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Port strike ends as ILA, USMX agree on hefty wage hike, contract extension

This story was updated at 7:57 a.m. Friday to include reporting of a Zoom meeting between Biden administration officials and port employers.

The short-lived strike by dockworkers that shut down East and Gulf Coast ports came to an end late Thursday when the International Longshoremen’s Association and the United States Maritime Alliance announced they had come to a tentative agreement on wages and an extension of the master contract.

The first ILA strike in five decades saw 45,000 union employees walk off the job and bring container and ro-ro handling to a halt at 36 ports across 14 major marine hubs from New England to Texas.

Rumors of a settlement swirled Thursday, just days after President Joe Biden scolded employers for not bargaining in good faith and urged a resumption to negotiations. The settlement clears a potential major issue for Democrats with the general election just weeks away, without Biden having to invoke the Taft-Hartley Act forcing the union back to work while negotiations resumed.

The new deal, which sources close to the talks said came together quickly, provides a pay raise of 61%, or $4 per hour over each of the six years of the pact, and extends the master contract to Jan. 15, 2025, to allow the sides to negotiate outstanding issues. A final agreement would still have to be ratified by union members.

In a joint statement, the sides said all current job actions will cease immediately and all work covered under the master contract will resume on Friday.

“I want to applaud the International Longshoremen’s Association and the United States Maritime Alliance for coming together to reopen the East Coast and Gulf ports,” Biden said in a statement released by the White House. “Today’s tentative agreement on a record wage and an extension of the collective bargaining process represents critical progress towards a strong contract. I congratulate the dockworkers from the ILA, who deserve a strong contract after sacrificing so much to keep our ports open during the pandemic. And I applaud the port operators and carriers who are members of the U.S. Maritime Alliance for working hard and putting a strong offer on the table.

“I want to thank the union workers, the carriers, and the port operators for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding. Collective bargaining works, and it is critical to building a stronger economy from the middle out and the bottom up.”

Vice President Kamala Harris in a statement said, “This is about fairness — and our economy works best when workers share in record profits. Dockworkers deserve a fair share for their hard work getting essential goods out to communities across America.”

The ILA had been firm about seeking a wage hike of $5 per hour while terminal operators and shipping lines were offering around $3. The USMX on Wednesday said they were open to negotiating but wouldn’t do it under ILA pre-conditions.

Reports said Acting Secretary of Labor Julie Su met with the sides in North Bergen, New Jersey, as negotiations reached a conclusion. Su in 2023 helped members of the International Longshore & Warehouse Union agree to a contract with the Pacific Maritime Association which gave West Coast dockworkers a 32% pay raise over their five-year contract.

In a virtual meeting Thursday employers met at Biden’s direction, the reports said, with White House officials including chief of staff Jeff Zients, National Economic Council director Lael Brainard, Transportation Secretary Pete Buttigieg and Su to pressure carriers to reach a deal and reopen the ports. It was then that USMX was asked to make a higher offer that could persuade the ILA to extend their contract.

The tentative agreement was reached as the number of vessels waiting outside ports continued to increase and major retailers were forced to wait for their imports amid fears of shortages of medicines, fresh fruits and other vital goods. Exporters including manufacturers and agri-businesses were also caught in a squeeze waiting for ports to reopen. Container lines were prepping surcharges to account for extended voyages if a longer strike forced them to divert ships to West Coast ports.

Businesses were quick to react to news of the agreement.

“The decision to end the current strike and allow the East and Gulf Coast ports to reopen is good news for the nation’s economy,” said Matthew Shay, president and chief executive of the National Retail Federation. “It is critically important that the International Longshoremen’s Association and United States Maritime Alliance work diligently and in good faith to reach a fair, final agreement before the extension expires. The sooner they reach a deal, the better for all American families.”

The NRF on Wednesday led a coalition of trade organizations urging Biden to intervene in the strike and restart contract negotiations.

Find more articles by Stuart Chirls here.

Related coverage:

Union chief says he has received death threats during dock strike

Biden scolds ocean carriers for not paying dockworkers ‘fair’ wages

What shippers need to know about the port strike and cargo insurance

1 million TEUs could soon be stalled outside strike ports

Image shows stacked shipping containers.

East Coast container ports are shut down by a strike by International Longshoremen’s Association workers, but that hasn’t stopped the parade of inbound ships from queuing up outside those maritime hubs.

“Currently, there are over 400,000 twenty foot-equivalent units (TEUs) being carried on the queued vessels outside the affected East and Gulf Coast ports, another 33% increase from yesterday and a 170% jump from the day before the strike began,” said Jena Santoro, senior manager of Intelligence Solutions at Everstream Analytics, in an email to FreightWaves. “There are now 59 vessels waiting, up from 45 [Wednesday] and just three on Sunday.

