October 12, 2023

• MSC and Maersk are mothballing one of the largest shipping container ships until consumer spending and supply of space picks up.

The major shippers share space on each others ships, but there is glut of container supply that is not filled leading to price pressures across the industry.

The spike in supply happened in 2021 and has subsided considerably with the slow-down in consumer spending.

The current "oversupply" of shipping containers resulted from forced investment in shipping after skyrocketing rates during the supply chain crisis during and after the pandemic.

Weak global growth is forecast in 2024 by the IMF financial surveillance monitor.

All will have an impact on intermodal sector employment.

Shippers race to implement "AI" solutions to new Due Diligence.

Shipping container companies are now interested in all the goods carried on their ships.

Stories of fraud in supply have been rampant. A recent conference on supply and custom service had a story:

“Just before I left Customs we did an exercise called Operation Mirage [2017]. You can see it but it really isn’t there. … We did a scientific statistical sample of textile products coming out of China to ensure that the [product] valuation was correct. We went out to visit 180 companies that were importers of record. Fifty-five percent of them did not exist. They were bogus. Somebody back in China was orchestrating their transitions. … We asked one woman how she managed all of these import documents and she said they just used her name and gave her a penny per transaction. She was making about $10,000 a month and that’s when I knew I had to retire.”

Or, this:

In 2017, CBP seized over 5 pounds of fentanyl through 1,300 noncompliant importers. It was a major win considering a lethal dose of fentanyl is only 2 milligrams.

In 2010, CBP disrupted what could have caused untold fatalities, a potential terrorist attack involving ink cartridges set to detonate in small packages sent throughout the U.S. (FW)

Recent fake parts for airline engines have raise interest again about securing and monitoring supply chains and unregulated distributors.

To date, Safran and GE have uncovered more than 90 other certificates that had similarly been falsified. Bogus parts have been found on 126 engines, and all are linked to the same parts distributor in London: AOG Technics Ltd., a little-known outfit started eight years ago by a young entrepreneur named Jose Alejandro Zamora Yrala. (BN)

CN has released their "Winter Plan" for 2023. The document goes into some detail for investors about how they will be fine even though they face the following issues affecting capacity:

• Lock/port closures (which happen every year)
• Extended interswitching (brought into place in the Federal budget)
• Replacement worker legislation (anti-scab legislation) where they say

Such legislation will result in more and longer‑lasting strikes, increase the need for back‑to‑work legislation and create a more hostile labour relations climate.

a narrative that is quite the opposite of established research on the use of replacement workers.

• New federal regulation on Duty and Rest Period Rules for Railway Operating Employees that reduced work times from 18 to 12 hours per day. Aparthttps://www.cn.ca/winterplan from the obvious safety aspects of this, since the regulation applies to all railways, it is hardly going to uniquely affect CN profits. CN complains that these regulations may have some, so far, undetermined impact on their operations.