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April 24 2023

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16 Journal of Commerce | A pril 24, 2023 International Maritime year over year, while Asia-US West Coast rates have slipped 80 percent from this time last year. But the falling rates will see ship- pers on the two major lanes out of Asia enjoying their largest annual reduc- tion in shipping costs in at least the last seven years, according to Philip Damas, managing director and head of supply chain advisors at Drewry. "As many beneficial cargo own- ers conclude their annual tender negotiations for new trans-Pacific contracts commencing May 1, it is becoming clear that contracts rates this year in the trans-Pacific and Asia-Europe will give exporters and importers a cut in shipping costs of 55 to 85 percent in most cases when compared with 2022 costs," Damas said in an April 3 briefing. He said the rapid decline in rate levels had seen some of Drewry's shipper customers booking savings of But it also marked the beginning of an aggressive market correction that John McCown, founder of Blue Alpha Capital, estimates will cut industry net profit for 2023 by 80 percent year over year to $43.2 billion. "The second quarter 2022 results were the peak in terms of earnings... There will be further declines from the fourth quarter of 2022 in the quarters to come," McCown wrote in a quarterly container shipping out - look published April 3. By the start of April, spot rates on the trans-Pacific and Asia-Europe trade lanes were down by up to 90 percent compared with the same time last year, according to various rate indices tracked by the Journal of Commerce. Contract rates on both trades have also fallen sharply, with data from rate benchmarking platform Xeneta show - ing Asia-North Europe long-term rates of 90 days or longer down 45 percent THE SHARP CORRECTION of container shipping markets will result in plung- ing profitability for carriers this year, but massive savings in transport costs for importers and exporters in major markets, according to analysts. A rate collapse on major trades out of Asia during the second half of 2022 was not enough to stop global con- tainer carriers from reporting a collec- tive $220 billion in pre-tax earnings for the year, according to data from Sea-Intelligence Maritime Analysis. THE US NATIONAL Labor Relations Board (NLRB) has ruled that main- tenance and repair jobs at a Seattle marine terminal do not belong to the US International Longshore and Warehouse Union (ILWU), further clouding the status of coastwide long- shore contract negotiations that have been ongoing for nearly a year. The ILWU, which said it will appeal the ruling, has been turning up the heat on employers with a series of sta›ng slowdowns that have hin- dered terminal operations at the ports of Los Angeles and Long Beach. Crane operators and top handler drivers from ILWU Local 13, which covers Los Angeles–Long Beach, rejected their assignments for the April 6 night shift and April 7 morning shift, essentially shutting nearly all the port's terminals. The following Monday, April 10, ILWU Local 13 slowed the dispatch of workers and refused to allow a representative of the Pacific Maritime Association (PMA), which represents employers, to observe the dispatching process, according to three sources close to the matter who asked not to be identified. The dispatch hall is jointly operated by the ILWU and the PMA. ILWU Local 13 said in a statement April 7 that it held its monthly mem- bership meeting on the evening of April 6 for the swearing in of incom- ing Local 13 President Gary Herrera, noting that the membership meeting is a "contractual right." A source close to the matter said that although the ILWU is allowed to call a stop-work meeting each month under the coast- wide contract to discuss union issues, the April 6 meeting was not previ- ously arranged according to the terms of the agreement. In addition, ILWU Local 13 said union members who observe religious holidays "took the opportunity to cel- ebrate with their families" on April¢7. Good Friday is not a recognized holi- day under the coastwide contract. In a subsequent statement April 7, the PMA said, "These actions under- mine confidence in West Coast ports and threaten to further accelerate the diversion of discretionary cargo to Atlantic and Gulf Coast ports." Strong words The ILWU international o›ce, Local 13, and the PMA have not responded to requests for comment on either the NLRB ruling or the latest job actions, but sources say the controversial jurisdictional issue involving Terminal 5 (T-5) in Role reversal Shipper savings to rocket in 2023 at expense of carrier profits: analysts By Greg Knowler Watershed ruling NLRB rules against ILWU in T-5 dispute as job actions escalate By Bill Mongelluzzo The latest ILWU labor actions have resulted in cargo- handling delays and a shutdown of marine terminals at LA-Long Beach (pictured). Richard H Grant / Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

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