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Speciality Chemicals06-Dec-2024
HOUSTON (ICIS)–Rates for shipping containers
from east Asia and China to the US were flat to
softer this week while global average rates
rose by 6%, but the looming strike at US Gulf
and East Coast ports could put upward pressure
on rates in the coming week.
Rates from supply chain advisors Drewry showed
Shanghai-New York rates fell slightly to $5,160
from $5,182, while rates from Shanghai to Los
Angeles plunged by more than 12%, as shown in
the following chart.
The previous chart also shows the sharp
increases in rates from Shanghai to Rotterdam
and Genoa, which contributed to the global
average increase as shown in the following
chart.
Drewry expects an increase in rates on the
Transpacific trade in the coming week due to
the looming ILA (International Longshoremen’s
Association) port strike in January 2025 and
the anticipated rush to ship goods before the
strike begins.
The 15 January deadline for finalizing a new
labor agreement between unionized dock workers
at US Gulf and East Coast ports and the
negotiating entity for the ports is nearing
with no clear progress on a key
remaining issue – automation.
Rates at online freight shipping marketplace
and platform provider Freightos showed a sharp
increase on the Asia-NY trade lane and a 4%
decrease from Asia-LA.
Rates at Freightos are higher than rates at
Drewry.
Judah Levine, head of research at Freightos,
said the increases on Asia-NY are because of
importers again frontloading shipments ahead of
a possible strike and to beat tariffs proposed
by the incoming Trump administration.
Some carriers have already begun introducing
general rate increases (GRIs) to try and push
rates higher.
Levine said the window to move shipments from
the East Coast to the West Coast ahead of a
possible strike is closing, but many retailers
are sitting on significant inventories from
pulling forward shipments ahead of the original
1 October strike deadline.
“These factors may make early December rate
increases difficult to sustain, though prices
could increase later in the month or early in
January ahead of Lunar New Year,” Levine said.
Container ships and costs for shipping
containers are relevant to the chemical
industry because while most chemicals are
liquids and are shipped in tankers, container
ships transport polymers, such as polyethylene
(PE) and polypropylene (PP), are shipped in
pellets.
They also transport liquid chemicals in
isotanks.
LIQUID TANKER RATES
Overall, the US chemical tanker freight rates
were unchanged this week for several trade
lanes, except for the USG-Asia trade lane as
spot tonnage remains tight.
This all-basis limited spot activity to most
regions and as COA nominations are taking
longer than usual for the regular vessel
owners.
They have tried to delay the sailings but there
has been very little spot space in the market
leaving no other options for full cargoes and
in turn impacting spot rates.
MEG, ethanol and styrene still are being seen
quoted in the market from various traders, for
early January loadings to Asia.
Eastbound space had not yet been fully absorbed
despite the few fresh inquiries for small
specialty parcels stemming from USG bound for
Antwerp, most owners waiting for full contract
nominations.
Various glycol, ethanol,
methyl tertiary butyl ether (MTBE)
and methanol parcels were seen quoted to ARA
and the Mediterranean as methanol prices in the
region remain higher.
Additionally, ethanol, glycols and caustic soda
were seen in the market to various regions.
PANAMA CANAL
Fiscal Year 2024 revenue rose from 2023, the
Panama Canal Authority said this week even
after having to reduce crossings for part of
the year because of a severe drought.
The Authority said a noticeable impact from the
drought was a decrease in deep draft transits,
which fell by 21%.
Despite the arrival of the rainy season, the
challenge of water for Panama and the Panama
Canal remains and serves as a reminder that
climate change and its effects are a reality
requiring immediate attention and concrete
action.
Potential solutions include the identification
of alternative sources of water from the 51
watersheds and lakes in Panama, along with
projects that can increase storage capacity to
ensure water availability for the entire
Panamanian population and the Canal’s
operation, thereby ensuring its long-term
sustainability.
At the same time, the Panama Canal is exploring
additional short- and long-term solutions that
can optimize the use and storage of water at
the Canal for the benefit of both the local
population and its operations.
Additional reporting by Kevin Callahan
Thumbnail image shows a container ship.
