SSGA, AgTC to team up for ag transport events

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SSGA Executive Director Eric Wenberg and AgTC Executive Director Peter Friedmann.

SSGA Executive Director Eric Wenberg and AgTC Executive Director Peter Friedmann.

The Specialty Soya and Grains Alliance has long had a great relationship with the Agriculture Transportation Coalition, known as AgTC. So we’re thrilled that AgTC plans to hold one of its workshops on the heels of Transportation Go!

Transportation Go! will take place March 15-16 at the Hilton Omaha in Omaha, Nebraska, and AgTC’s Ag Shipper Workshop at the same location following a joint lunch between the two events.

“Transportation Go! is an interactive conference that addresses the myriad challenges and opportunities ag shippers are facing,” said Eric Wenberg, SSGA executive director. “We appreciate that AgTC recognizes our agenda and wants to build upon that with its workshop. These are two events that will actually make a difference in the industry.”

Register for Transportation Go! at this link. Note that the hotel block is available through Feb. 21. Also, please note that AgTC’s workshop is a separate event, and registration for that can be found at this link.

Through an interactive agenda with high-profile speakers and unique networking opportunities, Transportation Go! promotes in-depth discussions about the global supply chain and how it affects the vital movement of agricultural products from the United States, notably the Upper Midwest. This year’s agenda includes Commissioner Max Vekich of the Federal Maritime Commission, Elaine Trevino of the U.S. Department of Transportation, David Briggs of Scoular Global Shipping and more.

During the AgTC workshop, attendees will discuss pressing challenges for exporters and importers in an informal and off-the-record way. Invited guests will include an ocean carrier and trucking executive.

“The Agriculture Transportation Coalition looks forward to partnering with the SSGA to provide a unique transportation forum,” said Peter Friedmann, AgTC’s executive director. “We will bring our AgTC-USDA Ag Shipper Workshop format, offering all Midwest agriculture the chance to dialogue face-to-face with top ocean carrier, trucking, rail and port gateway authorities who will come to Omaha. These transportation providers and ag exporters (and importers) can speak openly, benefiting by our no-press, off-the-record rules. Ag transport is adopting quickly to changing markets and needs — exporters of soybeans, grains, protein, dairy, corn and any other ag, will get insight into what the short term and long-term future holds, new and needed transport options, and decisions by Congress and Federal Maritime Commission that impact your transport options now.”

Transportation Roundup: Rail agreements and labor negotiations

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The Federal Maritime Commission is working through more than 200 complaints against ocean carriers with rising demurrage and detention fees a top complaint. This comes even as congestion at ports eases and rates drop. In an interview with Supply Chain Dive, Commissioner Carl Bentzel said the FMC is prioritizing demurrage and detention fees as well as intermodal chassis refusals.

Last week, CSX railroad reached agreements with unions Brotherhood of Maintenance of Way – Employes Division (BMWED) and the Brotherhood of Railway Carmen (BRC) over sick leave, providing four paid sick days each year plus three paid personal days for sick time. Now unions are asking other Class I railroads to follow suit. Read more about the agreement here.

A rail union, Transportation Trades Department (TDD), AFL-CIO, is asking the Federal Railroad Administration to provide more oversight of railroads safety operations. This comes after a Norfolk Southern train derailed in Ohio on Feb. 3. TDD believes all Class I railroads should adopt the confidential close call reporting system, so that all employees can anonymously report safety concerns. While none of the seven major U.S. freight railroads currently uses the program, some have internal systems that perform similar functions. Read more about the opinion.

Dockworkers and marine terminal employees from the West Coast agreed to set aside Seattle’s Terminal 5 issue and resume labor negotiations.

Without a resolution, the impasse over the dockworkers’ contract could result in irreversible West Coast port losses, Agriculture Transportation Coalition (AgTC) Executive Director Peter Friedmann said recently. Read about that and more of Friedmann’s remarks to the Propeller Club of Northern California via the American Journal of Transportation here.

Transportation Go! agenda nearly finalized

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Transportation Go!, the premier conference for soybean, grain and other agricultural transportation issues in the Midwest, is set to take place March 15-16, 2023, in Omaha, Nebraska, at the Hilton Omaha. Registration for this second-annual event is now open at transportationgo.com.

