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US Logistics Update [Jan 25, 2025]-English

U.S. Economy


  • President Donald Trump said he is considering imposing 25% tariffs on Canada and Mexico and a 10% universal tariff starting next month on February 1, which was not included in his inauguration day executive order, adding to uncertainty as markets expected him to be cautious on tariff policy. Meanwhile, operations to round up and deport illegal immigrants are in full swing, with more than 400 people reportedly arrested and deported in the past week alone. In many areas, illegal immigrants are staying home and not showing up for work due to fears of a crackdown by authorities, causing major service disruptions at restaurants, farms, and other places where many illegal immigrants work due to labor shortages.

 

  • While many companies are busy setting up war rooms to respond to major changes such as President Trump's executive orders on immigration, trade, taxes, and energy policies, there is a growing realization that Trump's inauguration will open up new opportunities and that these opportunities should be capitalized on. In particular, the logistics industry is concerned about the contraction of trade volume due to the imposition of tariffs and the U-turn of some policies such as electric vehicles, but the existing policies cannot be easily changed in a short period of time, and on the other hand, there is a demand for factory relocation and new facilities due to Trump's expansion of on-shoring, energy policy shift, and the 5, 000 billion dollars in Stargate AI investment, demand for power plant construction and power generation facilities such as Transformer, demand for semiconductors, demand for the military industry due to the US military buildup and the EU's defense spending increase (2%->5%), and new demands such as Saudi Arabia, China, Japan, and other countries that have promised to invest $600 billion in the US and increase imports of US products are also expected to increase significantly, creating many logistics opportunities.

 

Maritime Cargo Market Trends


  • North America Vessel, Rail Dwell time (Week 4 / Flexport) 


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

    Maersk and Hapag-Lloyd's Gemini Alliance has announced that it will utilize its hub-and-spoke network to achieve an on-time performance rate of more than 90%. Currently, the industry average on-time performance, including the two carriers, is around 55% (by Sea-Intelligence Maritime Analysis), so if the Gemini Alliance achieves this goal, it will not only improve carrier reliability, but also transform the supply chain as a whole. This is because even after the end of COVID-19, carrier punctuality has not recovered and the entire supply chain has been disrupted by inventory management challenges such as JIT. While the industry is somewhat negative on Gemini Alliance's strategy due to external variables such as ports and terminals, a Maesk executive said, “Instead of asking ‘what happens if we fail,’ our competitors should ask ‘what happens if we succeed,’” JOC reported.

       

  • Price trends from Asia to the US


 

 

Air Cargo Market Trends


  • CBP Announces Proposed Revisions to De Minimis Rule

    On January 17, U.S. Customs and Border Protection (CBP) published a proposed rule to amend the De Minimis ($800) rule. According to CBP, the proposed rule would disqualify goods that are subject to certain trade and national security measures, including tariffs under sections 232, 201, and 301, from duty-free treatment and require the provision of a 10-digit Harmonized Tariff Schedule of the United States (HTSUS) number. This means that goods valued at less than $800 will no longer be duty-free, which is expected to hit TEMU, Shein and others. The proposed amendments are currently under comment, but implementation is likely to be delayed due to President Trump's executive order prohibiting all executive branch agencies from creating new regulations for the next 60 days.

 

  • Global Air Cargo Price Trends

    Global air cargo spot prices remain significantly elevated, up over +20% compared to the previous year, despite a typical seasonal dip in early January 2025. Rates particularly from Asia Pacific and MESA regions contribute to maintaining this higher level. Spot rates for Asia Pacific to the USA dropped by -5% week-on-week in early January 2025, and tonnage fell sharply initially but rebounded. However, spot rates remain substantially higher year-on-year, with a noted decrease from China to the USA.

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