Photo by Shutterstock
Ethylene06-Dec-2024
SAO PAULO (ICIS)–EU chemicals trade group
welcomed on Friday the “political agreement”
between the 27-country bloc and the
five-country bloc Mercosur on their free trade
deal but, after being 25 years in the making,
loose ends for its ratification remain.
The agreement, yet to be published in full,
must now be ratified by national parliaments as
well as executive EU bodies.
Considering the backlash it has already caused
among some constituencies, such as farmers in
France, it is not certain the deal will be
ratified swiftly. Deforestation concerns in the
Amazon or the sharp differences in workers’
rights in the EU and Mercosur have in the past
also
presented stones on the way.
On Friday, the president of the European
Commission – the EU’s main executive arm – told
citizens of the 450-million people bloc their
“livelihoods are protected”, addressing
particularly farmers’ concerns.
“This is a win-win agreement, which will bring
meaningful benefits to consumers and
businesses, on both sides. We are focused on
fairness and mutual benefit. We have listened
to the concerns of our farmers, and we acted on
them,” said Ursula von der Leyen.
“This agreement includes robust safeguards to
protect your livelihoods. EU-Mercosur is the
biggest agreement ever, when it comes to the
protection of EU food and drinks products. More
than 350 EU products now are protected by a
geographical indication. In addition, our
European health and food standards remain
untouchable.”
She added new safeguards had been added to the
deal to comply strictly with those standards to
access the EU market.
Von der Leyen added EU companies will save €4
billion worth of export duties per year.
BREATHING SPACE FOR BELEAGUERED EU
CHEMICALS?The chemicals industry
has always been in favor of the deal on both
sides of the Atlantic. The EU’s chemicals trade
group Cefic said on Friday its members should
“gain an edge” in trade with Mercosur,
paramount to compete against other global
chemicals players.
The EU and Germany – its largest chemicals
producer – are net exporters of chemicals. In
principle, they have a lot to win with free
trade agreements as they can allow them to
expand markets as trade barriers are reduced.
At the same time, in the global game of trade,
large companies also have more to win than
small- and medium-size enterprises (SMEs), who
do not have the same prowess in terms of reach
and influence.
Chemicals majors also tend to carry commanding
voices in trade groups such Cefic, Germany’s
VCI or, within Mercosur, Abiquim.
In 2022, trade between the EU and Mercosur
stood at €13.6 billion, with a trade surplus in
favor of the EU of €5.2 billion, according to
Cefic figures.
The figures are modest considering the EU’s
chemicals industry’s exports stood at €553.0
billion in 2022.
The 27-country bloc imported chemicals worth
€363.0 billion, so it posted a trade surplus of
€190.0 billion, according to the EU’s
statistics office Eurostat.
This landmark agreement marks a significant
milestone in fostering free, fair, sustainable
and resilient trade relations between the
European Union and the four Mercosur countries
Argentina, Brazil, Paraguay and Uruguay.
Both Cefic and the EU did not mention Bolivia
as a Mercosur member, but the country joined
the bloc in July. Venezuela used to be a part
of it, but its membership was suspended under
the current regime.
Cefic and other industrial trade groups in the
EU had already urged a rapid
conclusion of the agreement in November in
an open letter to EU bodies.
“The EU-Mercosur Agreement opens tremendous
opportunities for both regions. From an EU
perspective, it is a crucial opportunity for
companies to gain a competitive edge by
accessing one of the world’s largest markets,”
said Cefic’s deputy director general Sylvie
Lemoine.
“This agreement enhances market access,
enabling EU businesses to compete more
effectively on the global stage, fostering
economic growth and strengthening the EU’s
industrial base. This is fully in line with the
spirit of the Antwerp Declaration.”
“We now call upon all EU decision-makers to
rapidly ratify and bring the agreement into
force.”
Brazil’s chemicals producers’ trade group
Abiquim had not responded to a request for
comment at the time of writing, but in the past
it has been supportive of the trade deal.
Front page picture source: Cefic
Speciality Chemicals06-Dec-2024
LONDON (ICIS)–While countries around the world
bet on battery technology, Germany has taken a
step back with plans to cut funding for battery
research – to the dismay of its chemicals and
other industries.
