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Rate Related Update and Market Conditions

Market Overview

  • Alliance Changes: Starting February 2025, ONE, HMM, and YML will form the Premier Alliance. They will also begin a slot exchange cooperation with MSC, optimizing space allocation.
  • USWC Space Tightness: Space availability for IPI services to the U.S. West Coast remains tight. Labor negotiations between the ILA and USMX have yet to reach an agreement, increasing the likelihood of a strike, which could further affect capacity.
  • Pacific Northwest Delays: Significant shipment rollovers from China to Tacoma and Seattle are causing delays. It is crucial to book space early to avoid further disruptions.
  • Gulf Route Stability: According to HMM, shipments via Mexico to Houston by rail are minimally affected by ILA labor issues, making this route a stable option for Gulf-bound cargo.

Rate Predictions

YML has announced several General Rate Increases (GRIs) through October 15. These rate adjustments reflect ongoing space constraints and rising operational costs in key trade lanes. Shippers are encouraged to plan ahead and secure bookings early to mitigate the impact of these increases.

Port Congestion

Southern California Import Surge Increases Outbound Spot Truck Rates

Amid a nationwide cooling in truckload markets, Southern California is experiencing an uptick in demand for trucks and intermodal rail services due to increased cargo volumes. Shipper-paid spot truckload rates in the region rose by 6 cents per mile in August, contrasting the 6-cent decline in national averages. As more freight heads inland from Southern California ports, prices across all surface transportation modes are climbing. Shippers paid an average of $2.80 per mile, including fuel, for spot truck hauls.

  

Strike Threat at U.S. East and Gulf Ports Raises Supply Chain Concerns

The approaching September 30 contract deadline between the International Longshoreman Association (ILA) and the United States Maritime Alliance (USMX) is generating uncertainty for U.S. East and Gulf Coast ports. Negotiations are stalled, and the ILA has expressed unanimous support for a strike if a new agreement isn’t reached. Maersk has warned that a one-week strike could result in 4-6 weeks of recovery. Businesses are advised to prepare contingency plans for possible port disruptions and supply chain delays.

China’s Exports Hit Two-Year High Amid Domestic Economic Struggles

China’s exports surged by nearly 9% in August, reaching $309 billion, the highest in two years, despite ongoing deflationary pressures within the country. The rise in exports is a rare bright spot for the economy, but the influx of cheaper goods has led to concerns from international trade partners. While the trade surplus reached $91 billion, the sustainability of export growth remains in question, as global demand weakens and trade tensions with major economies escalate.

Air Canada Prepares for Potential Pilot Strike, Cargo Shipments Face Delays

Air Canada is finalizing plans for a phased shutdown in the event of a pilot strike, which could begin on September 19. Talks between Air Canada and the Air Line Pilots Association (ALPA) have stalled, with a strike potentially grounding the airline’s cargo operations. Shipments of live animals and temperature-sensitive goods will be prioritized but curtailed if the strike proceeds. A full shutdown would take effect next Wednesday, with an estimated 7-10 days needed to fully resume normal operations after the strike.