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separate legislation to empower the FMC to regulate rail demurrage when the carrier is responsible for door-to-door delivery , but any such legislation faces a steep climb — beyond finding a Republican co-sponsor . Johnson , whose South Dakota electorate includes soybean exporters that depend on rail access , is sitting this one out , according to several people familiar with the matter .
Rail demurrage isn ’ t regulated by the US Surface Transportation Board due to an exemption for intermodal services , and some members of the FMC , notably Chairman Daniel Maffei , view through-fare ladings as falling under the agency ’ s remit . But Class I railroads have long-standing clout in Congress , discouraging some members from joining Garamendi ’ s cause . Even if the FMC regulates the specific conditions for rail storage , ocean carriers would face the unenviably task of seeking reimbursements from their railroad partners .
The issues the House left alone are unwieldly , with the antitrust exemption alone involving at least three congressional committees , whereas most lawmaking involves just one . Legislators may have blasted ocean carriers ’ greed during the heights of US port disruption , but grilling the likes of Microsoft and TikTok has taken priority in recent months .
The path forward for OSRA 2.0 is narrow , with little sign of appetite within the Senate Commerce Committee to draw up their own version . There ’ s also the reality that the congressional calendar this summer leaves few windows for senators to work on a bill even if they wanted to . Given that OSRA-22 is just two years old and the FMC is still working through mandated rulemaking , there ’ s an argument to hold off until more required technical changes become apparent . Final rules for detention and demurrage as required by OSRA-22 and issued by the FMC on Feb . 23 , for example , have yet to take effect .
email : mark . szakonyi @ spglobal . com
Import surge clogs Vancouver rail flow
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The Port of Vancouver has been struggling with rail container backlogs for more than two months caused primarily by a double-digit surge in imports , and it will take at least several more weeks to clear the congestion , according to port and rail executives . “ The last two weeks have seen improvement , but there ’ s still volatility ,” Peter Xotta , president and CEO of the Vancouver Fraser Port Authority , told the Journal of Commerce March 22 . The rail container dwell time at Vancouver ’ s marine terminals for Canadian Pacific Kansas City ( CPKC ) is mostly seven days-plus , according to the port ’ s website , while the dwell for Canadian National Railway ( CN ) is in the three- to five-day range . The dwells have been consistently elevated this year ; for both railroads combined , the average rail container dwell time at the marine terminals was 5.2 days in January and 6.7 days in February . Dwell times of four days or less are considered desirable to maintain fluidity at the marine terminals . Imports into Vancouver are spiking , similar to the increase occurring at ports along the US West Coast . After a 13 % decline in laden import containers last year in Vancouver , imports increased 11.3 % in January and 18 % in February year over year , according to port statistics . The backlog of rail containers is being exacerbated by a shortage of available rail cars , market stakeholders say . “ All marine terminals in Vancouver are facing heavy congestion , resulting from an inadequate supply of rail cars from major Class I railways ,” a customer service advisory from Hapag- Lloyd said March 22 . “ The volumes that have come into Vancouver are being exceptionally strong — I think 40 % stronger than expected ,” Nadeem Velani , executive vice president and CFO at CPKC , told a conference in mid- March sponsored by JP Morgan Chase . Velani said the railroad is whittling down the container count and will continue to do so through March and into April . Freight forwarders are concerned that if the high rail container dwell times are not addressed soon , it could disrupt intermodal rail traffic to the eastern half of the country when the trans-Pacific trade enters the summer-fall
peak shipping season . Also lurking in the background is the fact CN and CPKC are engaged in contentious labor contract negotiations with the Teamsters union . The railroads have asked the Canadian federal government to appoint a conciliator to head off a possible strike in May that would further exacerbate the rail congestion in Vancouver .
Chinese carrier launches Shanghai – Los Angeles expedited service
The launch of Hede ( Hong Kong ) International Shipping ’ s premium weekly service from Shanghai to Los Angeles in late March added one more contender to the competitive trans-Pacific market at a time when it is beginning to turn around from a weak 2023 . The Chinese-owned carrier ’ s first vessel departed Shanghai on March 21 , with arrival at the West Basin Container Terminal ( WBCT ) in Los Angeles scheduled for April 3 , according to Roger Zhang , COO of Duke Shipping , the exclusive agent for the service . The transit time will be 13 days , and with access to a leased chassis fleet at WBCT , containers requiring expedited treatment will be discharged from the vessels directly to chassis so customers will be guaranteed next-day pickup at the terminal , Zhang told the Journal of Commerce . According to Infor Nexus , the average transit time from Shanghai to Los Angeles in January , the latest data available , was 15 days , a level that has been
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6 Journal of Commerce | April 8 , 2024 www . joc . com