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West Coast Shipping Ports – Which Ports Will Win And Which Will Lose?

The recent labor troubles and continuing congestion at West Coast Ports and the prospect of bigger containerships coming through the Panama Canal next year is driving traffic to East Coast ports, but only some will prosper in the future.

“Some regional ports that serve secondary markets and are unable to process larger vessels risk losing some services or being skipped completely,” says Fitch Ratings, one the three U.S. companies that provide credit and bond ratings, along with Moody’s and Standard; Poor

Carriers are seeking economies of scale through higher utilization of each vessel, which can result in fewer vessel calls overall,” Fitch added. It also noted that the larger vessels can limit a carrier’s reliance on any particular port or terminal.

This has led to a reduction in the number of ports called on each voyage, raising pressure on ports to improve terminal capability and productivity,” the firm pointed out.

Some ports already enjoy adequate water depth and are investing to improve existing terminal’s efficiencies, seeking to maintain or improve their positions by increasing their share of first call services,” Fitch said.

However, it observed that trends towards carriers’ consolidating services could leave smaller regional ports at risk of losing some service or being skipped completely by carriers.

The impact of changes in depth and other terminal improvements must be considered together with the relative importance of the port as a gateway to its region,” Fitch said.

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NLRB Avoids College Football Union Ruling

2015-09-18_12-41-02Companies are now considered joint employers with staff leasing firms under federal labor law, according to a decision handed down by the National Labor Relations Board.

Under this joint employer doctrine, a company can be found liable for its staffing firm’s unfair labor practices, along with breaches of collective bargaining agreements.

For the last 30 years, the board has determined whether two companies are joint employers by assessing whether they exert enough direct and significant control over the same employees to share or codetermine matters regarding essential terms and conditions of employment.

“The board expanded the standard to include situations where a company exercises direct or indirect control over the essential terms and conditions of employment of another firm’s employees or has the right to do so (even if they do not exercise that right),” explained Pat O’Connor,an attorney with Kent & O’Connor Inc., he represents employer groups, including the International Warehouse Logistics Association.

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Chemical Data Signals Slowing Economy

2015-09-18_12-47-05The Chemical Activity Barometer, a leading economic indicator created by the American Chemistry Council, dropped 0.3% in August, which ACC characterized as “a marked deceleration of activity from second quarter performance.”

The declined follows a 0.1% gain reported for July as well as a 0.5% gain in both May and June (AA, 8-15-15, P. 4).

Data is measured on a three-month moving average. Accounting for adjustments, the CAB remains up 1.8% over this time last year, also a deceleration of annual growth as compared to this time last year when the barometer logged a 4.2% annual gain over 2013.

“Chemical, other equity, and product prices all suffered greatly in our latest reading of the Chemical Activity Barometer,” said ACC Chief Economist Kevin Swift, who in news interviews also predicted slowing GDP.

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