US Logistics Update [Nov 30, 2024]-English

U.S. Economy

The U.S. gross domestic product (GDP) grew at a preliminary annualized rate of 2.8% in the third quarter, the Commerce Department reported on Nov. 27. This is the same as the preliminary estimate released last month, indicating that the pace of growth has slowed slightly from the second quarter (3.0%), but continues to be strong. Meanwhile, the growth rate of the personal consumption expenditures (PCE) price index, which the Fed uses to guide its monetary policy decisions, was revised downward to 2.1% from 2.2%, bringing it closer to the Fed's inflation target (2%).

President-elect Trump's announcement of new “tariff bombs” targeting Canada, Mexico, and China has raised concerns that the tariffs may have ulterior motives beyond the ostensible goal of putting “America first” with strong protectionist policies. Notably, Trump's 25% tariffs on China under his administration did not stimulate inflation much (see graph above, right). Some have speculated that Trump's announcement could be a precursor to the renegotiation of the U.S./Mexico/Canada Agreement (USMCA). This hints that President-elect Trump may use tariffs as a tool to pursue various political and economic negotiations, free from inflationary pressures.

Maritime Cargo Market Trends

=> Rail delays of 1-2 weeks continue to occur in most western ports such as LA/LGB, SEA and Canada VAN,

Prince Rupert, etc.

Port of LA, October container handling volume increased by 25% year-on-year . The Port of Los Angeles announced that container throughput increased 25% year-over-year in October to 905,000 units, driven by increased volumes in response to tariff hikes and concerns about a resumption of the East Coast and Gulf port strikes. The Port of Long Beach also reported near-record volumes, with the two ports combining to handle 950,303 import containers. This surge in import volumes is expected to continue through early next year due to further increases in tariffs and delays in reaching a settlement in labor negotiations at the East Coast ports.

Air Cargo Market Trends

Canada Post Strike Update
Approximately 55,000 Canada Post employees have been on a nationwide strike since November 15, with no progress in negotiations as of the third week of the strike. Last week, a federally appointed special mediator temporarily suspended mediation because “the positions of the two sides are too far apart,” Canadian Labor Minister Steven MacKinnon said on 11/27. With the upcoming holiday shopping season, including Christmas, a major disruption in mail delivery is causing significant chaos.

U.S. downgrades China travel warning
On the 27th, the U.S. Department of State downgraded its travel advisory for China (Mainland) from Level 3, "Reconsider Travel," to Level 2, "Exercise Increased Caution," which is a recommendation for U.S. citizens. The highest level of the State Department's travel advisory is Level 4, "Do Not Travel," while the lowest level is Level 1, "Exercise Normal Precautions." Although this move came shortly after the U.S.-China prisoner exchange, many experts view the decision as a very positive signal for the potential increase in U.S.-China flights.

International cargo flights from China are breaking records daily
The number of international freighter flights to and from China has exceeded 3,400 weekly for three consecutive weeks and reached a record 3,485 this week, amid fierce competition to move goods before President-elect Trump's tariffs, reports Bloomberg, citing statistics from the Chinese Ministry of Transportation.

The trend is expected to continue through Jan. 20, the date of President-elect Trump's

inauguration next year. Meanwhile, through October, China's international cargo flights were up

73% year-on-year, and international cargo volume was up 8.3% year-on-year, according to the

report.