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Freight and Logistics News and Market Update

Week of October 2, 2024

Regions

Air

  • Labor actions have begun as US East and Gulf Coast port workers initiated a strike on October 1. The uncertainty around the duration of the strike has led shippers to consider shifting to air cargo in a market already experiencing a capacity crunch. Each day of the strike could result in 5-10 days of cargo backlog, potentially causing congestion and delays that could last weeks to months, just as air freight enters its peak shipping season.
  • As the US East and Gulf Coast Port strike begins, shippers looking to shift their modality to air cargo are likely to have issues finding available capacity. The air cargo market has experienced eight months of double-digit demand growth on the back of the eCommerce boom out of APAC hubs. The strike comes as the busiest time in the air cargo year is beginning, with increased demand for eCommerce shipments before the busy holiday season. The continued imbalance with demand growth outpacing capacity continues to push air freight rates higher with recent rates on APAC-US lanes up +30% Year-over-Year.
  • Hurricane Helene impacted the southeastern United States with the largest impacts felt in Florida, Georgia, Tennessee and the Carolinas. Airports across these states canceled hundreds of departures and arrivals as the storm swept through. Beginning October 1, the situation is expected to normalize with significant impacts still seen in certain areas including Asheville, Charlotte and Atlanta.

Ocean

  • Dockworkers represented by the International Longshoreman Association (ILA) began a strike impacting all major container ports from Texas up the East Coast. Disagreements between the ILA and the United States Maritime Alliance (USMX) on wages terms and benefits provided to workers are not expected to be resolved shortly, leading to extended delays and disruptions likely to be felt for weeks or months. The Biden administration is not expected to impose the Taft-Hartley act, which could suspend the current labor action and require good faith negotiations between the two sides.

Ground

  • ACT Research’s For-Hire Trucking Index reported an increase in volumes along with a decrease in trucking capacity. The data reflects both a rise in goods demand and inventory pre-positioning. Durable goods consumption rose 4.2% quarter over quarter in Q2. Imports, inventories and cross-border shipments are increasing. However, in play in this story are shippers pre-positioning ahead of the US East Coast port strikes.

This document is for informational purposes only. It does not constitute legal advice. Information herein was obtained from government, industry, and other public sources. It has not been independently verified by UPS and is subject to change. Recipient has sole responsibility for determining the usability of any information provided herein. Before recipient acts on the information, recipient should seek professional advice regarding its applicability to the recipient's specific circumstances.

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