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US ports avoid crisis with tentative ILA/USMX agreement

Jan 8, 2025 | , , , , , , , , ,

A potentially crippling strike across East and Gulf Coast ports, set to begin on 16th January 2025, has been averted with the announcement of a tentative six-year master contract agreement between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) on 8th January.

However, the agreement is not yet a done deal. It must be ratified by the ILA’s local wage-scale committees, leaving supply chains vulnerable to ongoing uncertainty that could stretch into the summer of 2025.

The roots of the dispute go back to October 2024, when dockworkers staged a three-day strike over issues of wages and automation. While the strike ended with an agreement on wage increases and a temporary extension of the existing contract, tensions simmered over automation, which the ILA argued could threaten jobs. Talks resumed on 7th January 2025 in New Jersey, culminating in an agreement just days before the strike deadline.

A pivotal moment in the negotiations came on 20th December 2024, when President-elect Donald Trump met with ILA President Harold Daggett in Florida. Trump expressed open support for the union’s anti-automation stance, stating that foreign-owned carriers should invest in American dockworkers rather than fully automated systems. His intervention reportedly added significant pressure on carriers, leading to a compromise in the tentative deal. The agreement allows for limited semi-automation while guaranteeing union jobs tied to new technologies.

Although the immediate strike threat has passed, the risk of disruption remains. The ratification process is expected to take months, and uncertainty will continue to impact supply chains.

Metro has implemented contingency measures to mitigate the impact of potential labour unrest. These include diverting cargo to West Coast ports, Canadian trans-loading and expanding air freight options. These solutions remain critical as the ratification process unfolds.

At the same time, we are urging carriers to lift surcharges such as “Work Disruption” and “Port Congestion” fees, which have added financial strain to supply chains since October 2024.

The threat of renewed disruption is likely to persist until the agreement is ratified. Metro strongly advises shippers to remain vigilant, flexible, and prepared to adapt their logistics strategies in the months ahead.

With uncertainties lingering, Metro’s proactive solutions are essential to maintaining a resilient and adaptable supply chain. Our expert team continuously monitors developments, offering strategic guidance to help you optimise routes, avoid disruption, and manage costs effectively.

EMAIL our Managing Director, Andrew Smith, to discover how Metro can protect and future-proof your North American supply chain.

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Shipping routes likely to remain diverted until August

Jan 8, 2025 | , , , , , , , , , , , , , , ,

The diversion of container shipping around the Cape of Good Hope is expected to continue well into 2025 as carriers prioritise stability over the potential risks of returning to the Red Sea, despite recent advancements in the Suez Canal’s infrastructure

The reluctance to return to the Red Sea stems from attacks on commercial shipping by Iran-backed Houthi forces, which have created a precarious operating environment. Earlier incidents prompted carriers to divert ships around the Cape of Good Hope, and the industry remains cautious about resuming transits until the risks are fully mitigated.

Efforts by carriers like CMA CGM to reintroduce Suez services under naval protection have met resistance from shippers who fear both financial and operational uncertainties. As a result, even if the Red Sea crisis were resolved, it is likely that diversions around the Cape of Good Hope would persist for several months while confidence is rebuilt.

The logistical complexity of reconfiguring networks, combined with the risk of potential attacks, has led carriers to maintain their Cape of Good Hope detours and with the lines set to phase in new networks over February and March, further adjustments to accommodate Suez transits are unlikely before August at the earliest.

Shippers, too, are hesitant to support a return to the Red Sea. The concern is not just the extended transit times around Africa but the financial risks associated with general average (GA). If a ship were to be attacked and damaged, resulting in environmental cleanup or other liabilities, insurers may not cover GA in such high-risk zones.

Egypt has successfully tested a new 10 km extension of the Suez Canal, which allows for two-way traffic and increases the canal’s daily capacity by an additional 6 to 8 ships. This improvement also reduces the likelihood of severe disruptions, such as the grounding of the “Ever Given” in the single-lane section of the canal.

As conditions stabilise, the Suez will likely regain its position as the preferred route, but for now the added capacity is not required.

With geopolitical risks casting uncertainty over the industry, building resilient supply chains, securing comprehensive cargo insurance, and managing budgets effectively will be essential for shippers navigating the complexities of the 2025 sea freight landscape.

In this volatile market, our marine insurance cover and fixed-rate agreements on key shipping routes help minimise risk and provide budgetary stability.

To discover how Metro’s insurance solutions and fixed-rate options can support your business in 2025, please EMAIL Managing Director Andy Smith.

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Freight market outlook 2025: Navigating uncertainty and change

Jan 8, 2025 | , , , , , , , , , , , , , , , ,

The freight industry faces a challenging 2025, with ongoing diversions around Africa, potential labour strikes, and looming tariff changes shaping the air and sea freight landscape. 

While best and worst-case scenarios could unfold, the most likely outcome lies somewhere in between, creating a complex and dynamic environment for shippers and carriers alike.

Red sea disruptions and capacity adjustments

Persistent attacks in the Red Sea continue to divert container traffic via the Cape of Good Hope, extending transit times and keeping freight rates elevated. Even if hostilities end, a lengthy adjustment period is likely as shipping lines reintroduce Red Sea routes.

With carriers set to phase in new networks in February and March, further changes to accommodate Suez transits may not occur before August. This transitional phase could temporarily worsen congestion and delays. However, once stabilised, the market would benefit from restored transit times and reduced rates.

