This week:
- US retailers say they’re ready for Trump tariffs or second ILA strike in 2025
- Several major LTL carriers lay the groundwork for 2025 rate hikes with single-digit GRIs
- Rail container dwell times reach two-year high at LA-LB ports amid heavy Asian imports
- Canadian government forces ports to reopen, now facing significant backlog and delays
- EPA awards $3 billion to 55 US ports for zero-emission, clean energy projects
US Retailers Brace for Tariff Troubles, Potential Second ILA Strike
US retailers are confident in their ability to navigate whatever happens in early 2025, including President-elect Donald Trump’s promised tariffs on Chinese goods and a potential second strike by International Longshoremen’s Association (ILA) dockworkers.
During recent third-quarter earnings calls, Ralph Lauren, Target, and Williams Sonoma assured investors they have strategies in place for potential disruptions. All three highlighted how they diverted cargo to the West Coast in advance of the October 1 ILA strike at East and Gulf Coast ports. Ralph Lauren reminded investors of how it had used air cargo in the days before the work stoppage started.
The three-day ILA strike ended with a tentative deal and a promise to negotiate a new master contract by January 15, 2025. However, the union pulled out of talks with maritime employers last week over continued concerns about the use of automation technology.
In comparison to sales, US inventories have risen this season in anticipation of higher tariffs once Trump takes office in January. On the campaign trail, Trump vowed tariffs on Chinese goods of more than 60%.
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LTL Carriers Signal 2025 Rate Hikes With Single-Digit GRIs
Several major US less-than-truckload (LTL) carriers set the stage for higher pricing in 2025, even though higher freight volumes have yet to hit their docks. Old Dominion Freight Line, FedEx Freight, and TForce Freight were among the carriers that released average general rate increases (GRIs) in the mid to upper single digits over the past few weeks.
GRIs are for non-contract business but typically set the expectations for contract pricing. On November 18, Old Dominion announced a 4.9% GRI set to take effect on December 2. FedEx Freight announced a 5.9% GRI effective January 6, while TForce Freight raised rates by 5.9% on average in October.
Carriers cite the need to fund ongoing network expansions and offset rising operating costs as the primary drivers for the rate hikes.
LA-LB Rail Container Dwell Times Reach Two-Year High
Rail container dwell times at the ports of Los Angeles and Long Beach surged to a two-year high in October. Industry observers say the October ILA strike and elevated import volumes led to the congestion.
According to data from the Pacific Merchant Shipping Association (PMSA), rail containers at the largest port complex in the US experienced average dwell times of 9.86 days in October, up from 9.25 days in the previous month and 8.2 days in August.
US imports from Asia moving through LA-LB have been stronger than usual since the peak season began in early summer, months ahead of its regular time. According to PIERS data, Asian imports at the complex were up 30% in July through September compared to the same period in 2023.
Canadian Ports Resume Operations, Face Backlogs and Delays
Canadian ports have resumed operations after the federal government’s Industrial Relations Board ordered an end to lockouts of union workers at West Coast ports and the Port of Montreal. The reopened ports face backlogs, leading to significant delays.
At the Port of Vancouver, the average dwell time from November 15 to 20 was 7.7 days. The Montreal Port Authority said it had more than 5,000 TEUs on the ground across its four terminals and 22 vessels waiting at anchor or on the way.
On the West Coast, the British Columbia Maritime Employers Association locked out International Longshore and Warehouse Union workers on November 4 after the union submitted a notice to strike. Around the same time in Montreal, the Maritime Employers Association took similar measures against the Canada Union of Public Employees Local 375 following months of work stoppages.
EPA Awards $3 Billion to Ports for Clean Energy Transition
The Environmental Protection Agency (EPA) announced in an October 29 press release that it will award $3 billion to 55 US ports to support their transition to zero-emission operations.
According to the press release, twenty-one of the ports plan to use the grant money to upgrade cargo handling equipment. The funds will also support the purchase of 1,000 drayage trucks, 20 vessels, and 10 locomotives.
The Port of Virginia will use the funds to invest in electric vehicles and charging infrastructure to achieve net-zero emissions by 2040. The Port of Baltimore will also purchase zero-emission vehicles and upgrade its electrical grid. Meanwhile, the Port of Philadelphia will replace diesel-powered equipment like cranes, yard tractors, and forklifts with clean energy alternatives.
