Recent developments in shipping and logistics industry highlight both disruptions and opportunities as companies adapt to changing conditions. The partnership between Maersk and Hapag-Lloyd aims to address safety concerns in the Red Sea and raise container rates. Meanwhile, the Port of Oakland has reported significant growth in container volumes, indicating strong import activity as the holiday season approaches. Despite strikes on the East and Gulf Coasts, U.S. retailers remain optimistic about a year-over-year increase in imports. As labor relations evolve, especially with the tentative agreement between the International Longshoremen’s Association and the United States Maritime Alliance, the maritime trade landscape is positioned for potential growth and change.
Learn more about these key industry updates:
Maersk, Hapag-Lloyd Expect Red Sea to Be Unsafe Into 2025 (Transport Topics)
Maersk and Hapag-Lloyd have announced a new partnership, effective February 1, 2025, as part of the Gemini Cooperation. This collaboration will continue utilizing the Cape of Good Hope Network following the holiday season and into 2025. Due to ongoing safety concerns in the Red Sea, transit routes to southern Africa have been rerouted, leading to increased container rates caused by an overcapacity in imports and exports. The partners plan to return to their usual route through the Red Sea when it is “safe to do so.”
Port of Oakland container volume continues to grow (Port of Oakland)
At the Port of Oakland, container volumes have shown consistent growth month after month. A recent report reveals that in August 2024, loaded container volume increased by 5.4% compared to August 2023. Also, loaded imports experienced a significant surge of 14.9%, jumping from 72,481 twenty-foot equivalent units (TEUs) in August 2023 to 83,272 TEUs in August 2024.Overall, the supply chain in the import sector appears to be functioning effectively.
Supply chains minimally affected as U.S. dock workers call off strike after 3 days (Trade Finance Global)
During the three-day strike, it was estimated that the economic impact could reach up to $5 billion per day. Unlike what suggested, reports indicate that the actual cost of the strike was no more than $9 billion, with no significant shortages or delays reported in the supply chain. This is positive news for the economy, as the trade and shipping industry had proactively prepared in advance for the anticipated lengthy strike.
U.S. retailers expect modest import bump in October to close out peak season (Journal of Commerce)
U.S. retailers anticipate a year-over-year increase in imports as 2024 comes to a close. Despite the strikes on the East and Gulf Coasts, the labor negotiations are not expected to cause significant disruptions in the transportation sector for retailers. The latest forecasts suggest that U.S. imports will rise by 3.1% from October 2023 to October 2024. Overall, the end of 2024 appears promising for an increase in retail U.S. imports.
U.S. ports start 100-day countdown clock to new strike and automation is poised to be the dealbreaker (CNBC)
As of last Thursday, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance, Ltd. (USMX) have reached a tentative agreement for a wage increase of 61.5%, falling short of the ILA’s desired 77% increase. While the strike is currently over, both parties have until January 15, 2025 to finalize the remaining terms. A significant sticking point remains the issue of port automation, which has to be addressed in the master contract by that deadline. The ILA has expressed concerns about the future of their jobs considering USMX’s automation plans and is seeking a complete ban on these measures. If an agreement is not reached by January 15, there is a high probability that another strike will take place.
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