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LogisticsLogistics

Ports Contract in Sight; Trade's New Focus; Deal-Making Diligence

By Paul Page

 

The Port of Oakland in March. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES

An agreement in the long-running contract talks between unionized longshore workers and employers at West Coast ports may be on the horizon. Some shipping officials are growing optimistic that a deal could be reached by June, the WSJ Logistics Report’s Paul Berger writes, potentially clearing away uncertainty that has been hanging over U.S. importers heading into the crucial fall selling season. The recent agreement on issues around automation use cleared one major hurdle, and a deal on staffing at non-automated container terminals puts the sides on track to nail down wages and benefits terms. That would mark the last major issue on the table. It still could take months to get a series of local agreements and rank-and-file votes completed, but the fears of widespread disruptions will likely fade with a tentative coast-wide contract. One matter apparently unresolved, however, is the length of the deal.

  • Container lines’ trans-Pacific general rate increases are faltering as spot rates resume their decline. (The Loadstar)
  • An auto parts importer told U.S. regulators that Evergreen Marine forced the shipper to move cargo from contract rates to the pricier spot market. (Journal of Commerce)
  • CMA CGM is adding nine new mid-size container ships to its fleet under long-term charters. (TradeWinds)
 

Quotable

“The goal is to have smoothly operating supply chains and fluid ports.”

— Jessica Dankert of the Retail Industry Leaders Association, on port labor contract talks.
 
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Economy & Trade

The Port of Long Beach in February. PHOTO: RINGO CHIU/ZUMA PRESS

There’s a key phrase missing from U.S. discussions with Japan, the European Union and other countries on terms for cross-border ties: free trade. This is part of the new world of trade deals, the WSJ’s Daniel Michaels writes, where agreements are no longer aimed at slashing duties but at a host of other issues, from digital copyright to air quality and technology and product standards. Such deals are often brokered in government-level agreements rather than full-blown treaties, a far cry from the ambitious pacts of years past that sought to tear away tariffs and other barriers to the free flow of goods between markets. The reshaping of free-trade agreements has been driven by shifting economic tides and political winds. Crucially, the rise of services and online commerce has left physical goods playing a proportionally smaller role in world trade, a key factor helping reshape global supply chains.

  • Britain’s free-trade pacts with New Zealand and Australia will come into force by the end of this month. (Associated Press)
 
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Commodities

Teck plans to spin off its coal business, such as this operation in British Columbia, from its metals business. PHOTO: JAMES MACDONALD/BLOOMBERG NEWS

Mining company Glencore’s contentious effort to buy Teck Resources is injecting a new variable into global deal-making calculations. The stumbling blocks over big takeover attempts like the $23 billion Glencore offer for Teck usually involve some combination of price, control or strategic fit. The WSJ’s Julie Steinberg writes that Teck is also raising environmental, social and governance issues in its refusal so far to engage with Glencore about a potential tie-up. The Canadian company has rejected Glencore’s offer in part because it doesn’t want exposure to Glencore’s coal business, and it has raised concerns about Glencore’s oil-trading business and what it said are potential geopolitical risks in certain countries where Glencore operates. So-called ESG issues have seeped into many corners of corporate strategy, particularly among resource companies. Coal has been one flashpoint and many big miners have promised to steer clear of buying new coal assets.

  • Australia’s exports to China hit a record high in March as tensions between the nations eased. (CNN)
  • Teck Resources and Canadian Pacific Kansas City will test hydrogen fuel-cell locomotives to transport coal under a new agreement. (Trains)
 
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Number of the Day

401,464

Carloads of motor vehicles and parts carried by railroads in North America in the first four months of 2023, up 10.6% over the past year and the most in the four-month period since 2019, according to the Association of American Railroads.

 

In Other News

Job growth in the U.S. expanded in April at the fastest pace since January and the unemployment rate matched the lowest level since 1969. (WSJ)

The WHO declared an end to the Covid-19 emergency, signaling that one of the most deadly and economically devastating pandemics in modern history is receding. (WSJ)

The U.S. again extended a sanctions carve-out allowing financial institutions to process transactions related to Russian energy sales. (WSJ)

The U.S. ended border vaccination requirements for non-U.S. travelers entering the country. (Commercial Carrier Journal)

Japan's Mitsubishi Materials is starting operations in Chile to produce cobalt for electric-vehicle batteries. (Nikkei Asia)

China’s Hozon New Energy will start making electric vehicles in Thailand for Southeast Asian markets. (Reuters)

Furniture retailer Ashley Furniture plans to build a 1 million-square-foot manufacturing and distribution facility near Phoenix. (Business Journals)

Ocado plans to use its acquisition of robotics company 6 River Systems to expand beyond the e-commerce grocery business. (DC Velocity)

Greece’s Dynacom Tanker Management ordered 10 large product tankers from China’s Dalian Shipbuilding. (Maritime Executive)

China Harbour Engineering won a contract to build a multi-purpose seaport in Cambodia. (Xinhua)

A majority of shippers in a survey expect less-than-truckload rates to rise over the next 12 months. (Logistics Management)

Indonesian startup Praktis raised $20 million in a Series A funding round backing its supply-chain technology aimed at small- to medium-sized direct-to-consumer brands. (TechCrunch)

 

About Us

Paul Page is editor of WSJ Logistics Report. Reach him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on Twitter at @WSJLogistics.

 
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