Supply Chain Update

Supply Chain Update

Rail Strike Temporarily Delayed
On July 15, 2022, a rail strike threatening the supply chain was temporarily delayed. The union
employees continue to be deadlocked with the rail carriers. President Biden named a three-member
team, who created an emergency board tasked with helping to resolve disputes between freight rail
carriers and the unions. The Presidential action temporarily halted a strike, while they work to resolve
the dispute. Union workers have been working without a contract since 2020 and are demanding higher
pay and better working conditions. The potential rail strike is on hold for a 30-day cooling period;
however, the threat continues to loom if the two sides cannot reach a deal. Approximately 30% of U.S.
cargo is moved by rail and a strike could bring the supply chain to a grinding halt as thousands of
containers move off the docks by rail. On dock congestion at the twin ports of LA/LB would increase
dramatically.

International Longshore and Warehouse Union (ILWU) and Pacific Maritime Association (PMA)
Contract
On July 26, 2022, a tentative health benefit agreement was reached while other issues remain in
negotiations. Both parties have agreed not to discuss the terms of the tentative agreement as
negotiations continue. Continuing health benefits is an important part of the contract being negotiated
between employers represented by the PMA and workers represented by the ILWU. The contract
expired on July 1, 2022, and the labor workforce continues to move the cargo without interruption.

Ports of Los Angeles and Long Beach Postpone On-Dock Dwell Fee Until August 26, 2022
Since November 1, 2021, the ports have been extending the Container Dwell Fee collection of on-dock
dwell fee on a weekly basis; however, on July 29, 2022, the twin ports announced that they would delay
implementing the fee by four weeks on ocean carriers whose import containers linger too long at
marine terminals. The plan, when implemented, would charge ocean carriers $100 per container,
increasing in $100 increments per container per day until the container leaves the terminal. Since the
program was announced on October 25, 2021, the ports have seen a continued decline of 26% in aging
cargo on the docks and have yet to assess fees.

Port of Savannah
Shippers avoided the West Coast because of uncertainty amid contract negotiations. Cargo ships
diverted from the west coast to the east coast ports resulted in the Port of Savannah currently
experiencing 40 cargo vessels waiting at the mouth of the river as the port berths are full and ships
continue to wait for over a week in anchorage.

Port of Oakland
Owner Operator Truckers protesting the AB-5 California law closed the Port of Oakland for 3 days which
created a backlog of on dock containers.

Please contact your Western Overseas representative with any questions.