Disruption Report #67: Container Rates Down Sharply, West Coast Longshoreman Talks on Hold, and There’s a Diesel Fuel Shortage in the Southeast

West Coast Longshoreman Talks On Hold

The lack of movement on labor negotiations (they started in May) is beginning to create concern. The west coast ports, particularly Long Beach and Los Angeles, are the country’s primary entry points for products flowing from Asia. That’s why we keep a constant eye on conditions there.

However, a dust-up in Seattle has talks on hold, causing some trepidation among those who rely on the two Southern California ports. Donna Littlejohn, in her Daily Breeze article, “West Coast longshore, employer contract talks hit a snag, impacting LA, Long Beach ports,” reports Port of Los Angeles Executive Director Gene Seroka as confident there will not be a strike. But he also believes we are months away from an agreement.

That is promising, but the longer the talks go on, the more nervous shippers become.

Concern over the lingering talks has prompted what Seroka called “a huge segment” of cargo to head for other ports on the Gulf and East coasts

West Coast longshore, employer contract talks hit a snag, impacting LA, Long Beach ports,” Donna Littlejohn, Daily Breeze, October 31, 2022

We all need to be patient, but it would be nice to get the threat of a such a potentially disruptive strike behind us.

Shanghai to Los Angeles 40′ Container Cost Drops 65% Since August

Drewry’s World Container Index reports freight rates edging back to pre-covid levels. We have a way to go, but it’s looking a lot better.

Oct. 27 % Change Aug. 4

Shanghai to Los Angeles $2,412 -65% $6,985
Shanghai to New York $6,034-38% $9,774
Shanghai to Rotterdam $3,845-57% $8,939

Diesel Fuel Inventories Running Low

Diesel fuel is scarce in the U.S. states of Maryland, Virginia, Alabama, Georgia, Tennessee, North Carolina, and South Carolina. As we all know, America’s trucks run on diesel, so a shortage could mean a hike in freight rates to compensate for higher fuel costs.

Timothy Nerozzi, reporting for Fox Business, reports:

The Biden administration says it is keeping a close watch on diesel inventories and working to boost supplies, following news that reserves have been depleted and could run out in less than a month if not replenished, sparking fears of shortages and rising prices.

Fuel company issues diesel shortage warning, says conditions ‘rapidly devolving’,” Timothy nerozzi, Fox business, october 28, 2022

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