Freight Forward: Labor Discontent in Canada

Welcome to Freight Forward, where each Monday, I’ll recap what happened in supply chains the previous week through JOC.com articles and additional sources and also what to expect for the week ahead.

I’m Cathy Roberson, a supply chain writer and researcher. For this weekly series, I serve as a research analyst for the Journal of Commerce (JOC), for whom I identify trends, provide thoughts and input into stories, and assist with air express and parcel last-mile queries.

Ocean Freight

• Column - Network realignment shines light on hub-focused product vs. direct calls, Lars Jensen
• Import demand from Asia, which typically tapers ahead of Black Friday sales, is holding steady, fueled by resilient retail sales, tariff concerns and the mid-January expiration of the tentative labor agreement at US East and Gulf coast ports writes Bill Mongelluzzo and Laura Robb . About 5.4% of the total capacity into the West Coast is forecast as of now to be blanked in November, according to data from maritime intelligence firm eeSea. The figure is about 8.1% on the East Coast. That’s down from the 11.5% blanked capacity observed in November of 2023 for ex-Asia imports into both regions.

• Intra-Asia rates on most major lanes had weakened before China’s Golden Week in early October and other Asian festival holidays, during which factories pause or slow production, but have sharply reversed in the last two weeks, according to carriers and forwarders writes Keith Wallis and Bency Matthew . Average spot rates from China to India have seen three-to-four-fold gains over the last month, data obtained by the Journal of Commerce from freight forwarders reveals.
• CMA CGM signed a joint venture deal with Moroccan port operator Marsa Maroc to equip and operate half the Nador West Med container terminal near the Gibraltar mouth of the Mediterranean writes Greg Knowler .
• The Port of Montreal is warning that shippers may face diverted cargoes as an indefinite strike began last Thursday at two marine terminals handling Mediterranean Shipping Co. container services, with over two dozen vessels facing an impact depending on the length of the current work stoppage writes Michael Angel .
• The British Columbia Maritime Employers Association (BCMEA) said in a statement last Friday it had received a 72-hour notice of a strike from the International Longshore and Warehouse Union 514, representing about 730 longshore foremen throughout the province. In response, the BCMEA said it would “take defensive action in the form of a coastwide lockout” of Local 514 members writes Michael Angel .
• Maersk reported Q3 revenue up by 30% year over year to $15.8 billion and increased its earnings before interest, taxes, depreciation and amortization (EBITDA) by 155% to $4.8 billion. Earnings before interest and taxes (EBIT) rose 515% to $3.3 billion, while Maersk’s third-quarter net profit of $3.1 billion was almost five times higher than the same quarter last year writes Greg Knowler.

“The transport and lead logistics parts are delivering something close to best-in-class, but on our warehousing and distribution we still have work to do to get us above that 6% margin and keep us there.”- CEO Vincent Clerc

• During Gemini’s startup period, Maersk CEO Vincent Clerc acknowledged that customers signing with Gemini would not accept higher rate levels based simply on a promise of 90% reliability. But he insisted that the carrier would not have to offer discounts to attract customers to the new network writes Greg Knowler.
• Ocean Network Express (ONE) upgraded its full-year profit forecast to $3.1 billion writes Keith Wallis . The upgraded forecast, which covers ONE’s financial year to March 31, 2025, is 13% higher than the $2.7 billion estimate it gave on July 31. Still, the carrier said forecasting its full-year result remains challenging.
• Matson is expecting elevated rates for its Asian services for the rest of the year amid steady e-commerce growth, US tariff threats, potential labor disruption and constrained capacity due to ongoing Red Sea diversions writes Laura Robb . CEO Matt Cox, during a third-quarter earnings call said that while conventional retailers were decreasing their orders, the growth of e-commerce shipments from Asia was more consistent as elevated air cargo rates pushed more shippers to move goods via ocean transport. The mid-January expiration of a tentative labor agreement for US East and Gulf coast dockworkers was also putting upward pressure on rates, Cox said.
• CSX Transportation has begun double-stacked intermodal service out of the Port of Baltimore after completing the first round of tunnel and track improvements from the port that will ultimately boost Baltimore’s current container handling capacity by one-third writes Michael Angel.

