Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EDT. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.
In this edition: West Coast labor union talks get ramped up a notch; Canada goes head-to-head with Mexico; and C.H. Robinson finds a new CEO.
Everything out West is totally fine — nothing to be concerned about, except maybe a few things regarding the West Coast port labor negotiations. We’ve officially hit the one-year anniversary of starting the new labor union contract conversation. Sadly, there was no weekend getaway to the mountains, just some work disruption.
The International Longshore and Warehouse Union on Friday effectively shut down operations at the ports of Los Angeles and Long Beach, driving the workers’ point home that they are none too happy with ocean carriers and terminal operators.
Labor stoppages aside, negotiations haven’t completely broken down. FreightWaves’ Greg Miller reported ILWU President Willie Adams “highlighted the health risks and lives lost of ILWU members during COVID and the ‘astronomical revenues’ of ocean carriers during that period, and argued that ILWU members deserve ‘an economic package’ that accounts for their role in the shipping industry’s windfall — in other words, they want a piece of the pandemic profit pie. Adams specifically pointed to the falling percentage of ILWU wages and benefits in comparison to PMA profits.”
This technically is the second major disruption this year, the first being the night shift on March 30 and day shift March 31. The good news is that since there is less container volume coming in on the West Coast, some of the long-term impacts of any work stoppages won’t be felt as deeply as if they occurred when there were 109 ships waiting to berth.
All the talk of reshoring manufacturing operations seems focused on Mexico and not Canada. Yes, Volkswagen is building a $14 billion battery plant for electric vehicles in St. Thomas, Ontario, that is slated to open in 2027, but Mexico seems to get a new facility of some sort every day.
Labor in Canada is still affordable but not nearly as cost effective as labor in Mexico. John Boyd, principal for the Boyd Co. Inc., said in Noi Mahoney’s story: “Canada’s long suit historically has been in the natural resources field, being a global supplier of timber, precious metals, natural gas, crude oil, crude bitumen and coal. The EV industry is a major end user of lithium for the production of auto and truck batteries. That said, two of North America’s largest deposits of lithium are in Canada.”
TRAC Tuesday. This week’s TRAC lane of the week is a long one, from Detroit to Memphis, Tennessee. This 735-mile journey runs about $2.29 a mile on the spot market. An all-in rate of $2,066 before margin should suffice to get this lane covered. Carriers will be eager to drive the spot rate up as it seems that spot rates are climbing with no chance of stopping. Hold firm on rates as outbound tender rejections in Detroit have fallen 450 basis points since last week. A major plummet to the OTRI has come and that should bring spot rates down a little, as Memphis’ OTRI has started increasing.
Who’s with Whom. Cars and trucks are kind of the same thing in regard to transportation, right? C.H. Robinson has thought along the same lines as the hunt for a new CEO is over. David Bozeman, an executive at Ford Motor Co., has been tapped to take over the U.S.’ largest freight brokerage. It turns out the choice might not be as strange as it appeared. Bozeman spent some time at Amazon Transportation Services, Caterpillar and Harley-Davidson Motor Co. The man knows a thing or two about vehicles.
FreightWaves’ Mark Solomon wrote that C.H. Robinson “has struggled with a sharp downturn in demand. Robinson had also struggled in recent months amid concerns about increased competition from the likes of new broker RXO Inc. However, it had lost market share in general in what had before been a historically strong environment for contract brokerage, from which Robinson generates most of its revenue.”
Double broker red flags
Double broker red flag No. 3: Thou shalt not trust an address.
The devil works hard, double brokers work harder. After perusing LinkedIn, I stumbled on this post. It turns out if you go to physicaladdress.com you can get a random physical address for a “business” for the cost of an average Starbucks run, $8 a month. This isn’t a sign to never trust a carrier’s address, but maybe take an extra few seconds to look it up on Google Maps, the way you would look up a residential delivery and run a few landmarks by the carrier to verify it’s legit.
Got any tips that are your favorite? Let me know or post on LinkedIn. I’d love to share them with everyone.
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