Welcome back to Freight Forwarding Weekly!
This week’s edition was edited by Michael, Freight Forwarding Weekly’s News Analyst.
If you’re new, this is a recap of this week’s top news stories in the world of global freight and forwarding.
This week’s edition is brought to you by our Premium Member in China, My Freight Solution.
Let’s dive into this week’s headlines.
But first …
📈 BY THE NUMBERS: Important numbers impacting freight and logistics.
⛽ Diesel: $5.141 / gal
Compared to a year ago, the average per-gallon price of diesel is up by $1.421. Data via the U.S. Energy Information Administration – Week of Nov. 28.
✈️ Air Cargo Index: 213.5 🔽 (October, FRED)
🚢 Global Container Index: $2,786 (Nov. 25)
🔝TOP NEWS THIS WEEK: Biden asks Congress to intervene in rail strike negotiations
U.S. President Joe Biden personally requested that the lame-duck Congress intervene in the ongoing negotiations between the railroads and four of the major rail unions. The railroads and rail unions supposedly reached an agreement that Biden helped broker before an original strike deadline that was set in September 2022.
Eight other rail unions approved five-year deals with the railroads and are reportedly receiving back wages for their workers for the negotiated 24% raises, which are retroactive to 2020.
“Let me be clear: a rail shutdown would devastate our economy,” President Biden warned in a statement released through the White House press office on November 28. “Without freight rail, many U.S. industries would shut down.”
The economic picture Biden painted was dramatic, as his economic advisors expect that as many as 765,000 people could be put out of work in the first two weeks of a rail union strike with no set timeline for resolution. Biden warned that whole “communities could lose access to chemicals necessary to ensure clean drinking water. Farms and ranches across the country could be unable to feed their livestock.”
Initially, the tentative agreement – the deal between the rail workers’ unions and the railroads – implemented a 24% pay raise for rail workers. The agreement also includes improved health benefits, and the ability to take unscheduled leave for medical needs, among other benefits. As already mentioned, the majority of the rail unions ratified the tentative agreement.
Now, Congress is in a crucial position to act quickly to resolve any further impasse between all of the stakeholders. House Speaker Nancy Pelosi, D-Calif., added: “This week, the House will consider legislation adopting the Tentative Agreement reached in September after months of hard-fought negotiations…We are reluctant to bypass the standard ratification process for the tentative agreement — but we must act to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt.”
More than 400 business groups and organizations have called on Congress to intervene in the labor standoff. Idle shipments of food and fuel would be impacted, and rail travelers would be stranded, risking billions of dollars in overall economic damage. These organizations calling for action include the U.S. Chamber of Commerce, American Trucking Associations, National Retail Federation, American Petroleum Institute, and the National Association of Manufacturers, etc.
Read more at the Associated Press.
🎄A holiday season rail strike could cost $2 billion per day.
A holiday season rail strike could cost at least $2 billion per day, reported the libertarian-leaning Reason citing Reuters. Read more here.
Other stories we’re watching…🔭
💥The pandemic shipping boom is no more (Tweet).
Liz Ann Sonders, a chief investment strategist at Charles Schwab & Co., tweeted on Nov. 28 an alarming chart depicting the cost curve to ship 40 feet containers from Shanghai to Los Angeles.
“Cost to ship 40ft container from Shanghai to Los Angeles has plunged to [its] lowest since May 2020, which means [the] pandemic boom is close to being completely erased,” Sonders posted.
Check out Liz Ann Sonders’ tweet right here.
🦥 Logistics and the supply-chain slowdowns are here.
The Wall Street Journal also reported that logistics and supply chains are slowing down due to noticeable wavering consumer demand and retailers coping with too much inventory. This also resulted in global container volumes falling 8.6 percent in September, reaching the lowest level in February – which is typically a period of strong shipping. WSJ referred to data from research group Descartes Datamyne told “container imports from China…were down nearly 23%” in Oct.
Since the Wall Street Journal article is behind a paywall, is archived here for your reading.
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This edition of our newsletter was written by Michael M., Freight Forwarding Weekly’s chief news analyst.