ILA Finalizes East Coast Longshore Contract
The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have reached a tentative six-year master contract agreement, averting a potential strike at U.S. East and Gulf Coast ports. This development follows months of intense negotiations, with significant discussions surrounding port automation and its impact on labor. The agreement is pending ratification by ILA members, during which time operations will continue under the previous contract’s terms.
A key aspect of the new contract is the balance between job protection and the implementation of new technologies. While specific details are yet to be disclosed, the agreement reportedly includes a substantial wage increase and establishes a framework for introducing technologies that aim to modernize port operations without compromising existing jobs. This compromise addresses the ILA’s concerns about automation leading to job losses, while allowing ports to enhance efficiency and competitiveness.
The successful negotiation reflects a collaborative effort to modernize port operations while safeguarding employment for American longshore workers.
Nationwide Winter Storm Disrupts Travel Conditions
Winter Storm Blair has created dangerous travel conditions and caused significant disruptions across the United States. The storm has resulted in at least six fatalities, with incidents reported in states such as Missouri and Illinois. Power outages have affected tens of thousands of residents in areas like Virginia, Kentucky, and Indiana, while heavy snowfall blanketed cities such as Kansas City and Louisville, with some regions receiving over a foot of snow.
Air travel has been severely impacted, with thousands of flights canceled, particularly in major hubs like Washington, D.C., and Chicago. Airlines have issued advisories and offered flexible rebooking options to passengers. Train services have also been disrupted, as Amtrak canceled multiple routes to ensure safety during the storm.
Officials have declared states of emergency in several regions, urging residents to stay off roads due to icy conditions and low visibility. Emergency responders and authorities are closely monitoring the situation, providing necessary resources to affected areas. The storm has even prompted adjustments to President Joe Biden’s travel plans, underscoring its widespread impact.
Railroads Excel During Peak Season Compared to Pandemic Challenges, Say IMCs
Intermodal marketing companies (IMCs) have noted that North American Class I railroads managed the 2024 peak shipping season more effectively than during the COVID-19 pandemic. Despite disruptions in cities like Chicago, Los Angeles, Portland, and Tacoma in the latter half of 2024, these challenges were less severe compared to the backlogs of 2020 and 2021. Notably, there was a more than 20% year-over-year increase in freight volumes originating from the Southwest U.S. during October and November 2024.
However, some industry participants caution against comparing current performance to the pandemic period, suggesting that the 2024 peak season more closely mirrors pre-pandemic trends. They argue that while railroads have shown improvement, the unique circumstances of the pandemic years make direct comparisons less meaningful.
Overall, the consensus among IMCs is that railroads have enhanced their operations, resulting in better handling of increased volumes during peak seasons. This improvement has provided shippers with greater confidence in the reliability of rail services, contributing to more efficient supply chain management.
Ocean Container Spot Rates Surge: What’s Driving the Increase?
Ocean container spot rates have experienced a significant surge in recent weeks, particularly on the eastbound trans-Pacific trade lane. The Drewry World Container Index reported a 3% week-over-week increase to $3,905 per forty-foot equivalent unit (FEU), with rates from Shanghai to Los Angeles rising by 7% to $4,829 per FEU, and from Shanghai to New York by 6% to $6,445 per FEU. This upward trend continued through December, with Freightos data indicating an 8% increase in Asia-U.S. West Coast rates to $4,825 per FEU, and a 3% rise in Asia-U.S. East Coast rates to $6,116 per FEU.
Several factors are contributing to this spike in spot rates. The upcoming Lunar New Year has led to increased shipping activity as businesses expedite orders before the holiday. Additionally, carriers have announced General Rate Increases (GRIs) for January, further elevating prices. Ongoing disruptions in the Red Sea region have also impacted shipping routes, causing delays and contributing to higher rates.
These developments have significant implications for shippers and the broader supply chain. Elevated spot rates increase transportation costs, which may be passed on to consumers, potentially affecting retail prices. Shippers are advised to plan accordingly, considering the current market volatility and potential for further rate increases in the lead-up to the Lunar New Year and beyond.
Diesel Prices Jump 5.8¢, Reaching $3.561 a Gallon to Kick Off the New Year
The national average price for a gallon of diesel in the United States increased by 5.8 cents, reaching $3.561, according to data released by the U.S. Energy Information Administration on January 6, 2025. This marks the largest weekly increase since a 4.7-cent rise on October 14, 2024. Over the past three weeks, diesel prices have cumulatively risen by 8.5 cents, following a period of relative stability in late November and December.
Regionally, the Gulf Coast experienced the most significant increase, with prices climbing 7.3 cents to $3.269 per gallon, though it remains the area with the lowest average diesel prices nationwide. The East Coast saw a rise of 4.7 cents, averaging $3.634 per gallon, with subregional variations: New England prices edged up 1.8 cents to $3.771, and the Central Atlantic increased by 2.7 cents to $3.801. The Midwest reported a 6.1-cent increase to $3.511 per gallon, while the West Coast saw a more modest rise of 2.3 cents, averaging $4.152 per gallon.
Despite these recent increases, the national average diesel price is 26.7 cents lower than at the same time in 2024, indicating an overall year-over-year decline. Notably, the New England subregion and California have experienced the most substantial decreases, with prices down 55.1 cents and 53.4 cents per gallon, respectively, compared to a year ago.