Battery research key to energy
transformation
Trying to catch up with China
New government may reverse cuts after
election
With the cuts in the federal government’s 2025
draft budget, the German federal research and
education ministry could stop funding new
battery research projects as soon as next year.
The cuts would also include a reduction in
so-called “commitment appropriations”
(Verpflichtungsermachtigungen) of more
than €100 million for spending on battery
research in future years, according to the
opposition Christian Democrats.
Chemical producers’ trade group VCI said that
the cuts would lead to “a loss of added value”
and raised the risk of Germany becoming more
dependent for batteries on other countries or
regions.
Germany needed strong research funding in this
field in order to catch up with other
countries, said Ulrike Zimmer, head of science,
technology and environment at VCI.
“This is the only way Germany can maintain its
chances in competition with the US and China,
and also train the urgently needed skilled
workers,” she said.
The planned funding cuts have already created
uncertainties at academic and research
institutes, VCI warned in a joint statement
this week with trade groups from the machinery,
electronics and digital sectors.
As it stands, employment contracts could
currently not be extended and new contracts
could not be signed, the groups said.
Research institutions were losing scientists
due to the lack of prospects in the battery
field, and the technology transfer via
collaborations and start-up companies was
coming to a standstill, they said.
They said the cuts would have far-reaching
consequences as they affected all industries
involved in the battery value chain: chemical
companies, mechanical and plant engineering,
cell manufacturers and all industries whose
products are based on the performance, price
and availability of batteries.
Affected sectors included electric vehicles
(EVs), stationary storage systems, drones,
power tools and robots, among others, they
said.
TRYING TO CATCH UP WITH
CHINA
Peter Lamp, head of battery technology at
automaker BMW, told a parliamentary committee
on Wednesday, 4 December that without powerful
batteries, the transformation to a carbon
dioxide (CO2)-neutral energy and transport
industry was not possible.
The availability of modern battery technologies
was crucial to successfully implementing the
energy transition, he said.
Lamp criticized Germany’s current dependence on
Asian battery cell suppliers.
Germany and the EU needed “technological
sovereignty” in this area, he said, adding that
the planned reduction in funding was therefore
“incomprehensible”.
Auto industry trade group VDA said that funding
for battery research was of “central
significance” for the future of the German
automotive industry.
The country’s Fraunhofer research institute
said in a submission to the committee that
government support for battery research was “an
essential prerequisite” for the success of
Germany’s energy and mobility transition.
Battery research played a key role in the
development of electrochemical energy storage
solutions, as well as battery and production
development, it said.
China and other Asian countries were far ahead
in developing and producing batteries, the
institute noted.
“In order to counter the dominance of Asian
players in battery technology and the
associated supply chains, Germany and Europe
must constantly build up skills and
technologies for large-volume battery cell
production for all applications, also as
insurance against geopolitical dependency,” it
said.
NEW GOVERNMENT
Government officials have said that the cuts
were necessary because the country’s supreme court ruled
last year that Berlin needed to trim spending
in order to comply with the “debt-brake”
(Schuldenbremse), which is a
constitutionally enshrined provision to keep
public deficits low and limit debt.
However, there is a chance that the cuts may be
reversed in the event of a change in government
in Berlin. Following the collapse last month
of Chancellor Olaf Scholz’s coalition
government, early elections will likely be held
in February.
The Christian Democrats, which are ahead of
Scholz’s Social Democrats in opinion polls on
the election, have said that the cuts to
battery research, as well as the abolition last
year of an incentive for the purchase of EVs,
were “short-sighted”.
The party has introduced a motion in parliament
calling for “strong battery research in
Germany”, which prompted Wednesday’s
parliamentary committee hearing.
Countries such as China, the US, Japan, and
South Korea had nearly tripled public spending
on battery research over the past four years
while Germany risked falling behind
internationally in this important area, it
said.
The cuts would also jeopardize the support the
government already committed for investments in
construction for battery plants, the party
said, and noted the support the government has
granted to a project by Sweden’s Northvolt at the
Heide chemicals and refining site northwest of
Hamburg.
Spending a lot of money on battery factories
and significantly less on research and training
was “highly risky”, it said.
The Northvolt project may not be realized,
however. The company last month filed for
Chapter 11 protection
and reorganization in the US, raising questions
about its future and the prospects of the
German project.
