Shippers who rely on US East Coast and Gulf ports were able to breathe a sigh of relief last Wednesday night when the ILA and USMX announced a tentative agreement for a new six-year contract, ending the threat of a strike and extending the existing contract through the review and ratification period required by both parties and will begin. almost.
The two sides have appeared to be far apart on the role of port automation, with the USMX seeking to introduce technologies to make ports more efficient, and the union rejecting even semi-automated processes that could eliminate jobs. But secret meetings held by representatives last Sunday produced language to reach a compromise that ultimately led to Wednesday night’s announcement.
Details of the agreement were redacted during ratification, however Joint statement He explained that the agreement will protect existing jobs and establish a framework for implementing technologies that will create more job opportunities and modernize the ports.
the The Wall Street Journal reports The new deal would prohibit full automation of ILA ports, and would separate processes for how new technologies are implemented without reducing the number of unions. It will reportedly allow operations at ports that already have multiple semi-autonomous cranes operated by a single worker to remain unchanged, while terminals that add new semi-autonomous cranes will be required to employ one union worker for each new crane.
These provisions appear to be a win for the ILA by preventing the introduction of full automation and the loss of jobs when semi-automation is introduced. USMX gains the right to offer technology to improve efficiency — including improving yard density — through the settlement, despite not realizing the full cost reductions that automation would bring.
Front-loading ahead of a potential strike in January helped keep North American container rates high through November, but is no longer a driver of rates as the strike deadline approaches. Although trans-Pacific prices for both coasts were at their levels last week, prices rose sharply to start the month as demand increased ahead of the Lunar New Year holiday that begins on January 29. Asia – West Coast prices are up 52% from late December to reach the $6,000/FEU level with East Coast prices at around $7,000/FEU for a 30% gain.
For Asia – Demand for shippers in Europe and the Mediterranean started earlier than usual this year due to longer lead times from Red Sea diversions. Rates, which increased about 60% from early November to December to around the $5,500/FEU level, have remained stable since then, with daily rates this week already starting to decline. Reports it Some carriers intend to reduce prices to around $4000/EU It also soon signals an unusually early end to the LNY rally and lower expectations for unusual upward pressure on interest rates right after the holiday.
Asia and Europe Prices may soon fall to the Red Sea crisis-era low of $3,000 to $4,000 per Feu, which they reached during periods of low demand last year. But trans-Pacific rates may not decline significantly once LNY demand eases, since preloading precedes the expected U.S. Tariff increase May maintain higher volumes than in the first quarter, with… NRF expects 10% increase in January compared to last year.
So far there are no reports of major logistics disruptions caused by the devastating fires in Los Angeles, and container ports are far enough away from the fires that they have not been affected. The scope of future rebuilding efforts could eventually impact container volumes with increased imports of construction materials being one factor High ocean volumes and rates in TürkiyeAfter the earthquake of 2023.
Air freight rates continued to decline compared to the peak season seen in December, but remained well above slow season rates as e-commerce volumes continued to remain steady. Capacity demandstrong. Fritos Air Index Data show that rates across the Atlantic are down 33% from their peak in December, suggesting that some peak season volumes have been routed through Europe this year. But at $2.12 per kilogram, the current rate is still 17% higher than a year ago and 32% higher than during periods of low demand last year, which may reflect continued capacity shortfalls on this line that have resulted in freighter shifts. To the Pacific Ocean.
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