A rather large and serious issue in Southern California is the trucking protest against AB5, a bill that has been passed that imposes a mandatory test for independent contracts that impacts the workforce and flow of truckers (to read more about AB5, please use the link at the bottom) Essentially, the bill requires carriers to offer employment to contract drivers that score low on the test, else these drivers must provide all the services through their own business. This greatly impacts the number of truckers available for various routes. Right now, there is protesting near the ports which not only impact the driving workforce but also limits movement in and out of the ports. SoCal is already plagued with so many issues in shipping, that adding yet another complication is doing serious damage to the system.
Port Utilization Issues
Charleston Port has been almost as congested as Los Angeles and with just as many problems. This once smaller scale port has seen massive increases in volume (likely as an effort for shippers to avoid mega hubs), though the area is not equipped to handle the influx. The Federal Maritime Commission (FMC) has requested White House intervention to assist with a labor dispute that has kept the terminal from being fully utilized. Commissioner Louis Sola is claiming the port is only being utilized to 50% of its capacity. Since March, vessels have been piling up, with a record 27 vessels waiting to berth. There has been ongoing construction to help improve the port, which is still underway.
NY/ NJ ports are experiencing a new wave of billing techniques in light of the 2022 Ocean Shipping Reform Act, a law that allocates funds to the FMC to help hire more staffing and assist in fair export practices (to read more about OSRA-22 please use this link at the bottom). An example of this Act going into effect comes from line Hapag Lloyd who is no longer billing customers for storage. Instead, this cost will be billed directly through the terminal’s own billing system. This comes from the need to “ensure compliance” under OSRA-22. Yang Ming and Wan Hai are in the process of making the switch as well. This change will upset the process for forwards and third-party logistic providers.
Trusting Expat
Despite the challenges in the industry, our team at Expat is always working to get the best rates and offer the best service. Please reach out to us, for all your logistic needs.
