US Logistics Update [Aug 16, 2025]-English

The US Department of Labor announced that the US Producer Price Index (PPI) rose 3.3% year-on-year and 0.9% month-on-month in July. This figure greatly exceeded experts' forecasts of a 0.2% month-on-month increase. The core PPI, excluding energy and food, rose 2.8% year-on-year and 0.6% month-on-month, significantly exceeding the forecast of a 0.3% increase. This indicates that companies are passing on tariff-related costs to consumers. Two days earlier, the July Consumer Price Index (CPI) was announced at 2.7% year-on-year, the same as in June, and the core CPI, excluding volatile energy and food prices, rose 3.1% year-on-year, in line with experts' forecasts. This led to high expectations that the Federal Reserve (Fed) would cut the benchmark interest rate in September, but immediately after the July PPI announcement, there were even predictions of an interest rate freeze. However, amid expectations that the U.S. unemployment rate will surge due to the Labor Department's drastic downward revision of employment figures for May and June, which led to the dismissal of the statistics director, the Fed's actions are drawing significant attention. (If the unemployment rate rises, interest rates must be lowered to stimulate employment growth.)

Meanwhile, AP reported that Americans are feeling “severe food cost stress” as food prices

continue to rise, and are beginning to change their shopping patterns to be more economical.

According to an AP survey, about 53% of Americans cite food costs as a major source of stress, and

are changing their consumption patterns by eating out less, buying only necessities, and using

more coupons. Starbucks has seen a decline in sales for six consecutive quarters. Since the

beginning of the year, Americans have been concerned about the possibility of rising prices due to

Trump's trade war, but so far, except for some items, there has been no significant increase in

prices. This is because companies secured inventory in advance at the beginning of the year, and

some companies decided to absorb the increased costs. Experts warn that once inventory is

depleted and the impact of tariffs on companies becomes a reality, price increases could

accelerate.

On the 13th, the Wall Street Journal (WSJ) reported that China's share of US imports peaked at 22% in 2018 and has since fallen to 12%, citing data from the US Bureau of Census. The WSJ noted that goods previously exported from China to the US are now being produced in other Asian countries such as Vietnam, Indonesia, and India, and that trade statistics may not accurately reflect China's share, nor is it easy to determine the extent of this shift. However, the WSJ assessed that some products imported from Vietnam or other countries to the US are actually made in China, with the aim of avoiding tariffs by transiting through a third country. U.S. imports from China have declined in most product categories, such as smartphones, toys, and furniture, but have increased significantly in home appliances and batteries used in electric vehicles. There are serious concerns that President Trump's tariff policy will lead to a global trade slowdown, as seen in trade with China.

Hapag-Lloyd and Gemini collaborate to improve on-time performance, but cost burdens remain
Hapag-Lloyd, which is aiming for a vessel on-time rate of over 90%, has invested heavily in the transition to the Gemini Network with Maersk. While this has resulted in significant short-term cost burdens, the company expects to achieve annual cost savings of $350 million to $400 million through this transition and aims to achieve over $1 billion in cost savings across the entire network by 2026, according to CEO Rolf Habben Jansen. Hapag-Lloyd announced that it has achieved a 90% on-time rate every month since the network became fully operational in June, emphasizing that it has successfully improved reliability in the global shipping industry. According to data from eeSea, the Gemini Network recorded the highest on-time rate among shipping alliances through July, particularly maintaining over 90% on the Europe-North America route. However, the overall average remains at 84%, indicating that there is still room for improvement. Hapag-Lloyd is confident that it can expand its cargo volume beyond the expected increase in global shipping demand (3-4%) in the second half of the year based on this achievement.

Canadian government settles Air Canada strike with ‘mandatory arbitration’
Air Canada, which suspended flights for 12 hours on August 16 due to a flight attendant strike, is scheduled to resume flights 12 hours after the strike began, following a mandatory arbitration order from the government. However, flights are not expected to return to normal until late Sunday afternoon. The Canadian government has instructed the Canada Industrial Relations Board (CIRB) to mediate in order to reach a swift resolution, but many experts predict that it will be difficult to reach a compromise, as the strike was triggered by the breakdown of eight months of negotiations and key issues such as wage increases remain unresolved.