Port Strike Fear Intensify as Imports Dip, Freight Costs Soar

• Negotiations between longshoremen and employers are getting heated due to Wage concerns and Job Security Issues. Allegations of creeping automation at ports have unions upset, refusing to meet until this “violation” is resolved.

• Volume at Port of LA/LB fell 4.5% in May. On the contrary, ocean freight rates could hit $20,000- $30,000 per container. Accompanied by an increase of 9% in airfreight rates 

• What’s driving the cost? Longer Red Sea Routes, Ocean carriers are canceling sailings which constricts available space, and demand is outpacing supply for both air and ocean freight.

Railroads Fear Losing Out To Trucks If No Changes Made To California Regulation

• CARB (California Air Resources Board) aimed at cutting emissions and mitigating carbon footprints, is seeking approval from EPA (Environmental Protection Agency), for California’s In-Use Locomotive Regulation. 

• This regulation would require all locomotives manufactured after 2035 that travel through the state of California to be zero-emission. Additionally, it would ban the operation of any locomotives that are more than 23 years old (based on manufacturing date).

• 70% of current locomotives moving in California would be affected by this ruling. Looking into the future, this would dramatically increase the cost of providing rail transportation out of California. Thus, pushing consumers to move more freight via truck rather than rail, further congesting the truckload market.

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References & Additional Articles

Port Strike Fears Intensify as Imports Dip, Freight Costs Soar (freightcaviar.com)

Railroads fear losing out to trucks if California gets its way - FreightWaves

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