Weekly Newsletter

Many believe that the aftermath of the recent wildfires in the LA area is expected to drive up import demand for bulk and breakbulk commodities. Rebuilding the area will boost the need for construction materials, generating demand for bulk and multi-purpose shipping. In a January 23rd report entitled Los Angeles wildfires-A catalyst for breakbulk shipping demand amid rebuilding efforts, stated: “As an aftermath, the region will need massive reconstructions, which will increase the cargo imports considerably at the west coast of the U.S. especially at the LA and LB ports.” The report says that some of the imported building materials that will be required for reconstruction include: iron, steel, plastering materials, lime, cement and machinery. There are many uncertainties as to the strategy for rebuilding areas of Los Angeles that were devastated by the recent wildfires. While many homeowners would like to quickly rebuild in the same areas destroyed by the fires, analysts and policy-makers are cautioning that rebuilding in fire prone areas risks running a repeat of the devastation in a fire of the future. One Southern California banker stated that the logistics of transporting debris from the fire impacted communities to landfills could take months and require a huge mobilization of trucking. According to Southern California media reports, California officials have not yet identified where all the fire rubble, waste and other debris will be taken after it is all collected. In past disasters, however, it has gone to landfills, recycling centers and lumber yards. 

The resilience of our importers in an ever-changing reshoring environment is being tested by the rapidly shifting landscape of global trade, tariff policies, and the competitive dynamics between the key manufacturing hubs of China, Vietnam, India, and Mexico. As we approach the imminent announcement of new tariffs from President Trump, the situation is becoming increasingly complex, particularly where it regards China. In the meantime, Samsung and LG have announced they are considering moving some of their appliance manufacturing from Mexico to the US. Is this the beginning of unintended consequences of Trump 2.0? Still, it may be hard to leave China.

Former Wisconsin congressman Sean Duffy received Senate confirmation Tuesday to serve as Secretary of Transportation in the new Trump administration. Duffy was confirmed by a 77-22 vote. Duffy represented Wisconsin in Congress from 2011 to 2019, during which time he introduced two bills directly related to transportation, neither of which advanced. Duffy showed interest in issues linked to the trucking industry during his time in Congress and co-sponsored several pieces of maritime-related legislation.

Panama President José Raúl Mulino has rejected a statement by President Donald Trump that America will take back control of the Panama Canal. At the same time, the new head of the FMC on Tuesday told a Senate hearing he questions whether a Hong Kong-based terminal operator that runs ports on both ends of the Panama Canal was contributing revenue to the Panamanian government as other terminal operators do. The comments by FMC Chairman Louis Sola come amid rising US scrutiny of Chinese influence over the canal.

Sola, who was tapped by Donald Trump on Jan. 20 to serve as FMC chair. “I don’t believe we’re on a level playing field.” The Panamanian government, in response to Trump’s recent ire about China’s presence at the canal, launched an audit of Hutchison offices in Panama last week. Sola told the Senate hearing, which was called specifically to examine the canal’s operations and the impact on US national security, that the two Hutchison ports have justified not contributing to the Panamanian government by claiming they’re not making money. But Sola, having worked himself on the development of the SSA Marine-operated terminal in Colon, Panama, questioned how the Hutchison ports could not be making money after 20 years in operation. Sola stressed he was confident the ACP could continue to efficiently operate the canal’s locks, and said the authority’s independence must be defended.

“Any effort by other interests in Panama to diminish the independence or professionalism of the authority must be stopped,” he said. Sola told the Senate Committee on Commerce, Science and Transportation that the FMC would continue to monitor toll pricing implemented by the ACP and how it auctions off transit slots during drought restrictions. The treaty underpinning the handover of canal control to Panama allows for the US to reclaim it by force if the neutrality of the waterway is threatened. Such a move would require Congressional authorization, depending on the circumstances.

After 429 days in captivity 25 seafarers held onboard the NYK chartered car carrier Galaxy Leader were released by the Houthi last week. The Houthis in Yemen hijacked the cargo vessel Galaxy Leader near Hodeidah in November 2023 while sailing to India. Reactions to the crew’s release from leaders and industry groups portrayed both relief that the seafarers were finally free to go home and be reunited with their families and frustration that such an incident could happen in the first place. World powers should never allow this to happen.

Some steelmakers in Canada and Mexico are telling customers that they are refusing new orders to the U.S. on concerns that President Donald Trump soon will reimpose duties.

Canada’s Stelco has been telling U.S.-based consumers it is pausing sales quotes, according to a person familiar with the matter. Mexico-based steel suppliers also stopped taking orders for material this week as they await potential action from President Trump.

