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.

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.

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.

SSGA Executive Director Eric Wenberg toured the Midwest last week, starting with the AgroExpo in St. Johns, Michigan and continuing with visits to members in Indiana.

AgroExpo featured more than 130 exhibitors, including SSGA members Legacy Seed/DF Seed, Michigan Agricultural Commodities, Star of the West and Zeeland Farm Services. Member Michigan Soybean Committee devoted space in its booth to showcase the importance of variety-specific agriculture in the state, showing high-oleic oils made from its soybeans and food soybeans like those used to make natto and tofu. It was perfect weather to spend a few days outside and learn about how diverse Michigan agriculture is in giving farmers choice with crops to grow.

Senator Debbie Stabenow opened the farm show and acknowledged the importance of the passage of the Ocean Shipping Reform Act to find better shipping solutions for exporters. Michigan Agri-Business Association President Chuck Lipstreu thanked SSGA for its work to support education and information on transport solutions for the state.

After AgroExpo, Wenberg traveled to Indiana to catch up with one of SSGA’s newest members, IOM Grains, as well as the Indiana Soybean Alliance and the Indiana Crop Improvement Association. SSGA will host its annual meeting in Indianapolis, scheduled for December 1-2, 2022. Indianapolis is a wonderful location for the meeting, with SSGA offering assistance to Indiana and stewarding specialty field crops nationally. Indiana Crop Improvement Association Director James Fung operates the association with international markets in mind, providing field inspection and audits, as well as seed variety testing that make specialty markets work in the region. Watch for more information on SSGA’s annual meeting in the coming weeks.

Wenberg’s tour will continue this week with visits to Midwest Agricultural Export Summit, hosted by the South Dakota District Export Council, South Dakota Soybean Research & Promotion Council and Sanford Health.

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

After meeting with truckers and marine terminal operators at the Port of New York and New Jersey, Federal Maritime Commission (FMC) Chairman Dan Maffei is warning ocean carriers to stop forcing shippers and drayage truckers to store their containers or pay a fee when they do so.

“The (FMC) has already been investigating reports of carriers charging per diem container charges even when the shipper or trucker cannot possibly return the container due to terminal congestion,” Maffei said. “I will ask that this investigation be broadened and intensified to cover instances where shippers and truckers are being forced to store containers or move them without proper compensation.”

Read more about the proposed fees here.

The FMC is seeking public comments on a new data collection regarding containerized vessel imports and exports as part of requirements established in the Ocean Shipping Reform Act.

The Act requires the FMC to collect and publish quarterly the total import and export tonnage and total loaded and empty 20-foot equivalent units (TEU) per vessel. The FMC’s proposal would collect tonnage and TEU information each month from ocean common carriers that transport 1,500 or more TEUS per month. Implementing this approach would collect at least 99% of all imported and exported containerized cargo. Interested parties can share their comments with the FMC for 60 days once the request is published in the Federal Register.

Read more here from the FMC.

The Surface Transportation Board is also seeking comments on its draft environmental impact statement regarding the potential Canadian Pacific and Kansas City Southern merger. The study concluded that train noise could be the largest environmental impact while other adverse impacts would be negligible, minor and/or temporary.

If approved, the merged rail company would make capital improvements including new or extended passing sidings, adding a section of double track and adding facility working track to 25 locations along the network.

Read more about the impact study and proposed merger here.

Other noteable transportation news:

• The New York Times profiles Maffei and the FMC
• Bloomberg reports container lines are set to smash year-old profit record by 73%
• Freightwaves/American Shipper says container rates are making an ‘orderly’ decline
• The Great Lakes continue to get questions about container capacity