informed decisions on a quarterly basis.
👩💻 Supply chain’s “tech age” is on the horizon. Venture capitalists and other private-equity investors have been favoring the logistics tech companies born out of the tumultuous pandemic era. Assembly lines and store shelves are being integrated with new tech in an effort to streamline the entire supply chain and avoid similar problems in the future. Ideas that were once considered “Band-Aids” during worldwide shutdowns are now being approached as a more efficient way to operate businesses in the long run. Will this bring more jobs to the table, or push people out? Only time will tell.
👂 Interested in attending a Supply Chain and Logistics conference in 2023? Logistics Brief is sharing the dates and locations of some of the biggest conferences to expect in the industry over the upcoming twelve months. These conferences are beneficial to attend for networking, learning, staying up-to-date, professional development, and showcasing new products and services available in the 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.