Trade groups applaud executive order on rail talks
Effort will help keep freight flowing, but West Coast dock worker negotiations and labor laws affecting California truckers remain key concerns, industry leaders say.
Victoria Kickham started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for DC Velocity.
Supply chain industry trade groups are praising the Biden administration’s efforts to address ongoing railway labor negotiations, calling it an important step to avoid disruptions that would slow trade and add to inflationary pressures.
President Biden signed an executive order Friday establishing a Presidential Emergency Board (PEB) to help resolve labor disputes between freight railroads and rail labor organizations. The move came ahead of a deadline to intervene in the nationwide talks covering 115,000 workers or risk a strike or lockout. The PEB has 30 days to investigate the dispute and issue a report on how it should be resolved.
Talks between major freight railroads and labor unions have dragged on for more than two years; Friday’s executive order begins a cooling-off period aimed at helping both sides reach a settlement.
The National Retail Federation (NRF) and the American Trucking Associations (ATA) said the PEB is an essential step to avoiding disruptions that would hamper trade as peak shipping season gets underway.
“Now that we are in the peak shipping season for back-to-school and winter holiday merchandise, it is critical that both parties come back to the table to reach an agreement without any kind of rail service disruption this fall,” NRF’s David French, senior vice president of government relations, said in a press release Friday. The association had sent a letter to President Biden earlier this month asking the administration to intervene.
ATA President and CEO Chris Spear echoed those sentiments.
“In order to move past our supply chain challenges and reduce the inflationary pressure that’s hurting American families, we must continue to steer clear of the kinds of avoidable, unnecessary disruptions to the movement of freight that this strike would have caused,” Spear said in a statement Friday. “Our nation’s supply chain has faced a wide range of stress factors during the past several months. We are glad the White House recognizes the importance of keeping freight rail running, one of the key modes of freight transportation that is highly interconnected with the trucking industry in delivering goods nationwide.”
The threat of a rail slowdown was adding to a host of other economic and supply chain pressures, including ongoing labor negotiations between shipping lines and dock workers on the West Coast, and the ramifications of California’s Assembly Bill 5 (AB5), a labor law that requires companies to compensate certain independent contractors as full employees, including truck drivers. Legal proceedings had kept the law from being applied to the trucking sector, but the issue is in the spotlight again following a June Supreme Court decision essentially allowing the law to take effect.
Dawn Tiura, CEO and president of Sourcing Industry Group (SIG), agreed that the rail issue is compounding the other problems occurring on the West Coast, but said the situation is expected to improve sooner than the dock worker talks. Combined with the complications of AB 5, she said the issues are a “perfect storm” affecting the supply chain, with the effects on trucking a key factor moving forward.
“We’re still down 85,000 drivers,” Tiura said in an interview Friday, referring to industry statistics citing a lack of available truck drivers nationwide.
SIG represents executives in sourcing, procurement, and risk at Fortune 500 and Global 1000 companies. Tiura pointed to recent efforts to relax guidelines for obtaining a commercial driver’s license (CDL) as a helpful step, but said that finding ways to attract more workers to the trucking industry is essential to avoiding the disruptions and delays that have plagued supply lines the past few years.
“We have to start incentivizing people to drive,” Tiura said, adding that she expects further action on AB5, which she said will affect freight capacity in California. “Getting this solved is going to be so important.”
Independent owner-operator truck drivers blocked the Port of Oakland earlier this week in protest of AB5, which they say will put them out of business by increasing their costs—in the form of additional fees and higher insurance, for instance—or forcing them into full-time employment.
The Port of Oakland has been awarded $50 million from the U.S. Department of Transportation’s Maritime Administration (MARAD) to modernize wharves and terminal infrastructure at its Outer Harbor facility, the port said today.
Those upgrades would enable the Outer Harbor to accommodate Ultra Large Container Vessels (ULCVs), which are now a regular part of the shipping fleet calling on West Coast ports. Each of these ships has a handling capacity of up to 24,000 TEUs (20-foot containers) but are currently restricted at portions of Oakland’s Outer Harbor by aging wharves which were originally designed for smaller ships.
According to the port, those changes will let it handle newer, larger vessels, which are more efficient, cost effective, and environmentally cleaner to operate than older ships. Specific investments for the project will include: wharf strengthening, structural repairs, replacing container crane rails, adding support piles, strengthening support beams, and replacing electrical bus bar system to accommodate larger ship-to-shore cranes.
Commercial fleet operators are steadily increasing their use of GPS fleet tracking, in-cab video solutions, and predictive analytics, driven by rising costs, evolving regulations, and competitive pressures, according to an industry report from Verizon Connect.
Those conclusions come from the company’s fifth annual “Fleet Technology Trends Report,” conducted in partnership with Bobit Business Media, and based on responses from 543 fleet management professionals.
The study showed that for five consecutive years, at least four out of five respondents have reported using at least one form of fleet technology, said Atlanta-based Verizon Connect, which provides fleet and mobile workforce management software platforms, embedded OEM hardware, and a connected vehicle device called Hum by Verizon.
The most commonly used of those technologies is GPS fleet tracking, with 69% of fleets across industries reporting its use, the survey showed. Of those users, 72% find it extremely or very beneficial, citing improved efficiency (62%) and a reduction in harsh driving/speeding events (49%).
