Hello and welcome to the Installment 5 of “Consolidated Regulatory and Supply Chain News”, the first for 2025.
This update brought to us on a quarterly basis by RAF Solutions offers members of the EACC high level information on news that could affect the trans-ocean business of import and export to / from the U.S. This will mostly be organized by type of information (i.e. ocean freight, air freight, regulations on either side, etc) but there may be some crossover in sections since one new regulation could impact many areas. However, news moves so fast these days that this update will be presented as a combination of consolidated news items and links to relevant articles.
Special Credit to Robert Barcelo from Port Everglades for great updates throughout the quarter on port and transportation issues. Several of those were paraphrased for the purpose of this publication.
Transportation:
Shrinking US drayage capacity to continue outstripping demand (Over-the-Road Drivers)
The disparity in growth between UIIA carriers (long haul) and IDD (local) drivers suggests that some owner-operators or drivers at small drayage carriers are shifting to larger operators, a trend also seen in the over-the-road truckload sector when rates drop.
“Drivers, in general, are the commodity in trucking,” said Paul Brashier, vice president of global supply chain for ITS Logistics, which provides drayage services among its offerings. “They will migrate to the larger carriers when the market is where it is now because the larger carriers can acquire business.”
Without stronger demand, “the small carriers will struggle to keep their doors open and have a more difficult time acquiring or holding on to business,” Brashier said.
And with US import volumes expected to slow amid tariff uncertainty and waning consumer confidence, drayage carriers face a tough year ahead.
“Unless there is something that significantly affects driver turn time, I don’t see anything lifting rates drastically,” said Brashier. “The biggest challenge is going to be rate per load and profitability.”
SOURCE: Journal of Commerce (joc.com)
Port Operations:
ILA is under pressure to justify wage increase with higher productivity with new contract.
As the implementation of the new master contract kicks off, the ILA is focusing on combating absenteeism and improving productivity while rejecting external criticisms that suggest workers will be pushed to work faster.
The new master contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), signed in early March, remains undisclosed to the public. The union has announced that it secured a 62% wage increase, along with other key benefits. A joint statement from both organizations described the agreement as a “win-win” for the ILA and USMX. While the union has been very vocal about the benefits it has secured, it is clear that it had to make a compromise on certain aspects, most likely improved productivity and efficiency.
During the negotiations for a new contract, the ILA has vehemently opposed automation to safeguard union jobs. The union argues that efficiency can be achieved without relying on machines, asserting that human labor, when properly equipped, can outperform automation in real-world conditions. Meanwhile, USMX has maintained its stance that modern technology is essential to improve worker safety, port efficiency, capacity, and supply chain resilience to bolster volume and port capacity.
The ILA said the agreement “protects current ILA jobs and establishes a framework for implementing technologies that will create more jobs while modernizing East and Gulf Coast ports, making them safer and more efficient and creating the capacity they need to keep our supply chains strong.”
USMX said only that the “agreement includes provisions that will increase wages, strengthen retirement and healthcare benefits, maintain current jurisdiction, and allow us to modernize our ports – making them safer and more efficient, and building the capacity we need to keep the American economy the global leader in trade”.
SOURCE: WorldCargoNews.com Published on 27-03-2025
US shippers slam USTR port fee plan – ‘an apocalypse for trade’ (Taxes on non-US built ships)
The Trump Administration’s plan to revive US shipbuilding by levying hefty fees on China-built or -flagged vessels calling at US ports is running into a hail of criticism from a broad range of US industry groups, including US vessel operators.
Virtually all welcome the idea of revitalizing US shipbuilding, but they claim studies show it would cause significant harm to US businesses and the economy.
Yesterday kicked off a two-day session of hearings on the planned charges put forward by the Office of the US Trade Representative (USTR). Following an investigation into heavy state subsidizing that had boosted China’s share of shipbuilding from less than 5% in 1999 to over 50% in 2023, Washington wants to curb China’s dominance in the sector and incentivize domestic vessel production.
It wants to impose charges every time an operator with a ship built in China calls at a US port that could reach more than $1.5m per call. In the event of a China-built ship operated by a Chinese carrier that has orders for new vessels to be built in China docking at a US port, the fees could be as high as $3.5m.
Dozens of trade groups and business owners signed up for the hearings, and quite a few of them published their concerns – often backed by new studies of the issue – ahead of the sessions. They ranged from the American Trucking Associations (ATA) and American Farm Bureau to the National Retail Federation and Chamber of Marine Commerce (CMC). Some 317 associations wrote to USTR.
Although the warnings point to a disastrous outcome, few expect Washington to abandon the plan completely, as the new administration views the maritime sector as a pillar of national security, and the president appears to be enamored with a revival of US shipbuilding.
Most likely the scheme will be reworked to avoid the worst repercussions but will go forward in a watered-down form.
