As we approach the end of 2024, the freight industry is experiencing significant turbulence due to several converging factors. Shippers and logistics professionals must stay informed and proactive to navigate these challenges effectively.

Potential ILA Strike and Its Implications

The International Longshoremen's Association (ILA) has been in protracted negotiations with the United States Maritime Alliance (USMX). While a tentative wage agreement was reached in October, discussions on automation have stalled. The ILA has set a strike deadline for January 15, 2025, if no agreement is finalized by then.

A strike could lead to:

• Port Shutdowns: Potentially affecting 36 ports along the U.S. East and Gulf Coasts, which handle over half of U.S. container volume.

  
  

• Supply Chain Disruptions: Delays in goods reaching their destinations, increased storage fees, and extended transit times.

• Increased Freight Costs: Carriers may introduce surcharges ranging from $1,000 to $4,500 per FEU in anticipation of disruptions.

  
  

Carrier Rate Increases Ahead of Chinese New Year

Carriers are implementing General Rate Increases (GRIs) to capitalize on peak shipping demand before the Chinese New Year on January 29, 2025. Recent GRIs have led to rate hikes of over 20% on key Asia-Europe routes, with elevated rates expected to persist until late January.

Potential New Tariffs and Their Impact

The incoming Trump administration has signaled intentions to impose new tariffs, including:

• 25% Tariffs: On imports from Canada and Mexico.

• 10% Tariffs: Or higher on Chinese imports.

  
  

These potential tariffs are prompting importers to expedite shipments to avoid increased costs, leading to a surge in freight volumes and contributing to rising rates.

Recommendations for Shippers

To mitigate these challenges:

• Diversify Shipping Routes: Consider alternative ports or modes of transportation to circumvent potential disruptions.

• Advance Planning: Schedule shipments earlier to avoid peak congestion and potential delays.

• Collaborate with Logistics Partners: Work closely with freight forwarders and carriers to develop contingency plans and secure capacity.

Staying informed and adaptable is crucial during this period of uncertainty. By proactively addressing these challenges, shippers can maintain supply chain resilience and minimize disruptions.