It’s the biggest day every four years. It’s not the opening ceremony of the Olympics or the FIFA World Cup, it’s Election Day. The citizens of the U.S. get to exercise their civic duty and vote for their elected officials. This year is extra special ’cause it’s a presidential election.
The election is crucial because the president will set policies and tariffs, enforce regulations, and do a host of other things that can impact the economy and the supply chain. Nothing is set in stone yet, but each candidate has different policies in mind that can impact the economy and subsequently the freight market.
On Friday, FreightWaves CEO Craig Fuller, Head of Freight Market Intelligence Zach Strickland and Senior Analyst Tony Mulvey broke down the different directions policies could go.
One of the main takeaways is that regardless of who wins the election the ensuing federal policies can massively impact the freight industry. “If you think about the freight economy, it’s so big, it’s so massive, because about 32% of the U.S. economy is tied to logistics-dependent industries,” Fuller said. “It means that these businesses simply cannot exist without logistics, and so policy has an enormous amount of impact on freight.”
Tariffs on imported goods stand to be a huge factor as companies see increased costs of doing business that are inevitably passed on to the consumer. The rise of nearshoring and the role of Mexico and cross-border freight will be something to keep in mind as policies come down after Jan. 20 that could make it harder for shippers to import goods from specific countries. Setting up or taking advantage of operations in Mexico could be a more popular option, thus increasing cross-border freight opportunities.
But the real dividing issue seems to be around energy production. Each candidate has wildly different plans for the same goal of expanding U.S. energy production. The main difference is that Kamala Harris is calling for energy policies that also take into account climate change and clean energy technologies. Donald Trump has said he wants to roll back regulations that hinder oil and gas drilling and coal mining.
With so many unknowns about who will become president and the impact that person will have on the freight market, it makes for a tumultuous few days till the final votes are counted. Here’s hoping that 2025 is the life raft the freight market needs to get back to moving freight and making money.
TRAC Tuesday. This week’s TRAC lane takes a walk down history lane. From the home of the first presidential election (1789, George Washington) in New York City to the home of the current president, Washington. The District of Columbia became the country’s capital a year after Washington was elected in 1790, but on this Election Day it seems fitting to return to the roots.
In the present day, this short 226-mile jaunt is almost a dollar more per mile at $3.44 than the National Truckload Index, which is at $2.45. Both major metropolitan areas are not typically a driver’s No. 1 go-to location, as traffic congestion can be difficult to navigate. Outbound tender rejections are at 5% for D.C. and 4% for New York. Shippers in both markets should be experiencing strong contract compliance with some utilization of secondary carriers to fill in gaps.
Who’s with whom? It seems as if the theme of 2024 was labor disagreements and strikes. Just as one issue gets resolved, another is waiting to take the headlines. In November’s version of Groundhog Day, strike port employers in western Canada lock out forepersons. This move could shut down trade in important west coast gateways for Canada.
This specific dispute is hung up on wages. It seems both the British Columbia Maritime Employers Association (BCMEA) representing ocean carriers and terminal operators at the Port of Vancouver are hung up on that aspect of negotiations. The current proposal from the BCMEA is a 19.2% wage hike over four years, increasing median pay for forepersons to CA$246,323-$293,617.
Not only is this labor dispute affecting the west coast of Canada, the Port of Montreal is getting into the mix. “Saying it has ‘no other choice,’ the Maritime Employers Association (MEA) said in a statement posted to its website that it will suspend salary guarantees as of Tuesday ‘for all longshore workers not working,’ as a means of mitigating ‘the cumulative financial impact of repeated strikes and lower volumes at the Port of Montreal,’” FreightWaves’ Stuart Chirls reported.
The primary effects of these striking ports will be felt by the Canadian trucking market, but Pacific Northwest ports on the West Coast and ports in the New England area could see a small increase in freight as ships divert ahead of any port struggles. That situation, though, depends on how long a possible strike or lockout could go on.
The more you know
Medical equipment makers call for more domestic production, tariffs
Borderlands Mexico: Major expansion project announced for Port of Progreso
4-state coalition gets nearly $250M for I-95 electric truck chargers
Boeing slashes DEI department in latest staff shake-up
The post Check Call: The election special appeared first on FreightWaves.