BATTERIES, EVs AND
CHEMICALS
Batteries and the EVs they power are important
market opportunities for the chemical industry.
An EV contains more plastics and polymer
composites and more synthetic rubber and
elastomers than a conventional vehicle powered
by the internal combustion engine.
However, BASF
said earlier this year that market dynamics
in the EV sector were slowing, and the company
would therefore pause or may not make certain
investments connected to the industry.
One project on which BASF paused work is a
proposed commercial-scale EV battery recycling
metal refinery at its chemicals production
complex in Tarragona, Spain.
GERMANY AUTO INDUSTRY SENTIMENT IN
DECLINE
Meanwhile, the sentiment in
Germany’s automotive industry continued to
deteriorate in November, according to the
latest survey by Munich-based research group
ifo this week.
Demand was weak and the industry remained stuck
in a “mix of far-reaching transformation,
intense competition, and a weak economy”, ifo
said.
Also, thousands of Volkswagen workers went on a
short strike on Monday, 2 December to protest
against potential job cuts and plant closures
in Germany, and their union, IG Metall, has
announced another strike for Monday, 9
December.
The automotive sector drives demand for
chemicals such as polypropylene (PP), along
with nylon, polystyrene (PS), styrene butadiene
rubber (SBR), polyurethane (PU), methyl
methacrylate (MMA) and polymethyl methacrylate
(PMMA).
Additional reporting by Tom
Brown
Please also visit the ICIS
topic page Automotive: Impact on chemicals
Thumbnail photo source: BASF
Focus by Stefan Baumgarten
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Recycled Polyethylene Terephthalate06-Dec-2024
LONDON (ICIS)–Senior Editor for Recycling Matt
Tudball discusses the latest developments in
the European recycled polyethylene
terephthalate (R-PET) market, including:
Different views on colourless (C) flake
prices in northwest Europe (NWE)
Higher bale prices heard but not confirmed
in eastern Europe and Poland
Outlook for 2025 still a big question mark
Crude Oil06-Dec-2024
LONDON (ICIS)–Economic growth in both the
eurozone and the EU accelerated in Q3,
according to official revised data on Friday.
Seasonally adjusted GDP increased by 0.4% in
the eurozone and the EU from the previous
quarter.
In Q2, GDP grew by 0.2% in both the eurozone
and the EU from Q1, statistics agency Eurostat
said in an update from its initial estimate at
the end of October.
% change from the previous
quarter
Q1
Q2
Q3
Eurozone
0.3
0.2
0.4
EU
0.3
0.2
0.4
On a year-on-year basis, Q3 GDP increased by
0.9% in the eurozone and by 1.0% in the EU.
Petrochemicals06-Dec-2024
MUMBAI (ICIS)–India’s central bank on Friday
maintained its benchmark interest rate at 6.5%
but cut its cash reserve ratio (CRR) by 50
basis points to 4%, in a bid to improve growth
and rein in high inflation.
Monetary policy stance kept at “neutral”
Year-to-March 2025 GDP growth forecast cut
to 6.6% from 7.2%
High food prices to keep consumer inflation
elevated in Oct-Dec 2024
In its monetary policy decision, the Reserve
Bank of India (RBI) retained its monetary
policy stance at “neutral”. It has maintained
the repo rate at 6.5% since February 2023.
CRR is the percentage of a bank’s total
deposits that it is required to maintain in
cash with the RBI as a reserve.
India is a giant emerging market in Asia and is
a major importer of petrochemicals.
The central bank’s hawkish outlook is due to
persistently high food inflation, which has yet
to stabilize, RBI governor Shaktikanta Das said
during his address to the media.
While the central bank remains optimistic about
India’s growth outlook, following a good
monsoon season and an anticipated revival of
capital expenditure, global factors could slow
down growth, Das said.
“Headwinds from geopolitical uncertainties,
volatility in international commodity prices,
and geo-economic fragmentation continue to pose
risks to the outlook,” RBI said in its official
statement.
The outlook is also “clouded by rising
tendencies of protectionism which have the
potential to undermine global growth and push
inflation higher”, it added.
RBI has lowered its GDP growth forecast for the
fiscal year ending March 2025 to 6.6%, from
7.2% previously, in view of weak fiscal Q2
performance.