“Given this trajectory, if the strike lasts even one week, the number of waiting container vessels could easily exceed 100 with the number of halted TEUs surpassing 1 million.”

It’s unknown how long the strike will last. No bargaining is scheduled between the ILA and employers represented by the United States Maritime Alliance (USMX).

Container lines have begun to set surcharges effective later this month to account for strike-related delays. If the strike drags on, shipping costs are expected to rise for cargo diverted to U.S. West Coast ports on a longer route through the Panama Canal. The dislocation is expected to eventually create a shortage of empty containers as well. 

There are 15 ships waiting outside Savannah, Georgia, followed by 13 at New York-New Jersey and nine at Norfolk, Virginia, Santoro said.

While ocean carriers reportedly have diverted some vessels and unloaded containers at Caribbean ports, Santoro said no queues have been seen yet at Altamira and Veracruz in Mexico.

At the same time, thousands of import loads from high-profile shippers aren’t moving from strike-affected ports. Data compiled by Vizion shows the biggest backup at the Port of Savannah with 8,971 TEUs on hold, followed by 3,901 at the Port of New York-New Jersey complex, 2,401 at Port Houston, 2,225 at Norfolk and 1,528 at Charleston, South Carolina.

Walmart leads the list of retailers among the top 10 consignees waiting for their cargo with 837 TEUs, along with Costco (290), Lowe’s (253) and Home Depot (222), Vizion found. Dwell time has stretched from single digits for TEUs picked up over the past 60 days, to estimated double digits along the East Coast: from an average 4.5 days per TEU to 21 days at New York-New Jersey; from four to 15 days at Savannah; from 3.7 to 22.1 days at Port Houston; from 5.5 to 19.7 days at Norfolk; and from 4.1 to 21.9 days at Charleston.

Find more articles by Stuart Chirls here.

Related coverage:

Union chief says he has received death threats during dock strike

Biden scolds ocean carriers for not paying dockworkers ‘fair’ wages

What shippers need to know about the port strike and cargo insurance

Wyoming trucking company faces EEOC lawsuit alleging sexual harassment

A Wyoming trucking company owner is facing an Equal Employment Opportunity Commission lawsuit alleging that he sexually harassed female truck drivers.

The lawsuit, filed Monday in the U.S. District Court for the District of Wyoming, accuses Big Piney-based Waller’s Trucking Company owner Norman Waller of sexually harassing multiple female employees, including a driver he hired in February 2017. The driver was allegedly subjected to near-daily sexual comments.

“Waller’s stream of sexually harassing comments was frequently made in front of [the driver’s] colleagues and other drivers, in-person, and over inter-truck CB radio,” the lawsuit says.

Waller did not immediately respond to a FreightWaves inquiry about the allegations and lawsuit. 

The suit alleges that Waller made the following comments, among others:

  • “Too bad you’re not wearing a skirt with no panties.”
  • “Make sure you wear a tank top so your boobies show.”
  • “You need to wear booby shirts so I can get more business.”

Waller is accused of making sexual propositions to the driver, including saying he would cut a hole in the wall if they did not have adjoining rooms on overnight jobs and asking her for a good morning kiss, the complaint says. The driver said she feared for her safety and took some of Waller’s comments as sexual threats.

According to the suit, Waller in 2018 bought the driver a vibrating toothbrush and told her she could use it for any body part. He in 2019 publicly referred to the driver as a “lot lizard” in a meeting, which is a derogatory term for a sex worker.

Waller’s behavior prompted a male employee to speak up for the female driver, the suit says. 

When the driver reported the incidents to the human resources representative, who was Waller’s wife, she “simply laughed,” according to the complaint. 

The driver quit her job when she asked Waller for the day off to attend her teenage daughter’s graduation. Waller messaged the driver that he would send her daughter a lace nightgown as a gift but would probably “get the pee slapped out of me,” the suit says. 

Waller is also accused of harassing another female employee, whom he allegedly instructed to “wear booby shirts” and to “dress sexy.” He also commented on the employee’s breasts and asked to see them.

When the employee publicly spoke out against the harassment, the suit says Waller scheduled her for fewer shifts. She quit her job in October 2019. 

“Federal law prohibits sexual harassment in the workplace, regardless of whether the offender is the owner of the business, a co-worker, a customer or a resident,” Regional Attorney Mary Jo O’Neill of the EEOC’s Phoenix District Office said in a statement. “The EEOC has pursued, and will continue to pursue, charges of sexual harassment against employers regardless of the status of the offender. Employers have a legal duty to stop sexual harassment and to protect their workers from such egregious sexual harassment in the workplace.”

