Trends and News for SMBs (April 1-15)

Labor tension at West Coast ports comes to a head 

Tension building for months in West Coast ports over labor talks finally came to a head when dock workers staged what appeared to be a 24-hour walkout, Yahoo reported.  

The consortium that runs West Coast ports, the Pacific Maritime Association, said in a statement: “The largest ILWU local on the West Coast has taken concerted action to withhold labor at the Ports of Los Angeles and Long Beach, resulting in widespread worker shortages. 

“A majority of the jobs for last night’s shift went unfilled, including all jobs for cargo-handling equipment operators needed to load and unload cargo. The workers who did show up were released because there was not a full complement of ILWU members to operate the terminals.” 

This action has “effectively shut down” the Ports of Los Angeles and Long Beach, the PMA added. However, the ILWU, representing most West Coast port workers, denied members had staged a walkout. 

Instead, the union claimed that: 

• Members had been attending a monthly membership meeting as was their contractual right. 
• Other workers had been “observing religious holidays” to celebrate with their families. 

Many analysts cast doubt on the sincerity of that statement. Freightwaves said: “Labor action at West Coast ports does not have a history of being explicitly confirmed; rather, it takes the form of passive-aggressive behavior that escalates with increasingly implausible deniability.” 

Contract talks have been ongoing since May 2022, starting shortly before the port worker contracts expired in July. 

But they have become bogged down. One main sticking point in the negotiations is reportedly implementing automation at the ports. Shippers are seeking this as it would improve efficiency and bring down costs, which port workers fear will undermine their livelihoods and conditions. Workers are also looking for what they consider to be a fair share of bumper profits the ports have earned since the pandemic. 

As things stand, the only winners from the impasse appear to be Los Angeles and Long Beach’s East Coast and Gulf rivals. Shippers are increasingly orientating operations around those ports to avoid the risk of major labor disturbances. 

Chinese manufacturing defies expectations as exports surge in March 

 China has defied predictions that its manufacturing sector would continue to falter in the post-pandemic economy after exports surged by an unexpected 15% in March, Reuters reported.  

Against a backdrop of slowing consumer spending worldwide, China has bucked trends. Its manufacturers are capitalizing on exports of electric vehicles, lithium and solar batteries, steel and clothing, and components. 

Other big winners in the export surge were plastic products, suitcases, and luggage. LCD panels, integrated circuits, mobile handsets, and computers and parts saw a drop in exports. The top importers of Chinese goods were Russia, Vietnam, Singapore, Malaysia, and other Asian economies as Beijing looks to achieve GDP growth of 5 percent this year. Exports to US, Europe, and Japan suffered due to weakened consumer power and a burgeoning trade war.  

The growth target is the lowest for over three decades but would represent a comeback after growth sank to 3 percent last year with China laboring under Xi’s zero-Covid policies. Analysts cautioned against over-optimism. They warned that the improvement partly reflects suppliers restocking after last year’s COVID-19 disruptions and would likely fizzle out in coming months due to a global economic slowdown. 

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said: “The wave of COVID outbreaks in December and January likely depleted factories’ inventories. Now that factories are running at full capacity, they caught up with the cumulated orders from the past. 

“The strong export growth is unlikely to sustain given the weak global macro outlook,” Financial Management Magazine reported.  

While export growth beat expectations, a fall in imports also defied forecasts – shrinking by 1.4 percent as opposed to the 5 percent forecast by economists. 

Tea-based leather brews up the power of microbes 

Leathers made from plant material have been making big news lately as they increasingly rival traditional animal skin products. But they are facing a sustainable rival themselves — in the shape of bacteria-produced leather, Sourcing Journal reported. 

Developers of the new bacteria leather describe how microbiology meets fashion through a process whereby the film on top of a liquid takes on a leather-like consistency. The liquid? Kombucha tea, it turns out. 

Theanne Schiros, associate professor at FIT and research scientist at Columbia University, described what she called a potential “fiber factory of the future” on CBS’s “Mission Unstoppable.” 

This would involve bacteria feeding on sugar in the kombucha mixture and nitrogen in the tea itself. As they feed the bacteria create a cellulose biofilm on top of the liquid. This, in turn, transforms plant-based lecithin emulsion to leather-like biomaterial. 