Our agenda is nearly finalized with Max Vekich, Federal Maritime Commission; Luisa Fernandez-Willey, Association of American Railroads; Elaine Trevino, U.S. Department of Transportation and more confirmed.

SSGA is also proud to be hosting local college students at the conference. Students from Bellevue University in the Supply Chain, Transportation and Logistics Management major are eager to attend and learn more at the conference, with Hang Tung Resources sponsoring the students’ registration fees. Fittingly, Jared Spader, Managing Director for Kincannon & Reed, will speak about developing talent in ag logistics during the dinner on March 15.

Learn more about our agenda and register at www.transportationgo.com.

Transportation Roundup: Spot rates fall; FMC seeks additional comments

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Spot rates for container shippers are falling back to pre-pandemic levels in multiple areas. The Journal of Commerce reported that spot rates for Asia to North Europe fell to similar levels seen in January 2020, due to high inventory and inflation.

Meanwhile, the premium for East Coast shipments has been exhausted, as the spread between ocean spot rates to the East and West coasts has narrowed to pre-pandemic levels. The Drewry World Container Freight Index reports a spread of $1,169 between Shanghai-New York and Shanghai-Los Angeles spot rates on Jan. 26, down from $3,995 in late September.

A resurgence in COVID-19 cases in China after Lunar New Year celebrations might sound scary for the supply chain, but CNBC reports that this wave shouldn’t deteriorate operating conditions as badly this time. With up to 80% of the Chinese population already previously infected with Covid, the chances are slim for another major outbreak, said one Chinese government scientist.

The Federal Maritime Commission received almost 30 comments in response to its Notice of Proposed Rulemaking (NPRM) on Unreasonable Refusal to Deal or Negotiate issues last fall but will now seek additional comments regarding the proposed Respect to Vessel Space Accommodations rule. The original comments raised many good questions that the FMC says, “demand appropriate time and further opportunity for comment to be given thorough consideration.” Learn more on the supplemental notice here.

Readers are encouraged to bring forth their ideas and questions to Transportation Go! March 15-16 in Omaha where FMC Commissioner Max Vekich will attend and be on hand for a private meeting with SSGA members. Learn more and register for the event at www.transportationgo.com.

Shipping containers with agricultural goods aren’t transported on airplanes, but nonetheless, the Boeing 747 is making history as the last ever of the aircraft was delivered to Atlas Air on Tuesday. There are both passenger and freight versions of the aircraft, which began production in 1967 and made air travel accessible to the average person. Learn more about the end of the Boeing 747 era here.

Transportation Roundup: Container imports continue to plunge, railroads still under fire

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In early December President Biden signed a bill to avoid the rail strike, but tensions are still high between class I railroads and unions.

At a Surface Transportation Board (STB) hearing this week, Union Pacific’s use of embargoes and staffing data is being questioned. This comes after UP failed to provide enough detail to the STB to explain their increase in embargoes since 2017, which jumped to more than 1,000 embargoes in 2022 compared to five in 2017. Read more about the hearing from CNBC.

Meanwhile, the plummet in U.S. imports continues, with November container numbers down 12% month on month, and 19.4% year on year. Imports are down 37% from the peak in May. Export numbers from Asia, especially China, continue to trend down, with China imports down 11% from October, 30.8% from Thailand and 17.4% from Vietnam. Read more from the Descartes report here.

These issues and more will be topics of discussion at the 2023 Transportation Go! In Omaha, Neb. March 15-16. More information and registration will be available soon.

Transportation Roundup: Rail strike threat continues

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The SSGA Competitive Shipping team continues to stay abreast of agriculture transportation issues in the container shipping industry, and railroad labor remains at top of mind.

The final two railroad unions voted upon labor agreements proposed in September, with members of the Brotherhood of Locomotive Engineers and Trainmen (BLET) and yardmasters with the Transportation Division of the International Association of Sheet Metal, Air, Rail, and Transportation Workers (SMART-TD) voting in favor of the agreement. However, the SMART-TD train and engine service members rejected the agreement.