The driver is seeking back pay and additional, unspecified compensation. 

DeSantis orders Florida National Guard, State Guard to intervene in port strike

Gov. Ron DeSantis said Thursday he will deploy the Florida National Guard and Florida State Guard to ports affected by the International Longshoremen’s Association (ILA) strike.

In an X/Twitter post, the governor stated that guard members will be deployed to ports affected by the strike “to maintain order and, where possible, resume operations at ports which are otherwise shut down.”

“Disrupting the distribution of food, equipment, and supplies as the Southeast U.S. recovers from Hurricane Helene is unacceptable,” DeSantis said in the post. “Floridians need a reliable, steady supply of resources and building materials to keep their families fed and rebuild their homes and businesses.”

In the post, DeSantis said the Florida Highway Patrol will manage the flow of traffic from all Florida seaports as needed to further speed the flow of goods held up by the strike. He said the Highway Patrol will provide escorts for commercial motor vehicles upon request.

“Unlike the federal government, Florida is taking decisive action to ensure that our economy continues to function and that victims of Hurricane Helene will have access to what they need to rebuild,” DeSantis continued.

The governor also ordered the Florida Department of Transportation to waive the collection of tolls and fees as well as size and weight restrictions for commercial vehicles to speed the transportation of goods and reduce operational costs.

Four of Florida’s ports – Port Everglades, Port Miami, Port Tampa Bay and Jaxport (Jacksonville) – are being impacted by the ILA strike, which is in its third day.

The age of engagement – Taking the Hire Road

On this week’s episode of Taking the Hire Road, host Leah Shaver, president and CEO of The National Transportation Institute, sat down with Beth Potratz, founder and CEO of driver recruiting platform Drive My Way, and Leigh Sauter, founder of Glass Ball Consulting. 

Potratz and Sauter spoke about why they started their new venture, Spark Change Lab, how fleet personnel in any role can participate in their workshops, and the resources they’ll be providing to recruiting and retention professionals about critical topics.

“Change is hard,” Shaver said. “Not just navigating change when it flies at us, but also actively trying to promote change within our organizations to propel success. Enter Spark Change Lab.”

Founded by two longtime trucking and supply chain pros, Spark Change Lab seeks ways to tackle and spur change within supply chain organizations head-on. 

“I’ve spent my career leading change and transformation initiatives,” said Potratz. “I’ve always wanted to make a difference with our industry’s toughest challenges.”

Sauter and Potratz met at a seminar Potratz was facilitating, and they discovered that they shared a passion for driving change and helping people solve real problems. They wanted to improve employee capabilities and commitment at every level in supply chain organizations.

After discussing the major challenges in supply chain management and staffing, Sauter and Potratz considered how they might put their talents to work, and eventually they conceived the idea for Spark Change Lab.

“I was so excited to partner with Beth, because she wasn’t just talking to an audience at her seminar,” said Sauter. “She was sincere about getting to the bottom of people’s real problems and solving them.”

Spark Change Lab takes a three-pronged approach to getting its message out: widespread access via webinars, live labs and industry conferences, and internal audits at the company level, where the team works directly with leaders to figure out specific solutions to day-to-day challenges. 

“The online webinars introduce the methodology and help people understand the power of the format,” Sauter explained.

Spark Change Lab brings together industry experts from all over the country to tackle pressing issues. In May, they hosted their first major webinar – attracting, retaining and supporting veterans transitioning to civilian life in supply chain careers. 

“We want to bridge the gap and help companies tap into that valuable talent pool and make sure that they know how to support American veterans in a meaningful way,” said Sauter.

They also held a lab on managing mergers and acquisitions in the industry, which was particularly timely given the economic pressures facing many freight businesses this year. 

“It’s a critical topic for industry leaders to understand in the context of trucking companies so we can see the best outcomes,” Sauter said.

Excited to continue their momentum, Spark Change Lab will also be offering live events in the near future. “We will have two in-person labs, because it’s vital to bring that energy and collaborative spirit into this market,” Sauter said.

Spark Change Lab will be back at the Transporting, Marketing & Sales Association (TMSA) Executive Summit for 2024, focusing on how to take marketing from a support function to a strategic driver of growth for trucking companies.

“We’re thrilled about our upcoming live lab at Women in Trucking, titled No More Idling:

From Lip Service to Real Progress for Women in Trucking,” said Sauter. “It’s designed to address the disconnect between companies’ publicly stated objectives and the reality that many women feel working in the freight industry.”

