Florida ports prepare for Milton as it becomes Category 5 hurricane
Tampa’s port is bracing for Hurricane Milton as the Category 5 storm rapidly strengthens as it barrels toward the state.
Port Tampa Bay said Sunday afternoon that it was monitoring the storm and working with local and state partners. The port has initiated its weather advisory group to monitor impacts to the port and its waterways.
Milton is expected to bring heavy rains to Florida from Monday through Wednesday night. Forecasters predict 5 to 10 inches of rain will be dumped on portions of the Florida
Peninsula and the Keys, with some areas seeing 15 inches. The rain is forecast to cause considerable flooding, the National Hurricane Center said.
The hurricane center called Milton’s intensification “remarkable” and said the storm developed into a Category 5 Monday afternoon. Some weakening is expected before it reaches the Florida Gulf Coast, but it will still make landfall as a life-threatening hurricane.
Meteorologists are forecasting up to 12 feet of storm surge into Tampa Bay — the highest ever — if the storm’s center hits near the city.
President Joe Biden on Monday approved an emergency declaration for Florida, which will allow assistance from the Federal Emergency Management Agency.
The U.S. Coast Guard on Sunday said the port could see gale-force winds within 48 hours. Operations were continuing as normal on Monday.
“Port Tampa Bay is doing all it can to prepare for Hurricane Milton, and to ensure safety of life, protection of the environment, and maritime commerce resiliency,” the port said in a statement.
The port expects cruises to be impacted.
Tampa International Airport will suspend operations at 9 a.m. Tuesday ahead of the storm. The Peter O. Knight, Tampa Executive and Plant City airports will also close.
Port Panama City, Seaport Manatee, Port St. Pete, the Jacksonville Port Authority and Port Canaveral were expecting gale-force winds but remained open Monday.
Milton is expected to have a significant impact on the aerospace, life sciences, general manufacturing, oil and gas, and freight industries, supply chain data monitoring company Resilinc reported.
Offshore natural gas and oil platforms will be impacted by the storm, said Jon Davis, chief meteorologist at Everstream Analytics, a supply chain risk analytics company.
The most vulnerable agricultural area will be the citrus belt, where early harvest has just started. Damage to trees can have impacts felt for years, Davis said.
The storm will have a moderate impact on supply chain hubs in Miami and Jacksonville, Florida, and Savannah, Georgia, he said.
Mandatory evacuation orders were already in effect Monday for Charlotte and Hillsborough counties.
The Tampa Bay weather service urged residents to spend the next two days completing their hurricane preparations.
What a fleet or driver should expect running FEMA loads
This article was originally published on www.freightwaves.com in 2017 in reaction to Hurricane Harvey. FreightWaves continues to receive questions regarding relief loads, so we are republishing it to help answer some of those questions.
I started Xpress Direct in 2002 and ran the operation until 2005. I have not worked for a trucking company in over a decade, as I have chosen a new path as CEO and Founder of FreightWaves, but I wanted to share my story. — Craig Fuller, CEO of FreightWaves
On Friday, I posted an article on FreightWaves about my personal experience running the on-demand emergency unit of US Xpress. Over the course of four-years of major hurricane activity, my division handled in excess of 20,000 shipments and billed over $100M in revenue in disaster relief loads alone (we had a much larger on-demand business- but disaster relief was significant for us). We happened to be involved in one of the first projects that ever used commercial contractors for logistics and experienced first-hand how challenging FEMA logistics can be.
Over the years, we became pretty good at understanding how to manage these projects and built systems and trained our staff to be prepared for it. We had a team that coordinated activity in Chattanooga in our hurricane “war-room” and would fly a group of on-site folks out to the relief sites to manage activity. While the work was challenging, we knew that we were doing something important. Over the years, we learned a few important things. I have tried to make note of these items below.
Things to keep in mind:
1. There will be thousands of loads, if not more. In our first project, we handled over 600 loads for Hurricane Isabel. This was not a huge hurricane and didn’t match the size of the Florida Four or Katrina. Some states are better prepared than others. Florida is world-class. I suspect Texas is also better prepared than most. The damage that Harvey inflicted on Texas will be massive and will take months to clean up. Expect truck demand to last for months and more than 10,000 loads.
