This week:

• Global air cargo rates in the second quarter remained above 2019 levels. 
• Surveyed fashion executives in the United States plan to reduce sourcing from China over the next two years.
• Air carriers, the trucking industry and The Port of Kahului are helping government officials deliver supplies during the disaster in Maui.
• International Longshore and Warehouse Union (ILWU) office workers and waterfront employers in Southern California are “making progress” in contract negotiations.
•  The hiring surge by U.S. trucking companies is slowing down. 

Air cargo rates remain at pre-pandemic levels, despite supply-demand woes

Second-quarter pricing dropped 40% year over year, but the average air cargo rates were 34% above those that were recorded in 2019, according to air freight analyst WorldACD.

A report from the International Air Transport Association (IATA) released last week, contained key data and index factors showing a decline in global manufacturing production and exports in June, which is seen as an indicator of air cargo demand.

“We remain hopeful that the difficult trading conditions for air cargo will moderate as inflation eases in major economies,” Willie Walsh, director general of IATA, said in the report. “This, in turn, could encourage the central banks to loosen the money supply, which could stimulate greater economic activity.”

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Fashion industry reducing sourcing from China

The latest survey from the U.S. Fashion Industry Association indicates that fashion companies are concerned about the volatile relationship between the United States and China, and are looking to mitigate risk by pivoting to other sourcing options.

In the survey, more than 40% of the execs say they currently source less than 10% percent of their apparel products from China. That’s a 10 percentage point increase from last year, and a 20-point increase since 2019.

Fashion executives cited forced labor allegations against China and risks in supply chain interruption as reasons for the decision.

Carriers focusing on emergency supplies in Maui

Air carriers, the trucking industry and The Port of Kahului are helping government officials deliver supplies during the disaster.

On Aug. 9, inter-island freight and transport company Young Brothers said that they would prioritize space for supplies and emergency vehicles during upcoming sailings.

“Due to shifts in capacity for certain sailings, Young Brothers may re-book some cargo to the next available sailing,” according to the notice. “As a reminder, less than container load cargo is moved on a space available basis and priority will be given to cargo that support relief efforts.”

Carriers from outside of Hawaii have also been sending help. Last Friday, and an Alaskan Airlines rescue flight brought supplies, and help transport people off the island.

ILWU office workers moving forward on contracts

After ILWU dockworkers recently established a tentative deal, this would be a significant boost to West Coast labor peace.

“It’s fair to say we’re making progress,” John Fageaux, president of the ILWU Local 63 Office Clerical Unit (OCU), told the Journal of Commerce last Tuesday. But, Fageaux also told the Journal that the two sides “still have a lot of ground to cover.”

The conversations have been focused on wages, pensions and technology, the negotiators told the Journal of Commerce.

So far, wages and contract length have been a point of contention.

Stephen Berry, lead negotiator for the Los Angeles-Long Beach Harbor Employers Association said the union is seeking a 28% increase over a three-year contract. Berry told the Journal of Commerce that employers want a contract longer than three years, although he didn’t say what they were offering.

The office worker’s negotiations wrapping up would help a potentially mercurial situation from playing out.

In the past, ILWU dockworkers have refused to cross picket lines set by the office workers union.

U.S. trucking hiring slows

According to the U.S. Bureau of Labor Statistics (BLS), trucking firms added only 1,200 jobs in July before seasonal adjustment, falling well below expectations.

By comparison, in July of 2022 and 2021, more than 11,000 jobs were added.

Extra workers currently are not needed due to soft freight demand.

“Manufacturing continues to act as a drag on the US economy,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said in an Aug. 1 statement. “However, producers are clearly shrugging off recession fears and planning for better times ahead.”