“We also take Spark Change Lab directly into companies to address whatever specific internal challenges they’re facing,” said Potratz. “Our services are designed to leverage the wisdom from the company’s own talent, with our team acting as objective facilitators to spark change.”

“Those are dynamic, collaborative sessions that give employees at all levels a chance to engage and a voice in problem solving and decision making,” said Potratz. 

Spark Change Lab uses these different mediums in hopes that they can reach the variety of organizations around the country that have different needs. “We don’t want to keep all the insights to ourselves,” Sauter said. 

“We realize people all learn differently, so from each lab, we have takeaways,” said Sauter. “We summarize the challenge and how you might approach it within your organization. We produce resource guides and playbooks with specific instructions for how to take actionable steps.”

The problems that Spark Change Lab seeks to tackle are identified by members of the supply chain community itself. 

Some of the topics brought to the organization’s attention, according to Potratz, include creating a culture that fosters diversity, equity and inclusion, how to prepare individuals to assume managerial roles, and what skills and competencies new managers need to work both up and down in the organization as opposed to the skills they mastered as individual contributors.

“We also plan to talk about how to address better adoption and human behavior when adopting new technologies or processes,” Potratz said. “It’s important for us to be able to hear from ground-level talent in every sector and address their concerns head-on.”

“We can tackle any organization with the Spark Change Lab methodology,” said Potratz.  

Click here to learn more about Spark Change Lab.

Sponsors: DriverReach, The National Transportation Institute, Career Now Brands, Carrier Intelligence, Infinit-I Workforce Solutions, WorkHound, Asurint, Arya By Leoforce, Seiza, Drive My Way, F|Staff, Trucksafe Consulting, Seated Social, Repowr

Frequently asked questions: The ILA port strike

The International Longshoremen’s Association (ILA) port strike has made headlines this week as a major disruption in supply chains across the East and Gulf coasts, and FreightWaves has compiled a boatload of information to address frequently asked questions about the situation.

Why did this strike happen?

The ILA went on strike after union dockworkers and their employers with the United States Maritime Alliance (USMX) failed to reach an agreement for a new master contract. The ILA is demanding a significant wage increase, a higher starting wage, premier health care benefits and job security against automation.

Further reading on this question is available here.

Which ports are affected?

The ILA strike is occurring at 14 container ports along the East and Gulf coasts, including three of the U.S.’s five busiest ports: the Port of New York and New Jersey, the Port of Savannah, Georgia, and the Port of Houston.

The master contract covers containerized and roll-on/roll-off (ro/ro) cargo that moves through U.S. ports from Maine to Texas, which is primarily the 14 East and Gulf Coast ports where USMX members employ members of the ILA.

These ports include Boston; New York and New Jersey; Philadelphia; Baltimore; Norfolk, Virginia; Wilmington, North Carolina; Charleston, South Carolina; Savannah; Jacksonville, Miami and Tampa, Florida; Mobile, Alabama; New Orleans; and Houston.

When did contract negotiations start?

Negotiations for a new contract began last February and continued to flounder. The ILA and USMX reached a deadlock in September this year. The previous six-year contract expired on Monday.

What is the International Longshoremen’s Association, the union representing striking workers?

The ILA was founded in 1877 as the Association of Lumber Handlers. According to the union’s website, it today represents upwards of 85,000 longshoremen on the U.S. East and Gulf coasts, the Great lakes, major U.S. rivers, Puerto Rico, eastern Canada, and the Bahamas. It is the largest union of maritime workers in North America.

The ILA is led by President Harold Daggett.

What is the United States Maritime Alliance, the organization representing employers of dockworkers?

USMX is a nonprofit, incorporated membership association that represents employers of the East and Gulf Coast longshore industry. According to the organization’s website, membership consists of container carriers, all major marine terminal operators and port associations at ports on the East and Gulf coasts.

USMX is headquartered in Lyndhurst, New Jersey, and is led by CEO David Adam.

What is the estimated impact of this strike on the broader U.S. economy?

Reuters reported that the strike could cost the U.S. as much as $5 billion per day. Analysts have speculated that the strike could interrupt billions of dollars of imported goods at East and Gulf Coast ports, from cars and light trucks to electronics to food, clothing, jewelry, and agricultural products.

The strike could also negatively impact businesses going into the busy holiday shopping season, though retailers have accelerated imports in recent months to prepare for this.

Further reading on this question is available here.

Should consumers expect supply chain scarcity? (Is it time to stockpile toilet paper?)

For the moment, it is uncertain how the strike will affect the supply chain of areas impacted. 

New York Gov. Kathy Hochul warned constituents Monday against panic-buying groceries. Despite calls for calm, there have been reports of worried shoppers cleaning out grocery store shelves in multiple states.

