Episode Transcript
[00:00:06] Speaker A: Good morning and welcome to the Lodestar podcast News in Brief, where, as always, we're going to be recapping the main events from last week's supply chain news and giving you an insight on what you might see on the Lodestar this week. And this is a slightly special episode because I'm joined by Alex Linnane and we are recording this from Miami because we are gearing up for Tiaka's air cargo forum this week. Alex, how are you feeling?
[00:00:27] Speaker B: Yeah, good. It's lovely to be in Miami. I love it.
[00:00:30] Speaker A: I know. Nice to have some sun. So let's get straight into the news because we want to get to the beach from last week, I guess the main story. And unless you were living under a rock, you definitely have not missed this. Donald Trump won the US Election, and this has got shippers slightly worried about his upcoming tariffs. Now, during his campaign, Trump vowed to implement tariffs of up to 20% on all imports into the US and additional tariffs of 60% on goods coming from China. I spoke to Jury Simon Heaney about this, and he did say that what Donald Trump says and does are not always the same thing. So at the moment, no one really knows whether he will implement this tariffs and if he will, how soon it will be. But to be on the safe side, it is expected that shippers are going to be front loading to avoid these tariffs while they can. And Zenita actually advised if you do have warehouse space, then it will be good to front load. It's the simplest way to manage risk in the short term. And I actually did speak to a large multinational US Shipper about this, and they said that for areas of our business that are sourcing from China, I'm sure this will lead to our purchasing organization reevaluating their sourcing decision based on the new foreign goods cost inclusive of tariffs. So we can expect some front loading. Alex, what do you make of all of this?
[00:01:42] Speaker B: Oh, well, there's quite a few issues to deal with here, but one of the things that Trump's trying to encourage is growth in domestic manufacturing in the US but that's not a very quick process. It takes a long time to set up manufacturing. And I think in the meantime, what it will really mean is that prices go up for American consumers, which, you know, could cause inflation. So that's one aspect that I think could happen. Then there's also Mexico. Trump's keen to avoid Chinese goods coming in via Mexico. And so there's going to be some interesting stuff happening between Mexico and the US Trade. And one nice thing that we saw, actually, is that US Trucking companies, which have had a really tough time recently, their shares rose quite significantly last week and it'll be interesting to see how and whether they benefit.
[00:02:29] Speaker A: Yeah, definitely. It should be worth noting as well, what I said about front loading. This is probably going to be exacerbated by the already ongoing Red Sea crisis. So shippers are already a bit worried, their stock and their supply chain. So front loading is already happening. But there's the upcoming Chinese New Year, plus the upcoming carrier alliance shakeup, which Simon Heaney said is always probably going to be quite disruptive as it beds in. So we can expect a cargo rush, basically. And it's going to be exacerbated by all these different factors that are happening. And this is also including the looming strike on the US east and Gulf coast come January, which they say negotiations are resuming, but we haven't heard anything.
[00:03:05] Speaker B: And that's due to start if it happens a week before, I think, Travel becomes president.
[00:03:11] Speaker A: Right.
[00:03:11] Speaker B: So that should be quite an interesting.
[00:03:13] Speaker A: Month, everything happening at once. Yeah, we'll be very busy then. And speaking of strikes, we have an update on the ongoing strikes at Canadian ports. And various dock worker unions on both the west coast and east coast of Canadian ports are striking at the moment. And this is affecting mainly the ports of Montreal, I think it's about 40% of capacity there, and the ports of Vancouver and Prince Rupert. Now, there's a bit of a stalemate situation going on so far, and the employees and the unions were both quite far apart. I spoke to the. I spoke to cifa, which is a Canadian association of freight forwarders, and they said that they were quite frustrated by the inaction that's going on at the moment. Alex, I believe there is some movement. What's happened?
[00:03:52] Speaker B: Well, the Maritime Employers association, so the Montreal strike, they have put in what they've said is a final offer and the longshoremen, basically, they said, have to agree to it or else the terms get worse. As we record this. We don't know yet what the longshoremen are going to say about it, but hopefully this means some movement there.
[00:04:12] Speaker A: Yeah, and I should also notice what. Well, CIFA and Everstream analytics both said that the US west coast will probably be a Plan B for shippers who can't get goods in through Canadian ports. And so obviously this is going to increase goods coming in through the US west coast that are meant for other areas. So that's obviously then going to add another boost to US Trucking.
[00:04:31] Speaker B: So while we're on that side of the Atlantic, there have been massive congestion issues at Guaralus Airport in Brazil. We were sent videos of how bad it is and there's a lot of cargo knocking around. The latest is that the airport has banned dry cargo from coming in temporarily and it's offering large discounts to anyone who can pick up their cargo at a weekend.
Things may be relieved in the short term, but I think the long term issue is that the airport authority does the handling and the reason it's so bad is because it doesn't have specialised private handlers in place.
[00:05:07] Speaker A: Thank you so much, Alex. And now, via the power of modern technology, we are joined by Gavin Van Marle who is going to talk us through last week's ocean freight rates. Hi, Gavin.
[00:05:16] Speaker C: Hello, Charlotte. This is Gav calling in from sunny Suffolk where the clouds have at last broken. We've actually seen some sun again. Oh, it's gone again. Oh, well. This week's spot rates sourced from Drury's World Container Index and Zenita's short term XSI shows Asia Europe carriers managed to hold the previous week's spot rate gains with another week of further improvement. The WCI's Shanghai Rotterdam leg grew 16% week on week to finish at $3,954 per 40 foot, while the Shanghai Genoa leg jumped 21% to $4,000. $399 per 40 foot. Similarly, Zenita's Far East Europe leg of its XSI saw a 25% week on week jump to $4,105 per 40 foot. It's a crucial period for the trade. With 2025 annual contract negotiations underway. Carriers are keen to keep spot rates as high as possible and this being supported by a combination of blank and sliding sailings and port congestions both in Europe and Asia. Jury expects further increases this week with new freight all kinds levels implemented on 15 November. Meanwhile, the Trans Pacific and Asia US East coast spot rates were as flat as a pancake flattened by a heavy flat thing, presumably as the market waited to see the results of you know what, Same on the transatlantic. Enjoy Miami. Over and out.
[00:06:45] Speaker D: Now we have got you up to date with all the main events from last week's supply chain news. Here is what you might see on the Lodestar this week. Well, as Alex and I are currently recording this from Miami, it is safe to say that we are going to have lots of stories from the Air Cargo Forum this week. We've both got plenty of interviews lined up with airlines, airports, associations, intelligence companies and forwarders. So expect a wide variation of opinions and stories about the current and future state of the air cargo market over the next few days. And please also do come and say hi to us if you see us walking around the event over the next few days. Also going to be vlogging and vox popping if that excites anyone. Havag Lloyd are reporting their Q3 results and a Lodestar Premium analysis last week found that when comparing Maersk Ocean Network Express and Matson Navigation's Q3 earnings, the less exposed to the Trans Pacific a carrier is, the less profit per TEU it is likely to be making. That's quite interesting and it'll be interesting to see if Hapag Lloyd's results back that trend up. And finally, COP 29 is kicking off this week. For those unfamiliar, COP 29 is the 29th Conference of the Parties to the UN Framework Convention on Climate Change. It's a mouthful, and that's going to be taking place in Azerbaijan this year from the 11th to the 22nd of November, and it's been described as a pivotal opportunity to accelerate action to tackle the climate crisis. So we may hopefully have some stories coming out of that about plans to decarbonise the transport and logistics sector or perhaps a lack of and that coverage is kindly sponsored by Evergreen. Thank you so much for joining me for this episode and I will see you next week.