India’s GDP for the July-September quarter
slowed to an almost two-year low of
5.4%, on sluggish growth and weak demand.
It was also significantly lower than the RBI’s
projection of a 7% growth for the quarter.
RBI GDP Forecasts
New – 6 December 2024
Old
October-December (Q3)
6.8%
7.4%
January-March (Q4)
7.2%
7.4%
Fiscal year ending March
2025
6.6%
7.2%
April-June (Q1 FY2025-26)
6.9%
7.3%
July-September (Q2)
7.3%
–
Meanwhile, inflation forecast for the current
fiscal year was raised to 4.8% from 4.5% on
continued high food inflation.
“Inflation increased sharply in September and
October 2024, led by an unanticipated increase
in food prices. Core inflation, though at
subdued levels, also registered a pickup in
October,” Das said.
In October, consumer inflation had risen to a
14-month high of
6.21% due to a spike in food prices.
The RBI expects food prices to keep inflation
rates elevated in the October-to- December
quarter, Das said.
RBI inflation forecasts
New – 6 December 2024
Old
October-December (Q3)
5.7%
4.8%
January-March (Q4)
4.5%
4.2%
Fiscal year ending March
2025
4.8%
4.5%
April-June (Q1 FY2025-26)
4.6%
4.3%
July-September (Q2)
4%
–
Focus article by Priya Jestin
Gas06-Dec-2024
Romanian MP calls on EU to work closely
with member states to cut back on red tape
Incoming Romanian government must address
bureaucracy, high taxation, introduce market
reform
Romania can establish itself as viable
regional alternative to Austrian gas hub
LONDON (ICIS)–The incoming European Commission
should simplify procedures to access funds for
energy projects and strengthen the dialogue
with member states particularly in Eastern
Europe amid growing popular discontent, a
Romanian parliamentarian told ICIS.
Speaking to ICIS, Cristina Pruna,
vice-president of the industries and services
committee in the Romanian parliament said the
Romanian energy sector played a major role not
only in the EU but also in supporting
neighbouring countries such as Moldova and
Ukraine.
She warned previous delays in allowing Romania
to join key agreements such as the EU’s
Schengen area, which abolishes border controls,
or bureaucratic procedures complicating efforts
to tap funds had created major frustrations,
which may be partially responsible for gains
made by far-right parties in recent polls.
REFORM
She conceded the incoming Romanian government,
which will be formed following parliamentary
elections on December 1, will also have to
address multiple internal challenges.
These include encouraging local and foreign
investments in the gas and renewable sectors,
cutting back on red tape, reducing taxes and
preparing the market for deregulation.
She said her party, Uniunea Salvati Romania
(USR), which is currently in talks to form the
incoming coalition government, had proposed to
establish a one-stop-shop at the regulator ANRE
to help investors navigate the bureaucratic
process to access EU funds for renewable
projects.
Furthermore, she said Romania should establish
power and gas markets where prices are set by
demand and supply and insisted there should be
a predictable legal framework in place to
support vulnerable consumers as well as
industrial consumers.
One of her party’s proposals is to introduce an
automatic mechanism to guarantee tax credits
for industrial consumers, which would allow
them to deduct from taxes part of rising energy
costs.
Market participants have complained caps on
electricity and gas prices introduced following
the 2022 energy crisis had led to burdensome
taxation and market distortions.
Pruna agreed caps should be lifted but insisted
consumers should be prepared for market
deregulation expected in 2025.
TAXATION
Although the ruling Partidul Social Democrat
(PSD) won the latest polls with a narrow lead,
their policies to date have led to a
high taxation regime that has
throttled investments and led to nosediving
liquidity on Romania’s forward electricity and
gas markets.
As a result of policies spearheaded by PSD and
the liberal party, PNL, in the outgoing
coalition government, up to 87% of the money
made from gas/oil sales is paid in royalties,
windfall taxes and contributions to various
funds.
Their policies have also led to regulatory
unpredictability, deterring large-scale
investments.