2. You will sit. When you get to the relief site, no one will have a clue what to do with you or be able to tell you where to go. Expect that there will be hundreds of other trucks waiting around with you for further instructions. The issue is that any decision requires the coordination of local, state, and Federal officials before any freight can be delivered. We had to get sign off from seven different agencies before delivering the first load, this is slow and painful. You will be dealing with government officials, many of which are not familiar with logistics and don’t understand what it takes to handle such projects. Also, considering the fact that the last major hurricane to hit the US was over twelve years ago, it is likely that few of the folks on the ground will have any clue what to do. They will be learning on the job.
3. Make sure you get a daily detention rate built into your confirmation sheets. FEMA pays detention. If you can prove you were invovled in the project, you should get paid. In my day, it was around $50/hour, but I am not sure what the going rate is today.
4. Get everything in writing. Yep. Don’t take anyone at their word. Even the biggest and best brokers are dealing with hundreds to thousands of orders and will forget what they promised you. Because of the way that the government pays- its in their interest to get you paid (since it is cost plus), so document the hell out of everything and it put in writing and agreed to by the broker.
5. If you take a load from a broker, expect the payment to be very very slow. This is not because the brokers are trying to screw you (although it does happen); it is more likely because they are required to send in paperwork and document everything that took place. Many of these brokers have never seen the types of volumes on a single order, so most of them are unprepared. If you work with the companies that are larger this should be less painful, but even they are slammed. An easy solution is to use a trucking payment service like Triumph. Chad Boblett of the Facebook group Rate per mile Masters can coordinate the process for getting setup. Check out his Facebook group or go to RPM Quickpay on the web. Even if you don’t want to use a factoring service for most of your freight, I strongly recommend doing it in this case. Plus, Triumph or a factoring company can tell you which brokers are shady and which ones are legit.
6. Brokers get paid cost plus. Keep this in mind when dealing with a broker. Insist on getting paid for all your work. Chances are the broker will be billing detention and other accessorials and since you are doing the hardwork; make sure you get paid. In our days, we were required to document everthing that happened. We got paid for deadhead, detention, linehaul, and other accessorials, but we had to document it. Using ELD data we were able to show how many miles we were on duty, where we repositioned trucks from/to, and how many hours our trucks were involved. We used ELD data to document it and it worked well.
7. Stay tuned or subscribe to FreightWaves for updates. FreightWaves has the most complete coverage of the freight market.
8. Expect cell service to suck. Yep. The hurricane will likely knock out or overpower both the grid and the cell towers. You might have to resort to CB radio for a period of time.
9. Most of all: be safe. Do not attempt to drive when conditions are unsafe. A load of bottled water is not worth your life. There will be thousands of more loads on-site.
After posting the article, here were comments from driver Steve Lapp:
Great info, but from a driver’s perspective working almost every hurricane relief effort since Hugo in 1989, I would add a few things:
Stop somewhere outside the emergency zone and stock up on canned or dried food and at least 2 cases of bottled water and plenty of Wal-Mart bags for emergency toilets.
There may be NO restaurants or even convenience or grocery stores open for weeks. Fill your tanks up about 150-200 miles out, there may be no fuel for days.
Bring something to pass the time, books or games are good, there may be no cell service or TV signals for weeks. Have a satellite GPS, no cell service = no phone based GPS and street signs and landmarks may be non existent.
Buy a heavy duty tire plug kit and an air hose that connects to your glad hands, nothing worse than having a flat 50 miles from nowhere with NO cell OR landline service. Finally, bring LOTS of patience!
Hurricane relief is the biggest dog and pony show you will ever see in trucking. But there is a certain satisfaction in being able to help people who are suffering.
Pallets of supplies ranging from generators, bottled water, to MREs.
What is ‘the Waffle House Index’?
Editor’s note: This story originally appeared on FreightWaves in 2022.
