The executive director of the Port of Los Angeles thinks a tentative agreement between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) on a new labour contract is imminent.
“I believe we are on the doorstep of a tentative agreement,” Gene Seroka, executive director for the Port of LA, said during a webinar on Thursday.
Serota said that both sides are “spending a lot of time at the negotiating table, and I am optimistic we will hear good news soon”.
The ILWU, which represents the 22,000 dockworkers, and the PMA, which represents the 29 West Coast ports, have been negotiating since the most recent contract expired on 1 July 2022.
Details of the negotiations have been hard to come by as both parties have vowed not to negotiate through the media.
Last month, the parties announced a tentative agreement on certain key issues.
ASIA-US CONTAINER RATES EDGE LOWER
Rates for shipping containers from east Asia and China to both US coasts edged lower this week, according to data from online freight shipping marketplace and platform provider Freightos.
Rates along both trade lanes rose earlier this month, leading some to think that rates had hit a floor and would begin to trend higher.
But Judah Levine, head of research at Freightos, said rates continue to face headwinds on softer demand for goods from US consumers and excess ocean freight capacity despite efforts by ocean carriers to reduce space through blank sailings.
Serota said high inventory levels at US warehouses is also creating headwinds for importers.
“With respect to inventory levels, the replenishment cycle has yet to kick in,” he said during the webinar. “Once we see a reduction in warehouse surpluses, there will be opportunities for increased import levels.”
Container ships are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers such as polyethylene (PE) and polypropylene (PP), which are shipped in pellets.
LIQUID TANKER RATES MOSTLY LOWER
US liquid chemical Tanker rates as assessed by ICIS were largely softer this week, with only the US Gulf to Asia trade lane seeing a slight uptick for 2,000 parcels.
Transatlantic eastbound rates for all parcel sizes were lower this week amid continuously weak rates for clean petroleum products (CPP), which means more shipowners are looking to take on chemical parcels.
The increased capacity for chem shipping weighed on rates.
Rates ticked lower from the US Gulf to the Caribbean and were steady from the US Gulf to South America.
TRUCKING
The trucking market remains soft with linehaul rates falling in April, according to the Cass Truckload Linehaul Index, produced monthly by Cass Information Systems Inc.
The index is a measure of market fluctuations in per-mile spot and contract truckload linehaul rates.
Cass said with spot rates already down significantly, the larger contract market is likely to continue adjusting down, if more gradually, but in the same direction.
“After a long soft patch, we see the US freight transportation industry on the verge of a new cycle as we begin to transition from the bottoming phase into the early phase of the freight cycle in the months to come,” Cass said.
RAILROADS
The order by the US Surface Transportation Board (STB), the regulatory agency that oversees railroads, requiring temporary reporting on service data for all Class I carriers is set to expire at the end of this month.
Rail service is vital to the chemicals industry, and trade groups such as the American Chemistry Council (ACC) and National Association of Chemical Distributors (NACD), have urged the STB to take action to improve rail service.
A majority of respondents in an ACC member survey in April said that rail conditions were the same or worse.
Most companies reported worse conditions for rail shipping compared with conditions prior to the pandemic.
Complaints included longer transit times, missed switches, increased demurrage charges, reduced service days and higher rates.
Source: Hellenic Shipping News