Meanwhile, there are fears that the three
far-right populist parties which won seats in
parliament – Alliance for the Union of
Romanians (AUR), Partidul Oamenilor Tineri
(POT) and S.O.S. Romania – could push for
policies that would exacerbate an already
visible nationalist streak which has
underpinned Romania’s energy regulations in
recent years.
AUR calls into question the privatisation and
sale of Romania’s oil and gas assets to OMV
Petrom in the early 2000s.
Meanwhile, the front-running presidential
candidate Calin Georgescu who will face the USR
candidate Elena Lasconi in a run-off on
December 8, claimed Romanians are ‘suffocated
by taxes’ but neither he nor his newly
established party POT has proposed concrete
measures to scrap them.
ENERGY MIX
Although USR advocates scaled up nuclear and
solar as well as onshore and offshore wind
production, Pruna is keen to point out that
Romania should capitalise on its gas reserves.
“Offshore Black Sea gas production is due to
come onstream in 2027 during the mandate of the
incoming 2025-2028 government. We need to
ensure that Romania establishes itself as a
viable regional market and an alternative to
the Austrian gas hub,” she said.
She also noted the importance of working
closely with Moldova and Ukraine to increase
border capacity for electricity and gas flows.
Ammonia05-Dec-2024
HOUSTON (ICIS)–Canadian farmers reported
growing more wheat, oats, soybeans, dry peas
and lentils, but less canola, corn and barley
in 2024, according to the production of
principle fields crops report from Statistics
Canada.
The government agency said that overall yields
were higher this year compared with 2023
but there were some areas where farmers
continued to face issues related to dry
conditions.
This was true particularly in western Canada,
which the report states had a promising start
to the 2024 growing season.
It noted that much of the prairies received
timely precipitation during seeding, although
cool conditions delayed crop development in
some areas.
Yet a lack of rain as the summer progressed,
coupled with hot weather, resulted in lower
yields in some areas compared with 2023.
There were good field conditions throughout the
fall months which allowed farmers to
complete harvest ahead of schedule, with most
crops out of the fields before data collection
for the November field crop survey.
The agency said there were locations that did
receive above-average rainfall, specifically in
Ontario and western Quebec, which when combined
with increased summer heat benefitted growers
with higher yields.
Total wheat production rose 6.1%
to 35 million tonnes in 2024, with
Saskatchewan wheat production rising 12.2%
to 16.5 million tonnes in 2024.
In Alberta, higher yields resulted in
a 6.4% increase in wheat production
to 9.9 million tonnes, while Manitoba
was up 0.7% to 5.5 million
tonnes.
Canola production decreased 7.0% nationally to
17.8 million tonnes in 2024, with this drop
because of lower yields and harvested area,
with the declined output attributed to the hot
and dry conditions in parts of western Canada
in July and August.
Total corn for grain production fell 0.5% to
15.3 million tonnes in 2024 with harvested area
down by 4.6% to 3.6 million acres, offsetting a
4.3% increase in yields to 168.7 bushels/acre.
Ontario farmers, who grow almost two-thirds of
Canada’s corn were down 3.5% to 9.6 million
tonnes, while Quebec rose 7.9% to 3.6 million
tonnes in 2024. Manitoba farmers had 1.8
million tonnes in 2024 with lower harvested
area, but yields were up 8.6% to 139.4
bushels/acre.
Soybean production increased 8.4% nationally to
7.6 million tonnes in 2024 with the increase
due to higher yields, which were up by 7.0% to
stand at 49.1 bushels/acre, while the harvested
area for the crop increased 1.3% to 5.7 million
acres.
In Ontario soybean production climbed 7.9% year
on year to 4.4 million tonnes in 2024, while in
Manitoba the harvested area fell 10.9% to 1.4
million acres in 2024. Production in Quebec
rose 9.3% to 1.4 million tonnes in 2024, on
higher yields and harvested area.
Barley production was decreased by 8.6% to 8.1
million tonnes in 2024 because of lower
harvested area, which the report said was
partially offset by a 3.3% increase in yields
to 63.2 bushels/acre nationally.
Total oat production increased by 27.0%
to 3.4 million tonnes as both
harvested area and yields increased
in 2024.
The improvements in crop output reflects the
sentiment towards fertilizer consumption within
in Canada this year, with nitrogen and potash
volumes having robust periods of consumption
during the spring.