As for the toilet paper question, a North Carolina State College of Natural Resources study stated that more than 99% of the tissue products used by Americans are produced in the U.S.

“People need to calm down and stop buying more than what they need to allow inventories to remain stable,” said Ronalds Gonzalez, an associate professor in the Department of Forest Biomaterials at North Carolina State, in the study.

What is government doing about the strike?

President Joe Biden has said he will not invoke the Taft-Hartley Act to order union members back to work. In a statement from the White House on Tuesday, Biden called for ocean carriers to increase dockworker wages.

Thus far, the president appears to continue a display of solidarity with the ILA, leaving it to the union and USMX to reach a compromise.

How long is the strike expected to last?

Short answer: No one knows.

The ILA rejected USMX’s most recent contract offer of a 50% pay increase over six years on Wednesday. The union appears to be committed to seeking more concessions from USMX, including a stop on automating dockworker jobs.

If history is anything to go by, the last time the ILA went on strike in 1977 saw East and Gulf Coast supply chains halted for weeks. According to a North Jersey report, Will Brucher, a labor historian at Rutgers University in New Brunswick, said the ILA port strike of 1977 lasted 44 days.

Strong Class 8 orders beat seasonal expectations

Strong Class 8 orders beat seasonal expectations

Class 8 preliminary truck orders roared back to life as OEMs’ 2025 order books opened up, according to recent data from both ACT Research and FTR Transportation Intelligence. ACT reported that September saw 37,100 initial orders, double the number compared to August and up 0.3% year over year. Kenny Vieth, president and senior analyst at ACT Research, noted the Class 8 order jump was “well above trend and seasonally elevated expectations in September.”  Compared to August, seasonally adjusted Class 8 orders jumped 92% to 35,200 units.

Rival firm FTR Transportation Intelligence reported an increase of 107% m/m compared to August, with September reaching 30,000 Class 8 net orders. The report noted the figure is in line with seasonal expectations when looking back at seven years’ worth of data, which saw the average September order level at 32,170 units. The report adds, “Given the current stagnation in the truck freight market from a volume and rate perspective, this is a very balanced order number and suggests an initial, healthy level of demand for new trucks in 2025 as September is typically the opening of order boards for the following year.”

Dan Moyer, senior analyst for commercial vehicles at FTR, said in the report that despite the freight market being stagnant, demand remains as fleets continue investing in newer equipment at replacement levels. Excess Class 8 inventory continues to be a development to watch. Moyer adds, “With inventory remaining near record levels, we also expect further downward pressure on build rates through the end of 2024.”

LMI reaches highest level of expansion since September 2022

(Source: Logistics Managers’ Index)

On Tuesday, the Logistics Managers’ Index released its September report, which saw its overall index increase for the 10th consecutive month to its highest level since September 2022. The LMI’s overall index rose 2.2 points from an August reading of 56.4 to 58.6 in September. One positive trend impacting the overall average was a continuation of August inventory levels into September. The report said, “We saw a continuation of August’s trends in September as Inventory Levels increased (+4.1) to 59.8. This is largely driven by the long-expected restocking of Downstream retailers. After several months of contraction, Downstream respondents are reporting expansion for Inventory Levels at a rate of 55.7.”

Regarding the East and Gulf Coast port strikes, the report cautioned that a prolonged work stoppage could have a meaningfully negative impact on capacity. The report highlighted a recent example where an imbalance of freight capacity relative to demand caused a massive boost in transportation prices in 2021. Prolonged port strikes have the potential to create a disproportionate demand for capacity as goods are rerouted to West Coast ports, potentially taking capacity out of other areas in the country and driving up prices.

The report adds, “It is likely that a prolonged strike would push us back towards that imbalance, artificially depressing available Transportation Capacity and inflating Transportation Prices across the country. This price growth is due to demand and not costs.”

Market update: August For-Hire Trucking Index – volumes rise, capacity still abundant

ACT Research recently released its September For-Hire Trucking Index, which saw higher volumes in August from growing goods demand and increases in inventories. The survey uses a diffusion index, with a reading above 50 showing growth, while below 50 shows degradation. The Volume Index saw a 4.8-point increase from 49.7 in July to 54.5 in August.

The report notes: “Consumption of durable goods rose 4.2% q/q SAAR in Q2, imports and inventories are growing, and cross-border shipments are increasing. Though, pre-positioning ahead of potential east coast port strikes is part of the story.”

ACT’s Capacity Index fell 1.1 points m/m from 47.6 in July to 4.6 in August. This is the 14th consecutive month that ACT’s capacity has declined, the longest streak since the survey’s inception in 2009. Private fleets adding capacity continues to cause added pressure on for-hire fleets and their capacity.

