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Seven supply chain shocks in seven weeks

Feb 19, 2025 | , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Just seven weeks into 2025, global supply chains have already faced a whirlwind of challenges.

From industrial action to trade barriers and shifting alliances, businesses must stay agile to navigate ongoing disruptions. Here are seven of the most impactful developments so far this year.

1. US east coast port strike averted (8th January)
A major disruption was narrowly avoided as the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) reached a tentative six-year agreement. The deal, approved on 7 February, prevented a strike that could have crippled US east coast ports for months. A final vote on 25 February will confirm its ratification.

2. Uncertainty over Suez Canal return (19th January)
Despite a fragile ceasefire in Gaza, container ships will not be returning to the Red Sea anytime soon. Carriers remain cautious, fearing renewed instability and prioritising the established Cape of Good Hope diversions. Even if ships do resume transit, severe disruption is expected, with schedules taking up to two months to stabilise.

3. Trump’s trade policies spark concerns (20th January)
Following his inauguration, President Trump swiftly reignited trade tensions, threatening tariffs on Colombia, China, Canada, and Mexico. Proposals include a 25% levy on steel and aluminium from Canada and Mexico, with reciprocal tariffs also being considered for UK imports. The potential trade war could have widespread consequences for global supply chains.

4. US air cargo demand under threat (1st February)
Trump’s decision to impose a 10% tariff on all Chinese imports and temporarily suspend the de minimis exemption for low-value Chinese shipments has sent shockwaves through the air freight sector. While the exemption was reinstated, changes to eCommerce regulations could significantly disrupt air cargo flows into the US, which is expected to receive 1.4 billion eCommerce packages this year.

5. New Asia shipping alliances reshape trade (2nd February)
The long-anticipated shift from three major container alliances (Ocean, THEA, 2M) to four key players (Ocean, Premier, Gemini, MSC) is now in effect. Asia-North Europe scheduled liner capacity will shrink by 11%, yet the number of weekly sailings will increase from 26 to 28. These changes will reshape global shipping networks for years to come.

6. European road freight rates stabilising (4th February)
After three years of decline, European road freight spot rates may have hit their lowest point. According to the European Road Freight Rate Benchmark, spot rates fell just 1% year-on-year in Q4 2024. While demand remains weak, cost pressures have kept rates 15% above pre-pandemic levels, with short-term volatility expected.

7. Carriers cut sailings to stabilise rates (14th February)
Shipping lines are aggressively blanking sailings to ease the transition to new alliance schedules and sustain freight rates. Between 17 February and 23 March, 51 sailings have been cancelled across key east-west trade routes, with February’s cancellations rising to 133 from 104 in January. Further capacity withdrawals and a general rate increase (GRI) could follow if demand fails to recover.

With trade disputes, shipping realignments, and geopolitical instability shaping global supply chains, the first quarter of 2025 has already presented significant challenges.

Staying ahead requires proactive strategy adjustments to mitigate risks and build resilience. That’s why we share these insights and why your Metro account management team is always by your side, ready to provide expert advice, share knowledge, and develop bespoke solutions tailored to your supply chain needs.

For high-level support, EMAIL Andrew Smith, Managing Director.

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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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The potential impact of the new US administration on global trade

Nov 27, 2024 | , , , , , , , , , , , , ,

As the United States, and the world, braces for potential shifts in trade policy, new tariff proposals and ongoing supply chain challenges are reshaping the global logistics landscape.

President-Elect Trump’s threatened trade tariffs, along with geopolitical and operational pressures, are driving significant changes in import patterns, freight rates, and supply chain strategies.

Protectionist policies
President Trump’s first administration was marked by aggressive trade policies, and his second term is marked by a resurgence of tariff-based strategies targeting China and other major trading partners. Proposed tariffs include a universal rate of 10-20% on all imports to the US, with an additional 60-100% on imports from China, together with another 10% above any additional tariffs, on all products, until the supply of the illegal drug fentanyl ceases. 

These measures could significantly raise consumer costs for goods such as apparel, toys, furniture, and household appliances. In 2023, tariffs on Chinese apparel cost U.S. companies and consumers $1.3 billion, with forecasts estimating that consumers would pay between $13.9 billion and $24 billion more annually due to the proposed tariffs.

Additional tariffs could reduce trans-Pacific shipping volumes, while supply chains may diversify further to Southeast Asia, India, and Latin America. These shifts would alter global shipping patterns and potentially lower container shipping demand from Asia.

Surge in imports ahead of tariffs
The prospect of new tariffs is expected to accelerate import activity, as businesses aim to pre-empt the potential cost increases by expediting shipments, placing substantial demand on vessel space. This surge, if realised, would exacerbate pressures on an already strained logistics infrastructure, particularly during peak seasons.

Volatility in sea freight rates
Tariff-driven demand spikes are poised to push freight rates higher, especially on trans-Pacific routes. Companies, wary of increasing costs, are likely to explore alternative sourcing locations outside China, though this has been complicated further as the US president-elect said he would sign an executive order imposing a 25% tariff on all goods coming from Mexico and Canada, after being inaugurated on 20 January 2025. The impending early Chinese lunar new year in late January 2025 further compounds the uncertainty, as shippers rush to secure capacity.