There were additional stretches of demand with
significant refill participant and a good
post-harvest run of ammonia also taking place
before the recent arrival of winter conditions.
Sentiment is that spring demand could continue
at a strong pace if nutrient values do not
escalate over the coming weeks and if future
crop prices either stay steady or can gain some
slightly increase before sowings start again.
Speciality Chemicals05-Dec-2024
HOUSTON (ICIS)–The 15 January deadline for
finalizing a new labor agreement between
unionized dock workers at US Gulf and East
Coast ports and the negotiating entity for the
ports is nearing with no clear progress on a
key remaining issue – automation.
This week, a union vice president criticized
semi-automated rail-mounted gantry cranes
(RMGs) for eliminating jobs and posing national
security risks in a post on the International
Longshoremen’s Association (ILA) website.
In response, the United States Maritime
Alliance (USMX), the group representing the
ports, defended automation as essential for
port modernization and addressing land
constraints.
The ILA paused a three-day
strike on 3 October after agreeing on a wage
increase, with a commitment to negotiate the
remaining issues by 15 January.
Top among the remaining issues is the
automation or semi-automation at the ports,
which the ILA is adamantly against because they
think it will take jobs typically done by
humans and which the USMX says is needed for
the US to remain competitive.
ILA Vice President Dennis A Daggett said in his
post on the union’s website that the ILA is not
against progress, innovation, or modernization
– “but we cannot support technology that
jeopardizes jobs, threatens national security,
and puts the future of the workforce at risk”.
Daggett explained that in the early-2000s,
employers introduced semi-automated RMGs at a
greenfield terminal on the East Coast, saying
the move would create thousands of jobs.
“What seemed like a win for one port turned out
to be the project that is becoming the model
for automation that could potentially chip away
at many jobs at almost every other terminal
along the East and Gulf coasts,” Daggett said.
Daggett said 95% of work performed by RMGs is
fully automated.
“From the moment a container is dropped off by
a shuttle carrier, the RMG operates on its own
– lifting, stacking, and moving containers,
including gantry and hoisting, without any
human intervention,” Daggett said. “This
includes the auto-stacking of containers in the
container stack, which is also fully automated.
Only in the last six feet of the container’s
journey on the landside, when it is placed on a
truck chassis, does an operator step in. But
how long until employers automate those final
six feet as well?”
The USMX, in a response, said modernization and
investment in new technology are core
priorities required to successfully bargain a
new master contract with the ILA – they are
essential to building a sustainable and greener
future for the US maritime industry.
“Port operations must evolve, and embracing
modern technology is critical to this
evolution,” the USMX said.
“It means improving performance to move more
cargo more efficiently through existing
facilities – advancements that are crucial for
US workers, consumers, and companies,” the USMX
said. “Due to the lack of available new land in
most ports, the only way for US East and Gulf
Coast ports to handle more volume is to densify
terminals – enabling the movement of more cargo
through their existing footprints. It has been
proven this can be accomplished while
delivering benefits to both USMX members and to
the ILA.”
The USMX stressed that it is not, nor has it
ever been, seeking to eliminate jobs, but to
simply implement and maintain the use of
equipment and technology already allowed under
the current contract agreements and already
widely in use, including at some USMX ports.
As an example, the USMX pointed to a terminal
where modern crane technology was implemented
more than a decade ago, which was previously
limited to a 775,000-container capacity using
traditional equipment.
That same terminal nearly doubled its volume
after incorporating the use of modern
rail-mounted gantry cranes into its daily
operations.
“The added capacity delivered an equal increase
in hours worked, leading to more union jobs, as
the terminal went from employing approximately
600 workers a day to nearly 1,200,” the USMX
said. “Moving more containers through the
existing terminal footprints also means higher
wages from the increased cargo, bringing in
more money for volume/tonnage bonuses.”
Container ships and costs for shipping
containers are relevant to the chemical
industry because while most chemicals are
liquids and are shipped in tankers, container
ships transport polymers, such as polyethylene
(PE) and polypropylene (PP), are shipped in
pellets.
They also transport liquid chemicals in
isotanks.
No negotiations are currently underway with
just about five weeks left before the deadline.
Focus article by Adam Yanelli
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