Ship Angel December Newsletter
In this month's newsletter, we discuss import tariffs, a potential US Port Strike, new Ship Angel content, and our January 2025 event in New York City.
New Ship Angel Content
?? Download the eBook today ??
The Cargo Compass
Ship Angel shorts on what is affecting the world of shipping this month.
US Import Tariffs
The newly elected US president has announced plans to increase tariffs on goods from Mexico and Canada by 25%. This tariff increase is linked to his demands for improvements in reducing "illegal drug" trade and "illegal immigration". The president also plans to impose a 10% tariff on all goods from China, with similar conditions related to immigration and drug control.
Furthermore, the incoming president has stated that if the "BRICS" nations (Brazil, Russia, India, China, South Africa, Iran, Egypt, Ethiopia, and the United Arab Emirates) stop using the US dollar in their transactions, he will impose a 100% tariff on goods from these countries.
While these tariff announcements may be a negotiating tactic, it's likely that the cost of goods will rise in the first quarter of the year.
US Port Strike
Recent reports indicate that negotiations between the International Longshoremen's Association (ILA) union and the United States Maritime Alliance (USMX) have stalled. This raises the possibility of a strike by port workers on the US East Coast. The main point of contention is the union's opposition to the USMX's insistence on automation. Final negotiations are TBD, with a deadline of January 15, 2025.
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Rates
Despite the announced tariffs, there has not been a major increase in demand for space as we enter December. On the contrary, we are seeing slow but downward movement in the major freight indices week over week, however, there was an increase recently on the Asia/Europe trade. Ocean carriers are pushing GRIs and increased spot rates for December, however, it is unknown if these increases will stick long term despite the coming pre-lunar New Year Push. Drewey has advised that the carriers globally have blanked about 10% of their services (72 out of 719) in December, which points to a high level of capacity management in the attempt to keep rates up.?
M&A
Over the past 15 months, there has been a trend of ocean carriers investing in terminal operations globally. CMA CGM has been particularly active, purchasing terminals in New York City and Brazil. MSC has invested almost $500 million in the German Port of Hamburg. Evergreen and PSA International have agreed to develop "high-efficiency terminals in important locations". Additionally, ONE has invested in multiple deals in Jakarta, Rotterdam, and Southern California. These deals indicate a desire by carriers to control more of the supply chain to improve efficiency and potentially gain a competitive advantage.
It is also believed that NYC’s premier port terminal (Maher) could be up for sale within the next year. The lease negotiations covering this terminal with the Port Authority are ongoing. It is highly possible the Australian owner of the terminal sells, most likely for north of $5 BIllion.
Ship Angel Roundtable Dinner
?? Calling All Supply Chain Leaders! ??
Ship Angel is hosting a roundtable dinner on January 22nd in New York City for leaders within supply chain. If you would like to join us for a discussion surrounding 2024 reflections, 2025 predictions, and best practices - click here to request a seat
Note:?Seats are limited and subject to availability.