U.S. Economy
The Federal Reserve (Fed) cut its benchmark interest rate by another 25 basis points, the second such cut since September, bringing the benchmark rate to 4.5%-4.75% from 4.75%-5.0%. The Fed said the economy continues to expand, unemployment has risen but remains low, and inflation is nearing its 2% target. Meanwhile, Fed Chairman Jerome Powell, who has been at odds with President Trump, says in a press conference on December 7 that he will not step down if President-elect Trump calls for his resignation. In addition, many experts, including those on Wall Street, are expecting another 0.25% rate cut at the December FOMC meeting on December 17-18.
With Donald Trump becoming the next president of the United States, logistics companies are scrambling to figure out how the next four years will affect freight rates, foreign trade, and commodity costs. In particular, during the campaign, Trump pledged to impose tariffs of between 60% and 100% on imports from China, and 10-20% on all other imports, and many are wondering how this will affect them. In past instances, freight rates have risen as companies rush to stock up before tariffs are imposed. In addition, while many companies are moving production to countries such as Vietnam and Mexico, China's manufacturing capabilities are still difficult to replicate, so many companies will likely continue to source goods from China despite the tariffs.
Maritime Cargo Market Trends
ㅇ North America Vessel, Rail Dwell time (Week 45 / Flexport)
=> Rail delay intensified at LA/LGB ports remain (12 days)
ㅇ Canada BC (British Columbia) Port
* Locked out International Longshore and Warehouse Union Local 514 port workers and supporters listen to NDP Leader Jagmeet
Singh speak at a rally on November 8, 2024 in Vancouver. Photo: DARRYL DYCK / THE CANADIAN PRESS
The ILWU union, which represents more than 700 dockworkers at ports in Vancouver, Prince Rupert, Nanaimo and elsewhere, has been working without a contract since March of last year, and following a 72-hour strike call on Monday, Nov. 4, the company (BCMEA) locked out the workplace, leaving port operations at a standstill as of the evening of Saturday, Nov. 9.
An update to the company's website on Saturday night, November 9, indicating that the Federal Mediation and Conciliation Service (FMCS) mediation between the parties has ended without progress and no further negotiations have been scheduled.
With the Port of Montreal strike already underway, diversions to eastern Canadian ports are unlikely to occur, leading to increased utilization of U.S. West Coast ports
Air Cargo Market Trends
ㅇ Brazil's GRU airport operations at risk of collapse
Cargo operations at São Paulo's GRU airport, Latin America's largest air cargo gateway, are
reportedly on the brink of collapse(by PSA BDP). Airlines are appealing to the federal government to
take urgent measures, including a five-day export ban on dry cargo, to prevent the airport from
shutting down.