As you know, we (NAWE) now represent the majority of terminal operations in the United States, handling over 90 per cent of container trades. Thus, we’re intricately tied to the nation’s supply chain. We’re deeply impacted by trade policy. Just three weeks ago, we initiated a weekly call, MarketWatch to monitor developments at the ports and determine whether we needed to take steps to support our members given the decline in trade, especially through our West Coast ports due to the tariffs imposed on Chinese goods.
We recently saw a drop of about 40 per cent in cargo at some of our terminals, which is reminiscent of the cargo loss we experienced during the pandemic when Chinese manufacturing was shut down. Recently, the President announced he would suspend or reduce tariffs on Chinese cargo, and just three weeks later, I was on a call discussing the largest surge in cargo movement as a result of those reductions. We are now gearing up to handle the impressive volumes expected to arrive. It’s a significant challenge, but we must adapt to these issues that are beyond our control as an industry.
We’re in contact with the administration regarding the impacts, though the decisions aren’t ours to make. Hence, we’re focusing on our efforts to take every possible step from a public perspective to adjust to the changes brought by the tariffs.
The final decisions regarding tariffs are something we can’t influence. We constantly engage with the administration, but ultimately, those decisions are made by our President. All we can do is adjust. Thankfully, volumes have been relatively good this year. Supply and demand ultimately dictate trade, meaning people might choose to buy from other sources, even with tariffs. Trade continues, even amid tariff implementations. When President Trump first instituted tariffs in his administration, the market was relatively strong, and people were eager to buy goods, which somewhat mitigated the impact.
I believe that we tend to enjoy purchasing things in the United States. Even if prices rise slightly, people will continue moving cargo. We’re hopeful of seeing a recovery from the recent 40 per cent drop to around 20 or 30 per cent increase soon. Ideally, this will balance out by the end of the year.
Hence, fingers crossed for that! Everything is pointing towards improvement, and that’s what we can hope for. When it comes to your vision for NAWE and its role in shaping the future of U.S. port operations, how do you envision contributing to that?
NAWE is in constant contact with our members, the terminals handling a significant portion of our nation’s supply chain. We cover all the pertinent industry issues and work with our members to construct a comprehensive vision for the industry in Washington, D.C.
As various issues arise—be it cybersecurity requirements or the development of policies to aid infrastructure, we strive to shape those policies. For instance, we’re currently addressing the numerous claims for hearing loss that our industry must handle. We’re advocating for policies that are fair and reasonable concerning these claims, especially those arising from terminal operations.
At the same time, we’re also focused on sustaining grants for low-emission port operations, which are essential for meeting environmental requirements in certain parts of the country. Unfortunately, this administration doesn’t seem particularly inclined toward those policies. Hence, we’re working diligently to ensure we remain eligible for assistance as we strive to improve the efficiency of our port operations.
As we strive for a more sustainable future, how can the maritime industry implement eco-friendly practices to reduce its environmental footprint while staying competitive on the global stage?
Yes, we are diligently addressing this issue alongside our association and members. When it comes to emissions and carbon reduction, much of the framework is influenced by local and state regulations regarding emissions.
The previous administration, under Biden, was highly focused on sustainability initiatives and encouraged our industry to find ways to minimize its environmental footprint. However, our situation is quite complex. The development of our ports has been a gradual process—first a port, then a small town, evolving into a city, and ultimately into a large urban metropolis. This growth occurred around the port, resulting in a significant population in the area. The terminals at the port have driven economic growth, but we face challenges in conveying the true value of these economic activities.
The previous administration supported sustainability policies, and as we transition to working with the new administration, there appears to be a greater focus on efficiency and throughput. This presents an opportunity for us to thoughtfully navigate our approach, aiming to reduce our environmental impact and emissions while also gathering support for our initiatives.
Ideally, we might have preferred that development hadn’t taken place around the port to avoid some of these challenges. However, there is an ongoing social demand to mitigate the impact of our operations.
At NAWE, we are dedicating significant time to this issue. While we find ourselves navigating a different path now, given the new administration’s focus, I am confident we can make progress. Our goals can positively impact the environment and sustainability while enhancing efficiency and competitiveness within our port complexes. That’s our plan moving forward.
How can emerging technologies like AI, IoT, and data analytics shape the future of waterfront operations?
We recognize that the information system in the shipping industry is lacking. The quality of data provided by the industry is inadequate. Before serving as the President of NAWE, I was a Commissioner at the Federal Maritime Commission, where I proposed an initiative aimed at harmonizing data standards called the Maritime Transportation Data Initiative. This initiative would have required real-time information from shipping companies, enabling us to leverage various technology and process programs.