SOURCE: TheLoadStar.com BY Ian Putzger Americas correspondent 25 March 2025
Import cargo levels continue to rise among uncertainty over tariffs (Bright lights in the midst of uncertainty)
Amid continuing tariff turmoil, imports at the nation’s major container ports are expected to remain elevated through this spring, but volume could see year-over-year drops this summer, according to the Global Port Tracker report released today by the National Retail Federation and Hackett Associates.
“Retailers are continuing to bring as much merchandise into the country ahead of rising tariffs as possible,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “The on-again, off-again tariffs against Canada and Mexico won’t have a direct impact on port volumes because most of those goods move by truck or rail. But new tariffs on goods from China that have already doubled from 10% to 20% are a concern, as well as uncertainty over ‘reciprocal’ tariffs that could start in April. Retailers have been working on supply chain diversification, but that doesn’t happen overnight. In the meantime, tariffs are taxes on imports ultimately paid by consumers, not foreign countries, and American families will pay more as long as they are in place.”
SOURCE: American Journal of Transportation (ajot.com) March 11, 2025
Panama Canal Update
BlackRock-TiL Consortium acquires Hutchison Port Holdings’ stake in Panama Ports Company, S.A., which owns and operates the ports of Balboa and Cristobal in Panama.
CK Hutchison Holdings Limited (CK Hutchison) has reached a deal with the BlackRock-TiL Consortium to sell 90% interest in Panama Ports Company, S.A., which operates the crucial Balboa and Cristobal ports. The consortium is comprised of BlackRock, Inc., Global Infrastructure Partners, and Terminal Investment Limited (TiL), the terminal investment arm of MSC.
The move, disclosed in a regulatory filing, comes amid increasing pressure from the Trump administration over concerns about Chinese influence in the Panama Canal.
The sale is part of a broader transaction that involves the sale of all shares in Hutchison Port Holdings S.a r.l. (HPHS) and Hutchison Port Group Holdings Limited (HPGHL), which together hold an 80% interest in Hutchison Ports. This includes ownership and operations of 43 ports with 199 berths across 23 countries, as well as management resources, terminal operating systems, and other related assets. However, the sale excludes interests in the Hutchison Port Holdings Trust, which operates ports in Hong Kong, Shenzhen, South China, and other Mainland Chinese ports.
After adjusting for minority interests and repayment of certain shareholder loans due from the Hutchison Ports group to the company, the deal is expected to deliver cash proceeds of over US$19 billion.
The transaction remains subject to due diligence, legal approvals, and shareholder consent. However, the exclusivity clause between CK Hutchison and the BlackRock-TiL Consortium ensures that the two parties have a 145-day window to iron out the final terms.
NOTE: This information has been changing almost daily. The lasted news we could find is CK Hutchinson may not accept the proposal after they have already agreed to it. President Xi has put a hold on this and final outcome remains a To Be Determined situation.
POSTED BY: WorldCargoNews.com Published on 04-03-2025 at 17:38
CK Hutchison Flags Political Risk as Port Deal Upsets China
TARIFFS
Below is a curated selection of some fact-based articles of interest:
Trump’s tariffs: Tracking the status of international trade actions
https://www.supplychaindive.com/news/trump-tariffs-status-canada-mexico-china-eu/743577/
US will charge 25% tariffs on foreign-made cars
https://www.supplychaindive.com/news/trump-automotive-tariffs/743656/
What 25 retail leaders are saying about tariffs
Positive stories to offset the unknown concerns for the future:
USDA Reports ‘Fully Stocked Shelves’ as Egg Shortage Eases (Ending with some Feel-Good News)
The U.S. Department of Agriculture (USDA) says that supply chain issues for eggs at grocery stores have “greatly improved,” as wholesale prices have fallen ahead of the Easter holiday. In its egg market overview published on March 28, the USDA reported that consumers “are once again seeing fully stocked shelves and enjoying a range of choices without purchase restrictions.” The average wholesale price of a dozen eggs also dipped by 8% between March 21 and March 28, and is down 63% from late-February’s record highs.
Six Ways to Navigate Supply Chain Volatility Amid Geopolitical Shifts
Florida – Cold Chain Funding Bill Reintroduced in Congress
https://www.supplychainbrain.com/articles/41448-cold-chain-funding-bill-reintroduced-in-congress
Survey: Supplier Businesses are ‘Optimistic’ Despite Incipient Trade Wars
Five Key Trends Reshaping the Freight Economy in 2025
More Positive Outlook
Supply chain software provider Descartes said it expects to continue to grow the business in the new year but that broad uncertainty on the global trade front could produce lumpy results from quarter to quarter. “We don’t know what’s going to happen next, and we don’t think anyone else does either,” said CEO Ed Ryan on a quarterly call with analysts Wednesday after the market closed.
The Canada-based company is seeing more inquiries for its global trade intelligence offering given the fast-changing tariff landscape. The added inbound activity complements extant demand from customers for help navigating growing sanctioned-party lists and increasing export licensing complexity.
“Businesses have been somewhat paralyzed as they consider decisions for the short and long term,” Ryan said. “They’ve got to consider how to restructure their supply chains and logistics operations.”
Compliments