U.S. Election and Economic Trends
The U.S. presidential election has been a tumultuous affair, with Vice President Biden's campaign taking a lead in the polls after a pro-Trump speaker's “garbage island” remark, and Trump's campaign using it to drive a garbage truck to swing public opinion back toward Trump. This uncertainty, coupled with the conflict in the Middle East, impacted the price of gold, which briefly topped $2,800 per ounce. Meanwhile, the market is still betting on Trump's chances of staying in power, and as proof of this, the stock of the former president's social media company, Truth Social, has surged 250% in the past month, overtaking X (formerly Twitter) in market capitalization. In addition, the number of Latin American migrants rushing to reach the border before Trump's inauguration is on the rise, the UK's Daily Telegraph reported.
The U.S. gross domestic product (GDP) grew at a preliminary estimate of 2.8% (annualized rate from the previous quarter) in the third quarter, the Commerce Department reported today. Following 3.0% growth in the second quarter, the economy continued to grow at a solid pace, driven by robust consumption. Meanwhile, the U.S. Commerce Department reported that personal consumption expenditures (PCE) rose 2.1% year-over-year in September, with underlying PCE, which excludes the volatile energy and food and beverages, rising 2.7% year-over-year, flat from the previous month. While PCE is very close to the Fed's inflation target, it is not the same as the underlying PCE that the Fed uses when making monetary policy decisions. The underlying PCE, which the Fed uses to guide its monetary policy decisions, came in at 2.7%, making it difficult to predict whether the Fed will cut or keep rates unchanged. Meanwhile, with the holiday season just around the corner, beginning with Thanksgiving and Black Friday and continuing through Christmas and early New Year's, Gallup polls show that Americans are expected to spend the largest amount of money ever during the holiday season, which is exciting the logistics industry.
Maritime Cargo Market Trends
ㅇ North America Vessel, Rail Dwell time (Week 44 / Flexport)
=> Rail delay intensified at LA/LGB ports (9 days ->12 days)
Western Canadian port union strike
Following the strike at the Port of Montreal, the ILWU, Canada's western port union, announced that it will go on strike for 72 hours starting at 9 a.m. on Monday, November 4, according to the BC Maritime Employers Association (BCMEA). As a result, railroads connected to Canada's western ports, including CN, CSX, and NS, have also announced that they will be closed on Nov. 4.
Labor negotiations at US East and Gulf ports to officially resume in mid-November
Labor negotiations between the International Longshoremen's Association (ILA) and the parties are expected to officially resume in mid-November, after the U.S. presidential election, according to industry officials. Meanwhile, the ILA's recent three-day strike had limited impact on air cargo demand as many companies have already taken steps to mitigate potential disruptions. However, many experts warn that if a labor agreement is not reached by January 15, 2025, a second strike could occur, causing even greater disruption to the supply chain, prompting alternative logistics options and communicate closely with shippers and forwarders to proactively manage potential transportation disruptions and increased costs.
Biden to invest $3 billion in port infrastructure improvements
President Biden announced on Monday that the U.S. will invest a total of $3 billion in infrastructure improvements at 55 U.S. ports. The investment will be used to purchase carbon-free port equipment and charging facilities, cargo handling equipment and trucks, etc. as part of the Inflation Reduction Act (IRA), and is expected to help improve the poor infrastructure of U.S. ports.
Air Cargo Market Trends
Airfreight Price Trends (From US)
A surge in charter cargo flights from Asia has led to a significant increase in supply and a sharp drop in spot prices. Significant excess supply situation expected to continue until the end of the year. Regular consolidated shipment prices remain unchanged as it is important to maintain service quality, including on-time performance and securing stable supply.