U.S. Economy
Ahead of President-elect Trump's inauguration, U.S. markets are focused on how the Fed's monetary policy will change. With the Republican Party taking control of both the Senate and the House of Representatives following Trump's election, expectations of a rate cut by the Federal Reserve (Fed) are rapidly cooling amid concerns that inflation could return if Trump's campaign promises of tariffs, tax cuts, and mass deportations of illegal immigrants are realized.
Amid a flurry of reports about the impact of a Trump presidency, the Wall Street Journal (WSJ) reported on Tuesday that some U.S. companies are rushing to buy products from China to sell for months and up to a year in advance. The WSJ reported that even when the first Trump administration launched a "tariff war" against China in 2018, some companies stockpiled Chinese products, and that since October, when Trump's election became likely, Chinese exports to the U.S. have already increased 13% year-over-year. Wall Street analysts expect these pre-orders to continue to drive China's exports to the U.S. in the coming months.
Meanwhile, the election was not a Republican victory but a Democratic defeat, suggesting that Trump's policies will face stiff resistance. In other words, Trump's vote total in the 2024 election was 77 million, an increase of 3 million votes from 2020, while Vice President Harris received 74 million votes compared to Biden's 81 million in 2020, a decrease of 7 million votes. Many voters refused to go to the polls because they felt they could not vote for either Democratic or Republican candidate. Given that economic distress caused by high inflation was a major factor in the GOP's victory, it will be interesting to see how the party will implement policies that could cause high inflation, such as tariffs/tax cuts/deportation of illegal immigrants.
Maritime Cargo Market Trends
North America Vessel, Rail Dwell time (Week 47 / Flexport)
=> Rail delay intensified in most western ports such as LA/LGB, SEA and Canada VAN, Prince Rupert, etc.
Rail Delay Situation
Rail delays are intensifying as container volumes on the U.S. West Coast surge due to the arrival of the peak season, the search for alternatives to the East Coast port strike, and concerns about tariffs from the Trump administration. Shippers are responding with more costly alternatives such as cross-docking, air diversion, transloading, and diversion to Mexican/Canadian coastal ports to avoid delays. Many experts do not expect rail delays to be resolved until the first quarter of next year.
Montreal, BC (British Columbia) Port Update
Port of Montreal in eastern Canada and Vancouver/Prince Rupert in western Canada resumed operations last weekend. However, backlogs are taking a long time to be processed, which may lead to an increase in Detention, Demurrage (D&D) and arguments.
US ILA and USMX Labor Negotiations Trends
On the 19th, the AAFA (American Apparel & Footwear Association) urged ILA and USMX to continue negotiations on the master contract set to expire on January 15th next year. The AAFA, an organization with more than 1,000 fashion industry members, asked the ILA and USMX to negotiate to avoid a strike at East and Gulf Coast ports. It also sent a separate letter to President Joe Biden, urging the U.S. government to expand its efforts to protect international maritime traffic routes in the Red Sea from attacks by Houthi rebels. Meanwhile, to prepare for a possible strike by East and Gulf Coast dockworkers next January and President-elect Trump's higher tariffs, U.S. retailers imported 350,000 TEUs more containers than expected in November and December, according to Global Port Tracker. Specifically, November imports are expected to increase by 13.6% year-on-year and December imports are expected to increase by 6.1%.
ㅇ 2025 Ocean Alliances (by Lars Jensen)
Air Cargo Market Trends
Canada to Strike About 55,000 Postal Workers
On November 15, approximately 55,000 Canada Post employees went on a nationwide strike, demanding a 24% wage increase and improved working conditions over the next four years. As a result, the delivery of 85,000 passports has been suspended, and there are concerns of major disruptions in mail delivery during the peak holiday shopping season, including Christmas.
Rising expectations of resuming transit through Russian airspace
President-elect Trump has vowed to immediately end the war between Russia and Ukraine if he takes office. If Trump fulfills his pledge and allows access to Russian airspace, it is expected to significantly improve the convenience of airlines and various customers who are suffering from increased operating costs and reduced supplies.