Biden Prepares to Veto as Congress Reverses Clean Truck Plan
Good morning! It's finally Friday, and as we gear up for the weekend, let's take a quick look at the key industry happenings. Stay tuned for the latest trends, strategies, and innovations in our daily dispatch that keep your supply chain knowledge cutting-edge. Here's to ending the week on a high note! ☕️
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Congress has overturned the Biden administration's stricter heavy-truck emissions rules, but President Biden is expected to veto the Republican-led move. The regulations, aimed at reducing air pollution and transitioning to low- or zero-emission powertrains, have faced opposition from Republican legislators who argue they are burdensome and costly, while Democrats support them as part of broader emissions reforms. The veto would uphold the Clean Truck Plan, but discussions also highlight the need to address obstacles to purchasing more efficient and cleaner trucks, such as the Federal Excise Tax.
Check out today’s featured article from Fleet Owner to read about the back-in-forth between Congress and President Biden over heavy-truck emission regulations. Is the veto underway? Will the Federal Excise Tax be brought into question?
Featured Article:
Congress overturns Clean Truck Plan, but Biden readies veto pen | Fleet Owner
“In nearly party-line votes, the House and Senate passed legislation that would stop the EPA’s stricter regulations on heavy-duty truck emissions, the first part of Biden’s freight decarbonization strategy.”
Compliance & Regulations 🚢
Two Maritime Transport Companies Penalized for Breaching Ocean Shipping Reform Act
The Federal Maritime Commission (FMC) has imposed fines on carriers Ocean Network Express (ONE) and Wan Hai Lines, totaling $2.65 million, for violating the Ocean Shipping Reform Act of 2022 through unreasonable pricing practices related to demurrage and empty container returns. ONE agreed to a $1.7 million civil penalty and will issue refunds and waivers to affected shippers for assessing detention charges when no appointments were available for equipment return. On the other hand, Wan Hai Lines consented to a $950,000 fine for failing to maintain reasonable pricing practices around empty container returns and has taken corrective action, refunding all detention charges collected under the disputed invoices.
This action is part of the FMC's increased scrutiny of the shipping industry, with over 280 complaints received since the enactment of the Ocean Shipping Reform Act. The commission is sending a clear message to the international shipping community about compliance with U.S. legal obligations, with FMC Chairman Daniel B. Maffei commending the efforts that resulted in "meaningful civil penalties, and relief for impacted shippers." Other carriers, like Hapag-Lloyd and Evergreen Shipping, have also faced penalties and complaints related to their service practices.
Politics & Regulations 🇺🇸
Supply Chain-Related Bills Given Green Light by Transportation and Infrastructure Committee
The U.S. House Committee on Transportation and Infrastructure has endorsed a series of bills, aiming to fortify and secure American supply chains against potential disturbances. A total of 12 new legislations and five additional measures were passed by the Committee on May 23.
Among the approved legislations are H.R. 3399, which commissions a federal study on the security risks and economic consequences of potential failures of the Soo Locks in Michigan; H.R. 1836, augmenting the Ocean Shipping Reform Act of 2022 by enabling the Federal Maritime Commission to scrutinize anti-competitive complaints; and H.R. 3316, which expands One Federal Decision environmental reviews to major port, aviation, and pipeline projects. Tom Madrecki, vice president of supply chain and logistics for the Consumer Brands Association, lauded the Committee's approval, stating that the legislations symbolize progress in combating the supply chain challenges that could potentially impact consumers.
Let’s Get Global 🌎
🇪🇺 EU Targets Strengthening Supply Chains Against Cyber Threats. Under new EU regulations set to come into force in 2024, European transport and logistics firms, including airlines, airports, and shipping lines, will have to bolster their cybersecurity measures. All member states are now required to establish dedicated teams for responding to cybersecurity incidents, extending the responsibility for basic cybersecurity protocols to a broader range of companies in critical sectors. The transportation sector, particularly aviation, has been identified as the most susceptible to cyberattacks, with 27 incidents recorded between January 2021 and October 2022, often for financial gain or geopolitical tensions, such as the Russia/Ukraine conflict.
🇮🇷 U.S. Takes Measures to Safeguard Oil Tankers and Merchant Vessels in Iranian Maritime Zones. The U.S. government has expressed rising concerns over the safety of commercial ships, including oil tankers, navigating Iranian waters following a series of seizures by Iran. U.S. military officials have indicated their commitment to safeguarding maritime activities in the critical Strait of Hormuz, a crucial passageway for Middle Eastern container ships and oil tankers. The Pentagon, recognizing the potential disruption to the global economy and supply chains, has prioritized the protection of these vessels, ramping up patrol frequencies and oversight measures in the region.
🇰🇷 CJ Logistics Inaugurates Starbucks' Biggest Distribution Hub in South Korea. CJ Logistics, South Korea's largest logistics company, has opened the country's largest Starbucks distribution center near Busan New Port. Spanning an area of 38,000 square meters, the facility handles 130,000 daily shipments of imported coffee beans. With South Korea having the second-highest number of Starbucks outlets globally, the opening of this facility strengthens CJ Logistics' position in the growing coffee logistics market.