The SMART-TD train and engine service members joined three other unions in rejecting of the tentative agreements, creating fear of a freight rail strike in the next few weeks.

Management of major railroads and leaders of four railroad unions are set to meet today for the first joint negotiations. Read more from CNN. CNBC’s Lori Ann LaRocco also has good coverage and analysis of the situation here and here.

In other shipping news:

  • Containerized shipments between the U.S. and China in recent months have been falling, while purchases between the U.S. and other southeast Asian countries are making up the difference. Data from Descartes show that Chinese imports accounted for 40% of all U.S. August imports but was down to 35% of total imports last month. Learn more about the trends from Freightwaves.
  • The Port of New York and New Jersey handled the most cargo in the U.S. for the third straight month, while the Port of Los Angeles posted its lowest level since 2009. Labor issues at several points in the transportation chain are to blame for this redirection and the looming rail strike adds to the uncertainty. Read more here from CNBC.
  • Low water levels of the Mississippi River continue to negatively impact the movement of goods and the pinch point has started to move upstream, near St. Louis. New Orleans grain terminals reported a 35% increase in barges last week, but farmers near the lower Mississippi River have received about $2 less per bushel for corn and soybeans. Learn more from Progressive Farmer.

Transportation Update: Challenges remain; keep lines of communication open

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While there have been some signs of progress on the global shipping front since the passage of the Ocean Shipping Reform Act in June, many challenges remain for SSGA member companies who export identity preserved soybeans and other specialty grains and oilseeds to foreign customers via shipping container.

Container freight struggles remain, and casualties throughout the supply chain are real and a threat to the industry, said one SSGA exporting member. Sourcing equipment, such as shipping containers, in rural America continues to be a real problem, said another, noting serious issues at ramps in Minneapolis and Kansas City in particular. Exporters who ship via container continue to be plagued by and frustrated with daily changes in early return dates (ERDs), something they’re facing with all carriers. These changes result in higher costs and can tie up chassis availability. Other issues in trucking, as well as rail, where the potential of a national strike looms, also threaten the timely delivery of agricultural products from rural America.

Making sure that dialogue remains open between suppliers and customers, as well as between suppliers and transportation companies, regulators and government officials, remains highly important at this time. Progress was made over the summer, but there’s a long way to go.

SSGA members know it’s important to talk about the United States as a reliable supplier of our products, and we are. But we also have to be able to talk about the realities of the situation with our customers who are relying on us to deliver. Freight has been and remains the biggest industry challenge to all members of our identity preserved supply chain.

SSGA and its members are open to all suggestions, ideas and solutions from inside and outside the industry. These exchanges give us all a platform to garner support. Reach out to our staff.

When we talk to customers about the specialty industry and identity preserved, they tell us they appreciate the direct connections and close relationships they have with their suppliers. Lean on those connections. Engage in real dialogue about the situation. They need to understand the challenges and may be able to provide answers on their end as well.

From fork to farm and back again, SSGA is here to listen and to help.

Transportation Roundup: Railroad union rejects proposal

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SSGA staff has compiled a roundup of current news in the container transportation industry. Click the links below to view the original stories.

A rail strike could again be looming after the third-largest railroad union rejected a proposal with employers Monday. The Brotherhood of Maintenance of Way Employes Division rejected the proposed five-year contract that included a 24% pay increase by 2024 but provided only one paid sick day. Both sides have agreed to resume negotiations until at least Nov. 19. Until then, railroad operations are expected to continue as normal. Read more here.

The U.S. Department of Labor (DOL) released a proposal that could raise costs for companies that rely on independent contractors such as trucking companies. The proposal released Tuesday would modify regulations for determining employee or independent contractor classification. The proposed text is similar to the guidance used by the Obama administration to classify workers as independent contractors. Comments can be submitted for 45 days on the rule after it is published in the Federal Register. Learn more about the proposal here.

Reports continue to predict lower import numbers, with October 9.4% lower year over year. November imports are expected to be down 4.8% and December imports down 6.1% from 2021, the lowest since February 2021. Retailers shipped merchandise earlier in the year to avoid inflation and prepare for supply chain disruptions, so they already have plenty of merchandise on hand for the holiday season. The lower import numbers are starting to improve backlog in intermodal yards. For example, as of Sept. 28, BNSF’s Dallas-Fort Worth intermodal terminal was storing about stacked 3,000 containers, a 25% drop from Sept. 12. The terminal is also having greater chassis availability and improved yard operations. Read more here.