Currently, we face significant challenges due to poor underlying data. Many companies do not provide timely information, especially regarding service cancellations to our terminals. For instance, over 100 vessel strings were cancelled during recent tariff issues, yet not all shipping companies communicated these cancellations until just a couple of days before the expected service. This creates a considerable challenge for terminal preparation and planning.
While there is excellent technology available that could improve our operations, we must improve the quality of information shared by companies within the shipping industry. The issue isn’t about the absence of technology but the need for better data inputs that can interact effectively with these systems.
Another point of frustration is the comparison with other sectors. For example, if I order a pizza, I can track its progress from the moment the order is accepted through baking, transportation, and delivery, often even receiving a photo of the finished product. However, in the shipping world, when a shipping line cancels a voyage that is set to take five weeks, we’re often informed just a day before its scheduled arrival, which is simply unacceptable.
As recipients of transport-related information, we need a more reliable data flow. The environment in which ocean carriers and railroads operate is indeed challenging. The reluctance to disclose cancellations, delays, or other operational difficulties often stems from a desire to avoid accountability in a complex international trade landscape. For example, if the Suez Canal is closed due to security issues, rerouting cargo can disrupt estimated arrival transparency.
This reluctance to engage in real-time information sharing ultimately harms everyone in the industry. When transportation providers fail to offer timely updates, it affects the entire logistics chain. If I were still at the FMC as a Commissioner, I would aggressively advocate for the adoption of a requirement for real-time information sharing. However, my focus now is on assisting our members in securing the best data possible.
I wholeheartedly agree that the challenge lies not in the technology itself but rather in the quality of data fed into these systems. Despite the many information sources available, if the data is outdated or static, it renders the technology ineffective. Thus, while we have the tools needed to enhance our operations, we must prioritize the enhancement of data inputs to ensure reliability. Ultimately, as 90% of our overseas trade moves by ship, improving our information systems is crucial for the efficiency of the entire industry.
How is NAWE supporting its members in navigating the shift toward smart port infrastructure?
Yes, we’re actively engaged in various initiatives. For example, we’re focusing on zero-emissions technology and smart innovations. We’re in the process of releasing a comprehensive catalogue that quantifies the equipment and technologies available to reduce emissions. This guide will highlight ways to achieve zero emissions and detail smart functions that can enhance cargo handling coordination.
We expect this report to serve as a practical resource for the industry, outlining how to operate optimally while addressing challenges surrounding batteries and secondary energy sources. As we transition to more electric equipment to lower emissions, ensuring a reliable electricity supply is crucial. We need to consider when it might become necessary to revert to diesel due to grid reliability. This interconnectedness impacts how we manage cargo and implement technology for enhanced efficiency.
Our goal is to support the industry’s ability to access the best cargo handling technology—like advanced cranes that optimize productivity and minimize wait times. This also facilitates better connectivity for truckers picking up cargo at terminals. While technology can be costly, we are backed by federal support, making it more feasible.
This year, the President has proposed a $550 million increase in the budget for port grants, bringing the total assistance to a remarkable $1 billion for port modernization in the U.S. We’ve worked diligently on these issues, advocating for grants that are environmentally structured yet focused on efficiency as well. Increased efficiency ultimately leads to lower emissions and reduced carbon outputs, which is beneficial for states aiming to cut emissions.
We’re continuously pursuing incentives and support in this highly competitive market. Unfortunately, the shipping industry often doesn’t reflect the true value of its contributions; it represents a small portion of the total GDP when it comes to production costs. Thus, we rely on assistance from the federal government and states to sustain our operations in this competitive landscape. The returns in our capital-intensive industry are not as favourable as in sectors like technology and entertainment.
We must make a compelling case to the government for the support we need. If there’s an expectation for us to enhance efficiency, a little help from the government is essential. The global interconnectedness of our work in international trade emphasizes the importance of reliable shipping.
During my decade in the Senate as an attorney, I observed that discussions often leaned heavily towards topics like communications. Meanwhile, critical issues surrounding maritime shipping seemed to fade into the background. While debates about the latest TV shows captured everyone’s attention, the essential matters that support the movement of goods frequently went unaddressed.
It’s easy to take for granted that products will simply appear at our doorstep, yet behind every operation, productivity, or meal, there’s an essential component of cargo movement from overseas. We must remember to keep the importance of shipping in the spotlight.
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