US Logistics Update [Jun 21. 2025]-English

The Federal Reserve (Fed) left its benchmark interest rate unchanged at 4.25-4.50% on June 18, reaffirming its “wait and see” stance and maintaining the likelihood of two rate cuts within the year, which it has signaled since December. This is the fourth consecutive rate hike since President Trump took office. The recent escalation of the conflict between Israel and Iran has heightened the sense of geopolitical crisis in the Middle East, and some experts have raised concerns that the Fed's wolfish response could lead to an economic downturn in a situation where international oil prices are unstable, but the Middle East is energy self-sufficient without crude oil and both inflation and unemployment are favorable.

However, most experts believe that the impact of the tariff policy has not yet been reflected in US

prices and risks significantly pushing up inflation in the future, and in fact, real data is gradually

showing signs of slowing down. For example, retail sales, which account for 70% of the US economy,

fell 0.9% month-on-month in May.

Latino consumers are staying home and spending less as Immigration and Customs Enforcement (ICE) ramps up raids at restaurants, construction sites, manufacturing plants and more, the New York Times and WSJ report. In its first-quarter earnings report, Coca cola cited reduced purchases by Latino consumers as one of the main reasons behind a 3% year-over-year decline in North American sales. Shoe store chain Shoe Palace noted during its recent earnings call that “customer visits are down sharply and the impact of immigration policy is clearly being felt.” President Trump's solution is being closely watched as a decrease in immigrants, who play an important role in the U.S. labor market, could slow down U.S. economic growth, which could reduce the Fed's room to cut interest rates and lead to a U.S. recession.

Trans Pacific East Bound (TPEB) trends
- Demand: Demand is trending downward. Especially, July booking decreased sharply.
- Vessel supply: recovered to 90% of peak level. July is concerned about oversupply due to sharp decline in demand.
- Equipment : Containers and chassis are in good supply.
- Rates : Significant decrease to West Coast ports ($3,500/FEU, -32% WoW), slight decrease to East Coast ports ($6,500/FEU, -11%, WoW)

Canadian National (CN) to invest $170 million to build new rail HUB outside Chicago
Canadian National has acquired 900 acres of land in Channahon, about 80 kilometers from Chicago, and will invest $170 million to build a new rail hub. The hub, which is expected to be completed by the end of 2027, is expected to shorten the transportation time between stations by 48 hours, significantly improving the quality of rail transportation services in Chicago and other parts of the Midwest.

Union Pacific Railroad (UP) Raises Theft Coverage to $250K
Amid ongoing struggles with cargo theft, the railroad industry is taking action, with Union Pacific (UP) set to significantly increase its cargo theft insurance payout limit from the current $100,000 to $250,000 starting July 1. However, the product requires the use of a special product code that carries an additional fee and requires the use of special security locks and anti-theft barrier seals, among other requirements, making its effectiveness questionable. In contrast, industry rival BNSF Railway does not require special locks and anti-theft seals for its $250,000 policy. UP also charges a fee of $100, while BNSF charges $80.

AN-124 (the world's largest heavy freighter airplane) is reaching the end of its service life
The world's largest freighter aircraft, the An-124, is approaching the end of its service life, raising concerns about the future of large air cargo transportation amid a significant increase in demand for heavy cargo in the aerospace, military, and energy sectors since the pandemic, the Journal of Commerce (JOC) reports. Ukraine-based Antonov Airlines, which operates seven An-124s, said the first of its aircraft will reach the end of its operational life in 2034, with the first retirement expected in 2034. While plans are underway to extend the life of some of the aircraft by 10 years, experts say it will take years to develop and field the aircraft, and neither Boeing nor Airbus, in particular, is likely to build a large, heavy freighter, which means higher freight rates and supply instability will continue.

DHL Express Canada suspends parcel deliveries due to union strike
DHL Express Canada went on strike on June 8 after collective negotiations broke down with Unifor, the union representing more than 2,100 truck drivers and warehouse and sortation workers who deliver parcels for DHL. DHL had been hiring replacement workers to handle parcel volumes, but on June 20, legislation banning the use of replacement workers came into effect, bringing operations to a complete halt. On June 17, DHL gradually stopped accepting parcels to and from Canada, and on June 19, DHL stopped accepting all parcels to and from Canada.