Retailers and shippers are bracing for operational disruptions and cost increases as the January 2025 deadline for the International Longshoremen’s Association (ILA) negotiations looms, alongside the threat of new tariffs on Chinese imports from President-elect Donald Trump.

This combination of challenges has led to an extended peak shipping season, as businesses rush to front-load cargo and mitigate potential impacts.

Surge in imports
US ports have seen a significant increase in inbound cargo volumes, reflecting retailers’ efforts to stock up ahead of potential disruptions. October imports jumped by over 9% year on year, exceeding projections, and further increases of nearly 15% are forecast for both November and December. The January 2025 forecast has also been revised sharply upward, with inbound cargo now expected to grow by over 12% compared to the same period last year, up from an earlier forecast of just 2.6%.

This surge is driven by retailers’ attempts to avoid disruptions caused by either an ILA strike or increased tariffs on goods from China. The race to bring goods into the US before the 15th January contract negotiation deadline and the expected implementation of tariffs has led to heightened activity at ports, with shippers working to ensure goods arrive before potential delays or cost increases take effect.

Rising inventories
The rush to import goods has resulted in a notable increase in retail inventory levels. The US retail inventory-to-sales ratio rose to 1.42 in September, up from 1.27 in August. This level, last seen in early 2023 and 2021, is among the highest recorded since the pandemic began. Retailers are stockpiling goods not only to prepare for potential supply chain disruptions but also to shield themselves from the anticipated cost impact of higher tariffs on Chinese products.

Labour negotiations
ILA negotiations with the US Maritime Alliance (USMX) have stalled, with automation emerging as the primary sticking point. The ILA strongly opposes the introduction of semi-automated equipment, such as rail-mounted gantry cranes, at marine terminals. With no agreement in sight, the likelihood of a strike after the January 15 deadline has increased, adding uncertainty for retailers and logistics providers.

While the October three-day strike was resolved with a temporary pact, the breakdown of talks in November has heightened concerns. Retailers are closely monitoring developments, knowing that a prolonged strike could severely disrupt supply chains and lead to higher costs for both businesses and consumers.

Tariff uncertainty
President-elect Trump’s promise to impose tariffs exceeding 60% on Chinese goods is also driving the import surge. Although it remains unclear whether the tariffs will be implemented immediately or phased in, retailers are taking no chances. Many have accelerated their efforts to source goods from alternative suppliers, building on years of diversification away from reliance on China.

Retailers have used recent earnings calls to emphasise the progress made in reducing exposure to Chinese imports, but for some, the impending tariffs will still have a significant impact. The race to import goods before January reflects both the uncertainty surrounding the tariff timeline and the anticipated financial strain they will impose.

Preparing for 2025
As the new year approaches, businesses are facing a perfect storm of challenges in the supply chain. The combined threats of port labour disruptions and tariff hikes are driving unprecedented levels of front-loading, resulting in increased strain on logistics networks and rising inventory levels.

Retailers and shippers are implementing strategies to manage these uncertainties, from diversifying supply chains to stockpiling inventory. However, the potential for delays, higher costs, and operational disruptions will require ongoing agility and preparation to navigate the year ahead. The outcome of the ILA negotiations and the implementation timeline for tariffs will be key factors shaping the supply chain landscape in early 2025.

With disruption and tariff uncertainties redefining the market, Metro’s proactive solutions are essential to keeping your supply chain strong and adaptable.

Our expert team continuously monitors the shifting landscape, offering strategic guidance to help you navigate regulatory changes, optimise shipping routes to avoid disruption, and control costs effectively.

EMAIL Andrew Smith, Chief Commercial Officer, today to discover how Metro can protect and future-proof your North American supply chain.