🔋 Comparing the US and Europe: The Electric Vehicle Landscape. European governments have traditionally been more aggressive in regulating fuel consumption, but the United States is catching up with strict emissions regulations and fines for automakers that fail to meet EV sales targets. While European customers have long faced penalties for owning less-efficient cars and have the option of public transportation, US customers are mostly unaware of the costly EV transition as the burden falls on automakers. Italy, for example, struggles to increase EV adoption rates without massive subsidies, leading to a focus on synthetic fuels to sustain internal combustion engines. The US is pushing for battery-powered vehicles, while Europe considers a mix of hybrids, electrics, and e-fuels.
iLevel With You 🏡
More topics for the average American household to consider…
☀️ Anticipate Large Gatherings and Increased Prices for the Upcoming Summer Travel Season. As the summer travel season commences, travelers and airlines are looking for ways to navigate increased costs and high demand. Despite rising hotel and airfare prices, travel is on the rise, with millions expected to drive or fly this Memorial Day weekend. Airlines are making improvements to avoid last year's disruptions, hiring more staff, using bigger planes, and limiting flights to maintain reliability, even though these measures keep prices above pre-pandemic levels. Amid these changes, some travelers are adjusting plans to save money, while others continue to prioritize the experience of travel over other expenses.
🚛 Unintended Consequences: California's New Environmental Regulation Poses Challenges for Truckers. The electrification of trucks at California's ports is seen as a potential solution for reducing toxic emissions and improving air quality. However, the transition to electric trucks poses significant challenges, including the lack of charging infrastructure and longer charging times compared to refueling diesel trucks. Additionally, there are concerns about the potential negative impact on trucking companies and drivers, as previous regulations have resulted in drivers being burdened with excessive debt. The success of California's efforts will be closely watched as other states look to adopt similar emissions regulations.
✈️ Boeing CEO Foresees Prolonged Supply Chain Challenges Until 2024. Boeing CEO, Dave Calhoun, stated that it may take until the end of 2024 to address the supply chain issues that have been impacting global jetliner production. He emphasized the need for stability and a long-term resolution to the supply chain challenges. Calhoun's projection aligns with Airbus CEO Guillaume Faury's estimation that production levels will return to pre-pandemic levels by the end of 2024 or even 2025. Additionally, Calhoun mentioned that new jet designs are not expected in the industry until the mid-2030s due to constraints in propulsion and wing design.
Get Smart 🧠
Ramp up that brain power for these advanced topics…
🤖 Exploring the Potential Benefits and Challenges of Generative AI in Supply Chains. As the demand for advanced artificial intelligence (AI) solutions in supply chains rises, the rapid adoption of generative AI like ChatGPT promises transformative capabilities, but also poses unique challenges. This AI can perform tasks that were once uniquely human, such as creating art, personalizing marketing, and negotiating contracts, potentially changing the way we interact with technology. However, concerns around bias, misinformation, job losses, and misalignment of AI interests pose considerable risks. Success in this AI-driven era will depend on human leadership skills like asking the right questions, directing attention to key areas, and exercising sound judgment.
🔎 Gartner's Advice: Enhance Visibility Now to Mitigate Anticipated Disruptions. Gartner analyst Brock Johns recommends transportation professionals bolster resilience against potential supply chain disruptions in 2023 by widening their visibility tools. Despite current concerns about inflation, talent shortages, and complex supply chains, there's cautious optimism for an economic rebound by year-end. Johns advises that broadening visibility beyond tier-one suppliers could potentially bring about its own return on investment, attracting new partnerships, reducing costs, and fostering employee engagement.
🤝 The Crucial Impact of Smart Contracts on Supply Chain Management. The increasing digitization in the supply chain sector is gradually replacing traditional contracts with smart contracts, which are self-executing programs that automate contract fulfillment, thereby saving time, energy, and money. Unlike conventional contracts that require human interaction, smart contracts are automatic, being triggered by certain predefined conditions, making the entire process more efficient and less prone to errors or manipulation. While the advantages of smart contracts are notable - including swift execution, automatic payments, and cost-efficiency - they also pose certain challenges. Modifying an already executed smart contract is very complex, often requiring the creation of a new contract.
🧊 Understanding the Process of Cold Chain Packaging Validation. Transporting temperature-sensitive products requires meticulous planning and testing to ensure product safety and maintain the company's reputation. Cold chain package testing is an integral part of this process that ensures all people, processes, and technology involved can safely transport such products. It involves validating the entire cold chain system and testing individual packaging solutions to ensure they can maintain the required temperatures throughout transportation. This includes system validation, package testing, and material testing. The testing simulates real-world scenarios and is guided by industry standards and best practices. Companies must ensure continuous monitoring of their product's temperature during testing and transportation, for which various technological tools are available.
💡 Freight Experts Suggest Mississippi River Shipping as Solution to Supply Chain Challenges. Local port and shipping industry officials are looking to leverage available funding opportunities for various projects along the Mississippi River in the St. Louis region. These initiatives aim to attract investment and increase the volume of freight transported on the river, offering a potential solution to supply chain issues. The projects include repurposing old industrial sites, upgrading ports, and improving transportation efficiency, with federal and state funding playing a significant role in driving these developments.
The Workday Dash is an aggregation of articles regarding the transportation logistics, trucking, and supply chain industries for November 27, 2024, from iLevel Logistics Inc.