Catastrophic storm surges, wind and rainfall threaten the safety of Florida residents in the path of a hurricane — but will Waffle Houses remain open?
For many Southerners, Waffle House serves as a rite of passage for hot-served breakfast. No matter the time or weather, there’s a good chance your nearest location is still open. Aside from Waffle House’s cult following, it’s also gained attention from the federal government, specifically, the Federal Emergency Management Agency (FEMA).
Given that closed Waffle House locations are such a rare sight, the federal government has taken notice of how the breakfast chain operates in post-emergency conditions.
Former FEMA Administrator Craig Fugate coined the phrase “the Waffle House Index” — an informal metric used to approximate the scale of assistance required for disaster recovery, according to FEMA.
According to FEMA, local businesses play an important role in post-emergency recovery.
“If stores can open, people can go back to work. If people can go back to work, they can return to at least one piece of a normal life — and that little piece of normalcy can make a big difference,” FEMA said in a statement.
The consistent accuracy of the index is due in part to the sheer number of locations across the South. In Georgia, where the chain is based, you’re never too far from the nearest Waffle House, given its 435 locations — some within eyesight of each other.
A Waffle House spokesperson told FreightWaves company leaders were unavailable for comment.
“Given the situation on the ground now, many of [our senior leaders] are heading to the area. … Our focus needs to be on our people and the communities we serve,” said Njeri Boss, vice president of public relations.
However, Boss confirmed that 21 locations in Florida have already closed due to the storm.
“These are in the predicted path of the storm and/or are in low-lying areas where significant storm impact is expected,” she said.
While it’s rare for a Waffle House to close, many locations across the South were forced to lock their doors at the height of the COVID-19 pandemic, due to emergency restrictions and staff shortages.
In 2017, Hurricane Irma forced 157 locations to close their doors, according to Atlanta Magazine. To date, this is the record for closures due to weather conditions.
The chain has taken on the responsibility of serving food when no one else can. The restaurant employs “Jump Teams” that spring into action after a storm.
“They are volunteers who are transported to the affected location, whether that is by vehicle or plane,” Boss said. “They often travel with needed supplies and are sent to assist the local employees to handle potentially larger-than-usual numbers of customers after a storm passes.”
Chorus of investors calling on Forward Air to consider a sale grows
This story has been updated to include a statement from Forward Air.
Alternative asset manager Alta Fox has called on the beleaguered board of Forward Air to engage in a formal sales process following the company’s contested merger with Omni Logistics earlier this year. Alta Fox joins other Forward shareholders in suggesting the best path for the company is to seek new ownership and management.
Clearlake Capital, which holds a 14% equity interest in Forward (NASDAQ: FWRD), flipped from a passive investor to an activist investor in August, saying it may call on the company to review strategic options. Other investors like Irenic Capital and Ancora Advisors, which collectively hold 7% of the company’s equity, have pushed for similar change in recent months.
Alta Fox has a 3% stake in Forward.
“Do not confuse our stake as a vote of confidence in the Company’s Board and leadership. On the contrary, we view your disastrous track record of ignoring shareholders’ views as abhorrent,” a Monday letter to Forward’s board stated. “However, you have an opportunity now to do the right thing by listening to resounding investor feedback and executing a formal sales process that maximizes value for all shareholders.”
The letter said that in addition to roughly 25% of the company’s holders publicly calling for a change, other private equity firms holding Forward’s shares underscore “external confidence in a sale scenario.”
Shares of FWRD fell roughly 90% from the time the deal was announced in August 2023 to a May 2024 nadir of $11.21 per share. The stock has rallied to $36.76 (Monday at 10:50 a.m. EDT) since, but much of the move has been tied to speculation that the company could be purchased at a premium to its current price.
Forward has revamped its leadership team, made changes to the board and refocused on the revenue and cost synergies it says its new platform will deliver. However, the changes don’t appear to be enough to quell investor concerns.
“Let’s be clear: the debacle of the Omni Logistics LLC acquisition was a failure of your leadership,” Monday’s letter said. “Replacing the CEO and tinkering with Board composition does not absolve the majority of you who stood by while shareholder value has been destroyed.