The Federal Maritime Commission’s 58-page proposed rule on demurrage and detention billing requirements seeks to tighten container billing standards, including 30-day deadlines for invoices and limits on who can be billed, subjecting  ocean carriers and marine terminals “to stricter – and potentially costlier – billing requirements when they charge shippers for late containers,” according to American Shipper. The proposed rule is scheduled to be posted in the Federal Register this week. Read more here.

Transportation Roundup: Fall shipping rates continue to fall

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SSGA staff have compiled a round up of current news in the container transportation industry. Click the links below to view the original stories.

Fall is usually peak shipping season, as retailers begin to import more goods for the holidays. In 2022 though, freight rates for a container from China to the West Coast are down 60% from January, around $5,400 per box. The rate is still above pre-pandemic levels and isn’t expected to return to those levels anytime soon, in part due to higher fuel costs. Read more from the Wall Street Journal.

Spot rates continue to fall, with Drewry’s World Container Index dropping by 10% to $4,472 on Thursday. This rate is 57% below the peak of $10,377 exactly one year. Read more here.

The tentative deal on Sept. 15 between major U.S. railroads and unions avoided a railway strike, although some unions are still frustrated with the tentative agreement. Rail workers report not trusting that the tentative agreement will deliver on their needs. Workers are still longing for higher wage increases, paid time off and more flexible scheduling.

Several SSGA members were involved in a cargo shipment from the Port to Duluth to Antwerp, Belgium, earlier this month. The ABB Vanessa arrived at the Port of Duluth on Sept. 11 to pick up smart shipping containers from Nexyst 360. The containers were filled with dark red kidney beans from Chippewa Valley Bean and high-protein fish food from Prairie Aquatech. Nexyst 360 has more on their LinkedIn post. Back in May, Nexyst 360 and Chippewa Valley Bean credited SSGA’s Transportation Go! conference as the catalyst for their historic shipment of kidney beans from the Port of Duluth destined for Europe.

Looming rail strike could cripple ag shipping

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SSGA is monitoring the labor situation and potential rail strike that could take place later this week and severely affect service on Class I railroads BNSF, CSX Norfolk Southern, CN, CP and Union Pacific. Norfolk Southern has already announced that it will close all gates to intermodal traffic at noon local time on Wednesday.

Negotiations have been taking place, including Monday, but Friday, Sept. 16, 12:01 a.m. EDT is the end of a 60-day cooling-off period imposed earlier this summer by President Biden to prevent a conductors and engineers strike from taking place.

While SSGA urges railroad leaders (represented by the National Railway Labor Conference) and the unions (the Brotherhood of Locomotive Engineers and Trainmen and the SMART Transportation Division conductors union) to continue negotiations, along with Federal mediators, we also recommend that exporters check with your carriers to see what contingency plans they have in place or what their recommendations are to you in the case of any service disruptions.

According to a CNBC report, the unions say they will strike if quality of life is not addressed in a new contract. And while eight of 12 labor unions have reached tentative agreements with the rail carriers (up five from last week), the BLET and SMART TD unions represent half of all rail workers.

If the impasse continues, Congress could act to prevent a work stoppage by imposing a deal or by extending the cooling-off period. President Biden does not have the authority to prevent a strike.

The National Grain and Feed Association sent a letter to the railroads unions, the White House and Congressional leadership, urging continued negotiations and also suggested those interested in preventing a strike to reach out to your own labor contacts or to your lawmakers and implore continued good-faith talks or Congressional intervention. The letter noted the “significant negative impacts on … agricultural producers, processors and consumers,” especially at the beginning of harvest around the country. “The economic damages across the food and agricultural supply chain would be swift and severe,” the letter said.

According to one SSGA member, a shipping company has reached out to its containerized exporting customers and recommended they pick up as many import containers as possible this week from U.S. inland rail ramps to avoid cargo to become stranded if a strike should occur.