The report adds, “Overall, the supply-demand between fleets and capacity looks set to gradually begin to rebalance. As for-hire conditions have yet to pick up much, it’s hard to see capacity turning positive in the coming months, especially as for-hire fleet purchasing intentions remain under pressure.”

Driver availability remains elevated, with August marking the 27th month in a row the index has shown an expansion over 50 points. August saw an increase of 55.4 points compared to 53.1 points in July. The report said, “Driver availability remains persistently elevated and far from a shortage, partly supported by older drivers sticking around to help with higher living costs, and partly by the rise in migration in the past few years.”

FreightWaves SONAR spotlight: Outbound tender rejection rates muted as port strike begins

(Source: FreightWaves SONAR)

Summary: Nationwide outbound tender rejection rates remain depressed as the impacts from a major hurricane and East and Gulf Coast port strike begin to be felt. OTRI fell 17 basis points week over week from 4.72% on Sept. 23 to 4.55%. In contrast, the dry van segment continues to underperform the combined average but posted a 1-bp w/w gain from 4.39% to 4.4%. Lower tender rejection rates appear to be one impact on nationwide dry van spot market rates, which remain depressed but saw a 1-cent-per mile all-in w/w gain from $2.20 on Sept. 23 to $2.21. 

Supply chain disruptions and their impacts on contracted tendered freight volumes will be a key concern for truckload carriers in the coming days to weeks. While parts of Tennessee, the Carolinas and Florida work through Hurricane Helene damage, East and Gulf Coast labor strikes and the resulting work stoppage pose a major risk to freight volumes if a settlement cannot be reached quickly.

The waterfall theory of freight, in which a shipper tenders loads to a primary incumbent carrier or further down the routing guide, dries up in the absence of load tenders. Beginning with port drayage volumes, a strike lasting days into weeks can move upstream to warehouses those drayage carriers deliver into. No drayage deliveries means no transloading into 53-foot dry van or 53-foot rail containers, robbing both segments of committed volumes at a time when capacity remains abundant. The worst-case scenario would be large for-hire and private fleets, starved of committed tender volumes, moving their capacity on the spot market, undercutting smaller fleets, owner-operators and the freight brokerages that attempt to solicit for them.

For carriers and freight brokerages exposed to shippers who are impacted by the strike, finding solutions to a sudden drop in committed freight volumes may result in soliciting current and former customers to offset for missing volumes.

Closures continue on I-40 and I-26 in North Carolina, I-40 in Tennessee (FreightWaves)

Trucking firm exits inch closer to equilibrium (Trucking Dive)

J.B. Hunt, UP.Labs create FreightTech lab (FreightWaves)

Truckstop spot rates shifted ‘as expected’ last week, FTR says (The Trucker)

‘Down for the foreseeable future’: Truckers grapple with Hurricane Helene’s aftermath (Trucking Dive)
Freight market green shoots fade heading into October (FreightWaves)

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Union chief says he has received death threats during dock strike

Image shows striking dockworkers holding signs with containers in background.

As the East and Gulf Coast port strike entered its third day, the International Longshoremen’s Association said its leader has received death threats. Meanwhile, hundreds of trade groups implored President Joe Biden to intervene in the dockside work stoppage.

The first strike in nearly 50 years by 45,000 members of the ILA has shut down container handling at 14 ports from Texas to New England. 

After Biden on Tuesday backed the union, ILA President and chief negotiator Harold Daggett said his members would accept nothing less than a $5 increase in hourly pay. Shipping lines and marine terminal operators had offered $3 or a 50% bump over the six years of the most recent contract but later said they would not negotiate under such a pre-condition.

No new bargaining was scheduled.

Amid reports of panic-buying and the devastation wrought by Hurricane Helene, Daggett and other union officials have received death threats and been harassed, according to a statement posted on the ILA website.

“In telephone calls made to the staff of the International Longshoremen’s Association, and to countless ILA Locals up and down the coast, President Daggett and other ILA top officers have received vicious death threats and other forms of intimidation,” the statement said.

In Washington a coalition of trade groups on Wednesday called on Biden to reopen the ports and appoint a federal mediator to help negotiate a new longshore contract.

The National Retail Federation and 272 trade organizations representing importers and exporters, farmers, manufacturers, retailers, and logistics providers said a prolonged strike would cost the U.S. economy billions of dollars each day.

“Given the dire situation and the massive negative ramifications for our industries and the economy, we implore you to take immediate action to resolve this situation expeditiously,” the group said in a statement.

Find more articles by Stuart Chirls here.

