Competitive Edge
November 27th, 2024
Stay Current with InterlogUSA
Latest Industry Happenings and Market Updates:
Across International Shipping: News and Developments
[Regulation] Trump Tariffs Could Target Canada, Mexico: President-elect Donald Trump announced Nov. 25 that he plans to implement 25 percent tariffs on all goods coming into the U.S. from Canada and Mexico.
The new policy would be in violation of an existing trade pact between the three countries. However, Trump has vowed to undue the agreement via executive order. A move he says he will enact on day one in office.
[Labor] ILA-USMX Talks: A setback has paused negotiations for a new East/Gulf longshore contract. The two parties resumed talks in early November after reaching a partial tentative agreement last month. For more information, refer to the freight news section further below in the newsletter.
[Labor] Montreal Port Employers, Union Agree to Mediation: The Port of Montreal’s longshore union and maritime employers have agreed to mediation in their contract negotiations. In a joint release, the two sides said the mediation period will last 90 days.
The decision is a step forward in a hopeful resolution to a dispute that’s seen several labor-related actions taken by both sides. In the late summer and early fall, unionized dockworkers staged occasional strikes at key terminals and refused overtime work. In early November, employers locked out workers.
On Nov. 12, Canada Labor Minister Steve MacKinnon referred the dispute to binding arbitration, a legal process that would have forcibly placed government-assigned mediators to determine a settlement. Motivated to avoid government intervention, the two sides mutually agreed to assign their own independent mediator.
IMPORT: Asia to North America (Transpacific Eastbound)
Rates: Rates have stayed level over several weeks but remain high when compared to pre-pandemic levels.
Demand: Uncertainty over new and/or increased tariffs in the incoming U.S. presidential administration has motivated many importers to bring cargo in earlier.
Capacity: In early 2025 there could be an excess of available vessel capacity. This could prompt ocean carriers to implement blank sailing programs.
Congestion: Rail container dwell times have improved at the ports of Los Angeles and Long Beach.
TIPS:
- Early 2025 will feature events that could greatly impact international shipping: a shift in trade policy from an incoming presidential administration; Chinese New Year; and a potential longshore strike if ILA-USMX fail to secure a new contract before their mid-January deadline.
- As the year reaches its end, Q4 can be the right time to get a head start on your 2025 transportation and logistics strategies. While business needs can vary, in most cases, a discussion and evaluation of service providers (carriers, forwarders, Customs brokers, etc.,) should be top of mind, especially as it relates to any potential shortcomings in existing providers throughout 2024.
IMPORT: Europe to North America (Transatlantic Westbound)
2025 Services: Major carriers continue to unveil upcoming changes to their transatlantic offerings, including additional options to the Caribbean and South America.
Rates: Aside from a traditional round of peak season surcharges (PSSs), rates have generally shown little change since early fall.
Capacity: Available capacity at Europe ports have shown some signs of strain.
EXPORT: North America to Asia
Rates: Outbound rates to Asia from the U.S. East Coast have decreased slightly. Meanwhile, U.S. West Coast to Asia services remain at steady rate levels.
Space: Progress in improving container dwell times at U.S. West Coast ports has benefited export movement.
Freight News
Closing out 2024 & Looking Ahead to 2025: Holiday Outlook, Chinese New Year, and U.S. Labor Uncertainty
As 2024 draws to a close, attention is shifting to the key industry events and challenges that will shape the start of 2025. With the holiday season wrapping up the year, the looming Chinese New Year and ongoing labor uncertainties in the U.S. are prompting companies to stay nimble in order to navigate potential disruptions in the year ahead.
Holiday Outlook: This holiday season is projected to see record-breaking spending. According to the National Retail Federation (NRF), consumers are expected to spend an average of $902 on gifts, food, decorations, and other holiday-related items—around $25 more per person compared to last year.
Chinese New Year: The Chinese New Year holiday will begin on Tuesday, January 28th (Chinese New Year’s Eve) and last until February 4th, 2025. In the week leading up to the holiday, many factories will start closing, as workers head home to celebrate. This annual disruption has significant impacts on the supply chain, and stakeholders should prepare accordingly. We advise shippers to secure their bookings as early as possible to avoid delays.
U.S. Labor Uncertainty: In early October 2024, after several days of striking, the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) reached an agreement to move the expiration date of their master contract to January 15th, 2025. While a tentative agreement on wages was made, the contract terms are still subject to change if a final deal is not reached in mid-January. A key issue in negotiations remains the role of automation, with the ILA halting talks with USMX over this contentious subject.
Did you know? With Johnny Cargo!
The correct answer is Hapag-Lloyd!
The German-based ocean carrier will join Maersk to form the Gemini Cooperation, a two-member shipping alliance beginning in February 2025. The two carriers tout the upcoming Gemini will eventually offer industry-leading service coverage, including 90 percent schedule reliability across its network. However, industry experts are skeptical of whether such a level of service can be achieved.
Effective January 2025, Maersk will terminate its existing 2M Alliance with MSC, while Hapag-Lloyd will exit THE Alliance whose remaining members are Ocean Network Express, HMM, and Yang Ming. THE Alliance will rebrand to Premier Alliance in early 2025.
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