U.S. Economy
The U.S. Consumer Price Index (CPI) rose 2.4% year-over-year in September, the Labor Department reported on October 10th. This is the smallest increase in three years and seven months since February 2021, and continues the slowdown in inflation. Meanwhile, new job growth in the U.S. increased significantly in September, with the unemployment rate coming in at 4.1%, beating the August rate (4.2%) and consensus expectations (4.2%). Due to various employment and inflation indicators that significantly exceeded expectations, perceptions are growing that the U.S. economy is maintaining a solid growth trend, contrary to concerns.
As a result, expectations for a 'big cut' at the Fed's monetary policy meeting on November 6-7 are likely to diminish, further raising the outlook for a slowdown in the pace of interest rate reductions.
US investment bank Goldman Sachs quickly raised its year-end S&P 500 index forecast to 6,000p from 5,600p.
The likelihood of a recession was also cut to 15%, unchanged from its usual forecast.
The first phone call between President Biden and Israeli Prime Minister Netanyahu in 50 days ended without producing any results, raising the prospect of Israeli retaliation as a key variable in the US presidential election. With the presidential election approaching, the Biden administration urgently seeks to deter escalation in the Middle East. In contrast, Prime Minister Netanyahu views President Biden's call for a ceasefire as a "waste of the best opportunity in decades to dismantle Hamas and Hezbollah," according to reports from The New York Times and The Wall Street Journal. If, as Israel has declared, attacks are carried out on Iran's oil facilities, it is expected to lead to instability in oil prices and a decline in approval ratings for Vice President Harris.
Maritime Cargo Market Trends
ㅇ North America Vessel, Rail Dwell time (Week 41 / Flexport)
ㅇ Situation of Eastern and Gulf ports
Port operations quickly normalized after the ILA's strike suspension, and the Emergency Congestion Surcharge that carriers were planning to impose was either waived or canceled. (However, the Peak Season Surcharge will remain in place until the first half of October). Port congestion surcharges on FCL and LCL that some forwarders, such as Shipco, were planning to impose were also canceled. Bookings for ocean exports from the U.S. that were either rejected in anticipation of port strikes or redirected to alternative western ports are now returning to vessels departing from eastern and Gulf ports due to the suspension of strikes in those areas. This has created a rush of bookings, which is expected to continue until the end of October or early November. The Port of Montreal, Canada, which had been part of the East and Gulf port strikes, has also suspended its strike and is operating normally.
ㅇ Port of Brunswick/Savannah, Georgia overtakes Baltimore to become the largest U.S. automotive port
With several automotive companies, including Hyundai, Kia, and Mercedes-Benz, having production facilities in Georgia, the Port of Brunswick’s Colonel’s Island Terminal is set to become the largest automotive processing port by handling over 870,000 RO/RO cargo units in 2024, surpassing the Port of Baltimore, which has faced setbacks due to bridge incidents.
In August, Brunswick and Savannah ports processed 74,630 RO/RO cargo units, marking a 21.4% increase compared to the same month last year.
Meanwhile, the Georgia Ports Authority (GPA) has approved measures to expand vehicle transport processing space at Brunswick's Colonel’s Island Terminal, aiming to widen the gap with Baltimore. The expanded capacity is expected to be operational by the summer of 2025.
Air Cargo Market Trends
ㅇAirfreight Price Trends
Demand for imports to the U.S. was very weak due to the impact of China's National Day holiday, leading to a sharp drop in prices. However, it is expected that typical peak season trends will emerge starting next week, with an increase in supply and a significant rise in prices. On the export side, a shortage of supply may occur due to a large number of cargo flights from Asia being canceled, which could lead to a rise in spot prices. However, starting next week, a substantial increase in supply, including charter flights, is anticipated, resulting in a drop in spot prices and a return to an oversupply situation.
Customs and other market situation
ㅇ CBP raises Merchandise Processing Fee (MPF)
U.S. Customs and Border Protection (CBP) increased the MPF for Formal entry (goods whose monetary value exceeds $2,500, or commercial textile shipments (clothes/materials) regardless of value) cargo effective 10/1. The de minimis value has increased from $31.67 to $32.71 and the maximum value has increased from $614.35 to $634.62. However, the MPF rate remains at 0.3464%.
ㅇCanada Border Services Agency (CBSA) announced the development of an automated payment system for customs duties and other taxes called Assessment and Revenue Management (CARM), effective October 21st.
ㅇUPS Announces 5.9% Rate Increase Effective December 23rd
UPS announced on its website that it will increase rates for ground, air, and international delivery services by an average of 5.9% effective December 23rd. Rival FedEx preceded UPS by announcing a 5.9% rate hike effective January 6th of next year.
ㅇ Amazon Hires 250,000 Temporary Workers for Holiday Shopping Season
Amazon, the world's largest e-commerce company, is hiring 250,000 temporary workers nationwide to staff its warehouses and fulfillment network for the holiday shopping season. This is the same level as in 2023