Related coverage:

Biden scolds ocean carriers for not paying dockworkers ‘fair’ wages

What shippers need to know about the port strike and cargo insurance

Analysis: Port poker and the East Coast port strike

GlobalX Airlines to open cargo lane between Chicago, Puerto Rico

Close up, right-side view of GlobalX Cargo plane with blue lettering on a sunny day with white clouds above.

Startup carrier Global Crossing Airlines has struck a unique partnership with a digital freight exchange to launch cargo service between Chicago and Puerto Rico, filling a market need for direct, affordable containerized transport while providing the airline’s fledgling cargo business a welcome jolt.

Under a deal announced last week, Airblox, a startup airfreight capacity wholesaler for medium-term contracts, will have primary responsibility for feeding shipments to Global Grossing Airlines (OTCQB: JETMF) and sustaining the route. GlobalX, as the airline is also called, said it will fly an Airbus A321 converted freighter three times per week between Chicago O’Hare International Airport and San Juan, beginning Oct. 10.

The service will be exclusively available to freight forwarders through the Airblox platform, which is essentially operating as marketing partner for Global Crossing.

Global Crossing, a fast-growing passenger charter operator based in Miami, operates 18 A320-family aircraft, including four A321 used jets converted to freighter configuration. It has struggled to grow cargo business since entering that market in mid-2023 because of lukewarm regional freight demand, overcapacity in narrowbody freighter segment and greater customer familiarity in North America with the incumbent Boeing 737-800 converted freighter.

Industry sectors that are keen on easy, consistent airfreight access to Puerto Rico include automotive parts, pharmaceuticals and medical supplies.

“Our customers have told us that there is an opportunity in the market. There is no widebody capacity for skidded cargo. There’s no freighter capacity between San Juan and Chicago, particularly for express service. Everything flows through Cincinnati [DHL hub] or Miami,” and trucking in the winter can take several days, said Airblox board member Neel Jones Shah in a phone interview. “There’s a lot of demand in the Midwest, going into Puerto Rico and coming out of Puerto Rico to the Midwest. Hopefully we’ll have this airplane sold out very soon, then we’ll be able to add even more flights.”

Chicago also opens the door for expanded trade between Puerto Rico and the rest of the world because GlobalX can arrange interline cargo transfers with other airlines at O’Hare airport, a major gateway for international flights.

Three-quarters of U.S.-made pharmaceutical products are exported out of Puerto Rico, and drug companies have major R&D and production sites in the Midwest. Indianapolis, for example, is a large pharmaceutical hub and only two and a half hours from Chicago by truck. Abbott Laboratories is headquartered in Illinois.

Rotate Group, an air cargo consultancy, forecasts a 24% year-over-year increase in Puerto Rico’s life sciences exports during the next three years, highlighted by 30% annual gains in temperature-controlled medicines. Exports of medical devices are projected to grow 14% on an annual basis.

Health care exports are up 8% from a year ago, according to Rotate tracking data of movements to and from the island.

“There’s a lot of recurring traffic in this market. It’s a market where people are sending medical components down to be assembled into final goods, day in and day out, or they’re sending automotive parts, or forklift parts, because there’s automotive factories and Toyota has a big forklift factory in Puerto Rico,” explained Jones Shah, a veteran air cargo executive who recently left logistics provider Flexport after more than seven years as global head of airfreight and chief customer officer. “A lot of people in this lane segment need regular, reliable capacity, right, where they can get one-to-three-day transit times depending on the day of week the freight is ready.”

Initial plans are to operate the flights through the end of the year and to continue service if demand is sustainable.

GlobalX and Airblox also hope to attract businesses from freight forwarders that handle household goods shipments, which the Transportation Security Administration restricts from passenger flights because cargo owners are unknown shippers, he said.   

How Airblox works

Chicago-based entrepreneur Edip Petkas launched Airblox in 2022 as an electronic marketplace with a fintech overlay where airlines can sell future blocks of cargo space, or even entire aircraft, to freight forwarders that need stable, reliable capacity on a consistent basis for certain customers. The system also allows logistics companies to seamlessly tap into a lender network to finance any transportation purchases, as well as insurance.

The Airblox platform is geared to small and medium businesses looking to lock in prices for shipments 30 to 120 days before departure and that don’t have the scale or relationships to access the contract market. Those companies are typically relegated to the highly transactional spot market, where bookings are traditionally made within seven days of a flight departure and rates can be volatile. 

Airblox runs forwarders’ historical data through its algorithms to look for patterns on where they ship the most via the spot market and recommends how they can aggregate loads with other intermediaries on certain routes to make a unified offer on future capacity. Airlines benefit from the certainty of advance bookings and the fact that medium-term pricing typically provides better yields than long-term contracts. Capacity is traded in a blockchain infrastructure to secure transactions.

