The ILA strike ended after three days, and both parties achieved some victory following a tentative agreement in January 2025. However, many critical issues remain unresolved, and stakeholders are still concerned about the possibility of reaching an agreement.
Yellow Corporation continues to impact the logistics world, especially the LTL industry. By January, 112 terminals belonging to the former LTL giant will be sold, which could significantly enhance the LTL industry's capacity. The freight market continues to flip-flop as shipment and expenditures, especially labor expenditures, continue to decline. In 2025, the global shipping alliance is set to welcome more members, enhancing diverse service offerings and increasing competition among carriers.
Much Dread ILA Strike Comes to an End, But Much Broader Concerns Remain
The much-anticipated International Longshoremen's Association (ILA) strike has ended, and workers have resumed work. President Biden’s administration played a pivotal role in resolving the strike by convincing port employers to offer a 62% wage increase. This led to a tentative deal that will be in force until Jan. 15, 2025. However, some major concerns lie ahead. Automation and job protection take the front seat, and it remains to be seen if both can be resolved before the January deadline. The ILA, on its end, has pushed for airtight language around not permitting automation or semi-automation in the ports across the US East and Gulf Coast.
A Year After Bankruptcy, Yellow's Remaining 112 Terminals Go on Sale
Following its bankruptcy in 2023, Yellow Corporation is set to sell its remaining 112 terminals, releasing significant LTL capacity into the market. Thirty of these terminals are located near major US ports, and the sales could potentially enhance transloading and container storage.
Approved by a US bankruptcy court, the sale will begin with non-binding interest submissions to complete all sales by January 2025. Major LTL carriers like Estes, Saia, and XPO acquired most of the Yellow facilities that came on the market earlier, so the new sales could help them fill network gaps and prepare for future demand growth. However, some terminals may be too large for smaller operators, and most are not expected to reopen until 2025.
Freight Market Faces Continued Softness Amid Capacity Overhang and Lower Rates
Freight shipments and expenditures declined year-over-year, highlighting the challenges plaguing the U.S. freight market. The Cass Freight Index reported a 1.9% drop in shipments and a 9% decline in freight spending as the market's rebound remained sluggish.
Expenditures also dropped due to declining diesel prices and market rates, with inferred freight rates reaching a new cycle low. The market is expected to experience a slow recovery, with downward pressure persisting on rates as the industry adjusts to capacity changes and anticipates economic impacts from upcoming political events.
New Ocean Carrier Alliances Offer Diverse Service Options for Shippers in 2025
Gemini Cooperation and Premier Alliance will join the existing global shipping alliances in 2025. These two entering the shipping alliance could reshape the service landscape for trans-Pacific trade. The world’s largest container liner, Mediterranean Shipping Co. (MSC), will also operate as a standalone carrier.
However, it will engage in slot swaps with Premier Alliance on Asia-Europe routes and Zim on the US East Coast. These alliances are expected to operate networks covering 24 origin ports in Asia and 27 destination ports across North America, resulting in 648 port-pair combinations, of which 266 will offer direct services.
They will also enhance diverse service offerings and aim to create competitive pressure among carriers while allowing shippers flexibility in their logistics strategies.
Rising Cargo Theft and Infrastructure Changes Impact North American Logistics
Cargo theft continues to pose a significant challenge for North American logistics, but infrastructure improvements may be combating it. In New Jersey, police arrested four individuals connected to a cargo theft ring. Meanwhile, cargo theft remains a significant issue in Mexico, with organized crime groups driving theft rates up by 2.8% year-over-year.
On the infrastructure side, road construction on I-5 in Oregon is expected to shift traffic for up to two years to accommodate bridge replacement and road widening, minimizing lane closures. And Chinese-based Intretech has begun building a $60 million electronics factory in Monterrey, Mexico, to tap into the North American market.
Trump Promises Port Expansion and Manufacturing Boom in Georgia Amid Local Ports’ Growth
Former President Donald Trump promised to collaborate with state officials to further deepen the Port of Savannah, aiming to quadruple its traffic and drive a manufacturing boom. During the rally in Georgia, Trump highlighted the importance of tariffs to bolster US manufacturing, exporting goods through the port.
Simultaneously, the Georgia Ports Authority (GPA) announced further expansions at the Port of Brunswick, which will see an additional 50 acres of paved storage. The expansion aims to enhance capacity at Colonel's Island Terminal, the nation's busiest roll-on/roll-off (Ro/Ro) port.
Freight Volumes Rise, But Truckload Rates Drop for Third Straight Month in August
Truckload freight volumes and rates continued to diverge in August, as shipment volumes increased while prices fell for the third consecutive month, according to DAT Freight & Analytics. The DAT Truckload Volume Index (TVI) rose across all equipment types: van freight was up 2.8%, refrigerated (reefer) freight increased by 4.3%, and flatbed freight saw a modest 0.3% rise.
However, spot van, reefer, and flatbed rates all fell compared to July, with contract rates also decreasing. This mixed trend reflects ongoing pricing challenges for carriers, with about 85% of truckload freight moving under long-term contracts, which have faced year-over-year rate declines since August 2022.
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