Respondents also reported a focus on safety, with 57% of respondents citing improved driver safety as a key benefit of GPS fleet tracking. And 68% of users said in-cab video solutions are extremely or very beneficial. Together, those technologies help reduce distracted driving incidents, improve coaching sessions, and help reduce accident and insurance costs, Verizon Connect said.
Looking at the future, fleet management software is evolving to meet emerging challenges, including sustainability and electrification, the company said. "The findings from this year's Fleet Technology Trends Report highlight a strong commitment across industries to embracing fleet technology, with GPS tracking and in-cab video solutions consistently delivering measurable results,” Peter Mitchell, General Manager, Verizon Connect, said in a release. “As fleets face rising costs and increased regulatory pressures, these technologies are proving to be indispensable in helping organizations optimize their operations, reduce expenses, and navigate the path toward a more sustainable future.”
Businesses engaged in international trade face three major supply chain hurdles as they head into 2025: the disruptions caused by Chinese New Year (CNY), the looming threat of potential tariffs on foreign-made products that could be imposed by the incoming Trump Administration, and the unresolved contract negotiations between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX), according to an analysis from trucking and logistics provider Averitt.
Each of those factors could lead to significant shipping delays, production slowdowns, and increased costs, Averitt said.
First, Chinese New Year 2025 begins on January 29, prompting factories across China and other regions to shut down for weeks, typically causing production to halt and freight demand to skyrocket. The ripple effects can range from increased shipping costs to extended lead times, disrupting even the most well-planned operations. To prepare for that event, shippers should place orders early, build inventory buffers, secure freight space in advance, diversify shipping modes, and communicate with logistics providers, Averitt said.
Second, new or increased tariffs on foreign-made goods could drive up the cost of imports, disrupt established supply chains, and create uncertainty in the marketplace. In turn, shippers may face freight rate volatility and capacity constraints as businesses rush to stockpile inventory ahead of tariff deadlines. To navigate these challenges, shippers should prepare advance shipments and inventory stockpiling, diversity sourcing, negotiate supplier agreements, explore domestic production, and leverage financial strategies.
Third, unresolved contract negotiations between the ILA and the USMX will come to a head by January 15, when the current contract expires. Labor action or strikes could cause severe disruptions at East and Gulf Coast ports, triggering widespread delays and bottlenecks across the supply chain. To prepare for the worst, shippers should adopt a similar strategy to the other potential January threats: collaborate early, secure freight, diversify supply chains, and monitor policy changes.
According to Averitt, companies can cushion the impact of all three challenges by deploying a seamless, end-to-end solution covering the entire path from customs clearance to final-mile delivery. That strategy can help businesses to store inventory closer to their customers, mitigate delays, and reduce costs associated with supply chain disruptions. And combined with proactive communication and real-time visibility tools, the approach allows companies to maintain control and keep their supply chains resilient in the face of global uncertainties, Averitt said.
Bloomington, Indiana-based FTR said its Trucking Conditions Index declined in September to -2.47 from -1.39 in August as weakness in the principal freight dynamics – freight rates, utilization, and volume – offset lower fuel costs and slightly less unfavorable financing costs.
Those negative numbers are nothing new—the TCI has been positive only twice – in May and June of this year – since April 2022, but the group’s current forecast still envisions consistently positive readings through at least a two-year forecast horizon.
“Aside from a near-term boost mostly related to falling diesel prices, we have not changed our Trucking Conditions Index forecast significantly in the wake of the election,” Avery Vise, FTR’s vice president of trucking, said in a release. “The outlook continues to be more favorable for carriers than what they have experienced for well over two years. Our analysis indicates gradual but steadily rising capacity utilization leading to stronger freight rates in 2025.”
But FTR said its forecast remains unchanged. “Just like everyone else, we’ll be watching closely to see exactly what trade and other economic policies are implemented and over what time frame. Some freight disruptions are likely due to tariffs and other factors, but it is not yet clear that those actions will do more than shift the timing of activity,” Vise said.
The TCI tracks the changes representing five major conditions in the U.S. truck market: freight volumes, freight rates, fleet capacity, fuel prices, and financing costs. Combined into a single index indicating the industry’s overall health, a positive score represents good, optimistic conditions while a negative score shows the inverse.
Specifically, the new global average robot density has reached a record 162 units per 10,000 employees in 2023, which is more than double the mark of 74 units measured seven years ago.
Broken into geographical regions, the European Union has a robot density of 219 units per 10,000 employees, an increase of 5.2%, with Germany, Sweden, Denmark and Slovenia in the global top ten. Next, North America’s robot density is 197 units per 10,000 employees – up 4.2%. And Asia has a robot density of 182 units per 10,000 persons employed in manufacturing - an increase of 7.6%. The economies of Korea, Singapore, mainland China and Japan are among the top ten most automated countries.
Broken into individual countries, the U.S. ranked in 10th place in 2023, with a robot density of 295 units. Higher up on the list, the top five are:
The Republic of Korea, with 1,012 robot units, showing a 5% increase on average each year since 2018 thanks to its strong electronics and automotive industries.
Singapore had 770 robot units, in part because it is a small country with a very low number of employees in the manufacturing industry, so it can reach a high robot density with a relatively small operational stock.
China took third place in 2023, surpassing Germany and Japan with a mark of 470 robot units as the nation has managed to double its robot density within four years.
Germany ranks fourth with 429 robot units for a 5% CAGR since 2018.
Japan is in fifth place with 419 robot units, showing growth of 7% on average each year from 2018 to 2023.