Thunderbolt Global Logistics 2024 End of Year International & Domestic Transportation Update
December 30,2024
The year is ending the way it began with lots of uncertainty in the shipping world. The Houthi’s in Yemen are still attacking vessels in the Southern Red Sea. This is causing most ocean carriers to divert vessels around the Cape of Good Hope. An ILA (International Longshoreman’s Association) strike along USA East Coast & Gulf Coast is now looking very likely at midnight on January 15,2025. Part II of The Trump Presidency Part will begin again on January 20th with the threat of increased tariffs on imports from all over the world. No region of the world is safe from his threats. Even our largest trading partners (Canada and Mexico) are in his sights for additional tariffs.
The most concerning issue right now is the looming ILA (International Longshoremen’s Association) strike at nearly all USA East Coast and Gulf Coast ports. If it happens it will be a major disruption in ocean shipping. The deadline is midnight on January 15th. The 3-day strike back in early October was painful but carriers and ports rebounded quickly. The wage issue was settled but the automation issue at the terminals is the key point that the ILA and United States Maritime Alliance Ltd. (USMX) must work out. There are no negotiations going on at this time and the deadline is just over 2 weeks away. Ocean carriers are developing contingency plans if there is a strike.
There is no election around the corner like there was in October. President Elect Trump is firmly on the side of the ILA. The ocean carriers are sounding like they are not going to give in to the ILA demands of no automation at the port terminals. The 11 main ocean container carriers are foreign owned, and they will get very little sympathy from the U.S. Government and U.S. Public. A strike of more than a few days will cause weeks of congestion and delays. It will greatly impact the U.S. economy in a negative way. There aren’t many other shipping options to the East and Gulf Coast. Using Canadian ports is an option where it makes sense, but Canada has their own labor issues at their ports too. Space is also tight via Montreal, Quebec, St. John New Brunswick and Halifax Nova Scotia.
Ocean carriers are already publishing proposed surcharges that would go into effect if there was a strike in excess of $1500.00 per 40’ container. LCL carriers are doing the same and could charge up to $50.00 w/m if there is a strike. Importers and exporters will see higher shipping costs if the strike does happen.
OCEAN CARRIER ALLIANCES ARE CHANGING IN 2025
The ocean carrier alliances are going to play musical chairs in early 2025. The divorce between Mediterranean Shipping Company (MSC) and Maersk Line will become final on February 1st. MSC will operate as a standalone carrier with no primary carrier partner. The marriage of Maersk and Hapag Lloyd will commence on February 1,2025 under the “Gemini Cooperation” agreement. Hapag Lloyd will withdraw from their partnership with Yang Ming Lines, Ocean Network Express and Hyundai Merchant Marine. Yang Ming Lines (YML), Ocean Network Express (ONE) and Hyundai Merchant Marine (HMM) will now brand themselves as The Premier Alliance. Evergreen Lines, CMA CGM, Cosco Shipping and OOCL Lines is now called The Ocean Alliance. Their agreement is in place through 2032. Zim Lines is operating independently in many trade lanes. Zim also has an agreement with MSC in the Transpacific.
EUROPE TO THE UNITED STATES
Space is tight from Europe due to the potential ILA strike and possible tariffs on European imports.
Import rates have also been climbing but not to the same extent as they are from the Far East.
The upcoming changes in the ocean carrier alliances will cause some vessel scheduling issues. We can expect some service disruption in late January and February as the new partners start working together.
Hapag Lloyd and Maersk Lines Gemini Agreement will call The Port of Baltimore when they begin their partnership from North Europe, Italy (Via Tanger Morocco) and several ports in China. This will be a big positive for the port and for importers and exporters. This is especially true for out of gauge (OOG) cargo that would ship on flat rack or open top containers. Hapag Lloyd is a strong carrier for OOG cargo. They have very good availability of equipment.
Yang Ming Lines has announced that their AL2 service will start calling the Port of Baltimore in February.
Ports calls in Europe are Southampton, Rotterdam, Antwerp, Bremerhaven and Le Havre. It’s unclear at this time if their Premier Alliance Partners will also join this service or if they will partner with other carriers.
The RO/RO mafi carriers that call North Europe are for the most part back to handling heavy, wide and tall cargo. The Port of Baltimore is still the number 1 port for RO/RO cargo, and with that static cargo can ship to Baltimore for delivery to points in the Midwest for imports, and for exports out of the USA Midwest to destinations in Europe and elsewhere.
ASIA to the UNITED STATES
Imports from Asia are hot again after a brief cooling off period in November and early December.
Vessel space right now is very tight from all origins in Asia to the West Coast and East Coast.
The increased volume via the West Coast has led to rail delays going into the Midwest.
As written earlier the rates will continue to climb until Chinese New Year and then they should moderate.
If there are tariff increases from China when the Trump Administration takes office, this will impact volume to the U.S.A. Carriers will still use blank sailings as a way to create artificial demand when they deem it necessary.
LATIN AMERICA TO/FROM THE UNITED STATES
Rates are still strong from South America, especially Brazil to the USA. Space is tight due to a lack of capacity. Port congestion in Brazil is causing vessel delays going northbound. Southbound rates are stable and carriers are looking for cargo.
EXPORT FROM THE UNITED STATES
Ocean export volume from the United States is stronger now but that could change if trade wars erupt in 2025. Countries will implement tariffs against U.S. products if the U.S. does the same to them. Carriers are actively looking for freight to fill their ships.
Empty container availability at inland rail depots can vary by carrier and rail depot. Empty containers are dependent on imports at nearly all inland depots. If imports drop due to higher tariffs it could lead to equipment shortages at inland depots.
Vessel schedule integrity is still an issue. This will most likely persist well into 2025. An ILA strike will lead to vessel bunching as they wait for the strike to end.
Special equipment (open top and flat rack containers) can be scarce at some ports (Baltimore in particular), so the earlier we can book space and secure equipment, the better off we and you are.
TRUCKING ISSUES IN THE UNITED STATES
Container drayage at most ports and railroads are still fluid with no discernible issues with capacity. If there is a strike in January all bets are off regarding truck capacity. It will tighten up quickly if there is a strike. Importers will likely see an increase in demurrage costs if the ports become very congested.
This needs to be watched very closely.
Flatbed trucking is in relatively good shape around the country. We have not seen areas where we cannot find available trucks.
Heavy haul capacity is also still in relatively good shape. There is still a lot of cargo being shipped requiring multi-axle trucks. There are energy and infrastructure projects that are keeping the heavy haul truckers busy.
WHAT DO WE RECOMMEND
Continue to plan ahead. We hope that the ILA and USMX can reach an agreement before the January 15th midnight deadline.
We always must be ready for the unexpected. We ask all our customers and overseas partners to keep in close contact with us so we can help you transport your shipment from Point A to Point B.
WHAT IS THUNDERBOLT GLOBAL LOGISTICS DOING?
We are still working hard every day to make sure the freight keeps moving. We are constantly checking on every shipment to make sure there are no delays. We’ll watch the ILA/USMX negotiations closely. We’ll wait and see if increased tariffs will come into effect when President Trump takes office January 20th.
We are grateful for all the support we receive from around the USA and around the world. Please contact us if you have any questions or need more information.
We hope everyone had a Merry Christmas, Happy Hanukkah and will have a safe New Year. All the best for 2025!
Jim Shapiro, Director