“Your misguided capital allocation and reckless oversight have caused irreparable damage to Forward Air. Do not compound your failures by continuing to ignore your shareholders and risk further tarnishing your credibility as public company directors – even after this saga concludes.”
The letter said a sale could “unlock the Company’s full potential” and “help reverse damage” caused by the acquisition.
Shares of FWRD were up 3.9% at 10:50 a.m. EDT on Monday compared to the S&P 500, which was off 0.3%.
Forward Air issued a statement regarding the matter after the market closed on Monday.
“The Forward Air Board of Directors and management acknowledge and value the perspectives of the Company’s shareholders,” the statement read. “The Company has recently undergone a significant transformation, including substantially refreshing its Board and management team, and is focused on continuing to provide industry leading service and executing its strategic plan with a renewed sense of continuous improvement, transparency and accountability.
“The refreshed Board and management team are actively analyzing the business and strategy to ensure the Company pursues the best path forward to enhance shareholder value.”
Dockworkers are back on the job at ports across the East and Gulf coasts, but their union warned that major issues involving automation remain to be negotiated before an extension of the current contract expires early in 2025.
Major terminals were open Sunday to help get container handling restarted after the three-day strike by 45,000 members of the International Longshoremen’s Association (ILA) brought import cargo to a halt and forced dozens of ships to wait at anchor outside marine gateways from New England to Texas.
As much as 1 million twenty-foot equivalent units’ worth of cargo likely would have been stuck outside the ports if the strike had lasted as long as one week.
The ILA suspended its work stoppage late Thursday after tentatively agreeing to a 62% pay raise with port employers represented by the United States Maritime Alliance (USMX). Working with the assistance of Biden administration officials, the sides also agreed to extend the most recent master contract through Jan. 15 and return to bargaining on a new six-year pact. At issue are benefits, container royalties and an insistence by the union that automation technology be barred from 14 container handling centers across 36 ports.
“While securing a substantial wage increase is an important part of the contract, we must also protect our historical work jurisdiction [over specific jobs] and prevent automation from replacing jobs,” President Harold Daggett said in a message to members posted on the union website.
Terminal operators and shipping lines of the USMX have said they are in agreement with the union on technology issues.
Ratification of a new contract by the ILA rank and file is not a certainty; 33,000 workers now on strike at Boeing in September rejected a tentative agreement with the largest U.S. aerospace company.
This week’s FreightWaves Supply Chain Pricing Power Index: 35 (Shippers)
Last week’s FreightWaves Supply Chain Pricing Power Index: 35 (Shippers)
Three-month FreightWaves Supply Chain Pricing Power Index Outlook: 40 (Shippers)
The FreightWaves Supply Chain Pricing Power Index uses the analytics and data in FreightWavesSONAR to analyze the market and estimate the negotiating power for rates between shippers and carriers.
This week’s Pricing Power Index is based on the following indicators:
Tender volumes remain under pressure
The International Longshoremen’s Association strike was shorter than many anticipated, lasting just three days, when some of the largest retailers were expecting the terminal closures to last at least a week. Now, even though the strike was shorter than many expected, volume levels across domestic modes were lower to start October.
SONAR: Outbound Tender Volume Index — Seasonality View: 2024 (white) and 2023 (blue) To learn more about FreightWaves SONAR,click here.
The Outbound Tender Volume Index (OTVI), a measure of national freight demand that tracks shippers’ requests for trucking capacity, is down 0.43% week over week, the third consecutive weekly decline. The OTVI turned negative year over year to start the month but has since turned positive again. At present, the OTVI is 3.63% higher year over year.
SONAR: Contract Load Accepted Volume – Seasonality View: 2024 (white) and 2023 (blue) To learn more about FreightWaves SONAR,click here.
Contract Load Accepted Volume (CLAV) is an index that measures accepted load volumes moving under contracted agreements. In short, it is similar to OTVI but without the rejected tenders. Looking at accepted tender volumes, we see a decrease of 1.02% w/w. The larger decrease than the overall OTVI is driven by tender rejection rates moving higher over the past week.
