July 13, 2021 / 9:30 AM Cargo congestion has reached historic proportions during the COVID-19 pandemic as the demand for imports by U.S. consumers and businesses has skyrocketed combined with an increase in operational disruptions. The effect has been felt across global supply chains, including the U.S.

On July 9, 2021, President Joe Biden took aim at the ocean shipping sector of the maritime industry with the issuance of his Executive Order (E.O.) on Promoting Competition in the American Economy. The E.O. addresses shipping, along with other industries, and is intended to promote fair competition in the American economy. The E.O. specifically references consolidation in the maritime shipping industry during the past couple of decades, suggesting that such consolidation may disadvantage U.S. exporters. To this end, the E.O. encourages the Federal Maritime Commission (FMC) "to ensure vigorous enforcement against shippers charging American exporters exorbitant charges and to "consider further rulemaking to improve detention and demurrage practices and enforcement of related Shipping Act prohibitions."

Notably, the E.O. also calls on the U.S. Department of Justice (DOJ) and Federal Trade Commission (FTC) to cooperate with the FMC and other agencies on the investigation and enforcement of existing antitrust laws.

The E.O. follows significant and ongoing activity involving the FMC concerning intermodal congestion. The Commission initiated Fact Finding No. 29, International Ocean Transportation Supply Chain Engagement, in order to identify operational solutions to cargo delivery system challenges related to COVID-19. The E.O. also follows a June 15, 2021, hearing of the House Subcommittee on the Coast Guard and Maritime Transportation on Impacts of Shipping Container Shortages, Delays, and Increased Demand on the North American Supply Chain, at which FMC Chairman Daniel B. Maffei highlighted how overseas shipping is critical to all Americans and how invaluable the contribution of ocean transportation is to economic competitiveness and our way of life. 

Although these ocean shipping and intermodal transportation system concerns are not new, the E.O. raises the profile and attention on the matters. Stakeholders in the industry should review the E.O. and closely monitor further industry developments with the FMC, Surface Transportation Board (STB) and DOJ.

July 8, 2021 / 10:25 AM McCarthy Construction Cos. was recently awarded three construction projects aimed at expanding cargo capacity at Port Houston and the Houston Ship Channel.

Two of the projects, totaling $99 million, are for the port’s expansions at its Bayport Container and Barbours Cut terminals. The third is to expand a dock along the Houston Ship Channel for a petrochemical company, McCarthy said in a release.

The Bayport Container Terminal project at Wharf 6 includes construction of a 1,000-foot-long wharf to allow for the latest generation of container cranes, enabling larger ships to call Port Houston. Construction on Wharf 6 is scheduled to be completed in 2023.

Wharf 6 at the Bayport Container Terminal is undergoing a $200 million expansion to stay ahead of the continuing growth in cargo volume, port officials said.

“If you look at a wharf, it doesn’t do as much good to build a wharf if we don’t build a yard behind it, and it doesn’t do as much good to build the wharf or the yard if we don’t buy the equipment to run it,” Thomas J. Heidt, Port Houston’s chief operating officer, said during the  port commission meeting June 22.

Port Houston handled 288,127 twenty-foot equivalent units in May, a 30% increase compared to the same month in 2020. McCarthy is also adding 10 acres of new shipping container storage at the Barbours Cut Terminal Container Yard 3N, the company said. The project, which also includes utility and road upgrades, is scheduled to be completed in 2022. 

McCarthy was also awarded a project by an international petrochemical bulk storage terminal services company located in Port Houston. McCarthy declined to name the company at this time.

The petrochemical operator project is for the construction of a new unloading barge dock and the addition to an existing bulkhead wall. It is scheduled to be completed in 2022. 

St. Louis-based McCarthy has worked on various projects at Port Houston over the past 30 years. The company recently completed projects at Bayport Container Terminal wharves 4 and 5, as well as a new container yard project at the Barbours Cut Terminal.

July 6, 2021 / 2:45 PM Authorities to unveil $2 billion plan to help with droughts and extreme storms: ‘We are seeing more frequent and more severe extreme weather events' The Panama Canal faces a creeping threat from climate change, including droughts so intense that ships sometimes reduce their cargo so as not to run aground, and giant storms that almost overwhelm its dams and locks, canal officials say.

The canal hasn’t had a major disruption like the one suffered by the Suez Canal in late March, when a container megaship ran aground for almost a week, tying up a chunk of global shipping at a time of rising bottlenecks in the world’s supply chains.

But the Panama waterway faces more serious long-term challenges that could also disrupt global shipping. The biggest problem is diminishing rainwater needed to operate the 50-mile waterway, through which 4% of global trade passes. Four of the past seven years have been among the driest since 1950, according to estimates from the state-run Panama Canal Authority. “Our challenge is how to solve the water problem,” said Ricaurte Vásquez, chief of the Panama Canal Authority. There is too little water during the dry months, or too much all at once as warmer weather causes bigger storms to hit the area, including nearby hurricanes.

 Canal authorities are working on a $2 billion plan to build infrastructure to manage and preserve freshwater reserves—an amount equal to the canal’s annual contributions to Panama’s government coffers. On Monday, officials said they would choose from among 30 proposed solutions and put those out for bids in about two years. The projects, with a completion target of 2028, are expected to be a combination of new dams and reservoirs, using treated sewage water, or finding alternative freshwater sources like diverting flows from other rivers. Authorities have also considered pumping desalinated seawater.

July 5, 2021 / 11:25 AM King Neptune must be angry. Last week a crazy fire-eye ignited on Mexico’s gulf coast, and last night a towering pillar of fire erupted in Azerbaijan’s Caspian Sea.

The Caspian eruption, which continues to smolder, was caused by a mud volcano, according to the country’s Emergencies Ministry. Mud volcanoes, also known as mud domes, are new landforms created by the eruption of mud or slurries, water and gases. The fire occurred about 6 miles from the Umid gas field, south of Baku, the Azerbaijani capital, and didn’t affect nearby oil and natural gas platforms, the ministry said in a statement.

“Azerbaijan has basically the perfect geological conditions for mud volcanoes,” said Mark Tingay, a geophysicist from the University of Adelaide in Australia, in a tweet. “The fireball was a major eruption of the Dashly Island (aka Ignatiy Stone Island) mud volcano! This mud volcano also had major eruptions in 1920 and 1945.” Tingy also reports that the main eruption lasted 8 minutes and was associated with a small magnitude 2 seismic event at ~1.5km depth.

A state oil company ship has been sent to investigate.


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