Major freight carriers have announced a general rate increase (GRI) that will allow them to effectively address the current challenges plaguing the trucking industry. For many of these carriers, such as Old Dominion Freight Line, the GRI will take effect in December, while a few others, like parcel major FedEx, will kick-start their GRI in January. Following an elongated strike that saw many of the major ports across Canada slowly grind to a halt, the government has stepped in, ordering labor disputes to be resolved through binding arbitration.
Continue reading this edition of the COGISTICS Transportation newsletter to learn more about the trends and news shaping the freight world.
Major LTL Carriers Sustain Annual Rate Hikes Amid Economic Pressures
Old Dominion Freight Line has announced a 4.9% GRI that aligns with its 2023 pricing adjustments. This GRI takes effect beginning Dec. 2 and applies across multiple tariff codes, reflecting the company’s strategy to offset rising operational costs and invest in service enhancements.
Other carriers within the industry, such as ABF Freight and Saia, have made similar increases to their GRIs, ranging from 5.9% to 7.9%. FedEx Freight is making a 5.9% GRI adjustment that will take effect in early 2025. With the changing GRIs, more carriers are better positioned to maintain their pricing power through the ongoing challenges, industrial recession, and the relaunch of Yellow Corp. terminals under new ownership. The GRI adjustments will be critical to sustaining service quality and operational efficiency.
Canada’s Main Ports Resume Operations After Government Intervention
Following timely intervention from the Canadian government and Canada Industrial Relations Board, ports like Montreal, Vancouver, and Prince Rupert, some of the country’s busiest ports, have reopened and resumed container-handling operations. The intervention came after Labor Minister Steven MacKinnon requested that labor disputes be resolved through binding arbitration.
Before the order, disruptions from disputes between employers and unions had halted intermodal services and left significant container backlogs, with 5,000 twenty-foot equivalent units (TEUs) and 55,000 linear feet of rail containers in Montreal alone. Vessel operators faced delays, and intermodal train services were suspended, with normalization expected to take weeks. This is the second government intervention in Canadian transportation labor disputes this year. Railroads CN and CPKC were also ordered to end a lockout in August.
Politics Shape US Longshore Labor Negotiations Amid Automation Debate
Political interventions, such as President Biden’s involvement in ending a brief East and Gulf Coast port strike in October, continue to shape the dynamics of U.S. longshore labor negotiations. These interventions have mostly favored unions, but with a new Republican administration keen on cutting down government power, it remains to be seen what stand they will take in the contract talks between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), which have stalled once again.
Management views automation as essential for port efficiency and handling growing volumes, but the union opposes it, fearing threats to its longstanding role. The previous intervention forced a 62% dockworker pay hike over six years, illustrating the political stakes during labor disputes, but questions about the new administration are still largely unanswered. Some insiders predict USMX may ultimately agree to union demands, including halting new automation, to avoid a protracted strike and further political intervention.
Tariffs and Inflation Loom as Retail Braces for Key Challenges
According to industry experts and analysts, the second Trump term could bring significant challenges and uncertainties for the retail industry. The incoming administration’s proposed tariffs, including a 10% across-the-board levy and a 60% tariff on Chinese goods, are expected to drive up costs across various retail segments and, worse, potentially lead to inflationary pressures as retailers pass higher costs onto consumers.
Wells Fargo analysts project that the planned tariffs could increase core inflation to 4% and slow GDP growth to 0.6% in 2025. The National Retail Federation predicts consumers may face billions in higher costs for essentials like clothing, toys, furniture, and footwear. If that happens, annual consumer spending power could decline by $46 billion to $78 billion. Trump has promised lower interest rates, which may have been enough to mitigate these financial risks for the country, but analysts have noted it is outside the president’s control.
ATA Economist Predicts Gradual Recovery for Trucking Amid Freight Market Challenges
Bob Costello, chief economist of the American Trucking Associations, forecasts a gradual improvement in the trucking industry as supply and demand imbalances correct over time. He noted that the trucking industry struggles with stagflation, in which costs remain high while freight rates and demand are down.
Although the general economy has grown, with GDP figures surpassing 2% in recent quarters, the goods, manufacturing, and construction sectors — critical for trucking — have lagged. The path to recovery will be gradual, but while challenges persist, including operational cost pressures, the forecast for the industry suggests stabilization rather than a rapid rebound.
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