Bank of America’s recent credit and debit card spending report shows that spending is barely higher in September. In the most recent report, for the week ending Sept. 28, total card spending was up 0.3% year over year. Spending across the discretionary categories was lower, significantly so when looking at online electronics and furniture, which fell 13% and 7% y/y, respectively.
SONAR: Outbound Tender Volume Index – Weekly Change To learn more about FreightWaves SONAR, click here.
As the overall market continues to see volume levels retreat from the Labor Day highs, the vast majority of the markets in the country are reporting lower volumes on a week-over-week basis. Of the 135 freight markets tracked within FreightWaves SONAR, 59 experienced higher volumes compared to last week, down from 63 in the week prior.
The markets that are experiencing volume growth have largely been the smaller freight markets, so any uptick in volume looks more significant than it is to the overall market. This week, there is an exception to that growth story, though. The Joliet, Illinois, market, which neighbors Chicago and is one of the largest markets in the country, saw volumes grow by 4.79% w/w.
In the port markets directly affected by the ILA strike, volumes largely fell. In Houston, outbound volumes fell by 4.61% w/w. In Elizabeth, New Jersey, volumes dropped by 13.52% w/w. In Baltimore, volumes were down 8.74%. With the terminals reopening Friday and port workers returning to work, it will help return volume to these markets, but it will take time to clear the queues that were starting to build, so it could be a longer build back than an immediate turning on of the faucet.
SONAR: Van Outbound Tender Volume Index (white, right axis) and Reefer Outbound Tender Volume Index (green, left axis) To learn more about FreightWaves SONAR, click here.
By mode: The dry van market experienced continued slowdown in volumes over the past week. The Van Outbound Tender Volume Index fell by 0.54% over the past week. With the move lower over the past week, dry van volumes are now lower on a year-over-year basis, currently down 0.2%.
The reefer market saw volumes continue to move significantly lower over the past week, falling to the lowest levels since late May. The Reefer Outbound Tender Volume Index fell by 3.85%, one of the most severe weekly declines outside of the holiday-affected weeks. After briefly turning positive y/y at the end of September, reefer volumes are now 2.14% lower y/y.
Rejection rates now higher than they were around Labor Day
The strike impacts on capacity have been minimal, but rejection rates have moved higher this week after ending September on a sour note. Even with the movement higher, rejection rates remain below 5%. The slight volatility this week was a positive sign for the market, hopefully setting the stage for some positive signs in the back half of the fourth quarter.
SONAR: Outbound Tender Reject Index – Seasonality View: 2024 (white), 2023 (blue) and 2019 (orange) To learn more about FreightWaves SONAR, click here.
Over the past week, the Outbound Tender Reject Index (OTRI), a measure of relative capacity, increased by 56 basis points to 4.96%, reversing course and moving higher than Labor Day levels. The OTRI is now 45 basis points above last year’s levels, a signal that while it doesn’t feel tighter because rejection rates are still below 5%, rejection rates are higher in aggregate. Rejection rates are moving back toward 2019 levels, now just 34 basis points below where they were at this time in 2019, compared to the 82 bps below 2019 they were this time last week.
SONAR: Outbound Tender Reject Index – Weekly change To learn more about FreightWaves SONAR, click here.
The map above shows the Outbound Tender Reject Index — Weekly Change for the 135 markets across the country. Markets shaded in blue are those where tender rejection rates have increased over the past week, whereas those in red have seen rejection rates decline. The bolder the color, the more significant the change.
Of the 135 markets, just 78 reported higher rejection rates over the past week, a significant increase from 40 in last week’s report.
The largest increases in the country continue to be the smaller freight markets by outbound volumes, including Bismarck and Fargo, North Dakota, where rejection rates increased by 1,208 bps and 800 bps, respectively. Given the size of the freight market, these increases aren’t that impactful to the overall freight market.
