Special: US election results November 2024
Last week, all eyes were on the US presidential election, which Donald Trump won handily after winning in all swing states. This result will lead to changes in US trade policy that will have a significant impact on logistics & shipping in the US.
President Trump has announced that he will impose a 60% tariff on Chinese goods and a 10% tariff on other imports into the US. This will be the highest tariff level since 1934.
In addition, President Trump will increase sanctions on Iran and Venezuela, which would remove oil supplies from the market.
His pro-fossil fuel energy policy will give a big boost to the US oil industry, which will benefit the logistics market (e.g. domestic trucking market, domestic logistics services). This would reduce inflationary pressures, lead to lower interest rates and increase consumer demand.
The stock market reacted to Trump's victory with a surge in the shares of many US companies (e.g. Tesla, steel industry, manufacturing). The growth potential of the US economy under his leadership (MAGA) seems huge.
KEY TRENDS EXPECTED IN SHIPPING AFTER THE US RESULTS
- Shippers of affected goods will continue to pull their orders forward as long as they can still avoid the tariffs → major boom spike in imports expected
- New container vessel orders up 52% with 254 new orders placed in 2024; so far 362 new container vessels have entered the market
- US-China trade will take up new speed as long as tariffs are not yet in place
- Possibility of labor disruption on the East Coast and Gulf in January 2025 remains a concern
- Growth of domestic manufacturing and increasing imports from overseas will increase overall demand for shipping, air cargo and international freight forwarding
- Trump vowed to “end wars” rather than start them → potential impact on Russian/Ukraine and Red Sea Crises remains unclear
- Steady demand from various cargo segments, keep the MPP vessel sector stable → index rise expected in the coming months
Shipping & climate change
- Trump will revamp the current US climate change policy. Under his former presidency, the US pulled out of the Paris Climate Agreement in 2017
- Without support from the USA, not much progress will be made on global emission reduction agreement → could put a break on discussions at the IMO for a carbon emission tax
OIL PRICES RISE 1% AFTER US ELECTIONS – 07.11.2024
Brent Crude Oil Futures – USD 75,63
US West Texas Intermediate (WTI) – USD 72.36
- Oil Prices react to election of President Trump
- The dollar index (.DXY), eased nearly 1% but remained near a two-week high after surging following Trump's victory
- 22% of Gulf of Mexico oil output shut due to Hurricane Rafael
- Strong USD and lower crude imports in China (oil imports fell 9% in October, showing a year-on-year decline) limit gains
What's next?
- Presumed sanctions on Iran + Venezuela will take oil supply off the market
- Ukraine/Russian and Red Sea Crises remain ongoing concerns
- US Dollar likely to stay strong, which will make oil more expensive for other currency holders
- Trump will refocus energy policy on oil production, which will give the US oil & gas industry a big push
- Trump pro-business approach will support overall economic growth, which will increase the demand for fuel
KEY SHIPPING TRENDS PER REGION
America & Canada
- The US keeps driving global economy and will continue to do so under Trump
- Demand remains strong and likely to jump up in the coming month → strong container trade in Q3
- Vessels from the Mediterranean and North Europe fully booked; also spot availability very limited
- Low water levels in St. Lawrence River in Canada start to impact operations (Maersk announced a Low Water Surcharge of USD 150 per 20’ containers from North Europe)
- Current Canada Port Strike is creating bottlenecks
- Demand continues to increase since the Golden Week holiday in ASPAC (beginning October). There are slight delays for vessel arrivals back to Asia due to schedule disruptions.
- Recent rough weather at US Gulf has closed temporary closures at some Mexican Ports → congestion
- Impacts from Hurricane Milton (e.g. Freeport and Florida Ports) ease
EUROPE
- Demand keeps increasing → higher call on ocean capacity
- Businesses keep advancing cargo throughout 2024 to increase resilience
- Weather conditions are signaling the arrival of autumn → fog, winds, heavy rains to affect operations
- Public holidays in week 44 and delays in several services from previous ports have caused congestion in terminals in Bremerhaven and Antwerp
- Waiting times remain high in Antwerp due to maintenance works on quay (until December 2024)
- 2025 Combined Nomenclature (CN), issued by the European Commission, becomes effective on 01.01.2025 January 2025. This annual update is essential for classifying goods correctly, determining customs duties, and managing trade statistics within the EU
ASIA
- The Gemini network (collaboration between Maersk + Hapag Lloyd) to be launched in February 2025 will contribute to schedule reliability
- Maersk announced new services from Greater China Area to keep cargo moving to Europe
- China’s economic growth has softened, but exports continue to b key growth deriver, while domestic demand remains weak
- On 27 September, tariffs introduced by the Biden administration in May 2024 took effect, impacting goods from China to the US across various sectors, including raw materials, intermediate inputs, and consumer products
SOUTH AMERICA
- PSS has been implemented on 27 October for all cargo from WC South America to Central America and the Caribbean
- Local Port Disruption surcharge introduced by Maersk on 21 October for all cargo moving to and from the US East Coast and Gulf Coast Terminals
- Overall, terminals in SAM are expecting waiting times of > 1 day and growing part/yard congestion due The to high volumes of vessels and cargo
- Also, port congestion, weather conditions and infrastructure upgrades keep impacting terminals in SAM.
Customer advice
Considering the ever-changing market conditions and forces, please:
- Think ahead and book well in advance. Try to plan for 6 months ++.
- Consider that the market can change significantly. Further disruptions can happen anytime.
- Identify contract options that enable flexibility and resilience for your business.
However, it is our job at Bertling to keep global supply moving and do all we can and apply our knowledge, network and expertise to protect our clients’ while taking the latest market developments into account. We are there to find the best solutions to ensure cargo flows.