Larger forwarders can electronically bid on their own for blocks of cargo capacity on single or multiple lanes. Carriers sharing bulk capacity on Airblox include National Airlines, Avianca, Norse Atlantic, Cargojet and Coyne Airways. 

Global Crossing waits for cargo pickup

GlobalX entered revenue service three years ago with A320-family passenger jets providing charter flights for airlines, cruise lines, casinos, sports teams, concert tours, and hotel and resort destinations. 

The company saw second-quarter revenue increase 83% to $57.5 million thanks to a 29% increase in passenger aircraft utilization and several contracts that were renegotiated at higher rates. Earnings before interest, taxes, depreciation, amortization and rent, a way to measure operational performance by removing variable lease costs for aircraft, increased from $500,000 to $18.7 million year over year. The airline turned a small net profit of $300,000 compared to a $7.5 million loss the prior year. During the summer, GlobalX began operating passenger flights for the U.S. Department of Defense and was awarded a five-year subcontract to support U.S. Immigration and Customs Enforcement’s deportation of illegal migrants.

GlobalX originally planned to have 15 A321 passenger-to-freighter aircraft by 2026 but early this year paused expansion of the freighter fleet because of challenges attracting new customers so it could focus on lucrative passenger flying. It is the only U.S. airline so far to operate the A321 converted freighter, which has a larger payload capacity than the 737-800 and is cheaper to operate than older Boeing 757s.

Cargo utilization fell 73%, from 613 hours to 161 hours, per aircraft during the second quarter, partly due to the loss of a U.S. Postal Service contract, which is shifting more parcel volume to trucking. To minimize financial exposure, GlobalX said it canceled two aircraft deliveries and deferred two others from lessors by taking them as passenger aircraft instead of moving ahead with cargo modifications.

The airline will consider exercising options for cargo conversions when demand picks up, President and Chief Financial Officer Ryan Goepel told FreightWaves.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Twitter: @ericreports / LinkedIn: Eric Kulisch / ekulisch@www.freightwaves.com

GlobalX Airlines delivers Haiti relief supplies after airport reopens

Global Crossing Airlines changes CEO, cargo direction

Flexport to reduce workforce by 2% amid company shift

Flexport, a global supply chain solutions provider, is reducing its headcount by 2% as part of a reorganization aimed at helping the company drive profitability.

“We have strategically reorganized our Omnichannel business to further integrate our forwarding and fulfillment teams, a natural next step following our acquisition of Shopify Logistics 16 months ago,” a Flexport spokesperson told FreightWaves.

Last year, Flexport acquired e-commerce giant Shopify’s logistics arm, marking the company’s expansion into e-commerce fulfillment and last-mile delivery. In January, Flexport secured a $260 million investment from Shopify aimed at providing a boost during a challenging period in the freight economy.

“Integrating these teams created redundancies that allowed us to reduce our overall company headcount by about 2%,” the Flexport spokesperson said. “We continue to sharpen our focus on larger customers and drive down operating costs, giving us the ability to profitability scale our business and create value for both our customers and Flexport. We have made great progress towards our growth and profitability goals in 2024, and the reorganization will enable our teams to leverage Flexport’s full suite of logistics capabilities to solve customer problems and help them grow.”

In a memo sent to staff members Wednesday, Flexport CEO Ryan Petersen said the company still had work to do to hit its growth and profitability goals and needed to “move faster to get there.”

“These changes will increase our velocity in that direction, and set us up for a successful next few years of profitable growth,” according to an internal memo first seen by The Information.

A number of Flexport employees went on social media Wednesday to announce they were part of the latest round of layoffs.

“Well, my time at Flexport has ended due to another round of layoffs. Looking for a new role to thrive in and a company to grow with,” William Grant, who worked as a materials procurement analyst at Flexport, posted on LinkedIn.

Patrick Demian, a Flexport senior software engineer, also posted on LinkedIn, “What a long strange trip it’s been. Starting at Deliverr Inc., then being acquired by Shopify, then re-acquired by Flexport, then multiple rounds of layoffs. The latest one finally got me out, but not out for the count.”

Flexport was founded in 2013 by Petersen and is based in San Francisco. Since its founding, Flexport has raised $2.35 billion in capital and has been valued at as much as $8 billion by venture capitalists.

The latest round of job cuts is the fourth over the last two years for a company that at one time had 3,200 employees. In January, Flexport reduced its workforce by 20%, about 500 employees. 

In January and October 2023, the company had two rounds of layoffs totaling 1,300 workers. In September 2023, Flexport’s board dismissed CEO Dave Clark.