The most significant changes in rejection rates are happening in larger markets like Chicago and Atlanta. Over the past week, rejection rates in Atlanta have increased by 76 bps, but the overall rejection rate in the market remains depressed at 3.6%. In Chicago, tender rejection rates increased by 89 bps over the past week, eclipsing the 5% level at 5.08%.
SONAR: Van Outbound Tender Reject Index (white), Reefer Outbound Tender Reject Index (green) and Flatbed Outbound Tender Reject Index (orange) To learn more about FreightWaves SONAR, click here.
By mode: All of the equipment types in the truckload market saw rejection rates move higher this week. The dry van market experienced the smallest increase in rejection rates of the various equipment types, which makes sense given it is the largest equipment type. The Van Outbound Tender Reject Index rose 55 basis points over the past week to 4.74%, up 30 bps from this time last year.
The reefer market has seen rejection rates climb back above the 10% level, an important level for the overall market. Over the past week, the Reefer Outbound Tender Reject Index increased by 169 bps to 10.72%. Reefer rejection rates are 320 basis points above where they were this time last year.
The flatbed market continues to shake off the challenging summer months as rejection rates have moved higher overall since the announcement of the initial interest rate cut. Additionally, the damage in the Southeast caused by Hurricane Helene will create more project freight opportunities as communities start rebuilding. The Flatbed Outbound Tender Reject Index increased by 168 bps over the past week to 8.34%. Flatbed rejection rates are now 179 bps above where they were last year.
Spot rates rebound to kick off the fourth quarter
With rejection rates moving slightly higher over the past week and challenges in the Southeast with sections of Interstates 26 and 40 shut down for prolonged periods, spot rates inched higher to kick off the fourth quarter.
SONAR: FreightWaves National Truckload Index – Linehaul Only (white, right axis) and Initially Reported Van Contract Rate (green, left axis) To learn more about FreightWaves SONAR, click here.
This week, the National Truckload Index — which includes fuel surcharge and various accessorials — recouped some of last week’s losses, rising 3 cents per mile to $2.23. The NTI is now 6 cents per mile or 2.6% lower than it was at this time last year.The increase in the linehaul variant of the NTI (NTIL) — which excludes fuel surcharges and other accessorials — was even more impressive, rising by 4 cents per mile to $1.68, erasing all of last week’s decline. The NTIL is 9 cents per mile higher than it was at this time last year. The discrepancy in the NTIL and NTI is solely the changes in fuel, which was far more expensive in 2023 than currently. The average diesel truck spot price per gallon is 96 cents, or 21%, lower than it was last year.
Initially reported dry van contract rates have stayed in a fairly tight range, remaining stable over the past week at $2.31 per mile. Throughout 2024, contract rates have been in a tight range, an indication that the extreme cost savings are in the rearview mirror and service is now coming to the forefront. Initially reported contract rates are down 7 cents per mile from this time last year, a 2.9% decline.
SONAR: RATES.USA To learn more about FreightWaves SONAR, click here.
The chart above shows the spread between the NTIL and dry van contract rates is trending back to pre-pandemic levels. The spread remains historically wide and has actually widened in recent weeks, diverting from the pre-pandemic average that it had been inching closer to throughout the year. Significant disruptions can quickly tighten the spread as spot rates react much faster, so seeing a narrowing of the spread in the fourth quarter, during truckload peak season, wouldn’t be a surprise. The question is how significant the narrowing is and whether it is sustainable, especially if the first quarter of 2025 is the traditionally soft period for freight demand.
SONAR: FreightWaves TRAC rate from Los Angeles to Dallas. To learn more about FreightWaves TRAC, click here.
The FreightWaves Trusted Rate Assessment Consortium spot rate from Los Angeles to Dallas fell slightly over the past week but in a significant way. The TRAC rate from Los Angeles to Dallas decreased by 3 cents per mile to $2.39. Spot rates along this lane are now just 10 cents per mile below the contract rate.
SONAR: FreightWaves TRAC rate from Atlanta to Chicago. To learn more about FreightWaves TRAC, click here.
