Rate Related Update and Market Conditions
Negotiations with East Coast Labor Unions
With a January 15 deadline nearing, labor and management remain at odds, lacking scheduled talks since the ILA’s November walkout. The ILA opposes port automation, citing security risks, while USMX sees it as vital for efficiency. The Trump administration’s pro-union stance may limit intervention in potential strikes. Shippers are advised to consider West Coast ports despite higher costs and logistical challenges.
Partnering with Hapag-Lloyd to form the “Gemini” alliance has sparked a global reshuffle in shipping alliances.
Following their split, Maersk and MSC formed the “Gemini” alliance with Hapag-Lloyd, reshaping global shipping alliances. They’ve chosen 12 key hub ports, like Singapore, for their strategic advantages. With stakes in several ports, they ensure efficiency and priority berthing. Aiming for 90% schedule reliability, “Gemini” focuses on supply chain optimization and resilience through advanced logistics networks, enhancing market dominance.
The festive atmosphere is arriving early on the US shipping routes.
As Chinese New Year nears, US shipping lines plan rate hikes on December 15 and January 1 due to potential East Coast strikes and tariff threats. The NRF forecasts a 14.3% increase in December imports and a 12% rise in January 2025. Despite a 15% import increase from China in November, rates dropped. TEMU leads US freight forwarding, while the Biden administration seeks Middle East agreements before Trump’s inauguration.
Shipping companies have begun announcing rate hikes for January 2025 on these routes
Maersk is increasing FAK rates and adjusting Peak Season Surcharges (PSS) on multiple routes, including the Far East to the Mediterranean, Middle East, and Africa, starting mid-December 2024. CMA CGM will impose a Panama Canal surcharge from the Far East to the US East Coast on January 1, 2025. HMM plans a PSS on routes to North America starting January 2, as trans-Pacific rates rise amid strike concerns.
Port Congestion
Indefinite Strike at Indian Ports
Indian dockworkers have threatened an indefinite strike at major government-controlled ports from December 17 if wage adjustments and incentives are not implemented by December 15. With stalled negotiations since 2021, demonstrations are underway, and further protests are planned. Private ports like Mundra will remain operational, but shippers may face higher costs and delays, potentially disrupting supply chains.
Port Attacked, Causing Explosion and Fire
Israeli missile strikes hit Syria’s Latakia port, targeting an air defense facility and naval assets after the Assad regime’s fall. Over 100 strikes aimed to prevent naval assets from falling into rebel hands. Multiple explosions and fires occurred, but no casualties or commercial ship presence were reported. Israeli Defense Minister Katz confirmed the destruction of Syrian naval vessels. Ships are advised to avoid Syrian waters.
The U.S. has passed a new bill that bans the import of various Chinese products, from lidar to garlic
The U.S. House has passed a bill under the NDAA potentially banning various Chinese imports, including lidar and garlic, due to security and safety concerns. It restricts Pentagon use of Chinese lidar and contracts with Chinese tutoring and semiconductor firms linked to Huawei. China’s Hesai Technology is suing the U.S. Defense Department, and China warns of countermeasures, urging cooperative relations.
President-Elect Trump Voices Support for U.S. Dockworkers Amid Labor Disputes
President-elect Donald Trump has expressed his backing for the International Longshoremen’s Association (ILA) during its ongoing labor negotiations with port employers. Harold Daggett, president of the ILA, met with Trump at Mar-a-Lago in Florida to discuss issues affecting dockworkers at East and Gulf Coast ports. The union has raised concerns about plans to increase automation in port operations, which they argue could impact jobs. The meeting underscores Trump’s focus on labor-related matters during his transition period.
