The president-elect, who enjoyed significant endorsements from unions across the country, has shown support for the ILA amid their ongoing negotiation battle with the USMX. However, the USMX has hit back, claiming that more technology will enhance safety and efficiency. Despite the 7.32% year-over-year decline in dry van outbound tender volumes, the National Truckload Index (NTI) rose to $2.52 per mile, a level not seen since January 2023.
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Donald Trump Sides With The ILA In Their Bid to Halt Automation
President-elect Donald Trump has expressed support for the International Longshoremen’s Association (ILA) in its opposition to port automation. This came after a meeting with ILA leaders Harold and Dennis Daggett. Trump criticized investments in automation, arguing they harm American workers, and suggested that funds should support the longshore workforce instead.
However, the USMX countered by emphasizing the importance of technology for safety, efficiency, and capacity at ports. The ILA has been negotiating with the United States Maritime Alliance (USMX) for a new six-year contract for East and Gulf Coast ports. Talks stalled over language permitting semi-automated equipment, which the union wants removed entirely.
The USMX, however, in a strongly-worded statement, pointed out that port operations impact many businesses across the economy, not just the carriers and longshore workers directly involved. Port automation will eventually help all facets of the supply chain, with the benefits trickling down to the end consumer via reduced inflation.
Truckload Spot Rates Surge as Market Conditions Tighten
The SONAR National Truckload Index (NTI) rose to $2.52 per mile, the highest level since January 2023. This increase came alongside a 63-basis-point jump in outbound tender rejection rates, which reached 5.87% — the highest since July. What is most interesting is that the surge occurred despite a 7.32% year-over-year decline in dry van outbound tender volumes.
The trucking sector is also experiencing a contraction, with the number of active trucking authorities dropping by 4% compared to last year, totaling 344,541. Even with reduced volumes, this tightening of capacity signals potential difficulties for shippers in securing capacity during future demand surges. Experts suggest that shippers secure contract rates now to ensure capacity, even at higher levels. If economic policies stimulate growth, demand in the freight market could rise sharply, potentially leading to higher costs for shippers and increased leverage for carriers.
Political Influence Reshapes US Longshore Union Negotiations
The recent suspension of negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) highlights a shift in how labor disputes at US ports are resolved. Following President Biden’s intervention to end a brief strike in October, politics have taken precedence over traditional bargaining methods.
A core issue between both parties remains automation. Management advocates for efficiency improvements to handle growing cargo volumes, while the ILA resists changes that could impact its longstanding role. The union has demanded a rollback of automation rights granted under existing contracts. Political dynamics complicate the talks. With a new administration under President-elect Trump, who has expressed support for the union’s anti-automation stance, industry stakeholders anticipate continued federal involvement.
This precedent, combined with the ILA’s political leverage and management’s minimal influence, suggests that USMX may ultimately concede to union demands. Analysts predict similar outcomes in upcoming negotiations, with carriers opting to avoid prolonged strikes and focus on future strategies.
Manufacturers Brace For A Trump Impact
U.S. manufacturers are investing significantly and purchasing large quantities of imported parts and materials ahead of anticipated tariffs under President-elect Donald Trump. A GEP and S&P Market Intelligence survey reported that November saw the highest buying activity in over a year, driven by concerns over rising costs and competition.
Items like emulsifiers, flavor enhancers, and fiber-optic cable splitters are in high demand. Some companies are doubling orders, hoping to mitigate the impact of potential tariffs on imports from countries like China. Trump has proposed significant tariffs, including 25% on imports from Mexico and Canada and up to 60% on some Chinese goods. While many firms are exploring alternative suppliers, the efficiency and reliability of Chinese production make a complete shift challenging. Importers are also facing logistical and compliance hurdles in other markets.
Canada Orders Postal Workers Back Amid Strike, Costly Delays
The Canadian government has asked an independent labor board to end a 55,000-worker Canada Post strike that has disrupted mail services for nearly a month during the holiday season. Labor Minister Steven MacKinnon requested the Canada Industrial Relations Board (CIRB) assess whether the parties are at an impasse and, if so, order operations to resume and extend existing contracts until May 22.
He also announced a commission led by lawyer William Kaplan to investigate the dispute’s underlying issues and propose solutions by mid-May. The strike began on November 15 and severely affected small businesses, with daily losses estimated at C$1.6 billion. While MacKinnon criticized the prolonged disruption, the Canadian Union of Postal Workers (CUPW) condemned the move as an attack on collective bargaining rights.
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