Businesses interested in how developments such as kombucha leather can be commercialized will be interested to note two factors: 

• The kombucha leather is flame retardant due to a densely packed mesh structure restricting oxygen’s ability to ignite the cellulose and a tanning treatment that retards combustion. 
• The environmental footprint of Kombucha leather is 97 percent lower than vegan synthetic leather, according to Schiros. 

These factors are likely important as businesses and entrepreneurs are looking to expand the use of alternative leathers to capitalize on demands for increased sustainability of materials. 

So far, the main uses for alternative bio leathers made from materials such as mushroom skins, pineapple leaves, apple skins, and mangoes have been limited to the fashion industry. But other sectors, such as the automotive industry, are closely examining the differing qualities of these leathers to see if they could have broader uses. 

For example, both BMW and Mercedes use Deserttex, a cactus-based material, to provide a luxurious leather alternative for their vehicles. Land Rover buyers can select a material called Eucalyptus Melange. 

Buyers descend on resurgent Canton Fair 

Hundreds of thousands of potential buyers worldwide are expected to descend on the Canton Fair — as China’s premier trade show reopens its doors, according to the Global Times. 

The spring edition of the Canton Fair will be the largest event held in China since the government relaxed its hardline zero-Covid stance. It will be the first time foreign buyers can attend China’s oldest trade fair since 2019. In 2020, the event was canceled and held only online. In 2021, it was held in person but only for visitors living on the Chinese mainland. 

This year organizers expect buyers from more than 220 countries to participate in either the online or in-person fair. The event is set to be held in Guangzhou from April 15 to May 5. 

Chinese authorities will be keenly watching the event to monitor the effects of a global downtown, trade tensions with the United States, and a burgeoning post-covid recovery are affecting business. Each phase lasts five days and will occupy 500,000 square meters of exhibition space. Among the 35,000 exhibitors expected at the event are American retail giant Walmart, several dozen multinationals, and numerous smaller companies. 

Earlier this year, a survey of members by the American Chamber of Commerce in South China (AmCham South China) found that 75 percent planned to increase investment in China in the next three to five years. 

Harley Seyedin, president of the AmCham South China, said the Canton Fair represented an essential interface between Chinese and US business. 

“Every year, the Canton Fair provides buyers and sellers from all over the world with various kinds of commodities with the best quality, allowing buyers from America to find suitable goods covered by their business and market outlets here as well,” Seyedin told the website China.org.cn. 

Businesses who miss this edition of the Canton Fair need not stress – a second edition of the event is held in the Autumn. 

East Coast giant regains top spot in battle of the ports 

The Port of New York and New Jersey has once again seized the crown marking a top spot in the US – overtaking both the Port of Los Angeles and Long Beach, NY NJ Port Authority reported.  

In February, the port shifted 571,177 TEUs, 83,000 TEUs more than the Port of Los Angeles and 27,000 more than the Port of Long Beach. New York and New Jersey lag considerably behind the West Coast rivals when they combine container volumes. 

The East Coast ports regained the number one position last year but lost again in December as LA and Long Beach staged a short-lived resurgence. A mixture of short-term and longer-term trends are underlying the growth of the East Coast ports. Recent statements from central East Coast and West Coast ports acknowledge the importance of the increasing threat of labor disturbances at the latter. 

During the stoppage mentioned in our earlier report, the PMA said: “These actions undermine confidence in West Coast ports and threaten to accelerate further the diversion of discretionary cargo to Atlantic and Gulf Coast ports.” 

The PMA is aware of how protracted negotiations around new labor contracts at West Coast ports have prompted many shippers to reduce risk and organize supply chains around East Coast or Gulf ports. New York and New Jersey Port Authority Executive Director Rick Cotton was, naturally, delighted to hail the same trend. 

“The nation’s busiest demonstrates the port’s continued reliability and consistency as other ports experienced uncertainty and challenges recently,” he said. 

Yet the shift also reflects a decline in trade with China and the fact that ports east of the Mississippi serve nearly two thirds of the population. The move toward East Coast ports was happening even in the pre-Covid era. Shippers should also take note of the huge drive to build infrastructure by ports such as Savannah.  

We at Ship4wd are dedicated to helping small and mid-sized businesses get the most out of their shipping processes. Regardless of their experience in logistics, business owners can count on us to get their shipments to where they need them.