U.S. Economy
The U.S. Consumer Price Index (CPI) rose 2.6% year-over-year in October, the Labor Department announced on November 13th. This is up 0.2 percentage points from September (2.4%) and marks the first time in seven months that consumer prices have stopped slowing and rebounded on an annualized basis since March (3.5%). Excluding volatile items such as energy and food, core CPI rose 3.3% y/y, the same as the September increase. Attention is now focused on future inflation trends, as experts believe that President-elect Trump's key campaign promises of tariffs, tax cuts, and immigration policies will trigger inflation. Meanwhile, with inflation data showing signs of stagnation and the U.S. economy continuing to grow strongly, led by consumption, there is growing speculation that the Fed may slow the pace of future rate cuts. (CME Fedwatch sees a 41.3% probability of the Fed keeping rates unchanged in December, hike from 22% a week ago)
With the Republican Party securing majority status in the House of Representatives as well as the Senate, incoming U.S. President Donald Trump will have a strong power base and is expected to push ahead with his key campaign promises, including tax cuts, building a border wall, deporting illegal immigrants, and fixing Obamacare, at a rapid pace in his first term. As a result, all sectors of the economy are expected to move quickly in line with the president-elect's policies, keeping sourcing managers, especially those who rely heavily on China, very busy.
Maritime Cargo Market Trends
North America Vessel, Rail Dwell time (Week 46 / Flexport)
=> Rail delay at LA/LGB ports ongoing
Montreal, BC (British Columbia) Port Update
On November 12, Canadian Labor Minister Steven MacKinnon's compulsory arbitration is expected to resume operations next Monday, November 18, with the ports of Montreal and Vancouver, Prince Rupert, and Nanaimo. Meanwhile, the British Columbia port unions have indicated that they plan to challenge the Canada Industrial Relations Board's cease-and-desist order and Minister Steven MacKinnon's compulsory arbitration, setting the stage for further disputes.
U.S. ILA and USMX Labor Negotiations
On Wednesday, November 13, the ILA announced that it had suspended negotiations with USMX following an impasse during a meeting in New Jersey the previous day, after USMX presented proposals regarding the automation and semi-automation of ports. The suspension of negotiations is expected to lead to the full-scale start of shipments via the West Coast bypass route. In preparation for the potential strike by East and Gulf Coast dockworkers in January and the higher tariffs under President-elect Trump, U.S. retailers are expected to import 350,000 more TEUs than initially anticipated in November and December, according to Global Port Tracker. Specifically, November imports are expected to increase by 13.6% year-on-year, while December imports are forecasted to rise by 6.1%.
Air Cargo Market Trends
Canada lifts restrictions on Chinese flights
Amid ongoing restrictions on Chinese airlines' flights to the U.S., the Canadian government has decided to lift its flight restrictions to China. In response, Air Canada (AC) plans to increase its flights to China from Vancouver from four to 14 times a week, with daily flights to Shanghai from four times a week in December and daily flights to Beijing from January 15 using B787 aircraft. Meanwhile, the U.S. continues to maintain flight restrictions on China (resulting in a significant shortage of passenger and cargo supply between China and the U.S.), and it will be interesting to see if the Trump administration will change this policy.
Amazon opens webstore to sell ultra-low-priced products
Amazon opened Amazon Haul, a webstore that sells ultra-low-priced goods aimed at Temu and Shein, on the 13th. The webstore sells ultra-low-priced items such as clothing, home goods, electronics, and more for $20 or less and is available only on the mobile app. Amazon advertises a wide range of products at crazy low prices, with delivery taking up to two weeks, but the prices are worth the wait.