From Chicago to Atlanta, spot rates rebounded to start October. The FreightWaves TRAC spot rate along this lane rose 14 cents per mile to $2.55, now 21 cents per mile below the contract rate.
FreightWaves Infographics: Yellow targets January sale for 112 remaining terminals
To view more FreightWaves infographics, click here
Borderlands Mexico: Gulf Coast ports slam US tariffs on Chinese container cranes
Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: US tariffs on China-made container crane could hinder Gulf Coast ports; Volkswagen inaugurates $114M Gulf Coast shipping hub in Texas; Southeastern Freight Line launches direct route to New Mexico; and Warehouse On Wheels opens location in Mexico.
Gulf Coast ports slam US tariffs on Chinese container cranes
Looming tariffs on Chinese-manufactured container cranes will significantly increase prices and could impact future projects at ports across the Gulf Coast, according to port officials.
In July, Port Houston approved the purchase of eight electric ship-to-shore container cranes for more than $113 million, the largest order in the port’s history.
The cranes are being manufactured by Zhenhua Heavy Industries Co. (ZPMC); a China-based, state-owned company and the world’s largest manufacturer of container cranes, accounting for over 70% of the world market.
Under tariffs on Chinese imports initiated by the Biden administration in May, the eight container cranes could be subject to an extra 25% duty, significantly raising their price, according to Port Houston CEO Charlie Jenkins.
Ship-to-shore cranes are used for loading and unloading containers and are considered critical for port productivity.
“At this time we are not certain the 8 ship-to-shore cranes awarded in July are susceptible to the tariff, but if so, we estimate the cost to be $28.5 million,” Jenkins told FreightWaves in an email. “The 8 cranes purchased are a critical part of our capital investment plan to grow capacity one step ahead of forecasted demand and support the expected larger vessels into Houston with the completion of Project 11.”
Project 11 is a $1.1 billion expansion of the Houston Ship Channel, which will allow the channel to accommodate an additional 1,400 vessels per year and could generate up to $134 million more annually in economic impact once completed by 2028.
Jenkins said the 25% tariff on Chinese-manufactured cranes will not have an impact on Project 11, but it is “unknown if other projects could be delayed.”
Port authorities, terminal operators and industry groups across the U.S. are urging the U.S. trade representative to reconsider the 25% tariff on all imports of ship-to-shore container cranes manufactured in China. (Photo” Jim Allen)
Along with Port Houston, the Port of Freeport in southeast Texas could see an additional $6 million in cost on two container cranes it has ordered from China-based manufacturers because of the 25% tariff.
The Port of New Orleans, which is expanding and planning the $1.8 billion Louisiana International Terminal (LIT), said the tariff could have a significant impact on the project’s budget and viability.
The LIT, which will be capable of handling 2 million twenty-foot equivalent units annually and ultralarge container vessels, aims to position New Orleans as one of the top international container gateways in the Gulf of Mexico.
The U.S. trade representative (USTR) announced the tariff increases in May on an array of Chinese imports, including ship-to-shore cranes, electric vehicles, lithium-ion EV batteries, steel and aluminum, semiconductor chips, solar cells, and medical products.
“In response to China’s unfair trade practices and to counteract the resulting harms, President Biden is directing his trade representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses,” the USTR said in a news release.
Port authorities, terminal operators and industry groups across the U.S. immediately pushed back against the tariff on ship-to-shore container cranes.
The American Association of Port Authorities (AAPA) sent a letter jointly with major ports from across the country to U.S. Trade Representative Katherine Tai in July urging her to reconsider the tariff on cranes.
“Simply put, the AAPA is confident that the tariff, if imposed, will not meet its stated objectives,” Cary Davis, head of the AAPA, wrote in the letter. “Instead, it will only result in negative outcomes, including grave harm to port efficiency and capacity, strained supply chains, increased consumer prices, and a weaker US economy.”
Last month, Tai announced that Chinese-made ship-to-shore cranes ordered prior to May 14, 2024, and cranes that enter the U.S. prior to May 14, 2026, would be excluded from the tariffs.
