U.S. Economy
The Federal Reserve announced that “businesses expressed optimism that demand will rise in the coming months” in its latest Beige Book, released ahead of the December Federal Open Market Committee (FOMC) meeting on December 17-18. Fed Chair Jerome Powell also spoke at a New York Times event on Thursday, calling the US economy “in surprisingly good shape”. Meanwhile, preliminary Mastercard figures show that retail sales on Black Friday, which marks the start of the annual holiday shopping season, were the largest on record, up 3.4% year-over-year. With many companies promoting potential price hikes in the wake of President-elect Trump's “tariff bombshell,” there is speculation that this year's holiday shopping season will be a record-breaking one. The holiday shopping season, from Black Friday to Cyber Monday to Christmas sales, accounts for more than one-third of retailers' sales in a year.
Despite the election of President-elect Trump, who has expressed resistance to green policies, including electric vehicles, six states, including California, New York, Massachusetts, Vermont, Washington, and Oregon, will require 35 percent of new cars in the 2026 model year to be zero-emission vehicles (ZEVs - zero-emission electric and hydrogen vehicles). The number of states joining the ZEV mandate will increase to 12 next year, and California, which is leading the charge, is the largest EV market in the U.S., accounting for 25% of all EV sales. The response from Korea is also gaining attention, as 17 electric vehicle battery plants (8 by LG Energy Solution, 6 by SK On, and 3 by Samsung SDI) are either operational or under construction in the United States.
Maritime Cargo Market Trends
North America Vessel, Rail Dwell time (Week 49 / Flexport)
Rail delay weighted in most of the western ports of the Americas such as LA/LGB, SEA and VAN, Prince Rupert, etc.
West Coast Port Situation Update
Increased US holiday shopping season volumes, diversions to western ports due to East and Gulf port strike concerns, and possible 'tariff bombs' from President-elect Trump is imminent, leading to a significant increase in cargo volumes in most western US ports, including LA/LGB, and increasing concerns about port congestion. rail connectivity, but it will also affect port operations in the future, significantly increasing the risk that congestion will recur.
Labor negotiations at East and Gulf ports
The International Longshoremen's Association (ILA) and employer group United States Maritime Alliance (USMX) are locked in a sharp standoff over automation at U.S. ports with less than a month and a half to go before the January 15, 2025 deadline for a tentative labor agreement. In a Dec. 2 Facebook post, ILA Vice President Dennis Daggett criticized semi-automated rail-mounted gantry cranes (RMGs) as job-killers and a national security risk if hacked, while USMX on Dec. 3 defended automation as essential to modernizing ports and expanding port handling capacity due to land shortages. Meanwhile, the two sides are currently in no negotiations.
Air Cargo Market Trends
Canada Post Strike Update
The Canada Post strike enters its fourth week with no progress in labor negotiations. In an appearance on CTV on Friday night, December 6, Mr. Jim Gallant, the arbitrator representing the Canadian Union of Postal Workers, stated that Canada Post's new offer is extremely disappointing as it is the exact opposite of the union's demands. The strike is expected to be prolonged.
Airfreight Price and Space Trends from the US
Significant increase in demand driven by e-commerce cargo for the holiday shopping season, including Black Friday, causing some supply shortages. Spot prices up. Same situation expected to continue until mid-January next year due to demand for purchasing and transportation of goods before price hike due to 'tariff bomb'.