Transportation Roundup: Labor strike effects to linger

Nearly 75% of International Longshore and Warehouse Union (ILWU) of Canada members voted to approve the tentative agreement with West Coast ports last week, but congestion in the supply chain could take months to recover from the strikes. The new agreement increases wages, benefits and training.

While the Canadian workers were on strike, many ocean carriers diverted and unloaded at U.S. ports instead. Containers on railroads piled up and are expected to take at least two months to clear up, while also taking a big hit to railroad’s revenue. Read more from CNBC here.

In ocean shipping, carriers are reporting lower profits but are still earning more than they did pre-COVID. Ocean Network Express (ONE) reported a 58% drop of net income in January-March and a 91% drop from last year, but the $513 million in earnings in their first quarter were still much higher than $5 million in April-June 2019. Profit trends are similar for CMA CGM: Their $1.33 billion net income this quarter is an 82% drop from a year ago and 34% drop from the first quarter. In quarter two of 2019, the ocean carrier had a net loss of $109 million.

Meanwhile, Maersk will adjust its operations in response to an expected decline of 1-4% of global container volumes. Their second quarter profits also sharply dropped from $8.62 billion in 2022 to $1.45 billion. Read more about Maersk’s drops in profit here.

Other articles of interest:

What the TEU tea leaves are telling us

Feds call attention to maritime ‘near misses’