ILA contract negotiations: US supply chains brace for disruption
As the Sept. 30 deadline for the International Longshoremen’s Association (ILA) contract renewal passed, negotiations have reached a standstill, leaving the specter of a potential strike hanging over U.S. supply chains. With little progress made in bridging the gap between union demands and the position of the United States Maritime Alliance (USMX), a work stoppage appears increasingly likely. This has already started impacting U.S. supply chains both in manufacturing and retail. The ILA agreement affects ports along the entire East Coast and Gulf Coast of the United States. These ports span from Maine all the way down to Texas, including major hubs such as Boston, New York/New Jersey, Philadelphia, Baltimore, Charleston, Savannah, Miami, New Orleans, Houston and several more. The repercussions of such a strike would be significant. The ILA represents 65,000 dockworkers at ports along the East Coast and Gulf Coast, responsible for handling approximately 43% of U.S. imports. A disruption in operations at these ports would ripple through the entire supply chain, affecting businesses across various sectors. Retailers, manufacturers and consumers could all feel the impact of delayed shipments, increased costs and potential shortages of essential goods.
Lufthansa Cargo introduces environmental surcharge to meet SAF quotas
Lufthansa Cargo on Tuesday announced it will levy a surcharge on shipping customers to cover the cost of mandated purchases of sustainable aviation fuel, mirroring a decision in May by Lufthansa Airlines to add an SAF fee on passenger tickets. Other airlines are expected to follow suit as European and other governments take action to decarbonize the aviation sector. Lufthansa Cargo and Swiss World Cargo will add SAF to their inclusive surcharge that covers additional costs, such as jet fuel costs above certain benchmarks and airport security prices, over which the airline has no control. A standardized index calculation system is used to track all applicable costs and set the surcharge, which is added to the net price of each shipment. The carriers decide to adjust the airfreight surcharge if indexed costs move up or down by a certain amount.
Gemini Cooperation terminals well placed for start of alliance
Cooperation between the two top ten lines is due to start in February 2025 and Drewry Shipping consultants outlined the various key regions including North Europe and the Mediterranean where the alliance will operate and said that while Hamburg’s Altenweder Terminal could be a challenge with the larger ships unable to pass under the Köhlbrandbrücke bridge, both carriers have overflow port capacity, Maersk at Bremerhaven and Hapag-Lloyd at Wilhelmshaven. Gemini will operate a hub and spoke system delivering cargo to major hubs and using shuttle vessels to deliver freight to regional ports. Ports and terminals specialist at Drewry’s Eleanor Hadland said: “Gemini is in a good position to start with very little exposure to ports and terminals where neither carrier has a shareholding.” Hadland said that where the lines are exposed to terminals in which they have no stake they do have long standing relationships and there should be little or no effect on the services that the Gemini operates.
$103m suit filed against Dali’s owner and manager
The US Department of Justice filed a $103m civil claim yesterday against the owner and manager of the Dali containership, alleging negligence and unseaworthy conditions led to this March’s dramatic accident in Baltimore which brought port operations to a halt for months. The damning 53-page claim filed at the US District Court for the District of Maryland against Grace Ocean and Synergy Marine details the moments leading up to the March 26 accident that saw the Francis Scott Key Bridge collapse with the loss of six lives. The claim details how the vessel lost power, regained power, and then lost power again before striking the bridge. The claim on behalf of the US does not include any damages for the reconstruction of the Francis Scott Key Bridge. The State of Maryland built, owned, maintained, and operated the bridge, and attorneys on the state’s behalf may file their own claim for those damages. Legal cases surrounding this year’s most high-profile shipping accident are expected to run for many years costing hundreds of millions of dollars. Lawyers for three of the families who lost loved ones when Baltimore’s Francis Scott Key Bridge collapsed six months ago are also suing the owners of the Dali containership for personal injuries, adding to a slew of lawsuits surrounding the vessel which is scheduled to leave American shores this week and make for China where extensive repairs will get underway.