Various shippers, businesses, and supply chains across North America are bracing for potential disruption to their freight flow. This comes amid the looming strikes for two consequential workers' associations on the continent that could see an exponential rise in costs and crippling downtimes. Beyond this news, Chinese EVs continue to explore new markets as the US and EU put up barriers that could derail trade across both markets.

We are exploring the situation over multiple modes of freight transportation, including ocean, rail, and air.

Looming East Coast Port Strikes as Talks Break Down

The International Longshoremen’s Association (ILA) on June 10 announced it had suspended talks with the United States Maritime Alliance (USMX) scheduled for the next day.

The issue was caused by the former's automation concerns with APM Terminals and Maersk Line. Both shipping lines have been accused of violating the current agreement, which expires on September 30, 2024, by using automated truck gates without union labor. According to the ILA, there must be a resolution to automation and an audit of jobs created by applying new technology before resuming talks.

Although it is not sure how the shipping lines and the maritime alliance will react, one thing is certain. If talks do not resume as soon as possible, it could lead to a strike. And while that may be unusual, any strike on the East Coast could significantly disrupt the already strained global supply chain. It could worsen port congestion, equipment shortages, and spiral shipping rates.

Canadian Railroad Workers Organize Second Strike Vote Amid Stalled Contract Negotiations

Following a complete halt on the first strike attempt organized by the Canadian railroad workers, the Canadian Pacific (CPKC) and Canadian National (CN) railway workers are again voting on authorizing another strike.

The TCRC Union is unhappy with the progress of negotiations on a new contract. Workers want higher wages and better working conditions, but they have yet to get any of those. The current strike vote is to renew the union’s mandate to strike, which is expiring soon. However, even if it passes, the organization cannot initiate the strike until mid-July due to government regulations. Both railways are asking the government to step in and resolve the dispute before it gets out of hand.

South East Asia Welcomes Chinese EVs As US And Europe Raise Barriers

The EU and the US continue to put up trade barriers against Chinese EVs amid reports that manufacturers benefit from unfair government subsidies.

Recently, the EU imposed provisional tariffs on Chinese EVs (as high as 38.1%), fostering protectionism. In the midst of these barriers, the Chinese EV market has turned to the Southeast Asian market. It is the fastest-rising EV market and accommodates price-sensitive customers who prioritize affordability over brand loyalty. Countries in the region also boast strong economies with a combined GDP of $3.08 trillion. Following the EU and US protectionism actions, logistics providers are worried.

At a summit on Monday in Montreal, held by the International Chamber of Shipping (ICS) and Chamber of Marine Commerce, the ICS chairman, Emanuele Grimaldi, said, “We are experiencing an unprecedented threat to free trade because of protectionism.”

E-Commerce Boom Set To Tighten Air Cargo Market in Q4

The air cargo industry is experiencing unusual volatility due to e-commerce. A surge in e-commerce traffic is expected to cause a significant capacity crunch in the fourth quarter (Q4).

If that happens, widebody freighter aircraft will be difficult or impossible to charter by Q4. That could potentially disrupt the traditional peak season and create unpredictable demand. To combat these, e-commerce giants like Alibaba, Shein, Temu, and Amazon are booking capacity early. Freight forwarders are warning that securing capacity will be more important than chasing low rates. At this rate, businesses that rely on air cargo may face a higher cost and difficulty finding space.

The US Container Import Boom Continues in May

US containerized freight imports have enjoyed significant growth, rising 11% annually.

May marked the ninth consecutive month of growth after a period of decline. Total imports for the first five months of 2024 are up 13% compared to 2023, and this growth is seen across various sectors, including consumer goods (both discretionary and staples), capital goods (especially electrical components), and industrial materials (like paper products). The reason behind the continued increase is unclear, especially considering the current inflation plaguing the country.

However, experts believe that strength in consumer spending and potentially lower inventory levels are seen as contributing factors.

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