Heightened supply chain challenges
Labour disputes continue to threaten North American supply chains, with the potential for an International Longshoremen’s Association (ILA) strike if negotiations do not conclude positively by January 2025. Concurrently, recent lockouts at Montreal and Vancouver ports have disrupted trade flows, with ripple effects expected at other ports, including Halifax.

A second Trump administration may prioritise renegotiating or withdrawing from international trade agreements to favour US interests, including potential revisions to WTO agreements. Such moves could disrupt North American trade flows and create further uncertainty for global shipping stakeholders. Additionally, heightened geopolitical tensions could impact critical maritime routes and alliances, particularly in the South China Sea.

The combination of tariff uncertainties, labour disputes, and shifting sourcing strategies signals a challenging period for global trade. Rising costs and operational complexities could challenge shipping in the long term, with broader implications for economic stability.

As the situation in the United States develops we will continue to provide regular updates, but if you have any concerns or questions about how these events might impact your shipments, please reach out to us.

EMAIL Chief Commercial Officer, Andy Smith today to learn how we can safeguard your supply chain during challenging periods.

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November: North American market update

Nov 13, 2024 | , , , , , , ,

The North American freight market faces a complex set of challenges as ongoing labour disputes, potential trade policy shifts, and evolving service offerings reshape the landscape.

Canadian port strikes strain supply chain
Labour disputes have disrupted operations at Canada’s east and west coast ports, with significant impacts on supply chains. At the Port of Montreal, the Maritime Employers Association (MEA) imposed a lockout after the Longshoremen’s Union CUPE Local 375 rejected their offer, halting operations since 31st October. On the west coast, stalled negotiations between the International Longshore and Warehouse Union (ILWU) and port authorities in Vancouver and Prince Rupert effectively paralysed these critical gateways for Canadian imports and exports.

The closures forced Canadian freight to be diverted to US west coast ports, including Seattle, Oakland, Los Angeles, and Long Beach, adding to congestion and creating backlogs that could take months to resolve.

Government intervenes to resume operations
In a decisive move on the 12th November, the Canadian government directed the Canada Industrial Relations Board (CIRB) to end the strikes at Vancouver and Montreal and impose binding arbitration. While business groups welcomed the intervention, union representatives criticised the move, arguing it undermines workers’ rights.

As operations begin to resume, the Montreal Port Authority announced plans to gradually clear terminal backlogs and restore fluidity, although it could take weeks to return to normal. Meanwhile, Vancouver’s container terminals remain delayed, with limited anchorage availability adding further challenges.

US east and gulf coast strike uncertainties persist
Following a brief three-day strike in October on the US east and Gulf coasts, concerns remain about potential further disruptions. The strike’s conclusion hinged on a provisional wage agreement between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), with more complex issues such as automation still unresolved.

Negotiations resumed with a new contract deadline of 15th January 2025, but ended early on the 12th November, when the ILA broke off talks with the USMX. According to ILA, the decision was made after USMX continued “pushing automation and semi-automation language in its Master Contract proposals that will eliminate ILA jobs.” The ILA added it “remains hopeful that USMX will alter its un-winnable strategy, and resume negotiations as soon as possible.”

The uncertainty surrounding contract outcomes is likely to push shippers to expedite shipments before January, amplifying capacity constraints across North American ports. The October strike impacted trans-Atlantic and Asia-US trade lanes, with trans-Atlantic westbound volumes falling by 15% and Asia-US east coast capacity expected to drop 17% in mid-November.

Potential tariff escalation under new US administration
The US presidential inauguration in January may bring significant trade policy changes, with proposed tariffs that could reach 60% on China and 20% on other countries.

While the EU, which has a $130bn trade surplus with the US, is preparing counter-tariffs, the UK, which enjoys a relatively modest surplus, appears unlikely to retaliate, favouring open trade instead.

This potential tariff escalation could lead to intense front-loading of shipments before January, creating a pre-inauguration shipping peak, which might align with the pre-Lunar New Year demand surge.

Metro’s expanding US focus
The United States is Metro’s 2nd largest origin/destination and client location, with a large number of customers also having their head office located in North America.

To better support this large and growing client base, Metro will open its first office in the US next year. The non-operational office will focus on local American customers, to enhance the level of service and support provided to them, including the oversight of 3rd country movements through the Americas.

In-house shipping line offers Express US service
Wholly-owned group subsidiary, Ellerman City Liners, has launched the weekly sailing United States Express Service (USX), delivering some of the fastest containerised transit times available. Direct to Philadelphia from just 13 days, USX utilises non-congested ports and terminals, to streamline port clearance and inland movements.

USX is the only direct service operating to and from Jacksonville, serving the Baltic, Scandinavia, Europe and the United States, with four calls on the East Coast, including Philadelphia.

Ellerman’s USX service offers fast and reliable transit times, with lots of flexibility and operates in cooperation with MSC. It is gratifying to see our group working closely with the world’s largest carrier, which underlines our continued commitment to supporting our partner carriers. Many of whom we have worked with for decades.

As North America’s sea freight market adapts to labour uncertainties and fluctuating trade policies, shippers face a complex landscape of demand pressures, capacity constraints, and fluctuating costs.

To discuss the current situation and how Metro can support your North American supply chain, please EMAIL Andrew Smith, Chief Commercial Officer.

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