The reintroduction of capacity also raises concerns about overcapacity. Carriers are actively working to mitigate this risk through measures like scrapping older vessels, reducing charter fleets, slow steaming, and blank sailings. While these steps may stabilise rates, their effectiveness will depend on demand levels throughout the year.

Labour strikes and tariff impacts

Despite agreement on outstanding issues on the 8th January, the threat of strikes at US East and Gulf coast ports has not entirely lifted. And while they are theoretically unlikely, they could remain a possibility until Summer 2025.

Tariffs, on the other hand, remain a critical factor. New US tariffs in 2025, particularly on Chinese imports and goods from Canada and Mexico, could drastically reshape trade flows. Anticipation of these tariffs has already led to front-loading, as shippers move goods early to avoid higher costs. This behaviour may disrupt seasonality, creating spikes in demand and rates before tariffs take effect, followed by lower volumes afterwards. Additionally, tariffs could encourage sourcing shifts to countries like Vietnam and India, further altering global trade dynamics.

Air freight under pressure

Air freight, driven by strong eCommerce demand from Asia, enjoyed robust growth in 2024, but 2025 presents significant headwinds. Potential changes to the US ‘de minimis’ thresholds could curb eCommerce shipments, while Trump’s proposed tariffs may disrupt transpacific flows further.

Capacity constraints, already a challenge, could ease slightly if eCommerce demand slows. This would benefit transatlantic shippers, who saw air cargo spot rates from Western Europe to the US double during the 2024 peak season. However, other pressures loom, including the EU’s ReFuelEU Sustainable Aviation Fuel (SAF) mandate, which took effect on 1st January 2025, requiring a minimum of 2% SAF at EU airports—raising airline costs.

A year of uncertainty

2025 will be a year of adjustment for the freight industry as carriers and shippers navigate geopolitical risks, evolving capacity challenges, and shifting trade policies.

In addition weather related issues as a result of global warming and other environmental impact need to be considered during certain months and seasons. Hurricanes, typhoons, flooding, fires, volcanic occurrences could all have an impact in certain regions at different times.

Shippers must prepare for fluctuating demand and rates, anticipate potential disruptions, and stay informed. Flexibility and proactive planning will be key to navigating the complexities of 2025 and ensuring long-term success.

For urgent and sensitive shipments, Metro offers tailored airfreight, charter, and sea/air solutions. With block space agreements (BSA) and capacity purchase agreements (CPA), to guarantee space and competitive rates on the busiest routes.

In a volatile sea freight market, our fixed-rate agreements on popular shipping routes reduce risk and provide essential budgetary certainty. 

To explore how Metro’s carrier agreements could optimise your supply chains and save you money in 2025, please EMAIL our Managing Director Andy Smith.

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Global financial events and Trump’s presidency: Implications for trade and logistics in 2025

Jan 8, 2025 | , , , , ,

As we step into 2025, the global financial and political landscape is undergoing significant transformations. Among the most notable developments is Donald Trump’s return to the U.S. presidency, a shift that is likely to influence international trade and logistics. 

Closer to home, Q1 economic indicators in the UK also signal a complex year ahead, marked by both opportunities and challenges for businesses operating in the trade and logistics sectors.

Shifting economic landscape in the UK

Investor confidence in the UK is showing signs of improvement as the year begins, with several factors contributing to this optimistic outlook:
Economic growth: The UK economy is projected to grow by 1.5% in 2025, up from 0.9% in 2024. This improvement is driven by more expansionary fiscal policies and increased public spending, which are expected to provide momentum to key sectors.
Interest rate cuts: The Bank of England is anticipated to implement further rate reductions throughout 2025 and into 2026. Lower borrowing costs are already boosting confidence, particularly in the commercial property sector.

However, the private sector remains under pressure from elevated taxes, borrowing costs, and rising wage expenses, factors that may temper overall growth.

Trump’s presidency and its potential impact on trade

Donald Trump’s return to the presidency this month may see the introduction of new policies that could reshape international trade and logistics. His administration has signalled a focus on tariffs, energy production, and stricter border controls, all of which carry implications for global supply chains:
Tariffs and trade policies: Proposed tariffs on imports could increase costs for goods entering the U.S., affecting supply chains globally. Retaliatory measures from other countries may escalate into a trade war, disrupting established trade routes and adding volatility to logistics markets. Higher shipping costs and increased customs barriers would likely emerge as additional challenges for businesses.
Energy production: By prioritising domestic energy production, the U.S. aims to reduce reliance on foreign oil. While this policy may lower energy costs domestically and benefit logistics operations reliant on energy-intensive processes, it could also influence global oil prices, impacting trade dynamics for oil-exporting nations.

The performance of the U.S. dollar under these policies is also likely to affect global markets, with potential downward pressure on the GBP/USD exchange rate impacting UK businesses reliant on international trade.

Navigating 2025’s complexities

The events shaping Q1 2025, both domestically and internationally, will have far-reaching consequences for the trade and logistics sectors. Businesses must remain agile and proactive to adapt to shifting market dynamics.

Metro’s award-winning services and unparalleled market expertise position us uniquely to help businesses navigate the complexities of 2025. Whether managing disruptions from new tariffs, adjusting supply chains in response to energy policy shifts, or adapting to UK economic changes, we provide the insights and solutions needed to succeed in a rapidly evolving landscape.

In the face of uncertainty, preparation and adaptability are key. With Metro as your partner, you can confidently tackle whatever challenges 2025 may bring.

EMAIL Managing Director, Andy Smith today to learn how we can safeguard your supply chain.

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