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US Logistics Update [Feb 1, 2025]-English

U.S. Economy


  • President Trump, true to his word, issued an executive order late afternoon on February 1, imposing 25% tariffs on imports from Canada and Mexico and an additional 10% tariff on China. However, only 10% tariffs were imposed on crude oil, natural gas, and electricity from Canada. The tariffs on Canada will begin on Tuesday, but no effective date was specified for Mexico and China. Meanwhile, ICE's crackdown on undocumented immigrants is in full swing, with many businesses that employ large numbers of undocumented or undocumented immigrants, such as moving, construction, delis, laundromats, and restaurants, experiencing disruptions as employees do not show up for work. As people refrain from going out in the wake of indiscriminate crackdowns, the number of people in the city centers of large cities has decreased significantly, and in some public schools, student attendance has dropped from 90 percent to 80 percent.

 

  • The Federal Reserve (Fed) announced that it decided to keep its benchmark interest rate unchanged at 4.25-4.40% at the Federal Open Market Committee (FOMC) meeting on January 28-29. The FOMC meeting was the first since President Trump's inauguration, and the Fed decided to keep rates unchanged despite public pressure from Trump to cut rates. Powell's term as chairman runs until May 2026, and he has said he will not step down in the face of Trump's calls for his resignation. Meanwhile, the IMF forecasts U.S. economic growth for this year at 2.7%, 0.5 percentage points higher than its October forecast, suggesting the U.S. will remain the engine of the global economy.

 

 

Maritime Cargo Market Trends


ㅇ  North America Vessel, Rail Dwell time (Week 5 / Flexport)


            

  • Gemini Alliance aims for 90%+ on-time performance by 2025 (Update)

    Gemini Alliance has announced that the full hub-and-spoke network will be in place by June, and that the 90%+ on-time rate will only apply to hub to hub, much to the dismay of the end-to-end reliability-conscious industry. In any case, it will be interesting to see who will be the winner between Premier, Ocean Alliance, MSC, and Gemini Alliance's hub and spoke network, which are running traditional port to port services, and the results will be used as a benchmark for future shipping companies. 

 

 

Trucking Market Trends


  • NMFTA to revamp the LTL freight classification system (NMFC)

    The National Motor Freight Classification (NMFC), a less-than-truckload (LTL) freight classification system established in 1936, will be revised for the first time in nearly 100 years. The National Motor Freight Traffic Association (NMFTA), which oversees the NMFC, announced that it will simplify the system to 18 classes and subclasses ranging from 50 to 500. The NMFC is a U.S. standard (outside the U.S., dimension-weight pricing systems are used), and while the NMFC is not a freight rate, it is a key factor in determining what trucking companies charge, with Density, Handling, Stowability, and Liability being the factors that determine class. The new rule is scheduled to go into effect on July 19 after a public hearing in late February/early March. However, many shippers are concerned that the NMFC revisions will result in higher LTL prices and will also require shippers to more accurately measure the dimensions and weight of all pallets and, for some companies, significantly change their palletizing and shipping procedures.

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