The ruling helped Port Houston save duty fees on three ship-to-shore cranes it recently received from Chinese manufacturers, but the port still faces import tariffs for the eight cranes it ordered in July.
“The bottom line is we’re working very diligently on this issue with a number of our stakeholders,” Jenkins said during the Port Houston commission meeting Sept. 24. “We will continue to work to exempt these cranes and find the opportunities to do so. It is a big financial burden.”
AAPA commended Tai’s decision. AAPA and port officials noted that one of the major issues with the tariff is there are currently no U.S. manufacturers of ship-to-shore cranes.
“Now, our organization continues to encourage the Biden Administration and Congress to thoughtfully consider long term alternatives,” AAPA said. “Until there is an American manufacturer, USTR should not impose tariffs on cranes that do nothing more than tax port development.”
In July, Finland-based crane manufacturer Konecranes announced plans to begin building port cranes in the U.S. The company currently builds cranes for the U.S. market from a factory in China.
“Konecranes expects the network to grow in states including Ohio, Virginia and Wisconsin in the coming years, and has received initial indications of interest from a number of customers,” the company said in a news release.
Konecranes did not provide a timeline for when it would open a factory in the U.S.
Volkswagen inaugurates $114M Gulf Coast shipping hub in Texas
Volkswagen Group of America recently opened a massive logistics facility in Freeport, Texas, to handle up to 140,000 vehicles annually.
The VW Gulf Coast hub creates over 110 direct jobs in addition to indirect jobs across trucking, rail and vessel operations, officials said in a news release.
“Our new Gulf Coast hub represents a $114 million investment in the Freeport area,” Pablo Di Si, president and CEO of Volkswagen Group of America, said on LinkedIn. “Port Freeport will import and process up to 140,000 vehicles annually, directly supporting one third [over 300] of our U.S. retail dealers.”
Volkswagen Group of America recently opened a logistics hub in Freeport, Texas, that has the capacity to handle up to 140,000 imported vehicles annually. (Photo: Volkswagen)
Port Freeport is about 60 miles south of Houston in southeast Texas, where the Brazos River empties into the Gulf of Mexico.
The port offers container, general cargo, breakbulk and roll-on/roll-off (ro-ro) services. Carriers offering ro-ro services at the port include Hoegh Autoliners, Glovis, Liberty Global Logistics, Sallaum and Grimaldi Lines.
Southeastern Freight Line launches direct route to New Mexico
Less-than-truckload provider Southeastern Freight Lines has expanded service with a direct route to Las Cruces, New Mexico.
The route will be serviced from Southeastern’s service center in El Paso, Texas, to meet the growing demand for freight movement in the Southwest, according to a news release.
The new service is aimed at reducing shipping costs, enhancing reliability and improving transit times, including next-day shipping from Dallas, Fort Worth, San Antonio and Odessa, Texas.
Southeastern Freight Lines is based in Lexington, Kentucky. The company has 3,083 trucks and 4,210 drivers, according to the Federal Motor Carrier Safety Administration.
Warehouse On Wheels opens location in Mexico
Fort Mitchell, Kentucky-based Warehouse On Wheels announced the opening of a new facility in Monterrey, Mexico.
The location will operate under the brand name Almacenes Moviles, offering mobile storage trailers for businesses in industries such as automotive, plastics, general manufacturing, retail distribution and construction.
“The company’s expansion into Monterrey underscores our dedication to meeting the evolving storage needs of businesses in the region and supporting their growth with practical and cost-effective solutions,” Brady Rodgers, president of Warehouse On Wheels Mexican operations, said in a statement.
Founded in 2017, Warehouse On Wheels has expanded to over 40 locations across North America, with a fleet of more than 36,000 trailer units.
Secretary, Maryland Post Office 21664
The Secretary, Maryland Post Office serves ZIP Code 21664. Photo by Jimmy Emerson, some rights reserved. Photo shared under the Creative Commons License.
Secretary Post Office
145 Main St.
Secretary, Maryland 21664
Pallets of supplies ranging from generators, bottled water, to MREs.
