Editor Spotlight
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by ILA labor uncertainty on the US East and Gulf coasts , unions negotiate separately and there ’ s little history of coordinating to gain significant leverage . Rather , unions in general claim solidarity with their striking brethren but rarely refuse to handle diverted cargo , which would be operationally challenging .
What unites the six unions is an existential fear of automation and a firmer understanding of their ability to control supply chains to get a larger piece of what they see as outstanding profits for the container shipping industry .
Container lines are on track this year to nearly double their profits to $ 50 billion compared to last year , according to maritime consultancy Drewry . That the industry ’ s 2025 profits will pale in comparison to the $ 300 billion windfall carriers recorded in 2022 won ’ t likely change what labor thinks it deserves .
email : mark . szakonyi @ spglobal . com
Canada faces strikes on both coasts
Nigel Jarvis / Shutterstock . com
A growing number of container ships in early November were waiting out the labor lockout at British Columbia ports in hopes of a speedy resolution . Meanwhile , on the other side of the country , the strike at marine terminals in Montreal halted all rail service at that port . Container terminals at Vancouver and Prince Rupert were effectively shut after the British Columbia Maritime Employers Association locked out members of the International Longshore and Warehouse Union Local 514 following a strike vote by its members . The strike began Nov . 4 . The shutdown of Canada ’ s West Coast ports comes as longshore workers affiliated with the Canadian Union of Public Employees Local 375 stage an indefinite strike against two marine terminals operated by Termont in Montreal . The Termont strike is also forcing CN to suspend all rail service in and out of Montreal , including at the Racine and Cast terminals operated by Montreal Gateway Terminals , which are not affected by the strike , Hapag-Lloyd said in a Nov . 5 advisory . The suspension also includes interchange services with CSX Transportation and Norfolk Southern in the Ohio Valley .
Congestion spurs Mexico , Central America network changes
Ocean carriers in early November were experiencing extensive delays at ports in Mexico and Central America , spurring several liners to revamp services or implement contingency plans to maintain reliability . The problems are being partly caused by strong trade volumes , especially from Mexico , carriers and forwarders say . Severe delays at Acajutla in El Salvador and Corinto in Nicaragua have led CMA CGM to implement a port congestion surcharge of $ 1,000 per container from Dec . 1 on shipments to and from the two countries , the carrier said in a Nov . 5 customer advisory . The surcharge on all types of cargo will remain until March 31 , 2025 . Meanwhile , CMA CGM and Maersk confirmed they are reshuffling their Mexico-Central America services from November in response to chronic port congestion cfalvarez / Shutterstock . com
and berthing delays at key ports in the region . Other carriers , including Hapag-Lloyd and Ocean Network Express ( ONE ), said their services are also being impacted by port disruption . “ We are observing delays at ports in Mexico , Panama , and Cartagena [ Colombia ], primarily due to high yard utilization , which is affecting cargo movement and vessel schedules ,” a ONE spokesperson told the Journal of Commerce .
Carrier profits rise , but outlooks mixed
Container lines are reporting strong third quarter profits but mixed outlooks . Maersk ’ s net profit nearly quintupled to $ 3.1 billion compared to the third quarter of last year , and the carrier raised its full-year operating profit forecast by $ 500 million to $ 11.5 billion . Ocean Network Express ( ONE ) has upgraded its full-year profit forecast to $ 3.1 billion , The upgraded forecast , which covers ONE ’ s financial year to March 31 , 2025 , is 13 % higher than the $ 2.7 billion estimate it gave on July 31 . Singapore-headquartered ONE said its interim net profit from April 1 to Sept . 30 climbed to $ 2.8 billion , up from $ 700 million in the same period of 2023 , and included net profit of $ 2 billion in its fiscal second quarter alone . However , indicating a weaker second half of its fiscal year , ONE forecast a $ 317 million net profit for the period
6 Journal of Commerce | November 18 , 2024 www . joc . com