Break Bulk and Project Logistics

• Baker Hughes and SLB are looking to natural gas and deepwater projects to boost long-term growth after Baker reported Q3 double-digit year-over-year decline in overall equipment and technology orders for the period, while SLB’s revenue results were dampened by lower commodity prices writes Autumn Cafiero Giusti.
• In the first nine months of 2024, breakbulk cargo volumes through the Port of Virginia jumped 372% year over year to 360,976 tons, according to the Virginia Port Authority (VPA). The cargo windfall is largely coming from the 2.6-gigawatt Coastal Virginia Offshore Wind project, which Virginia utility Dominion Energy is developing in the mid-Atlantic, about 27 miles off the coast of Virginia Beach, VPA spokesman Joe Harris told the Journal of Commerce writes Autumn Cafiero Giusti.
• Keith Wallis writes roll-on/roll-off (ro/ro) vessel operators are expecting a rebound in “high-and-heavy” cargo volumes next year on stronger exports from China and rising global demand in the construction and mining industries, shipping executives say.

LogTech

• Automation key to improving broker efficiency metrics- Among the many potential use cases, freight brokers are already rapidly expanding their daily truckload booking capacity writes Eric Johnson . “Decades of business process change is getting compressed down into two to three years,” Anthony Sutardja, CEO of brokerage automation software provider Parade, said at DAT Freight & Analytics’ DATCon event. “You’ll see the incremental shift on productivity versus like $800,000 [of annual revenue] per head, then $1 million, then $1.5 million.”

Inland

Trucking

• US trucking demand in the fourth quarter — whether truckload or less-than-truckload (LTL) — is essentially weak, and that isn’t likely to change until US manufacturing output strengthens substantially, speakers said during a Journal of Commerce webcast writes Bill Cassidy . “We’re just not seeing significant signs of a true, meaningful uptick in demand, even if we do have more seasonality,” Jason Miller, Eli Broad professor of supply chain management at Michigan State University said during the peak season trucking outlook webcast.

• US freight demand may be soft, but less-than-truckload (LTL) carriers are defying a two-year freight slump and increasing contractual pricing heading into 2025. Several large publicly-owned LTL providers have reported third-quarter contract renewal rates rising by anywhere from low single-digit to high single-digit percentages writes Bill Cassidy .

• Merger and acquisition activity in the already highly-consolidated US less-than-truckload (LTL) market is picking up speed — not from the top down, but from the bottom up writes Bill Cassidy . “I think if you’re not growing, you’re sinking,” Mike Moran, president of Moran Transportation, told the Journal of Commerce. “If you don’t maintain a certain size and a certain growth rate, you’ll have a hard time competing in this market.”

Intermodal

• Hub Group experienced double-digit growth in its intermodal volumes for the third quarter, ?but cautioned that a frontloaded peak season may lead to a softer finish to the year. It comes as the bid season begins in earnest, with shippers aiming to hold rates steady while intermodal carriers seek modest rate increases for 2025 writes Ari Ashe . Hub’s results suggest it benefited from an aggressive pricing posture in bids that went live earlier this year, reversing some of its market share loss in 2023 by offering attractive rates to shippers according to Ashe.

That's it for now. Thank you for reading! For readers interested in reading more Journal of Commerce stories, click here to subscribe. Enter code FFNL20 at checkout to receive a 20% discount on any subscription option. (Note that this is only for first-time subscribers or for upgrading a current subscription). What did I miss? Have a question? Let me know in the comments. I’ll be checking back throughout the week to answer questions, address comments, and share additional insights. In the meantime, here’s wishing everyone a good freight week ahead.

-Cathy