Point Global Logistics News of the Week — 11.25.22

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Potential for rail shutdown rises as largest union rejects labor deal

The largest rail union in the U.S. rejected its labor contract Monday, setting the stage for a potential shutdown of the nation’s freight rail system in as soon as two weeks.

Rank-and-file members of SMART-TD rejected the agreement, with 50.87% of conductors represented by the contract voting it down. The rejection comes the same day the country’s second largest union, the Brotherhood of Locomotive Engineers and Trainmen, announced its members approved their contract.

“SMART-TD members with their votes have spoken, it’s now back to the bargaining table for our operating craft members,” SMART-TD President Jeremy Ferguson said in a statement.

Carriers Feeling Cheery About On-Time Holiday Deliveries

The nation’s major shipping companies are in the best shape to get holiday shoppers’ packages delivered on time since the start of the pandemic, suggesting a return to normalcy.

Carriers like the U.S. Postal Service, FedEx and UPS project to have enough capacity after struggling under the holiday crush for the past two years, when many people hunkered down at home and turned to online shopping.

The system is already being put to the test ahead of big shopping days on Black Friday and Cyber Monday, when retailers entice shoppers with bargains. Amazon held a second Prime Day in October to jump-start early holiday sales, but some shoppers are still holding out for deals in the coming days.

S&P forecasts shipping rate recovery in 2024 after dip next year

Analyst believes increased scrapping and slower speeds will help container ships and other sectors

Weakening sectors such as liner shipping are set for a return to pre-pandemic rate levels next year, but there could be a recovery in 2024, according to S&P Global Market Intelligence.

The consultancy’s lead shipping analyst, Daejin Lee, said limited ship supply growth driven by new International Maritime Organization efficiency regulations is likely to boost freight markets in the medium to long term.

“Freight rates may return to the pre-pandemic level in 2023 with absence of congestion and weaker economic condition,” he added.