Freight Forward: Preparing for higher rates and higher tariffs

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

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• Column - NVOs eager to get past carriers’ tight grip on unexpectedly favorable market, Peter Tirschwell
• Column - US importers dabbling in frontloading ahead of new tariff threat, Mark Szakonyi
• US retailers are telling investors that after successfully managing the three-day port strike along the East and Gulf coasts in early October, they’re prepared to navigate any operational challenges that arise from higher tariffs on Chinese goods that President-elect Donald Trump has promised for his second term writes Mark Szakonyi
• Support from the US government and an increased focus on national security are positioning the US-flag fleet for significant expansion and investment in the coming years, a panel of US-flag shipowners, operators, brokers and investors told attendees at the Marine Money conference in New Orleans writes Autumn Cafiero Giusti. The bipartisan “Ships for America Act” sponsored by US senators Mark Kelly (D-Ariz.) and Mike Waltz (R-Fla.) in a bid to boost US shipbuilding and expand the US-flag fleet was cited as a key growth opportunity.

“We see that inventory levels as of today are not abnormal compared to normal inventory levels to be expected at this time of year,” Zim CFO Xavier Destriau said. “The demand has been strong and resilient in the US, so we don’t feel too alarmed that there might be inventory buildup going on right now in the US that might bite us back in subsequent quarters into 2025.”

• Laura Robb and Mark Szakonyi write that US import volumes are expected to remain elevated into 2025 amid cargo frontloading driven by labor and tariff concerns, officials at Zim Integrated Shipping Services said during their Q3 earnings call.
• DP World’s London Gateway recently opened a ï¿¡350 million ($442 million) all-electric fourth berth. In addition, Gemini Cooperation decided that vessels in the shared network will call at London Gateway instead of Felixstowe when the new alliance launches in February writes Greg Knowler.
• Green ocean corridors crucial to decarbonizing container shipping have grown rapidly over the past year, but the continued development of these trade routes is facing a “feasibility wall” in the absence of national policy incentives to narrow the cost gap between fossil fuels and cleaner alternatives, according to the Annual Progress Report on Green Shipping Corridors 2024 report, published by the Getting to Zero Coalition and the Global Maritime Forum. The report said this lack of action at the government level was now the number one bottleneck facing green corridor projects writes Greg Knowler.
• Starting in January, Zero Emission Maritime Buyers Alliance (ZEMBA) will invite shipping companies to bid on contracts to transport cargo using vessels powered by near-zero-emissions e-fuels writes Greg Knowler.
• A plan to triple the US’ current net nuclear power generation capacity of about 97 gigawatts (GW) by 2050, including building 200 GW of new net capacity, was announced by the Biden administration on Nov. 12. Nuclear projects are a promising source of future cargo for the heavy-lift and multipurpose vessel (MPV) sector writes Janet Nodar.
• The New York Shipping Exchange (NYSHEX) will launch a series of free ocean freight rate indexes in 2025 designed to underpin index-linked contracts. The indexes will be developed in conjunction with the Intercontinental Exchange (ICE), which has also invested in NYSHEX as part of a new tranche of funding it received Tuesday from a range of investors writes Eric Johnson.

LogTech

• Eric Johnson writes on the lack of consolidation driving freight visibility differentiation and competition. Eric notes that not since project44 acquired ClearMetal, Ocean Insights and Convey and FourKites acquired Haven in 2021 has there been an appreciable shrinking of the vendor list in the visibility market. Instead, standalone vendors such as Shippeo, Overhaul, Vizion, Terminal49, OpenTrack, Wakeo and Portcast all coexist alongside project44 and FourKites.

Air

• Freightos and e2open have integrated their systems to help forwarders access dynamic air freight rates within Freightos’ rate database and make associated electronic bookings on those rates writes Eric Johnson. The integration embeds Freightos’ WebCargo booking tool into e2open’s transportation management system (TMS).
• In my Cargo Facts column, I write on the U.S. Postal Service’s fiscal financial losses and UPS’ domestic air contract with USPS which officially began Oct. 1. While details of the USPS- UPS deal were not made public, the UPS10-Q filed with the Securities and Exchange Commission provides some insights. During Q3, revenue attributable to volume gains from USPS increased $111 million. Year to date through Sept. 30, revenue attributable to USPS increased $38 million, due primarily to air cargo volume growth in Q2 and Q3, which “more than offset lower volumes in the first quarter.”

Inland

• Union Pacific Railroad (UP) has again increased surcharges on shippers exceeding their weekly allotments in Southern California as domestic intermodal volumes show no signs of the seasonal slowdown typically seen by mid-November writes Ari Ashe. UP partners Hub Group, Schneider National, STG Logistics and Swift Intermodal control pricing on their privately-owned boxes, Ari notes.
• GenLogs is offering a free tracking service to combat cargo theft - Shippers, brokers and carriers can use GenLogs’ network of roadside cameras to help locate a missing asset. The company’s core product is designed to help carriers and freight brokers improve their ability to source capacity, find shipper business and vet carriers. As part of the vetting process, the company helps customers manage carrier compliance writes Eric Johnson.
• The Federal Motor Carrier Safety Administration (FMCSA) released a proposed rule that would amend freight broker recordkeeping requirements established by the Interstate Commerce Commission (ICC) in the 1940s and last amended in 1980 writes Bill Cassidy. Bill notes that the proposed rule could create conflict between brokers and shippers that insist on non-disclosure clauses in their contracts. Its potential impact on truckload spot rates is unclear, especially in a market still flush with capacity.
• Intermodal shippers are still facing disruption in service to central Florida on CSX Transportation in the aftermath of back-to-back hurricanes that hit the state in September and October writes Ari Ashe. CSX told the Journal of Commerce that hurricanes Helene and Milton caused power outages and damaged roadways and warehouses, disrupting the flow of the final-mile dray at its Winter Haven terminal. But the railroad said operations in Winter Haven have recently returned to normal.
• Several of the largest LTL carriers in recent weeks have released average general rate increases (GRIs) for 2025 ranging from the mid- to upper single digits writes Bill Cassidy. The biggest GRI came from Saia, which raised rates 7.9% on average in October. That GRI matched the average rate increase Saia claims it is getting in contract renewals.

• An investor group led by CEO Chris Jamroz is acquiring a majority stake in less-than-truckload (LTL) carrier Roadrunner. The deal, writes Bill Cassidy, sets the stage for further organic growth and acquisitions by the direct point-to-point LTL trucking company at a time when the US LTL sector is preparing for expansion, building out networks and raising rates.

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