Demand continues to be stable and retail sales have grown consecutively for 52 months. With Halloween being a bigger holiday season than ever before, consumers made retail purchases for this holiday that helped drive demand in September and October. Looking ahead, there is no evidence that there will be a slack in the upcoming months with the holiday season now upon us. The U.S. economy is strong, with jobs and retail sales up, which could lead to a better start to the new year as compared to last year. The new administration in the U.S. could lead to stronger tariffs against China in the new year as well as some changes to economic policy.
Ocean Freight
The Port of Los Angeles is growing—in fact it could handle $1 trillion worth of imports per quarter. The port handled record volumes in September, at 954,706 TEU’s, which was up 27% from last year, which helped drive an all-time volume of 2,854,904. Part of the reason for this surge is congestion in Asia ports, the uncertainty surrounding longshore workers at the East and Gulf ports in the U.S. as well as other issues impacting the global supply chain. This month, the port will increase its container traffic with a truck reservation system that will allow it to double its throughput.
This port has been able to benefit from the West Coast contract that was negotiated in 2023 between the Pacific Maritime Association and the International Longshoremen’s and Warehouse Association which will last for five years. The stability the contract brings to the port is allowing the port to flourish.
Maritime employers at the Port of Montreal are warning that they will suspend salary guarantees for striking union members in an escalation of the labor dispute by longshoremen. The Maritime Employers Association (MEA) said that they are holding salary guarantees to try to mitigate the financial impact of repeated strikes and lowered volumes at the port. The series of strikes at the port has also created a drop in container volumes at the port over the last few months.
Airfreight
With a nine-month solid run, the air cargo sector has entered its busy season for shipping. Air cargo tonnage increased 10% year over year for the beginning of October. The momentum is expected to continue through the first quarter of the new year. Volume for this year to-date is 12% higher than last year at this time, and global air cargo spot rates are higher than they have been all year. Exports from Asia are expected to remain steady into the first quarter.
The seven-week Boeing strike has finally come to an end with factory workers accepting a contract offer. The new contract includes pay raises of 38% over four years as well as ratification and productivity bonuses, however, it does not restore a company pension plan that was frozen almost 10 years ago.
Ground Transportation
Ground transportation has seen a few spikes in demand but freight demand in the ground transportation market has declined overall. However, a few smaller freight markets are experiencing a growth in volume. The dry van and reefer markets are down from recent highs, but rejection rates have stabilized a little above the 5% mark. This level indicates a looser freight market going into the holiday season.
E-commerce
Market research suggests that consumers will start shopping for the holidays in the coming weeks. More than half (55%) of U.S. shoppers will begin their shopping this month. The baby boomer consumers are most likely to shop in retail stores, while the GenZ generation prefers to do more of their shopping online.
Overall retail sales are predicted to rise this year, with Black Friday and Cyber Monday sales being a big driver in early holiday shopping. Some consumers do plan to shop deals on websites like Temu and Shein but should expect delays in items that are coming from overseas. U.S. consumers will be making a majority of their holiday purchases online, however, some consumers have said they do not have the money for non-essential purchases this holiday season.
Consumers will be price sensitive this upcoming holiday season as well as very of shipping time frames. Based on this price sensitivity, the peak season will not impact every e-commerce retailer in the same way. Some consumers will still be price shopping between online and offline shopping.
Your Trusted Partner
At Red Arrow Logistics, our goal is to keep you informed and equipped with the latest industry trends, challenges, and opportunities. Whether you’re optimizing your supply chain, mitigating disruptions, or planning for future growth, we’re here to provide the expertise and solutions you need to succeed.
Red Arrow offers the scale and scope of services including air, ocean, and ground transportation to meet the budget and schedule requirements of the largest and smallest companies alike. If we can be of assistance, please email us at [email protected] or give us a call at 425-747-7914.