The WCI-Index plunged 11% over the last week led by the Asia–Europe trade. In a week that saw the Houthi in Yemen lifting its threat to international shipping, with the exception of Israeli-owned and flagged vessels, the WCI decreased 11% per FEU on 23 January compared to the previous Thursday. Leading the sharp drop downwards was the Shanghai to Rotterdam trade which saw 19% drop. Container freight rates over the last year have been considerably higher than expected due to the attacks on commercial shipping by the Houthi in Yemen resulting in all the major lines of the Asia – Europe and Asia – US East Coast trades diverting vessels from the Red Sea and Suez Canal to go via the Cape of Good Hope. Adding an extra 10–14 days to a voyage in each direction the diversions acted to soak up excess capacity coming into the market that had been expected to put freight rates under pressure. With the ceasefire in Gaza the Houthis have largely lifted their threat to shipping transiting the region and a gradual return to Red Sea and Suez Canal transits is expected which will in turn increase excess capacity. At present though some lines are adopting a cautious approach as they will continue with Cape of Good Hope transits for the time being.

The expectation of a change in market conditions has started to filter through to spot container freight rates, combined with the lifting of a threat of a strike at East Coast ports and seasonal weakness around Chinese New Year. Shanghai-New York rates decreased 7%, while rates from Shanghai to Los Angeles reduced 8%. Many expect spot rates to decrease slightly in the coming weeks on the back of the Chinese Lunar New Year holidays.

When we compare the spot market trends of 2023 and 2024, it’s clear that 2023 was a relatively stable year, with far less volatility than what we’ve experienced in 2024. While we’ve seen some fluctuations in rates during January and February, it’s expected that the market will stabilize after the Lunar New Year, as carriers work to fill their vessels on their new services. This will likely happen as demand normalizes, and carriers scramble to secure bookings for the upcoming months.

Ocean carriers are warning of schedule disruptions in North Europe as extreme weather hits the English Channel and Bay of Biscay, with UK ports already heavily disrupted by a string of storms. The seven-day average vessel waiting time at the UK’s largest port of Felixstowe is about four days, while delays at Southampton port are up to 4.25 days. The extreme weather will move across the English Channel to mainland Europe with multiple high wind warnings in Hamburg, Antwerp, Rotterdam, Le Havre and Dunkirk in addition to Felixstowe and Southampton. “The passage of several storms from the Atlantic into European waters in recent and upcoming days will see disruptions across the port landscape in North Europe,” CM- CGM told customers in an advisory Wednesday.

Our ports capped off 2024 with solid growth, as most major facilities reported volume increases for December. The Port of LA processed 921,616 TEUs for the month, a 24% increase from 2023. For the entire year it processed more than 10.3 million TEUs. That’s a nearly 20% increase over 2023 and the second-best year in the port’s history.

The adjacent Port of LB ended the year with its busiest December on record. The entire year was its busiest ever, as was its Q4. In 2024, the port processed 9.6 million TEUs.

The Northwest Seaport Alliance said combined December container volumes from the ports of Seattle and Tacoma, Wash., increased 15.8% year over year. The port noted that improved vessel consistency and higher vessel calls contributed to the gain, as the number of international container voyages reached their highest level since 2020. It also noted that container volume for the year rose 12.3% over 2023 to 3,340,733 TEUs.

Port Houston posted a December volume increase of 4% year over year to 340,418 containers compared with 326,577 in the year-ago period. The facility noted that loaded exports increased 12% during the month due to robust shipments of resin, chemicals, rubber and textiles, while loaded imports fell 1%. 

The Port of Oakland posted a 3.8% year-over-year increase in December to 182,646 containers compared with 176,013. This was mostly due to year-over-year growth in loaded imports compensating for a decline in loaded exports. Total container volume for the year increased 9.5% to 2,262,921 TEUs.

The Georgia Ports Authority said container volume in December increased 4.7% to 442,000 TEUs from 422,287 in the year-ago period, the 12th consecutive month of year-over-year volume growth.

The South Carolina Ports Authority, Port Authority of New York and New Jersey and Port of Virginia had not released data by press time.

Dennis Dellinger, President and CEO of Cargo Transports and chair of the American Trucking Associations, called on Congress to repeal the federal excise tax (FET) on Wednesday. The FET was first enacted during World War I. It is a 12% tax on the sale of most heavy-duty trucks and trailers. More than $6 billion in FET was collected in 2023 from truck, trailer and semitrailer chassis, bodies and tractors sales. Industry organizations contend the tax is a barrier to the sale of new, more efficient tractors. "This tax has grown to be one of the highest excise taxes on any good in the United States," Dellinger says. "As it adds over $20,000 to the cost of a new $180,000 truck and $6,000 to the cost of a new $50,000 trailer, this onerous charge creates a disincentive to putting new equipment that is cleaner and safer than ever before on our nation's highways." Dellinger challenged lawmakers to improve the nation's infrastructure and, at the same time, reform the Federal Highway Trust Fund (HTF) to repeal the excise tax. 

Nationwide, LTL trucking remains flat.