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ILWU approve manning deal for non-automated terminals
The ILWU and PMA have reached a deal on manning requirements for non-automated terminals. The two sides have cleared a major hurdle. Therefore, negotiations could now accelerate toward a coastwide contract.
Three sources said the deal between ILWU Local 13 and the PMA was reached on Tuesday. The agreement involves manning requirements for cargo-handling equipment at conventional container terminals in LA and LB. This comes after the two sides reached agreement on manning needs at three automated terminals a few weeks ago.
Coastwide negotiations will now shift toward wages and pension benefits.
In mid April, ILWU Local 13 engaged in job actions at LA and LB to call attention to its proposals and bring management to the negotiation table. However, those activities have ceased.
Sources close to the negotiations say they are optimistic that a tentative agreement could be reached in the next couple of weeks. In early April, ILWU local employees in Hawaii reached a tentative deal that included a 10% wage increase.
When a tentative deal is reached, ILWU locals will wrap up discussions regarding issues at their ports. Then the entire coastwide agreement will be distributed to the ILWU membership for voting. This process will take several weeks. Therefore, members could have a ratification vote in mid-summer if a deal is struck soon.
US warehouse vacancy rose in Q1 as demand fell
Industrial real estate vacancy in the US has crept up to the highest level in 14 years as warehouses face less demand for distribution space. Builders are responding with fewer new projects. Therefore, rents have not fallen yet.
CBRE said first-quarter vacancy reached 3.5%, up 50 basis points from the fourth quarter of 2022. That is the highest vacancy rate since the second quarter of 2009, but remains below the 10-year average of 5%.
In the first quarter, 89 million square feet of warehouse space was made available. CBRE said that was the highest quarter-on-quarter increase on record. Additionally, new construction completions added 144.1 million square feet of space to the market. Additionally, leases only occupied 43% of the new supply. That is down from 73% in 2022.
54.2 million square feet of warehouse space was absorbed in the first quarter. That is the lowest net absorption since the second quarter of 2020 and below the 10-year average of 87.6 million square feet.
Regional markets, especially near ports, have also been seeing a slowdown as imports have waned and shippers reevaluate their warehousing needs. The NJ warehousing market’s vacancy rate increased to 3.3% in the first quarter, its highest since Q2 2022.
Even with weaker demand, there are other indicators that warehouse supply and demand remain healthy. Average rents rose 3% QoQ and 11% YoY to $9.91 per square foot.
About O’Neill Logistics
O’Neill Logistics is a leading third party logistics provider. We operate in California, Savannah, New Jersey. We service many verticals including Garments, Fashion Accessories, Footwear, Furniture, Home Goods, & Electronics. Additionally, we offer omni-channel distribution and all value-added services. Lastly, we focus on retail “drop shipment” fulfillment and item-level fulfillment services with same-day service offerings.
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