This week:
- ILA-USMX master contract negotiations fall apart over automation provisions
- Canadian government orders BC, Montreal ports to reopen but workers fail to return
- Analysts say trucking rate recession over soon, rosy forecast throughout 2025
- Panama Canal Authority proposes ambitious land bridge project to reclaim lost business
- US intermodal savings drop in Q3 but are still higher than ten-year trend
ILA Ends Master Contract Talks With USMX Over Automation Concerns
The International Longshoremen’s Association (ILA) announced last week that it had ceased master contract talks with maritime employers represented by the United States Maritime Alliance (USMX). ILA dockworkers went on a three-day strike at US East and Gulf Coast parts last month. A tentative deal on wages reopened the ports through January 15, 2025. But now, with two months left to go, automation remains a key sticking point between the two parties.
“The USMX introduced language in their proposal for semi-automated equipment to be used at ILA ports, which the union outright rejected,” the ILA said in a statement released November 13. The union went on to say it believes the automation provisions are a “renewed attempt by USMX to eliminate ILA jobs with automation.”
In its own statement, the USMX said the ILA’s automation demands are unrealistic. “Unfortunately, the ILA is insisting on an agreement that would move our industry backward by restricting the future use of technology that has existed in some of our ports for nearly two decades,” the USMX statement said.
The ILA represents more than 45,000 East and Gulf Coast port dockworkers. Its brief strike last month sent shockwaves through the US supply chain, with some sectors only now recovering. Following last week’s statements, both the ILA and the USMX said it hoped to resume negotiations soon.
Subscribe to JMR’s Weekly Supply Chain Roundup!
Stay informed with the latest supply chain news, trends, and insights. Get it delivered directly to your inbox every week.
Canadian Ports Reopen, Workers Defy Government Orders to Return
Longshore foremen in British Columbia and Montreal are defying Canadian government orders to return to work and submit to binding arbitration. The government forced a reopening of the ports last Thursday night following a two-week shutdown.
The labor dispute started in BC when the International Longshore and Warehouse Union Local 514 issued a strike notice to the British Columbia Maritime Employers Association (BCMEA). The BCMEA responded by locking out Local 514’s foremen. Around the same time, Local 375 of the Canadian Union of Public Employees (CUPE) announced plans to strike at Montreal’s Maisonneuve and Viau terminals.
The unions argue that the Canadian government’s orders to impose binding arbitration and force a return to work are unconstitutional. Local 514 vowed to challenge the legality of the orders in court. CUPE expressed disappointment with the government’s actions, claiming it undermines collective bargaining.
Analysts: Trucking Rate Recession Over Soon, Spot and Contract Rates Will Rise in 2025
The US trucking industry got some good news last week, as supply chain analysts predicted an impending end to the so-called freight recession. While trucking rates as a whole are not out of the woods yet, spot truckload rates are currently moving higher, exceeding year-over-year prices, and are expected to be up by low double-digit percentages by this time next year.
“The consensus is we’re off to the races,” Dean Croke, principal analyst at DAT Freight & Analytics, told the Journal of Commerce (JoC) last week. DAT predicts dry-van spot rates to be up 12% to 15% by November 2025. However, Croke expects contract rates to follow at a lower and slower pace.
Other industry observers are making similar projections. Jason Miller, the Eli Broad professor of supply chain management at Michigan State University and a JoC analyst, expects spot truckload rates to rise 15% to 20% by the end of 2025. Miller forecasts a 9% to 12% increase in the primary US long-haul truckload producer price index (PPI), which tends to mirror contract rates.
Panama Canal Authority Proposes Land Bridge for Oversized Vessels
The Panama Canal Authority (ACP) is asking for more than $1 billion in funding to develop an over-the-road network connecting the Pacific and Atlantic oceans. The proposed land bridge would handle the increasingly large container ships that exceed the canal’s capacity — cargo the ACP is currently losing to other ports like Cartagena, Colombia.
The ACP expects the project to cost upwards of $1.4 billion. The land bridge would incur additional unloading, trucking, and reloading costs, but the ACP believes the project will ultimately be cost-effective. The Panama Canal’s recent struggles with low water levels have further highlighted the need for alternative solutions.
US Intermodal Savings Drop in Q3, Still Beating Historical Trends
Intermodal shipping in the US continues to offer significant savings compared to truckload, even as both modes experience rate increases. According to the JoC’s latest Intermodal Savings Index (ISI), intermodal shippers saved over 20% on one-off business across the country in Q3 2024. Even though the Spot ISI averaged 122.3 in Q3 — a drop from the quarterly record of 123.5 in Q2 — the Q3 2044 average is significantly higher than the ten-year average of 114.5.
The Spot ISI was minimally impacted despite truck rates going down and intermodal rates rising. Analysts say this is because the only significant rate shifts were in Los Angeles. Truckload carriers and intermodal providers in Southern California raised rates in response to increased demand and higher port volumes, but the majority of the market outside LA saw declines in spot rates for both modes.
