Welcome to Check Call, our corner of the internet for all things 3PL, freight broker and supply chain. Check Call the podcast comes out every Tuesday at 12:30 p.m. EDT. Catch up on previous episodes here. If this was forwarded to you, sign up for Check Call the newsletter here.
Inside this edition: West Coast port labor talks continue; sustainability initiatives increasing stock prices; and another acquisition on the books.
What a coincidence? The International Longshore and Warehouse Union Local 13 has been working since July 2022 without a contract. The negotiations continued in good faith on both sides. Fast-forward to Easter weekend of this year and there were some issues at the ports of Los Angeles and Long Beach. First there was a membership meeting that affected the Thursday night shift’s ability to report to work and then the Friday day shift took the day to spend time with families for the religious holiday.
For all intents and purposes, the ILWU is still negotiating in good faith, it’s just a coincidence that the union members were committed to other engagements that caused the port to shut down for about 24 hours. The ILWU isn’t one to broadcast work stoppages. It happens sporadically, like in 2013, during the last contract negotiation, there were random days when work slowed down.
The brief 24-hour shutdown has negatively impacted freight importers/exporters and shippers looking to have their goods loaded on containers. According to FreightWaves’ Greg Miller’s article, “One Agriculture Transportation Coalition member had 10 trucks turned away from the Port of Long Beach on Thursday night, with containers of goods having to be stored at a yard near the port. This exporter incurred an added cost of $20,000, leading to a substantial loss on the international sale.”
East Coast ports have seen a rise in volumes since the middle of the pandemic, when ships on the West Coast were stuck at sea waiting for berths. It doesn’t appear to be stopping anytime soon — at least until the West Coast gets a ratified labor union agreement.
In preparation for Earth Day, it’s time to take a look at some of the supply chain sustainability practices. Ernst & Young conducted a survey about sustainable supply chains with 525 large corporations across Argentina, Brazil, Canada, Mexico and the United States. The No. 1 finding is that while executives have long-term sustainability goals for their supply chains, few have programs in place to measure their progress.
The biggest deterrent of crafting a sustainable supply chain is the cost. Unlike sinking money into a TMS that can improve efficiency and generate some additional revenue, most sustainability initiatives lack that ROI to the balance sheet. The study found that 33% of companies lack a business case for sustainable supply chains and nearly half of respondents said their companies are struggling to measure the return on sustainable supply chain activities.
With the looming decision of the Securities and Exchange Commission to disclose carbon emissions for publicly traded companies and consumers’ demand to buy more sustainable products or products with more sustainable packaging, changes to the supply chain are coming. Change won’t happen overnight, but refusing to adopt any new policies will hurt the balance sheet in the long term.
Transparency in the supply chain from how goods are sourced to the way they arrive at the final destination is the future. The E&Y study highlighted that 25% of trailblazers/early adopters of supply chain sustainability efforts have already experienced increased revenue and 43% expect increased share price from their efforts in the next one to three years.
TRAC Thursday. This week’s TRAC lane of the week takes a trip out West, Phoenix to Denver. Spot rates per mile have slightly increased since last week as Denver outbound tender rejections have increased. Phoenix, however, has rejections below 1%, meaning any changes to spot rates will come from the destination city. Denver has seen a mild recovery in outbound tender volumes, but volumes are still down from last month. An all-in rate of $2,557 before margin should do nicely to cover this load.
Who’s with whom? Pittsburgh-based Armada Supply Chain Solutions has acquired St. Louis-based Sunset Transportation. Armada, specializing in food and restaurant logistics, brings the technology and Sunset brings the service to become a powerhouse of 3PL solutions. Top management at both companies is expected to stay on through the acquisition.
Quotable moment from Armada CEO John Burke: “The acquisition of Sunset was an opportunity for us to combine the strengths of two kindred, service-based companies. This was a strategic decision to unlock new industry verticals, expand our transportation capabilities, and
ultimately deliver a complete portfolio of supply chain solutions. We look forward to building on the success of both companies and providing even greater value to our clients.”
The more you know
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